Fed’s Bowman: Inflation still uncomfortably high

Federal Reserve Board of Governors (Fed) Michelle Bowman made headlines on Tuesday, tempering expectations for a near-term interest rate cut. Fed Governor Bowman noted that despite recent progress in inflation, levels of price growth still remain well above the central bank’s target ranges and that recent moves in the unemployment rate could exaggerate the overall cooling in employment activity. work.

Key highlights

The labor market continues to relax and balance better.

We have seen some recent progress in reducing inflation, but inflation is still uncomfortably above the committee’s 2% target.

I still see upside risks to inflation.

We need to see the totality of the data as employment risks, and price stability mandates are in better balance.

If the incoming data show that inflation is moving sustainably towards the target, it will become appropriate to reduce rates gradually to prevent them from becoming excessively restrictive.

Wage gains remain above the pace consistent with our inflation target.

Although the unemployment rate is rising, it is still historically low.

I will remain cautious in my approach to any change in political position.

I still see the need to pay close attention to the price stability side of our mandate, while keeping an eye on the risks of a material weakening in the labor market.

It is possible that the strength of employment has been overstated and that the rise in the unemployment rate is exaggerating signs of cooling.