Federal Reserve (Fed) Board of Governors Michelle Bowman hit newswires on Tuesday, tempering expectations of a near-term rate cut. Fed Governor Bowman noted that despite recent progress on inflation, price growth levels still remain well-elevated compared to the central bank's target ranges, and that recent moves in the unemployment rate may be exaggerating general cooling in employment activity.
Key highlights
The labor market continues to loosen and come into better balance.
I have seen some recent further progress on lowering inflation, but inflation is still uncomfortably above the committee’s 2% goal.
I still sees upside risks to inflation.
We must view the totality of data as risks to employment and the price-stability mandates move into better balance.
Should incoming data show inflation is moving sustainably toward the target, it will become appropriate to gradually lower rates to prevent becoming overly restrictive.
Wage gains remain above the pace consistent with our inflation goal.
While the unemployment rate is up, it is still historically low.
I will remain cautious in my approach to any change in the policy stance.
I still see the need to pay close attention to the price-stability side of our mandate while watching for risks of a material weakening in the labor market.
It is possible that the strength of hiring has been overstated and that rise in the unemployment rate is exaggerating signs of cooling.
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