Fed official Bowman's interest rate expectations

Fed Governor Michelle Bowman said she still expects another rate hike. Fed Governor Michelle Bowman has argued that returning inflation to the central bank’s goal will require further tightening of monetary policy. “My fundamental economic outlook continues to expect that we will need to raise the federal funds rate further to keep policy restrictive enough to bring inflation down to our 2% goal on time,” Bowman said in a speech. “But monetary policy is not on a set course, and I will continue to monitor incoming data closely as we evaluate the implications for the economic outlook and the appropriate path of monetary policy.” Bowman continued: “If incoming data suggest that inflation has stalled or is insufficient to bring inflation down to 2% on time, I would be willing to support raising the federal funds rate at a future meeting.” Bowman, who has previously supported raising rates further, was among a small minority of policymakers who said they think the Fed is not done yet. Bowman said he supported the decision of the U.S. central bank’s policy-setting Federal Open Market Committee to keep interest rates at a 22-year high at its second consecutive meeting earlier this month. Chairman Jerome Powell told reporters at a news conference that the Fed was “proceeding cautiously” on whether the central bank needed to raise rates again. “We must bear in mind the historical lessons and risks associated with prematurely declaring victory in the fight against inflation, including the risk that inflation could settle above our 2% target without further policy tightening,” Bowman said.