Fed official Bowman's interest rate expectations

Fed Governor Michelle Bowman reiterated her expectation that inflation will continue to fall further if interest rates are held at current levels. Fed Governor Michelle Bowman reiterated her expectation that inflation will continue to fall further if interest rates are held at current levels, but said it was too early to begin cutting rates. Bowman said she will be watching incoming data closely to assess the appropriate path for policy and noted several risks that could increase inflation pressures, including the spread of geopolitical conflict, easing financial conditions and continued labor market tightness. “If the data continues to show that inflation is moving sustainably toward our 2% goal, then eventually it will be appropriate to gradually reduce our policy rate to prevent monetary policy from becoming overly restrictive. I think we’re not there yet,” Bowman said in comments very similar to statements she made earlier this month on monetary policy. She warned that cutting rates too soon could necessitate future rate hikes.