Federal Reserve Governor Michelle Bowman said on Thursday that she supports a rate cut in December as the 'final adjustment step' of the Fed's monetary policy, as the rising risks of inflation require the Fed to adopt a more cautious approach in the future.
The December rate cut is the 'final adjustment step'.
According to a Reuters report, Bowman stated in a speech at the California Bankers Association on Thursday that she supports the December rate cut as the 'final adjustment step' of the Fed's monetary policy, due to rising inflation risks, thus requiring a cautious approach for the future. She emphasized that premature judgments about the incoming government's future policies should be avoided, and that it is necessary to wait for the situation to become clearer before assessing its impact on economic activity, the labor market, and inflation.
In terms of monetary policy, Bowman takes a tough stance and is also concerned that the progress of inflation may have stagnated, noting upside risks, including the risk of 'pent-up demand' being released after the November presidential election.
She stated that the rise in stock prices may be one reason for the lack of further progress in inflation, and the recent increase in 10-year Treasury yields partly reflects concerns about inflation risks.
'I still tend to take a cautious, gradual approach to adjusting policy,' she said.
Bowman previously objected to the Fed's substantial reduction of short-term borrowing costs in September, stating on Thursday that she could have supported taking no action in December.
Bowman is the leading candidate for the Fed Vice Chair position.
Michael Barr announced that he will resign from the position of Fed Vice Chair by the end of February, a role crucial for enhancing the transparency and regulatory accountability of the financial system. Bowman is currently the leading successor, having been nominated by Trump during his first term in the White House.
(Federal Reserve Vice Chair Michael Barr has submitted his resignation! Formerly a 'debanking advocate for crypto', Chokepoint 2.0 is expected to collapse.)
Bowman has criticized Barr several times in recent years, and if she is elected as the Fed Vice Chair, the market expects her regulatory stance to be more open.
In her speech, she stated: 'Bank regulation is not necessarily a confrontational system between banks and regulators. On the contrary, banks and regulators often have a common goal: to establish a safe, sound, and effective banking system, and both parties are advancing these goals.'
This article Michelle Bowman: December rate cut is the 'final adjustment step' first appeared on Chain News ABMedia.