Fed Governor David Bowman says further interest rate hikes may be necessary if inflation remains high
Michelle Bowman, a member of the Board of Governors of the U.S. Federal Reserve, attends a “Fed Listens” event at Federal Reserve Headquarters in Washington, DC, on October 4, 2019.
Eric Baradat AFP | Getty Images
Federal Reserve President Michelle Bowman said Friday that the U.S. may need to raise interest rates to curb inflation, rather than cut rates as her colleagues have suggested and markets are expecting. Ta.
Bowman pointed to a number of potential upside risks to inflation and said policymakers should be wary of easing policy too quickly.
“This is not my baseline outlook, but if inflation stalls or even reverses, I would expect policy rates to change at future meetings,” he said in prepared remarks for a speech to the group. “We continue to see the risk that we may need to increase the rate further.” New York Fed watcher opinion. “Reducing the policy rate too soon or too soon could lead to a rebound in inflation, and further future increases in the policy rate would be needed to return inflation to 2% in the long term.”
As a member of the Board of Directors, Mr. Bowman is a permanent voting member of the Federal Open Market Committee, which sets interest rates. Since her inauguration at the end of 2018, she has been placed in a more hawkish position within the FOMC due to her public speeches, which suggests that she may be more aggressive towards controlling inflation. It means that you prefer a certain attitude.
Bowman said the most likely outcome remains “that eventually a rate cut will be appropriate,” but that “we still see a lot of upside risks to inflation” and it's “not yet at the stage.” It has not been reached.”
This speech before the shadow open market committee has markets nervous about the near-term future of Fed policy. In a statement released by several officials this week, Including Chairman Jerome Powellshowed a cautious stance on lowering interest rates. Atlanta Fed President Rafael Bostic, a FOMC elector, said: He told CNBC that the cuts are likely to be just one. Minneapolis Fed President Neel Kashkari has indicated that interest rates may not be cut unless inflation slows further.
Futures traders are pricing in three rate cuts this year, but when they will begin is uncertain between June and July. FOMC members in March also decided to cut interest rates three times this year, but one anonymous official on Dotplot suggested there would be no rate cuts until 2026, leaving many wondering how aggressive the central bank will be. He stated that there was considerable variation.
“Given the risks and uncertainties surrounding my economic outlook, I will continue to closely monitor the data as I assess the appropriate path for monetary policy and remain mindful of my approach when considering changes to my future policy stance,” Bowman said. We will continue to be cautious.” .
Given inflation risks, he said the improvements in supply that helped push numbers down this year may not have the same impact going forward. In addition to persistently high home prices and a tight labor market, he cited geopolitical risks and fiscal stimulus as other upside risks.
“Inflation statistics over the past two months suggest that progress may be uneven or slow going forward, particularly in core services,” Bowman said.
Fed officials will next review inflation data on Wednesday, when the Labor Department releases its March consumer price index report.
Summarize this content to 100 words Michelle Bowman, a member of the Board of Governors of the U.S. Federal Reserve, attends a “Fed Listens” event at Federal Reserve Headquarters in Washington, DC, on October 4, 2019. Eric Baradat AFP | Getty ImagesFederal Reserve President Michelle Bowman said Friday that the U.S. may need to raise interest rates to curb inflation, rather than cut rates as her colleagues have suggested and markets are expecting. Ta.Bowman pointed to a number of potential upside risks to inflation and said policymakers should be wary of easing policy too quickly.”This is not my baseline outlook, but if inflation stalls or even reverses, I would expect policy rates to change at future meetings,” he said in prepared remarks for a speech to the group. “We continue to see the risk that we may need to increase the rate further.” New York Fed watcher opinion. “Reducing the policy rate too soon or too soon could lead to a rebound in inflation, and further future increases in the policy rate would be needed to return inflation to 2% in the long term.”As a member of the Board of Directors, Mr. Bowman is a permanent voting member of the Federal Open Market Committee, which sets interest rates. Since her inauguration at the end of 2018, she has been placed in a more hawkish position within the FOMC due to her public speeches, which suggests that she may be more aggressive towards controlling inflation. It means that you prefer a certain attitude.Bowman said the most likely outcome remains “that eventually a rate cut will be appropriate,” but that “we still see a lot of upside risks to inflation” and it's “not yet at the stage.” It has not been reached.”This speech before the shadow open market committee has markets nervous about the near-term future of Fed policy. In a statement released by several officials this week, Including Chairman Jerome Powellshowed a cautious stance on lowering interest rates. Atlanta Fed President Rafael Bostic, a FOMC elector, said: He told CNBC that the cuts are likely to be just one. Minneapolis Fed President Neel Kashkari has indicated that interest rates may not be cut unless inflation slows further.Futures traders are pricing in three rate cuts this year, but when they will begin is uncertain between June and July. FOMC members in March also decided to cut interest rates three times this year, but one anonymous official on Dotplot suggested there would be no rate cuts until 2026, leaving many wondering how aggressive the central bank will be. He stated that there was considerable variation.”Given the risks and uncertainties surrounding my economic outlook, I will continue to closely monitor the data as I assess the appropriate path for monetary policy and remain mindful of my approach when considering changes to my future policy stance,” Bowman said. We will continue to be cautious.” .Given inflation risks, he said the improvements in supply that helped push numbers down this year may not have the same impact going forward. In addition to persistently high home prices and a tight labor market, he cited geopolitical risks and fiscal stimulus as other upside risks.”Inflation statistics over the past two months suggest that progress may be uneven or slow going forward, particularly in core services,” Bowman said.Fed officials will next review inflation data on Wednesday, when the Labor Department releases its March consumer price index report.Don't miss the next story from CNBC PRO.
https://www.cnbc.com/2024/04/05/fed-governor-bowman-says-additional-rate-hike-could-be-needed-if-inflation-stays-high.html Fed Governor David Bowman says further interest rate hikes may be necessary if inflation remains high
