Federal Reserve Vice Chair for Supervision Michelle Bowman stated that monetary policy remains at a moderately restrictive level, and unless the employment situation improves, officials should be prepared to cut interest rates further. Bowman added that, given the risk of further deterioration in the labor market, the Fed should not signal a policy hold, as many of her colleagues have done. "Until we see clear and sustained improvement in labor market conditions, we should remain prepared to adjust policy to bring it closer to a neutral level," Bowman said in prepared remarks for the New England Economic Forum scheduled for Friday in Foxborough, Massachusetts. "We should also avoid signaling that we will pause our actions without confirmation that the situation has changed," she said. "Doing so would suggest we are not attentive or responsive to recent and expected movements in the labor market." Bowman noted that inflationary pressures are easing, with diminishing effects from tariffs also providing assistance. "In my view, we should continue to focus on the risks to our employment mission and act preemptively to stabilize and support labor market conditions," she said. Policymakers at the Fed cut the benchmark interest rate by 25 basis points last month, marking the third consecutive rate cut, following a period of holding rates steady for most of 2025.
Comments