Federal Reserve Governor Bowman Hints at Possible Support for July Rate Cut

Federal Reserve Governor Bowman stated: "If inflationary pressures are brought under control, I will support lowering the policy rate as soon as possible at the next meeting to bring it closer to a neutral level and maintain a healthy labor market." Last year, Bowman was highly focused on inflation risks. She said that, as more economic slack is expected this year, she believes the price increases caused by tariffs will be "modest and one-off." She described the labor market as solid and expected to be near full employment. However, she also cited evidence of vulnerabilities, including reduced labor market dynamism, slowing economic growth, and a narrow concentration of job gains. Therefore, she believes the Fed should "place greater emphasis on the downside risks to the employment objective" in its future decisions. This marks Bowman's first substantive comment on the economic outlook since being nominated by Trump this spring and confirmed by the Senate as the Fed's Vice Chair for Supervision.