Fed Governor Michelle Bowman spoke over the weekend and said:
- We should remain willing to raise rates at a future meeting if data show inflation progress has stalled.
- In considering further rate hikes and how long to keep rates restrictive, consistent drops in inflation will be looked for.
- Additional U.S. interest-rate increases will be needed.
- Monetary policy is not on a preset course.
- Slowing consumer spending and loosening in labor market conditions will be watched for.
- Recent decline in core inflation is a ‘positive’ sign, but inflation remains well above target.
- Demand for workers exceeds supply, adding upward pressure on prices.
- No signs of sharp credit contraction from March banking turmoil.
- Bowman supported the Fed’s quarter-point increase in interest rates last month due to high inflation, strong consumer spending, a rebound in the housing market, and a labor market that’s driving up prices.
- In June forecasts, most Fed policymakers expected the year to end with the Fed policy rate at 5.6%, a quarter-point above the setting established in late July. However, Bowman’s comments suggest she believes the rate will need to go higher.
- After the recent rate hike, Fed Chair Jerome Powell left the possibility open for another increase in September, but also indicated that cooler data could justify a pause.
- On Friday, NFP showed some slowing of the pace of hires, but despite the slowing, the unemployment remains at 3.5%, and there are more available jobs than workers to fill them.
Bowman comments are a bit more hawkish than those of Goolbee and Bostic from last week. She is a permanent voting member of the Fed. Below are the links to the comments from Fed’s Goolsbee and Bostic from last week.
Goolsbee:
Bostic