Source: Finance Association
① Bowman said that although there are signs that the US job market is moving towards a better balance, the pace has slowed down; ② “If upcoming data shows that progress in inflation has stagnated or reversed, I am still willing to adjust the federal funds rate target range at future meetings.”
On Friday (May 17) local time, Federal Reserve Governor Michelle Bowman (Michelle Bowman) said that she expects US inflation to remain high and reiterated that the possibility of interest rate hikes will not be ruled out if necessary.
Bowman said at the annual meeting of the Pennsylvania Bankers Association: “Although the current monetary policy position seems to be at a restrictive level, if upcoming data shows that progress in inflation has stagnated or reversed, I am still willing to adjust the federal funds rate target range at future meetings.”
Data released earlier this week showed that overall US CPI growth slowed to 3.4% in April. Core CPI excluding food and energy rose 3.6% year on year, and also cooled down from 3.8% in March. But this level of progress doesn't seem to have impressed Bauman.
“We have made considerable progress in reducing inflation last year,” Bauman believes that the marked decline in the inflation rate last year was largely due to the resolution of supply chain issues. “However, no further progress has been seen this year, and I expect inflation to remain high for some time.”
Bowman said that although there are signs that the US job market is moving towards a better balance, the pace has slowed down. She pointed out that recent employment reports show that the job market is still strong, the unemployment rate remains below 4%, and the number of job vacancies is still higher than before the COVID-19 outbreak.
Bauman pointed out that up to now, the monetary policy stance appears to be restrictive. She will continue to monitor upcoming data to assess this position. “My baseline outlook remains that with policy interest rates remaining unchanged, inflation will fall further. But I see some upward risks of inflation, which may affect my judgment.”
Due to Bauman's recent series of tough statements, she is considered one of the most “hawkish” members of the current Federal Reserve policy makers (board+local Federal Reserve Chairman). Also, due to her status as a board member, she has the right to vote at every Federal Open Market Committee (FOMC) interest rate meeting.
Earlier this week, Federal Reserve Chairman Powell reiterated at a meeting that the bank would be patient and wait for signs of slowing inflation before taking action to cut interest rates. He warned, “After looking at the data for the first three months of this year, I'm not as confident that inflation will cool down as before.”
editor/tolk