Federal Reserve Governor Bowman said on Monday: "The progress made in reducing inflation since April is a welcome change, but core inflation remains uncomfortably high above 2% target." The Federal Open Market Committee (FOMC)At the latest FOMC meeting on September 17-18, Bowman was the only dissenter, leaning towards a 25 basis point rate cut rather than lowering the federal funds rate target range by 50 basis points to 4.75%-5.00%, which was the FOMC's decision.

Since the decision on September 18, she explained that a 50 basis point rate cut could be seen as the Fed prematurely declaring victory over inflation. Alternatively, this could also be seen as the FOMC recognizing greater downside risks to the economy. She reiterated this view in the speech text prepared for the Georgia Bankers Association on Monday.

"In my view, starting a rate cut cycle with a 25 basis point move will better cement the robustness of the economic conditions, while confidently acknowledging the progress we have made towards our goals," she said on Monday.

She said that due to suppressed demand and off-market funds, "rapidly lowering policy rates brings the risk of unleashing this suppressed demand, a more cautious approach will also avoid unnecessary stimulating demand and may rekindle inflationary pressures.

She said that due to suppressed demand and off-market funds, "rapidly lowering policy rates brings the risk of unleashing this suppressed demand, a more cautious approach will also avoid unnecessary stimulating demand and may rekindle inflationary pressures."

Bowman also stated that her estimate of the neutral interest rate, the level of interest rates that neither stimulate nor hinder economic growth, is significantly higher than before the epidemic. "With a higher estimate of the neutral interest rate, we will reach our target more quickly for any specific interest rate reduction."

She remains vigilant about inflation risks. Bowman pointed out, "The global supply chain is still vulnerable to the impact of labor strikes and exacerbated geopolitical tensions, which could lead to inflationary effects in food, energy, and other commodity markets."

Regarding the labor market, Bowman noted that the US labor market has emerged from extremely tight conditions in recent years. The ratio of job vacancies to unemployed workers has further decreased, slightly below the historical high before the epidemic, indicating a better balance between the available number of workers and jobs. However, there are still more job positions than workers, a situation that has only occurred twice in a longer period since World War II until 2018, further indicating that the labor market remains robust.

The increase in the US unemployment rate largely reflects weak hiring, as job seekers entering or re-entering the labor market take longer to find work, and layoffs remain rare. In addition to a cooling in labor demand, other factors may contribute to the rise in unemployment. The mismatch between the skills of new workers and existing jobs may further drive up the unemployment rate, suggesting that the rise in unemployment is partly due to an increase in labor supply. There may also be some temporary factors contributing to the recent rise in the unemployment rate, such as a sharp increase in the unemployment rate among eligible teenage workers in August.

Finally, Bowman stated that she and her colleagues will make decisions based on the upcoming data release and the impact on the economic outlook under the guidance of the Federal Reserve's dual mandate of full employment and price stability.

Editor/Rocky