Federal Reserve Bank Governor Michelle Bowman will be serving as a federal policymaker at the American Bankers Association Conference held in San Diego, California on February 11, 2019.
Anne Safir | Reuters
Federal Reserve Gov. Michelle Bowman said Monday that monetary policy is “in a good place now.”
“As we consider further adjustments to our target scope, we want to gain greater confidence that progress will continue in lowering inflation,” Bowman said in a speech to the American Bankers Association. .
The rise in core commodity prices has slowed progress since last spring, Bowman said. She hopes inflation will continue to slow this year, but she said, “it may take longer than we want.”
“While the labor market in particular remains strong, we continue to see greater risks to price stability,” Bowman said.
The latest consumer price index estimated that inflation rates were higher than expected in January, and that it wanted a 0.3% increase compared to Dow Jones estimates. This brings annual inflation to 3%, exceeding the consensus forecast at 2.9%.
The Fed maintained its target rate in the range of 4.25% to 4.5% at its policy meeting in January.
Bowman said on Monday that the current levels are appropriate to “ensure that the committee is patient and can pay attention to inflation data as it evolves.”
“The current policy stance provides an opportunity to review further indicators of economic activity and further clarify the administration’s policies and economic impact,” Bowman continued.
President Donald Trump’s tariffs on the US’s biggest trading partner have raised concerns among higher-priced economists. Hopes for further interest rate cuts in 2025 have been undermined by Trump’s trade war. According to data from CME Group, traders are currently priced at just one-half percent point rate reduction this year.
