Michelle Bowman, vice-chairman for oversight for the US Federal Reserve, will arrive at the Pasoros Center for Financial Markets and Policy Events at Georgetown University in Washington, D.C., USA on Friday, June 6, 2025.
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Federal Reserve Gov. Michelle Bowman said he would support interest rate cuts at his next policy meeting in July, as long as inflation pressures are kept down.
In his speech in Prague, Bowman has recently become the second central banker, suggesting that President Donald Trump’s tariffs are likely to have a temporary and calm effect on prices, thus paving the way for lower fees.
“If inflationary pressure is reduced, we will support the next meeting to approach a neutral setting and to keep a healthy labor market down quickly,” she said in her prepared remarks. “In the meantime, as the administration’s policies, economics and financial markets continue to evolve, I will continue to monitor the economic situation carefully.”
Bowman’s comments resemble those of Gov. Christopher Waller, who told CNBC on Friday that the Fed believes it can consider cutting in July.
Trump has pressured the Fed to lower interest rates as a way to save on the nation’s inflated government bonds. However, at last week’s meeting, the Federal Open Market Committee voted to hold a key interest rate target of 4.25%-4.5%.
On her part, Bowman said she supported a shift in approach that focused on lower policy uncertainty and focused on potential labor market weaknesses.
Economists were worried that Trump’s tariffs would surge inflation, but despite previous impacts, few measures have been shown. At the same time, the president eased his rhetoric and opened the door to negotiations with his major trading partners.
“I think the impact of tariffs on inflation could be delayed initially and less than expected, especially as many companies have frontloaded their inventory,” Bowman said. “Looking forward, it’s time to consider adjusting the policy rate.”
Trump said he believes the Fed should lower at least two percentage points. Bowman’s remarks didn’t mention how much she thinks she should lower the rate, and Waller said there’s no need for such a dramatic cut.
FOMC will then meet July 29th to 30th. According to CME Group’s FedWatch Gauge Measuring Futures Market pricing, traders assign a 23% chance of travelling in meetings.
