Fed Governor Michelle Bowman highlighted concerns over persistently high inflation and a tight labor market. In a speech, she suggested the need for additional monetary policy tightening should these conditions persist.
She stated, “The most recent CPI and employment reports have not provided consistent evidence that inflation is on a downward path, and I will continue to closely monitor the incoming data as I consider the appropriate stance of monetary policy going into our June meeting.”
She emphasized the necessity of a “sufficiently restrictive” policy stance to curtail inflation over time, especially if inflation remains elevated and the labor market continues to be tight.
She further added, “I also expect that our policy rate will need to remain sufficiently restrictive for some time to bring inflation down and create conditions that will support a sustainably strong labor market.”
Despite her clear inclination towards policy tightening, Governor Bowman was careful to stress the uncertainty of economic outlook and the adaptability of Fed’s policy actions.
“Of course, the economic outlook is uncertain and our policy actions are not on a preset course,” she concluded, indicating Fed’s readiness to adjust its approach as necessary in response to evolving economic conditions.
