Fed Vice Chair Michelle Bowman signaled openness to a rate cut as soon as the July FOMC meeting, should incoming data show continued progress on inflation and further signs of labor market fragility.
In a speech today, Bowman noted that recent inflation readings have come in below expectations and appear to be on a “sustained path” toward the 2% target. She downplayed the inflationary impact of recent trade policy changes, stating their effects on core PCE are likely to be “only minimal”.
Bowman acknowledged that risks to the Fed’s employment mandate may soon become more pressing, citing recent softness in consumer spending and “signs of fragility” in the labor market.
She emphasized the importance of upcoming economic data—including June’s jobs report and inflation print—as key inputs ahead of the July policy meeting.
“If inflation pressures remain contained,” Bowman said, “I would support lowering the policy rate as soon as our next meeting.”
