Fed’s Bowman urges proactive rate cuts, sees three reductions this year

Fed Governor Michelle Bowman signaled strong support for beginning interest rate cuts soon, saying in a speech over the weekend that tariff-driven price increases are a “one-time effect” and should fade without derailing the path back to 2% inflation. She argued that policy should “look through” temporary inflation spikes to avoid damaging the labor market.

She called for a gradual move toward the neutral rate, warning that delaying action risks a sharper deterioration in employment and slower economic growth. Bowman stressed that a “proactive approach” now would help avoid the need for larger policy corrections later if labor conditions worsen.

Bowman’s own Summary of Economic Projections still calls for three rate cuts this year, a view she has held since December. She noted that recent labor market data reinforce this stance, while reiterating that policy is not on a preset path. Bowman was one of two Fed governors to dissent last month against holding rates at 4.25%–4.50%, along with Christopher Waller.

Full speech of Fed’s Bowman here.