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.

San Francisco Fed President Mary Daly said overnight that she expects the central bank will need to cut interest rates “in the coming months,” citing a gradually cooling economy and persistent downside risks in the labor market. “I would see additional slowing as unwelcome,” Daly warned, adding that the labor market tends to “fall quickly and hard” once momentum is lost.

Daly also downplayed the inflationary impact of US tariffs, saying they pose only a short-term threat. Excluding tariff effects, she noted, inflation has been “gradually trending down,” and should continue to ease given restrictive policy and moderating demand.

In a panel discussion overnight, Fed Governor Lisa Cook described July’s weaker-than-expected jobs report as “concerning” and noted that the pattern of downward revisions to payroll figures was “somewhat typical of turning points.”

Cook warned that uncertainty is now acting like a tax on businesses, with executives spending more time managing ambiguity than making forward-looking decisions. “This is deadweight loss,” she said.

Boston Fed President Susan Collins supported that view, stating the uncertainty burden is “top of mind” for firms across sectors. She pointed out that the effects extend beyond capital spending, with many businesses now hesitant to adjust pricing strategies due to a lack of visibility. “There’s still a wait-and-see,” Collins said.

The shared emphasis from two Fed officials underscores how economic ambiguity is increasingly viewed as a constraint on both employment and inflation dynamics. While neither Cook nor Collins offered direct policy guidance, their comments will reinforce expectations that the Fed is growing more open to easing, particularly if labor and business activity remain sluggish into the fall.

Minneapolis Fed President Neel Kashkari reiterated his view that two rate cuts in 2025 remain a reasonable base case, telling CNBC today that “the economy is slowing — and that means, in the near term, it may become appropriate to start adjusting the federal-funds rate.” The comment aligns with growing expectations for a September cut, especially after last week’s soft jobs data.

However, Kashkari’s remarks are broadly consistent with the position he laid out in June, when he wrote in an essay that tariff impacts may be more muted than feared due to corporate adaptations and exemptions. At the time, he argued that these offsetting forces would allow inflation to ease gradually, supporting a measured policy adjustment.

In both June and today’s comments, Kashkari has signaled a preference for patience but also preparedness. Barring any surprises, his base case still assumes a September move, followed by another later in the year.