Fed Michelle Bowman has made her hawkish stance clear on the pressing issue of inflation that continues to grip the US economy. In a speech today, Bowman emphasized the persistence of inflationary pressures, signaling the need for a more restrictive monetary policy to anchor inflation back to the Fed’s 2% target.
“Inflation continues to be too high, and I expect it will likely be appropriate for the Committee to raise rates further and hold them at a restrictive level for some time to return inflation to our 2 percent goal in a timely way,” Bowman stated.
Bowman pointed to the latest inflation reading based on the PCE index, noting a rise in overall inflation driven, in part, by escalating oil prices. “I see a continued risk that high energy prices could reverse some of the progress we have seen on inflation in recent months,” she warned.
Also, Bowman cited the Summary of Economic Projections released during the September FOMC meeting, where “the median participant expects inflation to stay above 2 percent at least until the end of 2025.” This expectation of prolonged inflationary pressures aligns with Bowman’s perspective that “further policy tightening” will be instrumental in steering inflation back towards target.