Fed Governor Michelle Bowman emphasized her ongoing concerns about inflationary pressures, underscoring the need for sustained vigilance. Speaking on Saturday, she reiterated that, despite notable progress in curbing inflation, the levels remain worryingly high.
She highlighted the necessity for further rate hikes, stating, “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 pointed to the recent rise in the PCE index as a tangible indication of inflationary pressures. This increase, she believes, is partly attributed to climbing oil prices, which, if they persist or grow, could derail some of the achievements in inflation control observed over the past few months.
On a brighter note, Bowman acknowledged the overall positive health of the US economy. “Real gross domestic product has been growing at a solid pace,” she remarked, signifying a robust economic backdrop. This growth is supported by strong consumer spending, a rejuvenating housing sector, and encouraging labor market data that reflects consistent job gains.
However, Bowman concluded by emphasizing flexibility in the Fed’s approach, suggesting that monetary policy remains adaptable to the evolving economic landscape. “It is important to note that monetary policy is not on a pre-set course,” she clarified, ensuring that she and her colleagues will make informed decisions rooted in the most recent economic data and the broader implications for the economic future.