Fed Governor Michelle Bowman indicated yesteday her willingness to consider the possibility that the current policy rate might be adequately restrictive to further reduce inflation.
“My view has evolved to consider the possibility that the rate of inflation could decline further with the policy rate held at the current level for some time,” she said in a speech yesterday.
She added that if inflation continues to decrease towards the 2% target, “it will eventually become appropriate to begin the process of lowering our policy rate.”
However, she also emphasized “While the current stance of monetary policy appears to be sufficiently restrictive to bring inflation down to 2 percent over time, I remain willing to raise the federal funds rate further at a future meeting should the incoming data indicate that progress on inflation has stalled or reversed.”
