Fed Governor Bowman Open to Rate Cuts if Inflation Eases, Highlights Labor Market Risks

 

Federal Reserve Governor Michelle Bowman signaled potential support for lowering interest rates soon if inflation remains under control. Speaking in her first major policy remarks since becoming Vice Chair for Supervision this spring, Bowman suggested a rate cut at the next meeting could help move policy toward a neutral level while sustaining a strong labor market.  

Bowman, previously known for her inflation hawkishness, noted that expected economic slack this year may limit tariff-related price hikes to "small, one-off" effects. She described the job market as robust—near full employment—but pointed to emerging risks, including slowing growth, reduced labor market dynamism, and uneven job gains.  

Given these vulnerabilities, Bowman urged the Fed to weigh "downside risks to employment" more carefully in future policy decisions. Her comments mark a notable shift toward balancing inflation control with labor market stability.