Federal Reserve Vice President for Oversight Michelle Bowman said Friday she expects several rate cuts before the end of the year.
“I’m always concerned about the job market,” Bowman, considered one of the most hawkish members of the Federal Open Market Committee, said during an interview on FOX Business Network’s “Mornings with Maria.” I want to see some recovery there. But of course, I have planned three reductions before the end of 2026, in the hope of supporting the labor market. »
Bowman also said she expects to continue to see strong economic growth This year.
Federal Reserve Vice Chair for Supervision Michelle Bowman said she has announced three interest rate cuts before the end of the year. (Al Drago/Bloomberg/Getty Images)
FEDERAL RESERVE KEEPS INTEREST RATES STABLE
His comments come after the FOMC voted 11-1 on Wednesday to keep the benchmark federal funds rate unchanged in a range of 3.5% to 3.75%. This is the second consecutive meeting where rates have been held steady following three successive cuts of 25 basis points in September, October and December, until the end of last year.
Policymakers also released a Summary of Economic Projections (SEP), which shows that the median interest rate projection calls for just a 25 basis point cut for the rest of the year, followed by just one cut of that magnitude in 2027.
WILL THE FEDERAL RESERVE REDUCE INTEREST RATES IN 2026?
“In our SEP, FOMC participants noted their individual assessments of an appropriate path for the federal funds rate based on what each participant judges to be the most likely scenario for the economy,” the Federal Reserve Chairman said. Jerome Powell said. “The median participant expects the appropriate level of the federal funds rate to be 3.4% at the end of this year and 3.1% at the end of next year, unchanged from December.”
At the news conference following the Fed’s interest rate decision, Powell was asked what officials were seeing that led them to project a cut despite higher forecasts for inflation and unchanged projections for the interest rate. unemployment rate and economic growth.
FED’S POWELL SAYS IT’S ‘TOO EARLY TO KNOW’ IMPACT OF IRAN WAR ON ECONOMY
“Essentially, it is expected that we will do some inflation progress“That should happen when we start to see progress on tariffs in the middle of the year and then a decline in tariff inflation. We should see that.”
Federal Reserve Vice Chair for Supervision Michelle Bowman and Fed Chairman Jerome Powell said it was too early to tell what impact the war in Iran would have on the U.S. economy. (Al Drago/Bloomberg via Getty Images)
The latest rate decision comes amid a slowing labor market and growing uncertainty over the war in Iran. Like Powell, Bowman said it was too early to know how the Middle East conflict would affect the U.S. economy.
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“I think it’s too early to say what the long-term footprint of American economy activity and how we should think about it in terms of our long-term economic forecasts and how we should think about it in terms of our FOMC meetings and any rate changes that we might make due to economic developments going forward.