Michelle Bowman, a member of the U.S. Federal Reserve Board of Governors, has once again stressed that she is not in favor of interest rate cuts, noting that inflationary pressure still exists.
According to reports by U.S. economic media outlets on Thursday (local time), Bowman stated during a speech at the Washington Bankers Association 2024 Annual Convention that new data indicating a continuous drop toward a 2% inflation target is necessary before deciding to cut the rate, but the risk of inflationary pressure stills exists so it is not the time to cut the rates.
Bowman stated that she anticipates that inflationary pressure will decrease if the current monetary policy continues.
Bowman pointed out that vibrant economic activity has slowed, but the price decline is slow.
Bowman mentioned in London on June 25 that it is not the time to cut interest rates and if prices do not fall, she favors resuming interest rate hikes.
Federal Reserve officials are expected to cut interest rates by 0.25% once this year, and the market sees September as the implementation time.
In her speech that day, Bowman said the problem was that the number of banks in the United States is decreasing but the number of new banks being established is not sufficient.
Meanwhile, Raphael Bostic, President of the Federal Reserve Bank of Atlanta, predicted that there will be only one rate cut this year. However, this will lead to a continuous decrease in interest rates, with four cuts expected next year.
Under this scenario, the current U.S. benchmark interest rate which stands at the 5.25~5.5% range, would slightly exceed 4%.
In a newly published essay, Bostic emphasized that a rate cut is possible at the end of 2024 as prices and economic activity continue to calm, but clear evidence is needed that inflation is hitting the 2% goal.
