Michelle Bowman, a detailed deputy chairman for the supervision in the US Federal Reserve, will come to a PSAROS center for financial markets and politics at Georgetown University in Washington, DC, USA on Friday, June 6, 2025.
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Michelle Bowman, governor of the Federal Reserve, said on Monday that she would prefer interest reductions at the next political meeting in July as long as the inflation pressure remains silent.
In comments for a speech in Prague, Bowman became the second central banker in the last few days, which indicates that President Donald Trump's tariffs are likely to influence temporary and subdued prices and thus pave the way for lower prices.
“If the inflation pressure remains, I would support the political rate as soon as our next meets to bring it closer to its neutral environment and maintain a healthy job market,” she said in prepared comments. “In the meantime, I will continue to carefully monitor the economic conditions, as the guidelines, the economy and the financial markets of the administration develop.”
Bowman's comments are similar to those of the governor Christopher Waller, who announced CNBC on Friday that he also believes that the FED could take a reduction in July.
Trump put the Fed under pressure to reduce interest rates to save the nation's financing costs. The Federal Open Market Committee, however, voted last week to keep its most important interest rate in a target between 4.25%-4.5%.
Bowman said for her part that she had supported the change in the follow -up and found that the uncertainty of political uncertainty has decreased and the focus is now pretending to the potential weakness of the labor market.
Economists had feared that Trump's tariffs would encourage inflation, but the measures have so far shown little or hardly any effects. At the same time, the President has alleviated his rhetoric and opened the door for negotiations with large trading partners.
“I think it is likely that the effects of tariffs on inflation will take longer, are delayed and have a lower effect than originally expected, especially because many companies used their stocks,” said Bowman. “When we think forward, it is time to adapt the political rate.”
Trump said he thinks the Fed should lower at least 2 percentage points. Bowman's statements do not mention how much she believes that the rate should be reduced, and Waller said there is no need for such dramatic cuts.
The FOMC will meet next from July 29th to 30th. At the session, dealers only have a probability of 23% for a move, with a probability of around 78% that the Fed is reduced in September, according to the prices for futures market of the CME group.
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