Federal Reserve Governor Michelle Bowman said she expects inflation to fall further with interest rates held at their current level, but said it’s too soon for Fed officials to consider cutting rates.
“In my view, we are not yet at that point,” Bowman said Friday in prepared remarks to the Southwestern Graduate School of Banking in Maui, Hawaii. She also cautioned against lowering borrowing costs too soon.
“I will remain cautious in my approach to considering future changes in the stance of policy,” she said. “Reducing our policy rate too soon could result in requiring further future policy rate increases to return inflation to 2% in the longer run.”
The Fed governor called recent reports of slowing inflation “encouraging,” and said if price increases move sustainably toward the 2% target “it will eventually become appropriate to gradually lower our policy rate to prevent monetary policy from becoming overly restrictive.”
