NEW YORK (AP) – The top Federal Reserve official said Saturday this month’s surprise, Weaker than expected report on the US job market It reinforces her belief that interest rates should be lower.
Michelle Bowman was one of two Fed officials who voted a week and a half ago to cut interest rates. Such a move can help boost the economy by creating an economy It’s cheap for people to borrow money to buy a house Or it’s a car, but you could threaten if you push it. inflation It’s higher.
Bowman and his fellow opponents were defeated afterwards. Nine other Fed officials voted to stabilize interest ratesLike the Fed does it all year round. Federal Reserve Chairman Jerome Powell asserts how he wants to wait for more data President Donald Trump’s tariffs It is affecting inflation before the Fed makes the next move.
In a speech at a bankers meeting held in Colorado on Saturday, Bowman said the Fed should cut interest rates three times this year, “recent labor market data will bolster my views.” The Fed has three meetings remaining on its schedule for 2025.
A job report arrived last week just days after the Fed voted for interest rates showed that employers employed far fewer workers than economists had expected. He also said employment in the past few months is much lower than initially thought.
On the other hand, when it comes to inflation, Bowman believes Trump’s tariffs will “not cause a lasting shock to inflation,” and believes it is approaching the Fed’s 2% target. Since peaking above 9% after the pandemic, inflation has declined significantly, but has stubbornly exceeded 2%.
The Fed’s job is to keep the job market strong while maintaining a lid on inflation. The challenge is that there is one major tool to influence both these areas, and supporting one by moving interest rates up and down often means hurting other areas.
The fear is that Trump’s tariffs can be boxed into the Federal Reserve by pasting the economy in the worst-case scenario called “stagflation,” where the economy is stagnant but high inflation. The Fed does not have a good tool to fix it. You also need to prioritize either the job market or inflation before helping others.
On Wall Street, the Fed expects it will need to cut interest rates at its next meeting in September after the US employment report falls below economists’ expectations.
Trump often calls lower interest rates angry Personally insulting Powell While doing so. He has the opportunity Add another person to the Fed board The later governor’s Former President Joe Biden’s appointee I recently resigned.
