Fed's Bowman Signals Imminent Interest Rate Cut Amid Labor Market Concerns

Federal Reserve Vice Chair for Supervision, Michelle Bowman, indicates a potential interest rate cut due to labor market risks. Citing improved economic outlook and stable inflation, she supports adjusting rates soon. Her stance aligns with others, reflecting shifts amid President Trump's trade policies and economic challenges.

Federal Reserve Vice Chair for Supervision, Michelle Bowman, hinted at an imminent interest rate cut during a recent address in Prague. Elevated by former President Donald Trump, Bowman expressed growing concerns about labor market risks and diminishing worries regarding inflation impacts from high import taxes.

Bowman suggested that inflation appears to be stabilizing around the 2% target, with trade policy expected to have minimal effects. She supports adjusting the policy rate to maintain a healthy labor market, stating a possible rate reduction could happen in the next Federal Open Market Committee meeting.

Financial markets reacted positively to Bowman's comments, as officials remained vigilant amid economic uncertainties from trade policies. Fed Governor Christopher Waller also indicated support for a potential rate cut. This stance reflects a shift in the Fed's outlook, adapting to current economic challenges and external pressures.

(With inputs from agencies.)