MNI: Fed Can Be Patient On Interest Rates, Says Bowman

The Federal Reserve can be patient about making any further adjustments to interest rates given upside risks to inflation and policy uncertainty in Washington, Fed Governor Michelle Bowman said Monday. 

"Policy is now in a good place, allowing the Committee to be patient and pay closer attention to the inflation data as it evolves," Bowman said. "In my view, the current policy stance also provides the opportunity to review further indicators of economic activity and get further clarity on the administration's policies and their effects on the economy."

Bowman said the economy is strong and the job market is close to full employment. Core inflation, for its part, is "still somewhat elevated, but has appeared to resume its downward path, and my baseline expectation has been that it will moderate further
this year."

Still, Bowman said she sees upside risks to inflation, and has been closely watching data showing disinflation has become bumpier in recent months. "In 2023, the rate of inflation declined significantly, but it has taken longer to see further meaningful declines since that time."

Bowman said easier financial conditions from higher equity prices might have slowed progress on inflation, adding she is keeping an eye on the spike in long-term yields that has taken place since the Fed starting cutting rates in September.