Governor of the Federal Reserve Bank Michelle Bowman gives its first public comments as a federal policy maker at a conference of the American Bankers Association in San Diego, California, 11 February 2019.
Ann Saphir | Reuters
Governor of the Federal Reserve Michelle Bowman said on Monday that although the monetary policy “is now in a good place”, she wants to see that data reflects more progress on inflation before the interest rates are further reduced.
“I would like to get more confidence that the progress in lowering inflation will continue as we consider making further adjustments to the target range,” Bowman said in a speech at the American Bankers Association.
The rising inflation of the core products price since the last spring has delayed progress, Bowman said. Although she expects that inflation will continue to slow down this year, she said that disinflation can “take longer than we would hope.”
“I continue to see greater risks for price stability, especially while the labor market remains strong,” said Bowman.
The most recent consumer price index showed that inflation was higher than expected in January, and an increase of 0.5% month-over-month compared to the Dow Jones estimate in which an increase of 0.3% was called. This brought annual inflation to 3%, which exceeds the consensus forecasts for 2.9%
The FED maintained its target interest on a reach of 4.25% to 4.5% during the policy meeting in January.
Bowman said on Monday that the current level is suitable for “making the committee patient and to pay more attention to the inflation data as it evolves.”
“The current policy position also offers the possibility to revise further indicators of economic activity and to get further clarity about the policy of administration and their effects on the economy,” Bowman continued.
President Donald Trump’s rates at the largest trading partners of the US have expressed their concern among economists of higher prices. The expectations for further interest rates in 2025 are weakened on Trump’s trade war. Traders currently praise in just one quarter-time-point reduction this year, according to CME group data.