• Investing
  • Stock
  • Editor’s Pick
  • Economy
The Significant Deals
Editor's Pick

Fed’s Bowman calls for cautious approach on interest rates

by November 20, 2024
written by November 20, 2024

(Reuters) – Federal Reserve Governor Michelle Bowman, among the U.S. central bank’s most hawkish policymakers, on Wednesday called for a cautious approach to any further interest rate cuts, noting that inflation remains a concern and the labor market is strong.

The Fed reduced its policy rate earlier this month by a quarter of a percentage point to the 4.50%-4.75% range, a move that Bowman said she supported because it aligns with her preference for lowering short-term borrowing costs gradually. Bowman had cast a lone dissent on the Fed’s half-percentage-point rate reduction in September.

With inflation still elevated and progress toward the Fed’s 2% goal looking to have stalled, Bowman said in remarks prepared for delivery in West Palm Beach, Florida to the Forum Club of the Palm Beaches, “I would prefer to proceed cautiously in bringing the policy rate down to better assess how far we are from the end point, while recognizing that we have not yet achieved our inflation goal and closely watching the evolution of the labor market.”

Bowman said she believes the neutral policy rate – the level of borrowing costs that neither bolsters nor brakes economic growth – is much higher that it was before the COVID pandemic, “and therefore we may be closer to a neutral policy stance than we currently think.”

Indeed, she added, “we should also not rule out the risk that the policy rate may attain or even fall below its neutral level before we achieve our price stability goal.”

Bowman said she would watch incoming data and meet with a broad range of contacts before the Fed’s Dec. 17-18 meeting to assess the appropriateness of the current policy stance, and signaled that she feels the central bank is under no constraint to deliver another rate cut, as markets currently expect.

“I am pleased that the November post-meeting statement included a flexible, data-dependent approach, providing the (Federal Open Market) Committee with optionality in deciding future policy adjustments,” she said.

The bigger risk for the Fed is to its price stability goal, though deterioration in labor conditions is possible, she said.

(This story has been corrected to show Fed’s half-point rate cut was in September, not November, in paragraph 2)

This post appeared first on investing.com
0 comment
0
FacebookTwitterPinterestEmail

previous post
PIMCO bullish on stocks on US soft landing hopes, cautious on inflation
next post
UK inflation could undershoot forecasts, requiring faster rate cuts, BoE’s Ramsden says

You may also like

China central bank conducts 1.7 trln yuan of...

January 27, 2025

Fuji Media, rocked by sexual misconduct allegations, says...

January 27, 2025

ECB president fears loss of central bank independence

January 27, 2025

European tech shares tumble as China’s AI push...

January 27, 2025

Futures slip as investors eye China’s latest AI...

January 27, 2025

Markets may be repeating the mistake of 2019,...

January 27, 2025

How billionaire Caltagirone could influence Italy’s banking M&A...

January 27, 2025

How Italy’s MPS went from near collapse to...

January 27, 2025

Analysis-To weather Trump, emerging market investors look to...

January 27, 2025

Chinese AI startup DeepSeek overtakes ChatGPT on Apple...

January 27, 2025
Fill Out & Get More Relevant News








    Stay ahead of the market and unlock exclusive trading insights & timely news. We value your privacy - your information is secure, and you can unsubscribe anytime. Gain an edge with hand-picked trading opportunities, stay informed with market-moving updates, and learn from expert tips & strategies.

    Recent Posts

    • Trump implies government could cut contracts and subsidies to Musk’s companies

      June 7, 2025
    • Procter & Gamble to cut 7,000 jobs as part of broader restructuring

      June 6, 2025
    • Shein and Temu see U.S. demand plunge as loophole for cheap goods closes

      June 6, 2025
    • Shein and Temu see U.S. demand plunge as loophole for cheap goods closes

      June 5, 2025

    Categories

    • Economy (245)
    • Editor's Pick (3,646)
    • Investing (505)
    • Stock (6,426)

    Latest News

    • Trump implies government could cut contracts and subsidies to Musk’s companies
    • Procter & Gamble to cut 7,000 jobs as part of broader restructuring

    Popular News

    • UK retailer confidence plunges, sales decline expected to worsen, according to CBI survey
    • Wells Fargo profit beats forecasts as provisions shrink, shares rise

    About The Significant deals

    • Privacy Policy
    • Terms & Conditions

    Copyright © 2025 thesignificantdeals.com | All Rights Reserved

    The Significant Deals
    • Investing
    • Stock
    • Editor’s Pick
    • Economy