Michelle Bowman: December rate cut is the 'last adjustment step'

Federal Reserve Governor Michelle Bowman said on Thursday that she supports the rate cut in December as the "final adjustment step" of the Federal Reserve's monetary policy, because of the rise in inflation risks, and the Federal Reserve needs to adopt a more cautious attitude in the future.

The interest rate cut in December is the "final adjustment step"

According to a report by Reuters, Bowman expressed support for the interest rate cut in December as the "final adjustment step" of the Federal Reserve's monetary policy in a speech at the California Bankers Association. She stated that caution should be exercised in the face of rising inflation risks. She emphasized the need to avoid preemptive judgments on the future policies of the incoming government and instead wait for a clearer picture before assessing their impact on economic activity, the labor market, and inflation.

In terms of monetary policy, Bowman takes a tough stance and is also concerned that the progress of inflation may have stalled, pointing out the upward risks, including the risk of 'pent-up demand' being released after the November presidential election.

She said that the rise in stock prices may be one of the reasons for the lack of further progress in inflation, and the rise in the yield of 10-year government bonds in recent periods reflects concerns about inflation risks to a certain extent.

"I still tend to adjust policies in a cautious and gradual manner," she said.

Bowman had objected to the significant reduction in short-term borrowing costs by the Fed in September, and she said on Thursday that she could have supported taking no action in December.

Bowman is the top candidate for vice chairman of the Federal Reserve

Michael Barr announced that he will resign as vice chairman of the Federal Reserve before the end of February. The position is an important role responsible for strengthening the transparency and regulatory responsibility of the financial system. Bowman is currently the most likely successor, as she was nominated by Trump during his first term in office.

(Federal Reserve Vice Chairman Michael Barr has resigned! Formerly a 'proponent of crypto de-banking', Chokepoint 2.0 is expected to be dismantled)

Bowman has criticized Barr several times in the past few years. If she is selected as the vice chair of the Federal Reserve, the market expects her regulatory attitude to be more open.

In her speech, she said, "Bank regulation is not necessarily a confrontational system between banks and regulatory agencies. On the contrary, banks and regulatory agencies often have a common goal, which is to establish a safe, sound and effective banking system, and both sides are working towards these goals."

This article Michelle Bowman: rate cut in December is the "final adjustment step" first appeared in Chain News ABMedia.