The Federal Reserve Board of Governors hints: may support interest rate cuts in July

On 23 June, Fed Governor Bowman said, “If inflationary pressures are under control, I would support a reduction in the policy rate as soon as possible at the next meeting to bring it closer to neutral and maintain a healthy labor market.” Bowman has been very concerned about inflation risks last year. She said that with more spare capacity expected in the economy this year, she thought the price increase from the tariffs would be “small and one-off”. She described the labor market as solid and projected to be close to full employment. However, she also cited evidence of vulnerabilities, including weaker labor market dynamism, slower economic growth, and a narrow concentration of job growth, arguing that the Fed should “pay more attention to the downside risks to the employment target” in future policymaking. It was Bowman’s first substantive comment on the economic outlook since he was nominated by Trump this spring and confirmed by the Senate as vice chair for Fed supervision. ( gold ten )