NEW YORK — Federal Reserve Vice Chair for Supervision Michelle Bowman, recently tapped by President Trump as the US central bank’s top bank overseer, said Monday the time to cut interest rates is getting nearer as risks to the job market may be on the rise.
“It is time to consider adjusting the policy rate,” Bowman told a gathering held in Prague, Czech Republic. The official’s shift was unexpected as she had in recent months appeared skeptical of the need to ease monetary policy.
Bowman said inflation appears to be on a sustained path back to 2 percent and she said she expects “only minimal impact” on inflation from trade policy. “Should inflation pressures remain contained, I would support lowering the policy rate as soon as our next meeting in order to bring it closer to its neutral setting and to sustain a healthy labor market,” Bowman said.
She noted the job market is still in a good place but that she is also increasingly worried about rising risks to the sector and said that such concerns might need to take more prominence in thinking about the outlook.
“We should also recognize that downside risks to our employment mandate could soon become more salient, given recent softness in spending and signs of fragility in the labor market,” Bowman said.
