Fed's Bowman Prefers Cautious, Gradual Approach to Rates

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Bloomberg Jan 9 14:38 · 6444 Views

Federal Reserve Governor Michelle Bowman says she is concerned that the current stance of monetary policy "may not be as restrictive as others may see it." She speaks at a California Bankers Association event.

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Transcript

  • 00:00 I also continue to be concerned that the current stance of policy may not be as restrictive as others may see it.
  • 00:08 Given the ongoing strength in the economy,
  • 00:11 it seems unlikely that the overall level of interest rates and borrowing costs
  • 00:15 are providing meaningful restraint.
  • 00:19 With equity prices more than 20% higher than a year ago,
  • 00:22 easier financial conditions may be contributing to the lack of further progress on slowing inflation.
  • 00:28 In fact, concerns about inflation risks seem to partly explain the recent notable increase in the 10 year Treasury yield
  • 00:35 back to values last seen in the spring of 2024.
  • 00:40 In light of these considerations, I can
  • 00:43 continue to prefer a cautious and gradual approach to adjusting policy.
  • 00:50 Looking forward,
  • 00:51 it's important to note that monetary policy is not on a preset course.
  • 00:56 At each FOMC meeting, my colleagues and I will make our decisions based on the incoming data
  • 01:01 and the implications and risks to the outlook
  • 01:04 and guided by the Feds dual mandate goals
  • 01:07 of maximum employment and stable prices.
  • 01:11 And by the time of our next meeting later this month,
  • 01:14 we will have seen new reports on consumer and producer price inflation.
  • 01:19 In addition to closely watching the incoming data and broader financial conditions.
  • 01:24 I'll continue to meet with a broad range of contacts as I assess the appropriateness of our monetary policy stance.