Federal Reserve Governor Michelle Bowman reiterated that she expects inflation to remain high for some time. But she still believes that with interest rates maintained at current levels, price pressures will eventually subside.
Bowman said in prepared remarks to the Pennsylvania Bankers Association on Friday: The average core consumer price index annualized rate for this year through the end of April was 4.3%. Well above the average inflation rate in the second half of last year. So I expect inflation Rates will remain high for some time.
\”My baseline expectation remains that inflation will fall further while policy rates remain stable,\” she said. \”But I still think my outlook faces some upside inflation risks.\”
Her comments on inflation and policy were consistent with those earlier this month.
Bowman described the policy as restrictive but noted that she would continue to monitor future data to assess whether it would be enough to get inflation back to target.
She emphasized that there is no preset track for policy and reiterated that she would still be willing to raise interest rates if inflation progress stalls or reverses.
Bowman said progress toward a better balance in the labor market has slowed.
Strong consumer demand for services, increased immigration and continued labor market tightness run the risk of causing core services inflation to remain high.
There is also a risk that the easing of financial conditions since the end of last year and additional fiscal stimulus measures may also strengthen demand momentum, thereby hindering further progress in inflation and even causing inflation to accelerate again.
Fed Governor Bowman reiterates that inflation will remain high for some time
Federal Reserve Governor Michelle Bowman reiterated that she expects inflation to remain high for some time, but she still believes that with interest rates maintained at current levels, price pressures will eventually subside.
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