Federal Reserve Governor Michelle Bowman indicated on Monday, October 2, 2023, that she is open to supporting another increase in the central bank's policy interest rate if incoming data shows a lagging or stalled progress on inflation. Bowman voiced her concerns at a banking conference, stating that current inflation levels remain too high.
Reiterating her stance, Bowman reaffirmed that "further rate increases" are necessary to bring inflation back to the Fed's target of 2%. She pointed out the risk that high energy prices could potentially reverse recent progress made on inflation.
On Friday, the Personal Consumption Expenditures (PCE) inflation reading revealed an overall rise in inflation, partially driven by increasing oil prices. The median Federal Open Market Committee (FOMC) official anticipates that inflation will stay above the 2% target through 2025.
Bowman added, "This, along with my own expectation that progress on inflation is likely to be slow given the current level of monetary policy restraint, suggests that further policy tightening will be needed to bring inflation down in a sustainable and timely manner." These comments were made during her prepared remarks for a conference hosted by the Mississippi Bankers Association and Tennessee Bankers Association.
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