01:59 PM EST, 01/09/2025 (MT Newswires) -- Federal Reserve Governor Michelle Bowman said Thursday that the Federal Open Market Committee should remain cautious when considering changes to the Fed's policy rate and should wait for more clarity about the incoming Trump administration's plans.

"Looking ahead, we should be cautious in considering changes to the policy rate as we move toward a more neutral setting," Bowman said in a speech to the California Bankers Association. "Future actions should be based on a careful assessment of ongoing and sustained progress in achieving our goals, and we must be clear in our communication about how further changes are intended to affect economic conditions."

Bowman, who dissented at the September meeting when the FOMC lowered the target range of the federal funds rate by 50 basis points, said that she would have been content with no change in the target range at the mid-December meeting.

"I also continue to be concerned that the current stance of policy may not be as restrictive as others may see it," Bowman said. "Given the ongoing strength in the economy, it seems unlikely that the overall level of interest rates and borrowing costs are providing meaningful restraint."

Bowman emphasized that policy is not on a preset course and that the incoming data will determine the path of future decisions.

"I expect that the coming months should bring clarity on the incoming administration's policies and the carry-over of inflationary pressures from 2024, reflecting private spending decisions and an apparent faster spend-out of existing federal government appropriations in recent months," Bowman said. "It will be very important to understand how these factors will affect economic activity and inflation going forward."