09:23 AM EDT, 09/23/2025 (MT Newswires) -- Federal Reserve Vice Chair for Supervision Michelle Bowman said Tuesday that she was "pleased" with the Federal Open Market Committee's decision to lower its target rate at its meeting last week but added that it is only a first step and that a faster pace of reduction may be needed.

"Recent data have revealed a materially more fragile labor market along with inflation that, excluding tariffs, has continued to hover not far above our target," Bowman said in prepared remarks to the Kentucky Bankers Association Annual Convention. "Given this shift in labor market conditions, I am pleased that we have finally begun the process of removing policy restraint, reflecting the economic conditions and the balance of risks to our employment and inflation goals."

Looking ahead, Bowman said that if the economy evolves as expected, "last week's action should be the first step to bring the federal funds rate back to its neutral level."

Bowman was one of two Fed officials to dissent at the July 29-30 FOMC meeting, preferring a 25-basis point cut when the full committee voted to hold rates steady.

"So far this year, even with inflation within range of our target, the Committee has focused primarily on the inflation side of the dual mandate," Bowman said. "Now that we have seen many months of deteriorating labor market conditions, it is time for the Committee to act decisively and proactively to address decreasing labor market dynamism and emerging signs of fragility."

Bowman said that recent employment data and revisions suggest the FOMC could already be behind the curve in dealing with slowing labor market conditions.

"Should these conditions continue, I am concerned that we will need to adjust policy at a faster pace and to a larger degree going forward," Bowman said.