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Federal Reserve Watch for May 17: Bowman Repeats That Rate Hikes Cannot be Ruled Out, Will be Cautious on Rate Moves
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Federal Reserve Watch for May 17: Bowman Repeats That Rate Hikes Cannot be Ruled Out, Will be Cautious on Rate Moves
May 17, 2024 11:57 AM

02:35 PM EDT, 05/17/2024 (MT Newswires) -- Fed Governor Michelle Bowman (voter) repeated her previous comments that monetary policy is not on a preset course and that the lack of progress on inflation means that she is not able to rule out the need for further rate tightening.

She said she still expects inflation to slow down this year but said that she will be cautious about loosening monetary policy until there is further evidence of progress on inflation.

Recent comments of note:

(May 16) Atlanta Fed President Raphael Bostic (voter) said that he expects inflation to continue to slow, resulting in rate cuts later in the year, but noted that outlook is not assured.

(May 16) Cleveland Fed President Loretta Mester (voter) said that the current level of monetary policy is sufficient to address how the economy evolves, and it would be 'prudent' to leave policy there until the Federal Open Market Committee gains greater confidence in the progress on inflation.

(May 15) New York Fed President John Williams (voter) said in an interview with Reuters that he does not see a reason to either raise or lower interest rates at this point, saying that the current policy is well positioned currently.

(May 15) Minneapolis Fed President Neel Kashkari (nonvoter) said that rates may need to remain elevated to assure that policy is restrictive enough to bring down inflation.

(May 14) Fed Chairman Jerome Powell said that it may take longer for restrictive monetary policy to impact inflation than previously expected, requiring the Federal Open Market Committee to keep rates higher for longer. Powell said that the US economy is performing "very well" with a strong labor market, rising employment and wages, though with some signs of "gradual" cooling. Inflation is expected to slow through 2024, but he said that his level of confidence is lower than it was earlier in the year.

(May 13) Fed Vice Chair Philip Jefferson (voter) said that it is appropriate to maintain the federal funds rate in restrictive territory until there is further evidence that inflation is slowing toward the Fed's 2% goal.

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