The Fed’s Bowman says he has penciled in 3 rate cuts before the end of 2026.
Federal Reserve Vice Chair for Supervision Michelle Bowman joins ‘Mornings with Maria’ to discuss easy banking rules, the Fed’s view on economic growth, and the growing risks from sovereign debt, AI investments and global tensions.
Federal Reserve Vice Chair for Supervision Michelle Bowman said on Friday she penciled in more rate cuts before the end of the year.
“I’m still worried about the labor market,” Bowman, who is considered one of the more hawkish members of the Federal Open Market Committee, said during an interview on FOX Business Network’s “Mornings with Maria.” I want to see a little recovery there. However, I have listed three measures before the end of 2026 to support the labor market.”
Bowman also said he expects to continue to see strong economic growth this year.
Federal Reserve Vice Chair for Supervision Michelle Bowman said she has written about three interest rate cuts before the end of the year. (Al Drago/Bloomberg/Getty Images)
FEDERAL RESERVE HOLDS INTEREST RATES LEVEL
His comments come after the FOMC on Wednesday voted 11-1 to leave the benchmark federal funds rate unchanged in the 3.5% to 3.75% range. It was the second meeting in a row where tax rates were held steady after successive cuts supported by 25 basis points in September, October and December until the end of last year.
Policymakers also released the summary of economic projections (SEP), which showed that the median projection for interest rates sees just one 25 basis point cut for the rest of the year followed by one cut of that size in 2027.
IS THE FEDERAL RESERVE WAITING INTEREST RATE IN 2026?
“In our SEP, FOMC participants wrote down their individual assessments of the appropriate path for the federal funds rate under what each participant considers the most likely state for the economy,” said Federal Reserve Chairman Jerome Powell. “Participant projects mean that the appropriate level of the federal funds rate will be 3.4% at the end of this year and 3.1% at the end of next year, unchanged from December.”
FOX Business White House Correspondent Edward Lawrence reports as the Federal Reserve announces its decision to leave rates unchanged in ‘Money Making.’
During a press conference following the Fed’s interest rate decision, Powell was asked what officials saw that led them to plan to cut despite higher forecasts for both inflation and unchanged projections for the unemployment rate and economic growth.
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“Actually, the forecast is that we will be making some progress in terms of inflation, not as much as we expected, but there is progress in inflation,” said Powell. “It should come as we start to see in the middle of the year an improvement in prices and then a drop in inflation. We should be seeing that.”
Federal Reserve Vice Chair for Supervision Michelle Bowman, like Fed Chair Jerome Powell, said it is too soon to say how the Iran war will affect the US economy. (Al Drago/Bloomberg via Getty Images)
The latest rate decision comes amid a softening labor market and growing uncertainty over the Iran war. Like Powell, Bowman said it is too soon to know how the conflict in the Middle East will affect the US economy.
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“I think it’s too early to say what the long-term effect will be on US economic activity and how we should think about that in terms of our long-term economic forecast and how we should think about that in terms of our FOMC meetings and any rate changes that we might make because of the economic development going forward.”
