FED Vice Chair Michelle Bowman made a statement regarding potential interest rate cuts in light of recent economic data.
Changes in Monetary Policy Approach
Michelle Bowman, who was previously regarded as one of the hawkish members of the FED, unexpectedly stated that it was time to reconsider the fundamental principles of interest rate policy. She emphasized that "it's time to think about adjusting the policy rate."
Inflation Slowdown and Rate Cut Prospects
Bowman pointed out that inflation has slowed in recent months. If this trend continues, she would support a rate cut at the upcoming FED meeting scheduled for the end of July. In her comments, she noted:
"Recent economic data suggest that tariffs and other policies have no clear and significant impact on inflation ..."
This indicates a possible shift in economic policy in response to current developments.
Impact on Financial Markets and Investor Expectations
The upcoming FED meeting on July 29-30 is generating considerable interest among investors. According to the CME FedWatch indicator, a significant portion of market participants expects about a 78.7% probability of rate cuts in September. However, rates remain unchanged at 4.25%-4.5% for now.
Michelle Bowman's statements regarding potential interest rate cuts open new prospects for financial markets, and their implications could be significant if inflation trends continue.
