Federal Reserve Vice Chair for Supervision Michelle Bowman said Friday she has penciled in three interest rate cuts before the end of 2026 to support the labor market. Bowman, considered a hawkish member of the Federal Open Market Committee (FOMC), expressed concerns about the job market during an interview on the FOX Business Network’s “Mornings with Maria.”
Bowman’s Outlook on Interest Rates and Economic Growth
Bowman indicated that despite concerns, she expects strong economic growth to continue this year. Her forecast contrasts with the recent FOMC decision on Wednesday, when policymakers voted 11-1 to hold the benchmark federal funds rate steady at a range of 3.5% to 3.75%. This marked the second consecutive meeting without a rate change after three cuts last September, October, and December.
The FOMC’s Summary of Economic Projections (SEP) released alongside the decision showed a median forecast for only one 25-basis-point cut in 2026 and another in 2027, reflecting a more cautious approach compared to Bowman’s projections.
Uncertainty from Global Risks and Labor Market Concerns
Bowman and Fed Chair Jerome Powell both noted it is too early to assess the long-term economic impact of the ongoing war in Iran. Powell highlighted that some progress on inflation is expected around midyear, partly as tariff pressures ease, but inflation remains a concern.
Bowman emphasized the uncertainty surrounding how global tensions and evolving economic conditions will influence future FOMC policy decisions. She stressed the need to monitor labor market developments closely before adjusting interest rates.
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