Prague, June 23, 2025, 8:39 PM IST – Federal Reserve Governor Michelle Bowman expressed support for an interest rate cut at the Federal Open Market Committee (FOMC) meeting on July 29-30, 2025, provided inflation pressures remain subdued. Speaking in Prague on June 23, Bowman noted that President Donald Trump’s proposed tariffs are likely to have a “temporary and muted” impact on prices, aligning with fellow Governor Christopher Waller’s recent comments to CNBC. “Should inflation pressures remain contained, I would support lowering the policy rate as soon as our next meeting to bring it closer to its neutral setting and sustain a healthy labor market,” she said.
Bowman emphasized monitoring economic conditions, including the labor market and Trump’s trade policies, which she believes will have “minimal impacts” due to firms’ preemptive inventory stocking. Despite her dovish stance, the FOMC held rates at 4.25%-4.5% last week, reflecting caution amid a 2.4% inflation rate (2.8% core) in November 2024.
Market sentiment on X reflects optimism, with @PiQSuite posting, “Fed’s Bowman open to cutting rates in July if inflation stays contained,” highlighting labor market risks. However, traders assign only a 23% chance of a July cut, per CME Group’s FedWatch, with 78% expecting action in September.
Bowman’s shift from her hawkish January 2025 stance, when she called December’s cut the “final step,” underscores evolving Fed priorities as inflation cools and labor concerns grow.
