Federal Reserve Governor Michelle Bowman signaled Monday that she’s ready to support lowering interest rates as early as the July 29-30 meeting, provided inflation stays contained. Speaking in Prague, Bowman suggested bringing rates closer to “neutral” levels to maintain a healthy job market. Her position echoes Governor Christopher Waller’s Friday comments supporting potential July action.
Both Fed officials believe Trump’s tariffs will have limited inflation impact, noting many businesses already stockpiled inventory in anticipation. While President Trump advocates for aggressive 2-percentage-point cuts to reduce government borrowing costs, Fed officials haven’t specified cut sizes. The central bank held rates steady at 4.25%-4.5% last week, shifting focus toward potential labor market weakness. Despite these supportive comments, futures markets show only 23% odds of a July move, with September more likely at 78%.