The Federal Reserve is seen as likely to keep interest rates steady "for some time" in an effort to control "high" inflation in the US, Fed Governor Michelle Bowman said on Tuesday, adding that she did not expect the central bank to cut borrowing costs in 2024. .
At its most recent meeting earlier this month, the Fed left the federal funds rate unchanged at the highest range in more than two decades at 5.25% to 5.5% and signaled that it would implement just one reduction this year, as it seeks to bring price growth back to target. 2%.
"If upcoming data shows that inflation is moving sustainably toward our 2% goal, it will eventually be appropriate to gradually lower the federal funds rate to prevent monetary policy from becoming too tight," Bowman said.
Bowman, who is usually seen as one of the more hawkish voices at the Fed, emphasized that it is not yet "appropriate" to cut rates, adding that the policy-setting Federal Open Market Committee should consider a range of possible scenarios.
A rate cut too may lead to a re-increase in inflationary pressure. As a result, Bowman stated that he remains "ready" to raise rates further if progress on inflation stalls or reverses.
