Fed Governor Bowman supports rate cut in July due to inflation risks, creating divide in Fed

From Yahoo Finance: 2025-06-23 10:00:00

Federal Reserve governor Michelle Bowman supports a rate cut in July due to declining inflation and concerns about employment risks. This shift contrasts with Fed Chair Jerome Powell’s recent stance. Bowman and fellow governor Christopher Waller advocate for a rate cut at the next meeting, highlighting a growing divide within the central bank. Trump’s recent strikes on Iran add further uncertainty to discussions on inflation and economic growth. There are fears that rising oil prices could drive US inflation higher, leading to differing views on rate cuts within the Fed. Bowman believes the impact of tariffs on inflation may be smaller than initially expected, and negotiations could result in lower tariff rates. Not all Fed officials are in favor of immediate rate cuts, with some preferring to wait for more information. Powell emphasized the need to monitor inflation and goods prices in light of new tariffs before deciding on rate adjustments. For now, he recommends maintaining current rates.

Read more: Fed’s Bowman supports a rate cut ‘as soon’ as July, citing reduced inflation risks