Federal Reserve Vice Chair Michelle Bowman believes in more interest-rate cuts if the labor market weakens. Her stance contrasts with regional bank heads concerned about inflation. The Fed faces the challenge of balancing stable prices and low unemployment amid differing opinions on monetary policy. The neutral rate impacts economic growth, with the Fed projecting only one additional rate cut for 2026. President Trump advocates for lower rates to stimulate the housing market and reduce national debt interest costs. Employers added fewer jobs in December, highlighting a cautious labor market. Bowman warns against signaling a pause in rate cuts, citing risks to the jobs market. She also notes easing inflation pressures due to declining tariffs. The U.S. economy remains resilient, with confidence that inflation will decrease toward the 2% target.

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