Fed Officials Debate Inflation Risks and Future Rate Cuts

Federal Reserve Governor Michelle Bowman warned that inflation remains a concern and suggested that interest rates might be closer to a neutral level than currently thought. She emphasized caution in lowering rates to avoid reigniting inflation. Despite some cooling, inflation progress has stalled, and the labor market remains strong. Bowman noted that the neutral policy rate might be higher than pre-pandemic estimates, advocating for a cautious approach to rate adjustments. Her comments have reduced market expectations for a December rate cut.