Expectations for Inflation Slowdown Amid Challenges

Michelle Bowman, a Governor of the United States Federal Reserve, shared her insights on Friday regarding the anticipated slowdown of inflation throughout the year. Despite her expectations, Bowman highlighted the potential for a "bumpy and uneven" disinflationary process. She emphasized the significant risks to price stability, particularly pointing out the fragility of global supply chains as a major concern.

Gradual Monetary Policy Approach Preferred

Bowman expressed her preference for a gradual approach to monetary policy moving forward. She voiced concerns that the decision to cut interest rates in 2024 might have played a role in the stagnation of inflation reduction efforts. According to Bowman, it's unlikely that the current overall level of interest rates and borrowing costs are providing substantial restraint. She underscored the importance of the forthcoming inflation and employment reports, which the Fed will review before the March meeting, as critical factors in shaping future policy decisions.