Fed's Bowman: Lingering inflation risks warrant more cautious cuts
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Fed governor Michelle Bowman stated on September 24, 2024, that key inflation measures remain 'uncomfortably above' the 2% target, necessitating caution in interest rate cuts. She dissented to a recent half-point rate reduction, advocating for a quarter-point cut due to ongoing inflation risks from global supply chain disruptions, aggressive fiscal policy, and housing supply-demand mismatches. Core inflation was estimated at 2.6% through August. The Fed cut the benchmark rate from 5.25%-5.5% to 4.75%-5% last week, with an 11 to 1 vote, marking Bowman's dissent as the first since 2005. She expressed concerns about rapid rate cuts potentially unleashing pent-up demand and emphasized the strength of the labor market with an unemployment rate of 4.2%. Inflation data for August is set to be released soon.

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