United States Federal Reserve Governor Michelle Bowman expressed support for the December rate decision, viewing it as "the Committee's final step in the policy recalibration phase."
In a speech at Laguna Beach, California Bowman said that with a 100-basis point reduction in the target range since September, the current policy rate is now closer to her estimate of its neutral level, which she believes is higher than pre-pandemic levels. However, Bowman acknowledged the lack of continued progress in lowering inflation and the persistence of strong economic activity and labor market conditions.
"I expect that the coming months should bring clarity on the incoming administration's policies and the carry over of inflationary pressures from 2024, reflecting private spending decisions and an apparent faster spend-out of existing federal government appropriations in recent months. It will be very important to understand how these factors will affect economic activity and inflation going forward," she stressed.
