Federal Reserve Governor Michelle Bowman said Monday that her hawkish stance on monetary policy has “evolved,” and she now sees a chance that inflation will continue to decline without further interest rate hikes.
In his remarks to the South Carolina Bankers Association, Bowman said that if inflation continues to decline, it will eventually become appropriate to lower interest rates to prevent policy from putting significant downward pressure on growth.
“In my view, we’re not there yet,” Bowman said. She said there remained some “significant upside inflation risks” in the outlook.
In speeches last summer and into late November, Bowman said she expected interest rates would need to be raised again.
In September, the Fed expected another rate hike before the end of the year, but in December the central bank decided there was no need and kept interest rates steady at 5.25%-5.5%.