Fed Vice Chair for Supervision Bowman Says Could Support Rate Cut as Early as July FOMC Meeting

10:28 AM EDT, 06/23/2025 (MT Newswires) -- If conditions are appropriate, the Federal Open Market Committee could consider reducing interest rates as soon as its next meeting in July, Federal Reserve Vice Chair for Supervision Michelle Bowman said Monday at a research conference sponsored by the International Journal of Central Banking and the Czech National Bank.

"As we think about the path forward, it is time to consider adjusting the policy rate," Bowman said. As inflation has declined or come in below expectations over the past few months, we should recognize that inflation appears to be on a sustained path toward 2% and that there will likely be only minimal impacts on overall core PCE inflation from changes to trade policy."

Bowman said that she believes that negotiations will lower tariff rates from their current levels, leading to a temporary impact on inflation while downside risks to the employment picture become a larger concern by the FOMC's next meeting scheduled for July 29-30. Fed Governor Christopher Waller made similar comments on June 20, lifting market hopes of an earlier rate reduction.

"If upcoming data show inflation continuing to evolve favorably, with upward pressures remaining limited to goods prices, or if we see signs that softer spending is spilling over into weaker labor market conditions, such developments should be addressed in our policy discussions and reflected in our deliberations," Bowman said. "Should inflation pressures remain contained, I would support lowering the policy rate as soon as our next meeting in order to bring it closer to its neutral setting and to sustain a healthy labor market."

Bowman repeated that monetary policy is not on a preset course and that decisions are made on a meeting-by-meeting basis, which Fed Chair Jerome Powell is likely to be questioned about in his testimony before Congress on Tuesday and Wednesday.

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