Bowman outlines economic outlook and monetary policy risks

Michelle W. Bowman, Vice Chair for Supervision of the Federal Reserve Board, delivered a speech presenting her outlook on the U.S. economy and monetary policy.

• Policy actions and stance: She noted that the FOMC’s actions resulted in a cumulative 75 basis points of reductions since September, bringing the federal funds target range to 3-1/2 to 3-3/4 percent; she voted for those cuts to address labor market fragility and believes inflation excluding tariff effects is moving closer to 2 percent, while remaining ready to adjust policy based on incoming data.
• Context, data, and supervisory updates: She highlighted labor market fragility (unemployment 4.4% in December, private job gains about 30,000/month in Q4), reported core PCE inflation at 2.9% in December before tariff adjustments, noted growth support from AI-related and data center investment, and summarized supervisory reforms including finalizing leverage-ratio revisions, stress-test improvements, issuance of supervisory operating principles, and the withdrawal of climate-related supervisory guidance.