Federal Reserve Governor Bowman expects two more rate cuts this year to address the weakness in the labor market
Federal Reserve Governor Bowman expects to continue cutting interest rates in the remaining two policy meetings of 2025 to address the weak labor market and slowing economic growth. She believes that the Federal Reserve will cut rates twice more before the end of this year, with the benchmark interest rate range at 4.00% to 4.25%. Bowman stated that as long as economic data develops as expected, the Federal Reserve will maintain a gradual rate-cutting path. Philadelphia Fed President Harker also supports two more rate cuts this year, believing that current policy remains relatively tight
According to the Zhitong Finance APP, Federal Reserve Governor Bowman stated on Tuesday that she expects the Federal Reserve to continue cutting interest rates at the remaining two policy meetings in 2025 to address the slowdown in the labor market and weakening economic growth. Bowman said at an event in Washington, "I still believe that the Federal Reserve will cut rates two more times before the end of this year."
Currently, the Federal Reserve's benchmark interest rate range is 4.00% to 4.25%, marking the first rate cut since last December, with a reduction of 25 basis points. According to the dot plot released last month, most officials believe that further easing of monetary policy is appropriate in the context of ongoing signs of weakness in the labor market.
The Federal Reserve's next monetary policy meeting will be held from October 28 to 29, with the last meeting scheduled for the second week of December. The futures market is currently widely betting that the Federal Reserve will cut rates by 25 basis points at both meetings.
Bowman stated that as long as the labor market and other economic data "evolve as expected," she believes the Federal Reserve will continue on a gradual rate-cutting path. "If the economic situation continues to develop in the direction I expect, we will continue to push for a reduction in the federal funds rate."
Bowman voted against the decision to maintain interest rates at the July meeting alongside Governor Waller, calling for an earlier rate cut. However, she supported the rate cut decision at the September meeting, indicating that views within the Federal Reserve are gradually converging.
Both were appointed as Federal Reserve Governors by President Trump during his first term. They have previously stated that they believe the tariff measures reinstated by the Trump administration will not lead to sustained inflation, and that the current policy risks are more focused on the weakness in the labor market.
The Zhitong Finance APP reported yesterday that Philadelphia Fed President Harker is also inclined to implement two more rate cuts of 25 basis points each this year and believes that monetary policy should "ignore the short-term price increase effects caused by tariffs," as such shocks will not lead to sustained inflation. Harker pointed out that current policy remains "slightly tight," and further easing aligns with the Federal Reserve's latest Summary of Economic Projections (SEP). She warned that momentum in the U.S. labor market is weakening, with third-quarter growth above trend, but consumption is increasingly reliant on high-income groups
