Governor Fed Bowman says that the low job report supports his point of view for 3 rate drops this year

Michelle Bowman was one of the two officials of the Fed who voted a week and a half ago in favor of reducing interest rates. Such a decision could help stimulate the economy by making people cheaper to borrow money to buy a house or a car, but it could also threaten to push inflation above.

Bowman and another dissident lost after nine other Fed officials voted to maintain stable interest rates, as the Fed did all year round. The president of the Fed, Jerome Powell, was categorical that he wanted to expect more data on how President Donald Trump’s prices affect inflation before the Fed is the next decision.

During a speech at a conference of bankers in Colorado on Saturday, Bowman said that “the latest labor market data is strengthening my opinion” that the Fed should reduce interest rates three times this year. The Fed only had three meetings on the calendar in 2025.

The report on jobs arrived last week, only a few days after the Fed voted on interest rates, showed that employers hired much fewer workers last month than economists expected. He also said that hiring in previous months was much lower than that initially thought it.

On inflation, for his part, Bowman said that she was more confident than Trump’s prices “will not present a persistent shock of inflation” and sees him get closer to the lens of 2% of the Fed. Inflation has decreased considerably since it reached a peak greater than 9% after the pandemic, but it remained obstinately greater than 2%.

The Fed’s work is to maintain the labor market, while keeping a cover on inflation. Its challenge is that it has a main tool to affect both areas, and helping one by increasing or decreasing interest rates often means hurting the other.

A fear is that Trump’s prices can concentrate in the federal reserve by sticking the economy in the worst case called “stagflation”, where the economy stagnates but inflation is high. The FED does not have a good tool to solve this problem, and it should probably prioritize the labor market or inflation before helping the other.

In Wall Street, expectations are that the Fed will have to reduce interest rates at its next meeting in September after the American job report is much lower than the expectations of economists.

Trump called angrily for interest rates, often insulting Powell personally by doing so. He has the opportunity to add another person to the Council of Fed governors after a person named by former president Joe Bidenstepped recently.