Federal Reserve’s Michelle Bowman calls for interest rate cut in July due to tariffs

AP

Federal Reserve’s Michelle Bowman calls for interest rate cut in July due to tariffs possibly having smaller effects than expected.

Bowman said that President Donald Trump’s tariffs have so far not caused the jump in inflation that many economists feared, and any upcoming increase in prices would likely be just a one-time rise.

Federal Reserve governor Michelle Bowman on Monday said the central bank should consider cutting its key interest rate as soon as its next meeting in July, underscoring deep divisions among Fed officials as they endure sharp criticism from the White House.

Bowman, who was appointed to the Fed’s board of governors by Donald Trump in 2018, is the second high-profile official to express support for a potential July cut in as many days.

On Friday, Christopher Waller, also a Trump appointee to the Fed’s board, said in a television interview that the Fed should consider cutting borrowing costs next month.

The blunt calls for rate cuts by Waller and Bowman differ from Fed Chair Jerome Powell’s suggestion in a news conference last week that the central bank would monitor the economy over the summer and see how inflation responded to tariffs before deciding whether to reduce borrowing costs.