Fed Governor Bowman: Supports seeing December rate cut as “final step” in policy recalibration

Federal Reserve Governor Bowman said on Thursday that she supports last month's rate cut as the “final step” in the Fed's monetary policy recalibration, which must be done cautiously in the future because of rising inflation risks. “We should also avoid prejudging the future policies of the new administration,” Bowman said in remarks prepared for delivery to the California Bankers Association. “Instead, we should wait for more clarity and then seek to understand the implications for economic activity, labor markets and inflation.” It was Bowman's first such comment since he became the favorite to become the Fed's next top bank regulator. Barman announced this week that he will step down as the Fed's vice chairman for supervision by the end of next month. Bowman said, “This year will see a change in leadership at the banking agencies, and I expect that will translate into a shift in priorities and approach.” She reiterated her consistent call for more targeted regulatory requirements and a more “pragmatic” approach to policymaking.