Will the Fed stop meddling with interest rates? A statement by one of the top officials of the U.S. central bank caught the market’s attention.
Michelle Bowman, Vice President for Supervision at the Federal Reserve, said on Thursday, October 1, that she currently does not see an urgent need for further actions in monetary policy.
The comment was made during an event organized by the Atlantic Council in Washington.
According to Bowman, inflation is still above the Fed’s target, but it’s necessary to watch how the most recent interest-rate increase will affect the economy before deciding on the next steps.
In September, the Federal Reserve raised the benchmark rate by 0.25 percentage point, bringing the range to 3.75% to 4% per year. The projections released at the time still suggested the possibility of another increase by the end of 2026.
But Bowman was not the only official to take a more cautious tone.
The Fed Vice Chairman, Philip Jefferson, also said that more time may be needed to analyze the data before making another decision on interest rates.
In practice, the market is now closely tracking the next inflation, employment, and economic activity data.
And the question remains: will the Fed keep interest rates unchanged at the next meeting, or could it still change course?