Fed Governor Michelle Bowman Says Rate Hikes Ineffective for Energy-Driven Inflation

Federal Reserve Governor Michelle Bowman said on Friday that raising interest rates to address the current inflation spike would add unwarranted policy restraint. Bowman spoke at a conference in Reykjavík, Iceland. She stated that reacting to temporarily elevated energy price inflation would weigh unnecessarily on economic activity and labor market conditions.

8 percent in April. 3 percent when excluding food and energy prices. 3 percent.

Bowman said the policy reaction depends on the duration of the conflict with Iran. She added that she supported keeping language in the most recent post-meeting statement indicating the next rate move could be a cut. Three members of the Federal Open Market Committee voted against the statement because of the forward guidance language.