WASHINGTON: A senior US Federal Reserve official has warned that recent employment data confirms emerging weaknesses in the labour market.
Federal Reserve Vice Chair for Supervision Michelle Bowman advocated for three interest rate reductions this year during a summit in Colorado.
She described the approach as necessary to prevent further deterioration in job market conditions.
Bowman stated that early rate cuts would minimise the need for sharper adjustments if employment figures worsen.
The official downplayed inflation concerns linked to former President Donald Trump’s tariffs, calling them temporary.
She projected inflation would stabilise at the Fed’s two percent target once tariff effects fade.
Her comments highlighted divisions within the Fed regarding the timing of rate reductions.
Bowman was among two dissenting voices during July’s policy meeting where rates were held steady.
The remarks come amid sustained criticism from Trump targeting Fed Chair Jerome Powell’s rate decisions.
Bowman also questioned the reliability of government labour statistics due to declining survey response rates.
She advised caution in interpreting jobs data despite acknowledging market softness.
The warning follows July’s employment report showing downward revisions of 258,000 jobs for May and June.
Trump dismissed the labour statistics commissioner shortly after the report’s release, alleging data manipulation.
No evidence was provided to support the president’s claims against commissioner Erika McEntarfer. – AFP
