Federal Reserve Governor Michelle Bowman has signaled she is open to cutting interest rates as early as the July FOMC meeting, provided inflation pressures remain contained. In her latest remarks, Bowman said it is time to consider adjusting the policy rate and put more weight on the emerging downside risks to the job market.
She also downplayed concerns about recent trade policy changes, stating that tariffs and other government policy shifts are likely to have only minimal effects on inflation. Bowman noted that progress on trade has helped reduce uncertainty in the economic outlook.
While the labor market remains solid overall, she acknowledged that early signs of softness are beginning to emerge. This, along with continued cooling in inflation indicators like the PCE index, supports moving closer to a neutral policy stance.
Following her comments, U.S. Treasury yields fell. The 10-year Treasury yield dropped by 4.9 basis points to 3.859%, while the 2-year yield fell by 5.3 basis points to 4.322%.
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