Federal Reserve Governor Michelle Bowman said Tuesday that it is not yet the right time to start cutting interest rates. She added that she would be willing to raise rates if inflation does not decline.

In a prepared speech in London, Bowman said: «Should incoming data indicate that inflation is moving sustainably towards our 2% target, it will eventually become appropriate to gradually lower the federal funds rate to prevent that monetary policy becomes excessively restrictive. However, we are not yet at the point where it is appropriate to lower the key rate.»

Bowman’s comments reflect the prevailing sentiment at the central bank, where most policymakers have expressed the need for more evidence before they expect inflation to return to the Fed’s 2% target.

Recent data shows inflation moderating, with the Fed’s preferred indicator slightly below 3%. However, the Federal Open Market Rate Setting Committee noted after its last meeting that only “modest further progress” had been made.

Bowman stressed there are “a number of upside risks” that could accelerate his outlook, which is among the most aggressive compared to other politicians.

She said: «I remain open to raising the target range for the federal funds rate at a future meeting should inflation progress toward plateauing or even reverse. Given the risks and uncertainties surrounding my economic outlook, I will remain cautious in my approach as I consider future policy shifts.»

The Commerce Department will release the May Personal Consumption Expenditures Price Index, the Fed’s preferred gauge of inflation, on Friday. Economists polled by Dow Jones expect a 12-month inflation rate of 2.6% for both all items and the core index, which excludes food and energy prices.

While this would represent a slight decrease from April, Bowman still expects the Fed to keep its key overnight borrowing rate within a range of 5.25% to 5.50% for the foreseeable future.

Furthermore, it indicated that it would not be swayed by rate cuts made by other global central banks, such as the European Central Bank, which recently lowered key rates by a quarter of a percentage point. Bowman said that “it is possible that the path of monetary policy in the United States will diverge from that of other advanced economies in the coming months.”

In other news from the Fed, Governor Lisa Cook expressed optimism that inflation will show more significant gains in 2025, allowing for a potential rate cut.

“With significant progress on inflation and a gradual cooling of the labor market, at some point it will be appropriate to reduce the level of policy tightening to maintain a healthy balance in the economy,” Cook said at an event at the Economic Club of New York. New York.

Cook, while expressing optimism about lower inflation and a better job market, also acknowledged the presence of risk factors. These include higher credit card default rates, tighter credit conditions and challenges in assessing economic data that have undergone significant revisions.

The statements from Bowman and Cook follow those made Monday by other officials expressing reluctance to implement rate cuts.

San Francisco Fed President Mary Daly has rejected the idea of ​​preemptive cuts to safeguard against a weakening job market and a slowing economy. Daly stressed the importance of completing ongoing work and not taking unnecessary preventative action.

Additionally, Chicago Fed President Austan Goolsbee said that if he saw more months of favorable inflation data, he would question whether policy should remain as tight as it has been, potentially paving the way for rate cuts.

Governors Cook and Bowman are standing electors of the Federal Open Market Committee (FOMC), while Daly will vote this year and Goolsbee, although not an elector, attends meetings and presents forecasts to the committee.