Federal Reserve Vice Chairman Bowman stated that he still supports three interest rate cuts this year, and the first one may happen in September.

Federal Reserve Vice Chair Michelle Bowman released two key pieces of information in her latest speech: she supports three interest rate cuts this year and will be hosting a community bank meeting on October 9th. In a speech posted last Saturday (August 9th) on the Federal Reserve's official website, Bowman expressed her support for three interest rate cuts this year, citing recent weak labor market data in the United States as a reinforcement of her position. Last week, the Federal Reserve held its fifth consecutive meeting, keeping the federal funds rate target range unchanged at 4.25% to 4.50%. Bowman and another board member, Christopher Waller, both voted against the decision, arguing for a 25 basis point cut. Both Bowman and Waller were appointed as Fed board members during Trump's first term. Bowman has extensive professional knowledge in handling inflation, regulation, and banking operations. In March of this year, she was nominated by Trump to serve as Vice Chair of Supervision. In her latest speech, Bowman called on her colleagues to begin cutting interest rates at the September meeting. She stated that such a move "will help avoid further unnecessary deterioration in labor market conditions and reduce the likelihood of the Committee having to take more aggressive policy actions in the event of further deterioration in the labor market." Bowman reiterated her previous view that the inflationary impact of tariffs is unlikely to persist, saying, "As my confidence grows that tariffs will not sustainably impede inflation, I believe the upside risks to inflation stability have diminished." "With core inflation persisting on a track toward the 2% target, soft overall demand, and signs of weakness in the labor market, I believe our focus should be squarely on the risks facing the employment goal." Analysts suggest that Bowman and Waller's stance may garner more support from other committee members. Earlier this week, San Francisco Fed President Mary Daly, Minneapolis Fed President Neel Kashkari, and board member Lisa Cook all expressed concerns following the release of the nonfarm payroll data. The nonfarm report showed a gain of 73,000 jobs in July, below expectations. At the same time, the job gains in May and June were revised downward significantly. The unemployment rate rose slightly from 4.1% to 4.2%. In the section of her speech related to community banks, Bowman mentioned that the meeting on October 9th will discuss potential reforms to the capital framework for these lending institutions. She had previously expressed concerns about community banks losing ground in the competitive landscape and losing market share to larger banks. "Community banks are the cornerstone of the banking and financial system, providing support to local communities and their customers. These banks are often overlooked, with insufficient attention paid to long-standing and emerging issues, as well as industry and consumer concerns." Before joining the Federal Reserve system, Bowman served as Vice President of Farmers and Drovers Bank in Kansas. She mentioned the possibility of adjusting the so-called "community bank leverage ratio" framework. She plans to reshape the Fed's regulatory system for community banks, aiming to avoid applying capital requirements designed for large banks to community banks. This article is from "Cailianshe", authored by Zhao Hao, GMTEight editor: Li Cheng