Fed’s Bowman Says Interest Rates Must Fall, Anticipates 75 Bps Cut This Year: Report

• Bowman reportedly said that the key issue at the latest meeting was largely about timing.
• The Fed Governor added that her assessment of economic risks remains the same, with inflation likely to continue toward the 2% target. 
• Earlier on Friday, President Donald Trump nominated Kevin Warsh to be the next Federal Reserve Chair in a post on Truth Social.

Federal Reserve’s Vice Chair for Supervision, Michelle Bowman, reportedly said on Friday that she believes key rates in the U.S. must fall, despite her vote to hold steady this week.

According to a report from Reuters, Bowman voted to hold monetary policy steady so as to gather additional data before voting next.

She added that she estimates the need for three more quarter-percentage-point or 25 basis points rate cuts this year, adding that the latest Federal Reserve decision was simply to do with the timing of the next move.

Bowman voted to keep benchmark interest rates steady at 3.50% - 3.75% levels in the Fed’s first policy meeting of 2026. Fed Governors Stephen I. Miran and Christopher J. Waller voted to lower the target range by 25 bps.

The Federal Open Market Committee’s next meeting is scheduled for March 17-18.

Bowman’s Rationale

After cutting interest rates by a cumulative 75 bps over 2025, Bowman reportedly said that the key issue at the latest meeting was largely about timing, and whether to continue easing policy quickly and reach a neutral stance by April, or to move more gradually toward neutrality over the course of the year.

The Fed Governor added that her assessment of economic risks remains the same, with inflation likely to continue toward the 2% target. However, Bowman acknowledged early signs of labor-market stabilization and cited data limitations caused by last fall’s U.S. government shutdown as reasons to delay additional rate cuts.

“We can afford to take time and 'keep policy powder dry' for a little while in order to carefully assess how the lower degree of policy restraint is flowing through to ‍broader financial conditions and strengthening the labor market," she said as per the report.

"We should also not imply that we expect to maintain the current stance of policy for an extended period of time," Bowman added.

Fed Chair Nomination

Meanwhile, earlier on Friday, President Donald Trump nominated Kevin Warsh to be the next Federal Reserve Chair in a post on Truth Social.

Warsh was widely seen to be the front-runner for the position after Trump had praised White House National Economic Advisor Kevin Hassett for his performance in his current role and had indicated to keep him in the position.

Meanwhile, U.S. equities were trading in the red in Friday’s after-market hours. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was down by 0.13%, the Invesco QQQ Trust ETF (QQQ) fell 0.19%, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) declined 0.15%.

Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘extremely bearish’ territory.

The iShares 20+ Year Treasury Bond ETF (TLT) closed down by 0.56% on Friday, while the iShares 7-10 Year Treasury Bond ETF (IEF) ended the day 0.06% lower.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Also Read: Hassett Backs Trump’s Fed Choice, Says He Has ‘High Regard For Kevin’

Share

·

Add us on