The Zhitong Finance App learned that Bauman, the Federal Reserve's vice chairman in charge of regulatory affairs, said on Wednesday that she currently does not think it is necessary for the Federal Reserve to rush to further adjust interest rates, and that policymakers need time to evaluate the impact of previous interest rate actions.
Speaking at the International Finance Association (IIF) Annual Member Summit held in Bangkok on October 14, Bauman acknowledged that the inflation rate is still higher than the Federal Reserve's target, but said officials need to better understand basic economic trends and changing financial conditions. “We have some time to wait and watch how the financial situation evolves before we take further action,” Bowman said. She emphasized that while closely monitoring risks, it is necessary to comprehensively evaluate the various data that are continuously published.
The Federal Open Market Committee (FOMC) of the Federal Reserve unanimously decided to raise interest rates by 25 basis points in September, raising the benchmark interest rate range to 3.75% — 4.00%. Bauman previously stated at an Atlantic Council event that the Commission will need time to understand how this rate hike will gradually spread to the entire economy.
When asked if her position is different from the median forecast of the Federal Reserve officials showing that interest rates will be raised once before the end of the year, Bowman once again said that policymakers should first assess the impact of the September rate hike before deciding what further actions may be needed in the future.
Compared to many US Federal Reserve officials who spoke recently, Bowman's remarks on Wednesday sent a relatively dovish signal. New York Federal Reserve Chairman Williams said on Tuesday that he still believes it is appropriate for the Fed to raise interest rates again this year, but he does not think it is necessary for the central bank to further raise interest rates in 2027.
Williams said that as the impact of tariffs and energy price shocks gradually subsides, there are still signs that inflation will slow “quite significantly” next year and approach the Federal Reserve's 2% target. He said that in addition to other signs that underlying inflation is cooling down, it should be enough to offset the price pressure brought about by artificial intelligence (AI) infrastructure construction.
Also on Tuesday, Boston Federal Reserve Chairman Collins said that she is inclined to support the Federal Reserve's further interest rate hikes during the year to prevent the heavy pressure on energy costs under geopolitical turbulence, and that tariff policies and the wave of AI investment will further solidify the inflation trend.
Collins said that in order to help curb inflation, interest rates may need to be raised further before the end of this year. In a speech prepared for a banking conference hosted by the Boston Federal Reserve this week, she said, “I also currently anticipate that a moderate further rate hike before the end of the year would be appropriate to ensure that inflation returns to the Fed's 2% target in a timely and consistent manner.” However, Collins also cautioned that her judgment on whether interest rate adjustments need to be further accelerated and the exact timing will depend on a series of subsequent economic data including CPI and PCE inflation.
Furthermore, Chicago Federal Reserve Chairman Goulsby said that the AI boom has begun to push up prices, and inflation is still too high. “If inflation continues to be high, then I think it's very clear what the Federal Reserve needs to do.” Cleveland Federal Reserve Chairman Hamak and Dallas Federal Reserve Chairman Logan have made it clear that to pull inflation back to 2%, it will take more than one rate hike. Richmond Federal Reserve Chairman Barkin said that it is reasonable to take action to deal with continued inflation.