Bowman backs steep rate hikes and wants to 'get the Fed out' of housing market

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Federal Reserve Gov. Michelle Bowman said she supports an aggressive series of interest-rate increases to try to tame inflation and eventually wants the...

Federal Reserve Gov. Michelle Bowman said she supports an aggressive series of interest-rate increases to try to tame inflation and eventually wants the central bank to stop intervening in the U.S. housing market.

In a speech in Massachusetts, Bowman said she expects to support another 3/4-point increase in a key short-term interest rate at the Fed’s next strategy meeting in late July. “Since inflation unacceptably high, it doesn’t make sense to have the nominal federal funds rate below near-term inflation expectations,” she said.

Bowman, for her part, said the Fed’s aggressive new stance on interest rates “do not come without risk,” but like Powell, she said bringing down inflation is imperative. The Fed boosted its holdings of these securities to as high as $2.7 trillion from $1.37 trillion before the pandemic in a successful effort to reduce long-term U.S. interest rates and stimulate the economy.

 

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