US Fed official calls for interest rate cut as earl as July
WASHINGTON
Washington DC, USA - March 9, 2018: Closeup of Federal Reserve bank facade entrance, architecture building, eagle statue American flags, blue sky at sunny day.
A key U.S. central bank official has called for an interest rate cut as early as July if inflation effects from President Donald Trump's sweeping tariffs remain limited.
The comments by Federal Reserve vice chair for supervision Michelle Bowman came days after Fed governor Christopher Waller also said the bank could lower rates as soon as next month, amid differences among officials on how they should respond to levies.
"Should inflation pressures remain contained, I would support lowering the policy rate as soon as our next meeting in order to bring it closer to its neutral setting and to sustain a healthy labor market," Bowman said.
In its policy meeting this month, the Fed held its benchmark lending rate at a range between 4.25 percent and 4.5 percent, keeping it unchanged so far this year.
Fed Chair Jerome Powell said policymakers could afford to wait so as to understand the effects of Trump's tariffs, although the president has repeatedly urged the independent central bank to cut interest rates.
At a separate event in Milwaukee, Chicago Fed President Austan Goolsbee said once the "dirt in the air" from tariffs settle, officials should proceed with lowering rates.
For now, Bowman said the data have not shown clear signs of material impacts from tariffs and other policies, noting that such effects might be smaller than expected.
Officials have penciled in two rate reductions this year, and the Fed's next policy meeting will take place in late July.
