Bowman warns Fed could be behind the curve on jobs

Fed Governor Michelle Bowman said in a speech that she welcomes the Fed’s decision to start easing last week, noting that the balance of risks between inflation and employment has shifted. She said tariffs no longer appear likely to deliver a persistent inflation shock, which has reduced upside risks to price stability.

With demand softening and labor market conditions turning fragile, Bowman emphasized that the Fed must focus on its employment mandate. She cited benchmark payroll revisions as a clear warning, saying the Fed is at “serious risk of already being behind the curve” in addressing job market deterioration.

She argued the Fed should “preemptively stabilize and support labor market conditions.” If the current conditions continue, Bowman said, “we will need to adjust policy at a faster pace and to a larger degree going forward.”

Additionally, Bowman cautioned against a strict, backward-looking interpretation of data dependence, saying it could force the Fed to implement “abrupt and dramatic policy actions” later if it delays action now. Instead, Bowsheman urged a more “proactive forward-looking approach” framework, one that accounts for how the economy is likely to evolve rather than relying solely on the latest data points.

Full speech of Fed’s Bowman here.