- FOMC member Michelle Bowman has urged consistency in interest rate policy, following questions about why the FOMC cut rates in late 2024 but is holding steady now despite similar levels of inflation and unemployment data. Citing sharp downward revisions to U.S. job growth, Bowman reiterated her forecast for three cuts this year while warning that declining data reliability complicates policymaking.
Critics of Jerome Powell and the Federal Open Market Committee (FOMC) have argued the group’s shifting stance on when to cut the base rate has been anything but constant.
They point to a cut in the base rate in December, when Powell and his peers decided to lower the base rate despite inflation being at 2.9%—higher than the inflation rate from March to June this year. Moreover, the unemployment rate was at a relatively similar level to current readings.
Yet in 2025, and despite mounting pressure from the White House and economists to do so, Powell has thus far refused to ease interest rates.
While every member of the FOMC is aware of this rhetoric, Michelle Bowman has been the most recent to flag the issue.
“In my view, it is … important that the committee’s approach to monetary policy decision-making is consistent over time—especially when we face shifting economic conditions,” Bowman said this weekend in a speech at the Kansas Bankers Association 2025 CEO and Senior Management Summit, held in Colorado Springs.
Bowman’s statements are all the more interesting given that she was one of two dissenters from the Fed’s recent decision on the base rate. While the FOMC decided to hold the rate at 4.25% to 4.5%, Bowman had indicated prior to the meeting that she would like to see that figure come down.
Speaking in Colorado, she added: “I recognize and appreciate that other FOMC members may see things differently and that they were more comfortable with leaving the target range for the policy rate unchanged. I am committed to working together with my colleagues to ensure that monetary policy is appropriately positioned to achieve our dual goals of maximum employment and price stability.
“In the meantime, I will continue to carefully monitor the incoming data and information as the administration’s policies, the economy, and financial markets continue to evolve.”
Questions about the motivations—and even the political nature—of the FOMC’s decisions have come from influential voices in Washington, D.C. While Powell has long maintained that the Fed is not influenced by politics in any way, and has staunchly defended its independence from such influences, observers are still questioning, Why cut in 2024 but not now?
For example, Trump’s former commerce secretary, Wilbur Ross, told Fortune last month: “Powell didn’t have any trouble reducing interest rates. It’s only since Trump got in that he has been much more cautious.”
He added: “Whoever is in the Fed is, after all, a human being, and human beings have political preferences, they have economic preferences, so the word ‘independent’ doesn’t necessarily mean that it will be just fact-based.”
Trusting the data
Bowman, who is the Fed’s vice chair for supervision, also hinted that she (and potentially other members of the FOMC) may have lost some faith in key data releases which help inform decision-making.
“I have discussed many times in the past that, in recent years, the monthly labor market data have become increasingly difficult to interpret, in part reflecting declining survey response rates and the changing dynamics of immigration and net business creation,” Bowman said. “It is crucial that U.S. official data accurately capture cyclical or structural changes in the labor market in real time so that we can more confidently rely on these data for monetary and economic policymaking.”
The warning comes after a shocking report from the Bureau of Labor Statistics (BLS), which revealed the U.S. labor market is in far worse shape than previously believed.
The Labor Department reported on Aug. 1 that payrolls grew by just 73,000 last month, well below forecasts for about 100,000. But downward revisions for prior months alarmed investors even more, revealing that the labor market came to a near standstill over the spring. May’s tally was cut from 144,000 to 19,000, and June’s total was slashed from 147,000 to just 14,000, resulting in a combined cut of 258,000. The average gain over the past three months is now only 35,000.
Trump responded by firing Erika McEntarfer, the commissioner of the BLS, prompting questions about the Oval Office’s influence over data departments.
Bowman added: “I remain cautious about taking too much signal from data releases, but I see the latest news on economic growth, the labor market, and inflation as consistent with greater risks to the employment side of our dual mandate.
“My summary of economic projections includes three cuts for this year, which has been consistent with my forecast since last December, and the latest labor market data reinforce my view. I want to reiterate, though, that monetary policy is not on a preset course. At each FOMC meeting, my colleagues and I will make our decisions based on each of our assessments of the incoming data and the implications for and risks to the outlook, guided by the Fed’s dual-mandate goals of maximum employment and stable prices.”
