Critical Statements from Michelle Bowman, One of the FED’s Most Hawkish Voices: She Announced the Interest Rate Cut Expected Date!
Michelle Bowman, a prominent member of the Federal Reserve, has made critical statements regarding the potential lowering of interest rates, indicating that it is not yet the appropriate time to initiate such a move.
Despite growing expectations for a reduction in interest rates in 2024, the likelihood of the Federal Reserve maintaining the current interest rates is high, with estimates reaching 89.7% according to CME FedWatch. The earliest projected date for a potential interest rate cut stands at September, with some experts forecasting one cut for 2024, while others anticipate two cuts in September and December.
Bowman, who holds voting power in the Federal Open Market Committee (FOMC), emphasized the need for the Fed to maintain its current policy rate for the time being to effectively manage inflation. She expressed caution regarding the timing of interest rate cuts, stating that it is premature to initiate such measures and that the possibility of increasing interest rates remains open if inflation does not diminish.
Looking ahead to 2025, Bowman suggested that if economic data indicates sustainable progress towards the 2% inflation target, gradual reductions in interest rates will be considered to prevent overly restrictive monetary policy. However, she emphasized that the current circumstances do not warrant a policy rate reduction and she does not foresee any interest rate cuts for 2024, expecting them to commence in 2025.
As one of the more hawkish members of the Federal Reserve, Bowman also highlighted the potential risks associated with inflation, asserting that interest rates should rise if inflation does not decrease or begins to rise again. While acknowledging modest progress in inflation in 2024, she anticipates high inflation rates in the near future and will closely monitor incoming data to assess the effectiveness of US monetary policy in reducing inflation to the 2% target over time.
Additionally, the connection between the Federal Reserve’s interest rate increases and the subsequent bear market in November 2021, which saw Bitcoin hit a peak of $69,000, suggests that a policy change and possible interest rate cuts could lead to a resurgence of BTC. It is anticipated that the initiation of interest rate cuts by the Federal Reserve will result in increased activity in BTC and other cryptocurrencies.
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