Fed Governor Bowman: Supports December rate cut as the "final step" in policy readjustment

Federal Reserve Governor Bowman said Thursday she supported last month's rate cut as the "final step" in the central bank's monetary policy adjustments, and that caution must be exercised going forward as inflation risks rise. "We should also avoid prejudging the future policies of the new administration," Bowman said in remarks prepared for delivery to the California Bankers Association. "Rather, we should wait for greater clarity and then seek to understand the implications for economic activity, the labor market, and inflation." Bowman made the comments for the first time since she became a leading candidate to be the Fed's next top bank regulator. Barr announced this week that he will step down as the Fed's vice chairman for supervision by the end of next month. "This year will see a transition in leadership at the banking institutions, and I expect that will translate into shifts in priorities and approaches," Bowman said, reiterating her consistent calls for more targeted regulation and a more "pragmatic" approach to policy making.