The Federal Reserve’s once-solid stance is starting to show signs of shift, as some officials begin to side with President Donald Trump in calling for interest rate cuts as early as July.
On Monday, Fed Vice Chair for Supervision Michelle Bowman said the U.S. central bank should act quickly to support the labor market, arguing that Trump’s proposed tariffs are unlikely to drive inflation significantly higher.
“It is time to consider adjusting the policy rate,” Bowman said. “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 is the second Fed official to voice support for Trump’s position. Last Friday, Fed Governor Christopher Waller said tariffs would likely result in a “one-off” increase in inflation. Both officials were appointed by Trump.
Other members of the Fed haven’t gone as far, but the mood is shifting. On Monday, during a discussion in Milwaukee, Chicago Fed President Austan Goolsbee said the Fed could lower rates if inflation doesn’t materialize from the tariffs.
He remarked that in such a case, “we never left what I was calling the golden path before April 2,” referencing the date Trump announced a new wave of tariffs.
For months, Fed officials maintained they would wait to see the economic effects of Trump’s policies before making changes to rates. At its latest meeting, the Fed left the benchmark interest rate unchanged for the fourth straight time.
That wait-and-see approach has clashed with Trump’s ongoing frustration. He has repeatedly criticized Fed Chair Jerome Powell for not cutting rates, publicly labeling him a “fool” and a “numbskull.”
Now, the Fed’s consensus appears to be softening, just as tensions in the Middle East are adding pressure through rising energy prices.
And while the true economic effect of Trump’s tariffs remains uncertain, some officials are signaling that the risk to the job market outweighs inflation concerns.
As the global picture shifts and internal views diverge, the central bank’s carefully crafted independence is being tested—not only by political heat but also by business dynamics that are becoming harder to ignore.
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