Fed's Bowman: No Urgency for Further Rate Action, Time to Wait and See
Federal Reserve Vice Chair Michelle Bowman said on Wednesday there is no urgency for further rate moves, as the central bank monitors markets after September's hike. She also urged a 'complete reorganization' of Fed supervision following the Silicon Valley Bank collapse and highlighted capital needs
The US Federal Reserve has time to 'wait and see' how financial markets and the economy evolve after its September rate rise before deciding on further action, Vice Chair for Supervision Michelle Bowman said on Wednesday.
'I don't feel any urgency for taking further action at this point, we really need to take some time and understand how things will evolve,' Bowman said during the IMF-World Bank meetings in Bangkok.
The Fed raised its policy rate by a quarter of a percentage point to a 3.75 per cent-4.00 per cent range last month. Bowman's comments came after Boston Federal Reserve President Susan Collins said on Tuesday she believes the US central bank will need to raise rates again before the end of this year to bring down high inflation.
Separate from the debate over AI-driven cybersecurity risks to banks, Bowman said the central bank also considers the actual capital used in the creation and construction of data centers, from banks and other funding sources.
'We need to make sure that there's capital to support the future economy, again through how we're approaching supervision and regulation in the banking system,' she said.
Bowman also called for a 'complete reorganization' to improve supervision and boost accountability within the Fed in the wake of the Silicon Valley Bank collapse, following a review of the bank's 2023 failure she commissioned.