Fed’s Bowman Says Inflation Still Needs More Progress

Federal Reserve Vice Chair for Supervision Michelle W. Bowman said inflation remains persistent and policymakers still have work to do to bring it closer to the central bank’s 2% goal, while stopping short of endorsing an immediate rate increase. She said core personal consumption expenditures inflation could move closer to 2% next year if price pressures ease.

Speaking at the Council on Foreign Relations in Washington on November 10, Bowman estimated that 12-month core PCE inflation was 3.3% in October. That figure was her estimate, not an official reading. She said tariffs, energy costs and demand related to artificial intelligence each accounted for about one-quarter of above-target core PCE inflation in the year through September, with much of the remainder reflecting earlier price shocks.

Bowman said the outlook depended in part on whether pressures linked to energy and AI-related demand recede. In remarks and a question-and-answer session, she also identified geopolitical developments, including risks tied to the Middle East, as factors that could affect inflation. She said she wanted more information on how the economy responds to policy and financial conditions before...