US Fed’s Bowman sees no urgency for another rate hike

The US Federal Reserve has room to assess the impact of its September rate increase on markets and the economy before considering another move, Vice Chair for Supervision Michelle Bowman said on Wednesday, Reuters reported.

“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 central bank lifted its benchmark rate by 25 basis points last month, bringing the target range to 3.75%-4.00%.

Bowman’s remarks follow comments from Boston Fed President Susan Collins, who, on Tuesday, said that the central bank would likely need to raise rates again before the end of the year to curb high inflation, according to the Reuters report.

Addressing AI-related cybersecurity risks to banks, Bowman said the Fed is also examining how banks and other funding sources finance data centre construction.

“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 says.

Bowman also called for a “complete reorganisation” of the Fed’s supervisory operations to strengthen oversight and accountability. Her proposal follows a review she commissioned into the 2023 collapse of Silicon Valley Bank.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)
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