Federal Reserve Vice Chair Bowman Discusses US Economic Growth, Persistent Inflation, and Monetary Policy Risks

Federal Reserve Vice Chair for Supervision Michelle W. Bowman delivered a speech on the U.S. economy and monetary policy considerations. She noted that U.S. economic growth has accelerated this year, with real GDP likely increasing over 3% in the third quarter, supported by robust AI-related capital expenditures and solid consumer spending. However, interest-rate-sensitive sectors like residential investment have declined. Bowman highlighted improved labor market conditions but expressed disappointment over stalled progress in lowering inflation, which remains a priority. She also warned of risks to the economic outlook from financial markets, including potential equity corrections if AI investment returns fall short of expectations and sharp increases in private longer-term interest rates. Bowman emphasized that monetary policy is not on a preset course.