MNI BRIEF: Fed Gov Bowman Still Willing To Hike If Needed

Federal Reserve Governor Michelle Bowman reiterated her openness Tuesday to raising interest rates again if progress on inflation stalls or reverses, though she judges that current policy is restrictive and will bring inflation back to 2% over time.

"I remain willing to raise the federal funds rate at a future meeting should the incoming data indicate that progress on inflation has stalled or reversed," she said. (See: MNI INTERVIEW: Lagging Fed To Cut 100BP This Year-LaVorgna)

She sees a number of upside inflation risks to her outlook, and noted the January CPI and PPI inflation data suggest slower progress in bringing inflation down toward target. Meanwhile, spending has stayed strong, job growth has rebounded and the labor force participation rate retraced some earlier gains in recent months, she said.

"Should the incoming data continue to indicate that inflation is moving sustainably toward our 2% goal, it will eventually become appropriate to gradually lower our policy rate to prevent monetary policy from becoming overly restrictive. In my view, we are not yet at that point," she said in remarks prepared for the Florida Bankers Association.