Key facts
- Bowman said core PCE inflation likely rose 3.3% in October on higher energy prices and AI-related demand.
- Bowman said the labor market has improved but is not overheated.
- Bowman said her forecast is for core PCE inflation to move closer to 2% next year.
- Bowman said she is not calling for interest-rate hikes.
Federal Reserve Vice Chair of Supervision Michelle Bowman said inflation pressures are still building and that bringing inflation to the Fed's 2% target will take more work, according to remarks prepared for delivery to the Council on Foreign Relations in Washington, DC, on November 10. She stopped short of calling for interest-rate hikes.
Bowman said the core personal consumption expenditures price index likely rose 3.3% in October, driven by higher energy prices and AI-related demand. She said the labor market has improved but is not overheated, and that lack of progress on inflation has not come from the labor market.
She said her forecast is for core PCE inflation to move closer to 2% next year as pressures from the AI buildout and the Middle East conflict wane or unwind.
Bowman also warned that falling stock prices, rising bond yields and a stronger dollar have tightened financial conditions, creating possible risks to the economy.