NextFin news, Federal Reserve Governor Michelle Bowman said on Thursday, September 25, 2025, that the U.S. job market is showing signs of fragility, warranting further interest rate reductions by the central bank. Speaking at the Psaros Center for Financial Markets and Policy event at Georgetown University in Washington, D.C., Bowman emphasized that inflation is close enough to the Fed’s 2% target to allow a shift in focus toward supporting the weakening labor market.
Bowman, who was appointed to the Federal Reserve Board by former President Donald Trump, highlighted that recent labor market data revealed slower job growth and increased vulnerability. She noted that inflation pressures, partly driven by tariffs, are likely a one-time effect and that the underlying inflation rate is within the Fed’s acceptable range.
Earlier this year, Bowman had projected three rate cuts by the end of 2025, anticipating a soft landing for the economy. However, recent data showing only about 25,000 jobs created over the past three months, along with downward revisions to payroll figures, have underscored the fragility of the labor market. This has prompted Bowman to advocate for a more proactive monetary policy stance to support employment.
At the Federal Open Market Committee (FOMC) meeting in mid-September, the Fed cut interest rates by 25 basis points to a target range of 4.0%-4.25%, citing concerns over the labor market. Bowman dissented in the July meeting by favoring rate cuts earlier than the majority, and she supported the post-meeting statement in September that indicated the Fed would consider further policy adjustments based on incoming data.
Bowman warned that the Fed risks falling behind the curve if it does not act decisively to lower rates as the labor market weakens. She suggested that the central bank may need to accelerate rate cuts in the coming months to preemptively support job growth and economic stability.
Her comments come amid a complex economic backdrop where inflation remains stubbornly close to the Fed’s target, but employment indicators have softened. The Fed’s cautious approach reflects the challenge of balancing inflation control with the need to sustain labor market health.
Bowman’s remarks were reported by Bloomberg and reflect ongoing debates within the Federal Reserve about the pace and scale of monetary easing as the U.S. economy navigates uncertain conditions in late 2025.
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