Baumann: Need to weigh the costs and benefits of tightening policies

Michelle Bowman, the Vice Chair for Supervision at the Federal Reserve, stated that inflationary pressures persist while the labor market is stabilizing. She expects the core PCE in October to rise to 3.3% year-on-year, with rising energy prices and AI-related demand as the main driving factors. Bowman noted that the recent decline in stock prices, the rise in U.S. Treasury yields, and the strengthening of the dollar have tightened financial conditions, necessitating a careful assessment of the costs and benefits of further tightening policies.