The newest member of the US Federal Reserve said the central bank's pause on interest rates was "well placed."
Michelle "Miki" Bowman made her first public remarks as governor of the Fed at a conference Monday morning and was told encouraged by the number of "good" jobs and by the "strong" growth salaries.
"Our economy is well positioned," said Bowman. Bowman sits on the very first seat of the Fed's board of directors for people with local banking experience. Bowman was formerly the Commissioner of Kansas State Bank.
On price stability, Bowman said inflation was "close to the target," adding that she was finally "comfortable" with the current course of the Fed's monetary policy.
Since joining the Fed in November 2018, Bowman has attended two meetings of the Federal Open Market Committee: the December decision to increase rates and the January decision to maintain the rate. Bowman joined the rest of the FOMC constituents in these two unanimous political decisions.
Between these decisions, the Fed has significantly changed its monetary policy by giving up on its previous commitment to further increase short-term interest rates. In January, Fed Chairman Jerome Powell said the central bank would be "patient" as it monitored the country's economic risks and the country's financial situation.
Bowman stated that its primary purpose was the regulation of community banks, but acknowledged its role as a permanent voting member of the FOMC.
"I take this responsibility very seriously, including bringing the point of view of the community bank – and that of the local economy – Bowman said.
Bowman said the Fed was working to "adapt" the regulations to reduce the compliance burden for smaller institutions. In May 2018, President Donald Trump signed a law requiring federal bank regulators to relax a number of rules applicable to small banks, allowing slightly less frequent review cycles and less capital requirements. strict. The Fed is in the process of adopting these regulatory amendments.
Bowman also touched on another topical issue in financial regulation: the Community Reinvestment Act, an over 40-year-old law that ensures financial institutions meet the credit needs of the communities in which they exist. Community advocates argue that the CRA needs more money, of course, banks serve low- and middle-income borrowers, but they fear regulators may be too subjective in their valuations.
Bowman acknowledged that the CRA is essential to ensure that low-income borrowers are not discriminated against, but said that the regulatory approach to dealing with money is no longer an issue. ARC application could be better.
"There is a lack of clarity and lack of transparency in the review process," Bowman said.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Brian Cheung is a journalist covering the banking sector and the intersection of finance and Yahoo Finance policy. You can follow him on Twitter @bcheungz."data-reactid =" 39 ">Brian Cheung is a journalist covering the banking sector and the intersection of finance and Yahoo Finance policy. You can follow him on Twitter @bcheungz.
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