Fed’s Bowman Outlines “Pragmatic Monetary Policy Decision-Making Framework”: Emphasizes Dual Mandate and Flexible Response Mechanisms

Bowman believes that when conflicts arise between inflation and employment objectives, a more “flexible” balancing approach should be adopted rather than prioritizing one objective exclusively. While policymakers should moderately “look through the noise” when identifying “transitory inflation shocks,” they must also remain vigilant against the secondary impact of persistent conflicts on inflation expectations. She reiterated that policy must maintain transparency and consistency to uphold the Federal Reserve’s credibility and policy effectiveness.