Federal Reserve Governor Michelle Bowman has publicly advocated for three interest rate cuts by the end of 2025, targeting reductions in September, October, and December. Her stance, presented at the Kansas Bankers Association in Colorado Springs, cites rising unemployment (4.1% to 4.2%) and lower-than-expected job creation (73,000 new positions) as catalysts to prevent further labor market erosion. Bowman emphasized diminishing inflation risks from tariffs, stating: "As I gain even greater confidence that tariffs will not present a persistent shock to inflation, I see upside risks to price stability have diminished."
This diverges from the current FOMC majority holding rates steady at 4.25%-4.50% amid pressure from the Trump administration. Bowman and Governor Chris Waller were July's sole dissenters, but three additional FOMC officials—Lisa Cook, Mary Daly, and Neel Kashkari—have since echoed labor market concerns, heightening anticipation for September's meeting.
The proposed cuts could accelerate capital flows into risk assets like cryptocurrencies, historically evidenced during 2019-2020 easing cycles. Concurrent regulatory tailwinds—including the GENIUS Act and SEC crypto initiatives—and potential altcoin ETF approvals for assets like XRP, SOL, and DOGE amplify bullish sentiment. Crypto's total market cap rose 1.07% to $3.91 trillion amid the news.