Federal Reserve Vice Chair for Supervision Michelle W. Bowman said on Nov. 10 that October inflation data raised the risk price pressures could last longer, complicating the Fed’s effort to return inflation to 2%.
The Bureau of Labor Statistics (BLS) put the seasonally adjusted Consumer Price Index for All Urban Consumers (CPI-U) increase at 0.4% for October, following a 0.6% rise in September. The measure excluding food and energy advanced 0.3%, matching its pace in August and September. The energy index rose 0.7% after September’s 5.2% increase.
Using CPI data, Bowman estimated that core personal consumption expenditures (PCE) inflation likely reached 3.3% over the 12 months through October. That was her estimate, not an official PCE reading. She linked the pressure to energy costs and AI-related demand spreading into prices for core goods and services.
Bowman said tariffs, energy and AI-related demand together accounted for roughly three-quarters of above-target core PCE inflation through September. She said lingering effects from earlier inflation shocks likely made up the rest. Her view that core PCE inflation could move closer to 2% next year depends on those pressures easing, as detailed in EconoTimes’ earlier coverage of her inflation outlook.
She warned that another disruption in energy markets could reduce household purchasing power, with lower- and middle-income consumers especially exposed. Bowman also said market moves had modestly tightened financial conditions: share prices fell, private interest rates rose and the dollar strengthened.
Bowman said the potential benefit of additional tightening must be weighed against the cost to sectors sensitive to borrowing rates. “The benefit of additional policy tightening has to be carefully weighed against its costs for interest-rate-sensitive sectors,” she said.
The BLS did not report October’s 12-month CPI change for most series because it had not collected October 2025 survey data during a lapse in appropriations. Before the December Federal Open Market Committee meeting, officials were due to receive October PCE inflation and November employment reports. Bowman said policy was not on a preset course and that her remarks reflected her own views.
