Federal Reserve Governor Michelle Bowman: There is a good chance of achieving a 3% growth rate in the second half of 2025, with tariffs and immigration putting downward pressure on the neutral interest rate

On the 25th, Federal Reserve Governor Michelle Bowman stated in a media interview that there is great hope for achieving a 3% growth rate in the second half of 2025.

She indicated that her outlook on economic growth is likely more optimistic than that of many at the Federal Reserve. Economists need to remain humble about expectations regarding artificial intelligence.

She also mentioned that the influx of tariff revenues is suppressing the neutral interest rate, and immigration is also putting downward pressure on the neutral interest rate.

“I believe that interest rates are too restrictive, by a margin of 150-200 basis points. I hope to get significantly closer to the neutral interest rate in the next six months.”

She noted that significant fluctuations in population will have substantial consequences. Changes in tax and regulatory policies boost growth potential. The longer the Federal Reserve's restrictive policies last, the greater the economic risks.

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