In his first address after the September 2025 Fed policy statement, Powell was quite clear that rate cuts could be one-off. According to Powell, the markets were much closer to neutral level with the 25-bps rate cut.  That means, there may not be scope for more rate cuts from here. In fact, markets panicked a day after Powell’s speech. Powell has stayed very skeptical about cutting rates and is of the view that inflation is the bigger risk and the recent shift to unemployment is just temporary. For Powell, he appears a lot more worried about inflation risks. 

The views presented by Bowman, in her speech at Kentucky, were the other end. She underlined that the problem of jobs was a lot more serious than what the data showed. The rate of unemployment at 4.3% may look benign, but there were two other factors. Firstly, the monthly non-farm payroll additions were nearly a fourth of their equilibrium levels. Also, the only reason unemployment was not going up was due to supply of labour also falling in tandem. Wage growth has been much lower and Bowman feels that one crisis could aggravate the jobs scenario. 

To be fair, both Powell and Bowman have data points to support their perspective. Powell has held that the inflation risk is all too obvious. After all, between April and August, the PCE inflation has rallied from 2.3% to 2.7%; with core inflation at an elevated 2.9%. Powell had rightly said that the Q1 GDP contraction was largely due to front-loading of imports. That was ratified when the Q2 GDP growth came in at a robust 3.8%. Bowman also has data points to support her view. Cyclical sectors were hit much harder by the jobs crisis and non-farm payroll additions had taken a sharp hit. That is amply visible in the recent data flows. The actual reality lies somewhere between the extremes. 

The entire dichotomy arises from diverse interpretation of the tariff impact. Powell feels that the tariff impact would be very pronounced on inflation. That is evident from recent data. However, he also feels the impact will be persistent; which is yet to be tested. On the other hand, Bowman is of the view that the real impact of the tariffs would be on job losses. In a sense, she is right If you look at how employers are cautious about adding jobs. The only reason they are not cutting jobs is due to the experience of the post-COVID growth recovery. To sum up, inflation and jobs may be at risk in the US, so both may be justified in crying wolf. Better still, it is also possible there is no Wolf at all!