A second Federal Reserve official has indicated that the central bank should begin cutting rates as soon as next month — the latest sign of division among policymakers about how to respond to the uncertainty caused by President Donald Trump’s shifting economic policies.

Michelle Bowman, the Fed’s vice chair for supervision, said Monday that with inflation cooling and the labor market showing signs of weakness, “it is time to consider adjusting” interest rates to avoid putting too much downward pressure on economic growth.

“Should inflation pressures remain contained,” Bowman said in a speech in Prague, “I would support lowering the policy rate as soon as our next meeting in order to bring it closer to its neutral setting and to sustain a healthy labor market.”

Bowman’s remarks followed similar comments from Christopher Waller, a Fed governor, who said Friday in an interview with CNBC that policymakers should not wait for the labor market to weaken before lowering borrowing costs.

The two officials’ comments appear to put them at odds with Jerome Powell, the Fed chair, who last week stressed that the central bank could remain patient as it waited to see the impact of Trump’s tariffs and other economic policies. Those policies are widely expected to push up prices in the months ahead.

“Everyone that I know is forecasting a meaningful increase in inflation in coming months from tariffs because someone has to pay for the tariffs,” Powell said Wednesday in his customary news conference after the Fed meeting.

“The labor market is not crying out for a rate cut,” he said.

Bowman and Waller joined Powell and other officials in voting to hold interest rates steady at last week’s Fed meeting. But in their recent comments, they said they did not expect tariffs to have a significant impact on inflation — a position that puts them at odds not only with Powell but also with many private-sector forecasters.

“I think it is likely that the impact of tariffs on inflation may take longer, be more delayed and have a smaller effect than initially expected,” Bowman said Monday. She noted that measures of economic policy uncertainty, which hit record highs in recent months, had eased somewhat.

Bowman said she also did not expect tariffs to act as a significant drag on economic growth. But, she said, she is nonetheless concerned that cracks are beginning to show in the labor market.

Lower bank capital requirements

Bowman also said Monday that the “time has come” to revisit the key capital buffer requirements after concerns the rule has constrained lenders’ trading in the $29 trillion Treasuries market.

Bowman outlined an ambitious agenda earlier this month from reviewing what’s known as supplementary leverage ratio standards to insulating community banks from requirements targeting bigger firms.

The Fed and other regulators this week are set to unveil potential changes to leverage rules in a proposal that would change the overall ratio.

Bowman said the Fed will host a July 22 conference to discuss bank capital and noted “simple reforms” could improve Treasury market functioning by building resilience in case of stress events.

Bowman is widely expected to support easing the requirements of that proposal, known as Basel III endgame.

This report contains information from Bloomberg News.