United States Federal Reserve Governor Michelle Bowman strengthened her case for three interest rate cuts this year, citing escalating concerns about labour market deterioration after unemployment rose to 4.2% and job creation plummeted to just 73,000 in July.
The employment shock reverberated through financial markets, with traders now pricing in a 90% probability of a September rate cut - up from just 37% before the jobs report.
Massive downward revisions lopped 258,000 jobs from May and June totals, painting a starker picture of economic weakness than previously understood.
Bowman and fellow Governor Christopher Waller's July dissent marked the first time in over 30 years that two Fed governors voted against the majority, another sign of growing internal divisions about U.S. monetary policy direction.
Jobs market warning signs emerge
The three-month average of job gains collapsed to just 35,000, well below the 100,000 monthly pace economists consider consistent with steady-state employment.
Black unemployment climbed to 7.2%, its highest level since October 2021 - often a precursor to broader labour market deterioration.
Bowman described seeing "signs of fragility in labor market conditions" and argued that "with tariff-related price increases likely representing a one-time effect, it is appropriate to look through temporarily elevated inflation readings".
The Fed vice chair for supervision maintains that core inflation excluding tariff impacts sits "much closer" to the Fed's 2% target than the official 2.8% June reading, bolstering the case for monetary easing.
Trump pressure intensifies
President Trump escalated his attacks on Fed Chair Jerome Powell, calling him a "stubborn MORON" and demanding the board "assume control" if Powell refuses to cut rates substantially.
Trump narrowed his potential Fed chair replacements to four candidates, excluding Treasury Secretary Scott Bessent, who withdrew from consideration.
The political pressure comes as Fed Governor Adriana Kugler's resignation creates a vacancy Trump can fill with a rate-cut advocate.
