Federal Reserve member Michelle Bowman has advocated for a gradual approach to interest rate adjustments, citing a higher neutral rate compared to pre-pandemic levels. Bowman emphasized the need for a smaller Fed balance sheet to limit volatility in money markets, which she believes is crucial for better risk assessment. She also highlighted the importance of proactive monetary policy, suggesting that the Federal Open Market Committee (FOMC) may need to act more swiftly if labor market conditions deteriorate.