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1h ago

Miran Presses for Deep Fed Cuts as Officials Split on Inflation and Jobs

With the benchmark at 4.00%–4.25%, the newest governor argues rates are roughly two points too tight even as colleagues warn inflation remains above target.

Fed governor Stephen Miran said interest rates are too high and wants to lower them aggressively to protect the labour market. Bloomberg
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Vice Chair for Supervision of the Federal Reserve Board of Governors Michelle W. Bowman moderates a discussion with OpenAI CEO Sam Altman (not pictured) during the Federal Reserve's Integrated Review of the Capital Framework for Large Banks Conference in Washington, D.C., U.S., July 22, 2025. REUTERS/Ken Cedeno/File Photo

Overview

  • Stephen Miran, sworn in just before last week’s meeting, dissented for a 50 bp move and in a New York speech urged taking policy to the mid‑2% range by year‑end, citing a lower neutral rate from immigration, tariff, tax and regulatory shifts.
  • Fed officials offered contrasting messages, with St. Louis’s Alberto Musalem, Cleveland’s Beth Hammack and Atlanta’s Raphael Bostic counseling caution while Chair Jerome Powell has noted tariffs are adding roughly 0.3–0.4 percentage point to core PCE.
  • Vice Chair for Supervision Michelle Bowman said the Fed should act proactively to support a softening labor market, backed last week’s 25 bp cut, and argued tariff effects on inflation are likely small and short‑lived, while Chicago’s Austan Goolsbee urged care.
  • Markets are pricing a strong chance of at least one more 25 bp reduction this year, including high odds of a cut at the Oct. 28–29 meeting, according to fed funds futures tracking.
  • The White House’s petition to the Supreme Court to remove Governor Lisa Cook after a district court’s temporary block, along with Miran serving while on leave from the president’s CEA, has intensified concerns about pressure on the Fed’s independence.