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25m ago

New Fed Governor Stephen Miran Urges Deep Cuts, Says Rates Are Two Points Too High

He says recent policy shifts have lowered the economy’s neutral rate, making the current stance too tight for the job market.

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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U.S. Federal Reserve Chair Jerome Powell speaks during a press conference, following the issuance of the Federal Open Market Committee's statement on interest rate policy, in Washington, D.C., U.S., September 17, 2025. REUTERS/Elizabeth Frantz
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Overview

  • In his first public remarks as a governor, Miran told the Economic Club of New York that policy is well into restrictive territory and said the appropriate federal funds rate is in the mid-2 percent range.
  • He was the sole dissent in last week’s 11–1 vote for a quarter-point cut, arguing for a half-point move and laying out a path for larger, faster reductions than the FOMC majority favors.
  • Miran argues immigration restrictions will ease rent pressures and lower measured inflation, projecting CPI rent inflation falling from roughly 3.5% to below 1.5% by 2027, which he says would trim PCE by about 0.3 percentage point.
  • He played down tariff-driven price risks, while other Fed officials warned that core inflation near 3% and trade costs call for caution and limited additional easing.
  • Miran is serving on the Fed board while on leave as chair of the White House Council of Economic Advisers, prompting independence concerns as investors price a high likelihood of at least one more quarter-point cut this year.