With a Light Touch: Fed Governor Miran Advocates for Lower Interest Rates

Fed Governor Stephen Miran has expressed his support for significantly lower interest rates, aligning himself closely with the White House's stance, which seeks a more relaxed monetary policy. In his first major speech at the Economic Club of New York, Miran advocated for a key interest rate between 2% and 2.5%. This is significantly lower than the current 4% to 4.25% set by the central bank last week as part of the first rate cut during President Donald Trump's second term. Miran warned that overly strict interest rate policies could risk unnecessary job losses and higher unemployment. Miran also forecast economic growth, which is expected to gain momentum starting next year as the tax benefits of a recently passed mega-law affect families and businesses. He anticipates better economic development in the second half of the year and beyond. When asked about his Central Bank reform proposals, which he designed for the Manhattan Institute think tank, Miran defended his decision to be temporarily unpaid on leave. He does not see a long-term position at the White House as long as no reason for it is known to him. Miran also downplayed President Trump's efforts to reshape the Federal Reserve and push it towards a rate cut. Trump recently expressed the desire to gain a majority on the Fed Board that supports lower financing costs. Miran emphasized the importance of diverse opinions in monetary policy and highlighted that he will form his own independent viewpoint. Currently, most Fed decision-makers anticipate three rate cuts next year. In light of the challenges posed by Trump's tariffs, the labor market is already showing initial weaknesses, which unsettle companies and complicate decisions about expansions or new hires.