On Monday, newly appointed Federal Reserve Governor Stephen Miran expressed concerns regarding the Fed’s reluctance to implement more significant rate cuts, suggesting that this stance could jeopardize job growth in the United States.
Just a week before, Miran had voted for a substantial half-point rate cut shortly after leaving his role as an economic advisor for Trump. He stood out as the only dissenting vote among the twelve Fed policymakers, as eleven—including Fed Chairman Jerome Powell—opted for a standard cut.
“My perspective on the suitable monetary policy does not align with that of my Federal Open Market Committee colleagues,” the ex-Trump advisor commented, addressing the group responsible for determining the US’s primary borrowing rate.
Miran made these remarks during his debut address at the Economic Club of New York after recently assuming his position.
“I consider this monetary policy excessively tight, and I contend that it carries significant risks to the Fed’s employment goals,” he continued. “The ideal funds rate should be around the mid-2% range, nearly two full percentage points below the current rate… Holding short-term interest rates approximately two percentage points too high could lead to needless layoffs and a spike in unemployment.”
The Senate confirmed Miran with a narrow vote of 48-47, with only Senator Lisa Murkowski (R-Alaska) siding with all Democrats against Trump’s nomination.
Pursuing a replacement for former Fed Board member Adriana Kugler, who resigned abruptly last month, President Trump appointed Miran from his role leading the Council of Economic Advisers (CEA).
Miran will complete Kugler’s term, which expires on January 31, 2026.
This appointment followed President Trump’s unsuccessful attempt to dismiss Fed Governor Lisa Cook last month due to allegations of misrepresenting her primary residence, which may amount to mortgage fraud.
The White House was also in contention with Fed Chair Jerome Powell over the $2.5 billion renovation of the central bank’s offices in Washington D.C., which drew criticism during a congressional hearing over the summer.
Miran’s confirmation arrived just before the Fed convened on September 16 and 17 to assess interest rates and their potential adjustments.
Stay Updated with Morning Report
Receive the latest news, videos, and insights daily.
Thank you for subscribing!
The president aims to fill the Federal Reserve with appointees who are more amenable to endorsing interest rate cuts, but there remains significant pushback from officials against lowering the key borrowing rate. This decision holds implications for ordinary Americans, affecting their home loans and credit card payments.
St. Louis Fed President Alberto Musalem outlined in comments earlier on Monday that the central bank’s priority should remain focused on curbing inflation.
“I backed the recent 25-basis-point reduction in the FOMC’s policy rate as a preventive measure designed to support the labor market and mitigate additional weakening,” Musalem stated during remarks at the Brookings Institution in D.C. “However, I believe we should proceed cautiously, as there is limited room for further easing without potentially adopting overly accommodative policies.”
The situation is ongoing; please check back for further updates.
