More is better. And the bigger the better.

The Federal Reserve’s newest member is not only pushing for much lower interest rates – and soon – but says inflation from tariffs should not be a barrier to doing so.

Fed Governor Stephen Miran, in his first monetary policy speech since taking on the temporary role Sept. 15, made clear his opinions and arguments for lowering the Federal Funds Rate are in line with President Trump’s demands for exactly that.

• Miran was the only member of the Federal Open Market Committee to break with the panel’s decision to lower rates by a quarter percentage point Sept. 17.
• He dissented in favor of a jumbo cut of a larger half point cut and also forecast a much more aggressive approach to future rate cuts.

Miran’s a Fed outlier and proud of it

In an unprecedented arrangement, Miran is on unpaid leave as chair of the White House Council of Economic Advisers while serving a temporary term at the Fed that ends Jan. 31.

More Economic Analysis:

• Fed rate cut could boost your wallet, job, and portfolio

Miran would be able to stay at the Fed indefinitely, however, if Trump doesn’t nominate a successor.

His appointment rattled Fed watchers, economists and traders both here and abroad who spoke of the need for the U.S. central bank to remain independent of political control.

Trump has made clear he intends to appoint Fed governors who back his version of monetary policy.

Federal Reserve’s monetary policy balances inflation, jobs

The Federal Reserve’s dual mandate from Congress requires price stability and full employment.

• Lower interest rates lead to less unemployment but higher prices.
• Higher interest rates lead to lower inflation but higher unemployment.

Related: Controversial Fed official drops bold 3-word message

The Fed had held off cutting the Federal Funds Rate this year to monitor the impact tariff inflation through the nation’s supply chain and to determine if those price increases would be a one-time bump or linger into consumers’ wallets.

The funds rate is now 4.0% to 4.25%.

Miran calls for aggressive interest-rate cuts

In his remarks Sept. 22 before the Economic Club of New York, Miran heavily referenced data and studies from the Council of Economic Advisors.

Miran said in his prepared remarks that the neutral rate of interest — where the policy rate neither stimulates nor weighs on the economy — has been pushed lower this year by tariffs, immigration restrictions and tax policy.

“Based on this analysis, I believe the appropriate fed funds rate is in the mid-2 percent area, almost two percentage points lower than current policy,” Miran said.

Trump has been demanding a three-percentage-point cut for months.

Lower interest rates will prevent damaging the economy, Miran said.

“The upshot is that monetary policy is well into restrictive territory,” Miran said. “Leaving short-term interest rates roughly two percentage points too tight risks unnecessary layoffs and higher unemployment.”

By contrast, the median projection of the Fed’s 19 officials has them lowering rates by another half percentage point.

“It’s not a panic. A panicky move would be something like 75 basis points or more,” Miran said in a question-and-answer session following his speech. “I’m not panicked, I just see that the risks grow the longer you remain significantly above neutral.”

Miran’s expands his view on the U.S. economy

“With respect to tariffs, relatively small changes in some goods prices have led to what I view as unreasonable levels of concern,” Miran said, adding that the Trump Administration’s tariff policy “will lead to substantial swings in net national saving.”

Miran, a Harvard-educated macroeconomist, also took a solid swing himself at the U.S. regulatory environment:

• America’s regulatory patchwork has become a material impediment to growth.
• Regulation hinders productivity growth, restricts capacity, and ultimately helps fuel inflation.
• Regulators may have good reason for doing so…but we must be clear-eyed about the economic consequences.

Miran also nodded to the fallback position of many that economics is an unpredictable science.

“To be clear, I don’t want to imply more precision than I think is possible in economics. Assumptions and approximations abound,” he said.

“Nevertheless, I must stake out a position, and this is my best ballpark estimation.”

Other Fed officials cool towards sticky inflation

Meanwhile, Sept. 22 was a busy day for Fed watchers:

• Fed Bank of St. Louis President Alberto Musalem noted he sees limited room for cuts amid elevated inflation.
• His Cleveland counterpart Beth Hammack said officials should be cautious to avoid overheating the economy.
• And Atlanta Fed President Raphael Bostic told The Wall Street Journal that inflation concerns would make him hesitant for now to declare support for cutting rates again in October, even though economic risks have shifted in recent months toward greater worries about employment.

According to Bloomberg, Morgan Stanley’s Michael Wilson said investor focus is likely to shift to the Fed’s tolerance of sticky inflation in 2026, and away from worries about a weaker labor market.

“Should the administration’s intention to ‘run it hot’ play out next year while the Fed cuts rates, revenue and earnings growth could come in much stronger than expected,” he wrote.

Related: J.P. Morgan sends strong recession message on Fed interest-rate cut

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No one in Washington power circles is saying publicly that the executive branch should exert intense, deep, and loyalty-demanding influence over the Federal Reserve’s monetary policymaking.

No one except for President Donald Trump, and his actions have been very transparent.

• Treasury Secretary Scott Bessent says he supports an independent Fed, albeit one that is desperately in need of reform on both its policymaking and regulatory sides.
• Council of Economic Advisors Director Keven Hassett, whom Bessett is interviewing to be the next Fed chair, also says Fed independence is critical.

The Trump administration’s historic attempt to control the Fed is whipping up concerns at home and abroad from economists and traders about the future independence of the U.S. central bank.

These efforts are escalating, with the Fed facing a critical vote on interest rates Sept. 17 as multiple volatile salvos heighten already disquieted anxieties.

The Fed is widely expected to cut the benchmark Federal Funds Rate by a quarter of a percentage point in response to mounting evidence of a weakening labor market.

Beyond that vote, economists and Fed watchers express increasing concern that packing the Board of Governors and changing the way regional bank presidents are elected could have disastrous long-term implications for the nation’s economy.

Senate Republicans hustle to seat Stephen Miran immediately

Trump loyalist Stephen Miran could be attending his first Federal Open Market Committee meeting next week as a voting member of the Board of Governors if the GOP-led Senate approves his nomination Sept. 15.

Similar votes in the past have taken weeks and sometimes months to clear the full Senate.

Miran’s temporary spot expires Jan. 31, but he could stay on indefinitely until a permanent candidate is named or he is given the role.

Related: JPMorgan’s Dimon issues stark recession message after jobs shock

Miran rankled Democrats on the Senate Banking Committee when he said he would only take a leave of absence from his White House role.

He declined their request to quit the Trump administration while serving as a Fed governor.

Princeton Professor Alan Blinder, a former Fed vice chair, blasted Miran’s intention to “wear both hats’’ while a Fed governor.

“This has never happened before. It is inconceivable,” Blinder told CNBC Sept. 11.

The last time a threat of this magnitude to the central bank’s independence harkens “maybe back to the 1830s,” Blinder said.

White House plans urgent appeal of Fed Governor Lisa Cook’s firing

Fed Governor Lisa Cook can keep her job, for now.

On Sept. 9, she won an injunction from a federal judge blocking President Trump’s attempt to fire her for cause over unsubstantiated allegations of mortgage fraud which allegedly occurred before she joined the Fed.

More Federal Reserve:

• Can the president fire a Federal Reserve governor?
• DOJ turns up the heat to remove embattled Fed official

The Department of Justice is expected to appeal the injunction, a legal move that could land at the conservative-majority Supreme Court.

With the Sept. 17 FOMC meeting less than a week away, it is highly likely that Cook will be participating in the interest-rate vote.

The FOMC’s Summary of Economic Projections, the quarterly report card and forecast on the economy, including its widely watched “dot plot,” is also due to be released Sept. 17.

The SEP helps guide market expectations and business outlooks.

Secretary Bessent holds talks to replace Powell as Fed chair

Treasury Secretary Bessent is conducting interviews with a slate of 11 candidates to replace Jerome Powell when his term as chair expires May 31, 2026.

President Trump has blasted Powell for months for not lowering interest rates three percentage points, ratcheting up his demands by invoking personal and professional criticisms with a special focus on social media slurs (“Too Late”).

Some of the candidates are past and current Fed officials, including Fed Governors Christopher Waller and Michelle Bowman, who dissented in July from holding the funds rate steady because of what both economists said were deepening signs of labor market weakness.

Economist Robert K. Triest, a professor at Northeastern University and former Federal Reserve Bank of Boston official, expects the Fed to remain “data-driven” moving forward, but took note of the politicization concerns.

He noted the president’s unprecedented firing of the then-chief of the Department of Labor Statistics in August after low jobs numbers in July, plus deep revisions of the June and May jobs reports.

“I think it’s extremely concerning that, in addition to the technical difficulties that the BLS and those agencies have at this point, that there is additional political pressure and uncertainty,’’ Triest said.

Related: Mortgage rates react as bets rise on Fed interest rate cut

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What’s more important to you: the increasing prices you pay for goods and services or the job you work at the same wage to afford them?

Well, inflation seems to be the winner hands down when it comes to certain economists.

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At last month’s meeting of the Fed’s Federal Open Market Committee, most of the participants’ concerns over tariff inflation took priority over softening in the labor market.

The July 30 FOMC minutes were released Aug. 20.

They show that President Donald Trump’s tariffs fed a growing divide within the independent central bank’s benchmark policy-making panel.

The dual mandate plays a major role in the economy

The minutes do not name participants however the majority of the 12-member FOMC left the Federal Funds Rate unchanged in a range of 4.25% to 4.5% last month, citing elevated uncertainty despite seeing economic activity moderating during the first half of the year.

The statement at the time characterized the labor market as “solid” but said inflation remained “somewhat elevated.”

Related: White House bullies Federal Reserve governor in bold political attack

The reason: expected inflation from tariffs creeping up this summer then through the supply chain into homes, factories and retail outlets later this year.

The independent central bank sets monetary policy according to its dual mandate: maintaining low inflation and stable unemployment rates while the economy chugs along at a stable rate of growth.

Sounds easy, but rising prices can lead to decreases in employment rates and higher job numbers lead to increased inflation.

The Fed needs to maintain a balanced approach to monetary policy taking into account all potential impacts of U.S. fiscal policy such as tariffs and taxes. It’s also historically non-partisan.

The funds rate is tied to the cost of borrowing money which is why, in addition to mortgages, car loans and credit cards bills have sky-high interest rates.

The Fed’s prudent “wait-and-see” approach has the White House team enraged.

Trump has made repeated calls for Fed Chair Jerome Powell to resign, and has threatened to install a “shadow’’ replacement who will lead the charge to slash rates.

July FOMC also raised questions about the labor market

Several participants said they saw the risks to their dual mandate as roughly balanced, the minutes showed, while a couple said they were more concerned about the labor market.

Though the minutes don’t identify policymakers by name, Governors Christopher Waller and Michelle Bowman voted against the decision to hold rates steady, pointing to a weakening job market.

Related: Fed’s Jackson Hole conference could mean fireworks this week

In his press conference following the meeting, Powell said the inflationary impact from tariffs could well be temporary, but the central bank needed to guard against a more persistent effect.

A majority of the 18 policymakers in attendance “judged the upside risk to inflation as the greater of these two risks,” the minutes show.

Several participants emphasized that inflation had exceeded the Fed’s own 2% target for an extended period, and that this experience increased the risk of longer-term inflation expectations becoming unanchored.

More Federal Reserve:

• GOP plan to remove Fed Chair Powell escalates
• Trump deflects reports on firing Fed Chair Powell ‘soon’
• Former Federal Reserve official sends bold message on ‘regime change’

The next FOMC meeting is Sept. 17.

The widely watched CME Group’s FedWatch Tool expects a 81.9% chance of a .25% rate cut.

Some Fed watchers and market experts expect a .50% cut while others say the FOMC will hold rates steady again.

There are two more major economic reports on August data to come prior to that meeting: the CPI and the jobs report.

Both will play major roles in how the FOMC will act.

Meanwhile, around 120 economists, academics and government leaders from across the globe are gathering Aug. 21 to Aug. 23 at the Jackson Hole Economic Symposium in Wyoming.

Powell’s landmark speech will be widely watched as an indicator if the Fed is moving toward a rate cut. 

Related: Fed governor hails new ‘revolution’ in banking

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