Stephen Miran – Live Laugh Love Do

Federal Reserve official pushes big interest-rate cuts

admin — Tue, 23 Sep 2025 12:24:04 +0000

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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.

Stephen Miran, a member of the Board of Governors of the Federal Reserve System, believes interest rates should be significantly lower.

Win McNamee/Getty Images

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.

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.

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Trump’s pick for the Fed ‘fuels an existential threat’

admin — Sat, 09 Aug 2025 17:06:53 +0000

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The Federal Reserve could be getting more than another dovish vote with the appointment of Stephen Miran as governor.

It could signal an intention to amend the Federal Reserve Act and diminish policymakers’ independence, according to analysts at JPMorgan.

On Thursday, President Donald Trump named Miran, the chair of the White House’s Council of Economic Advisers, to fill a vacancy left by Adriana Kugler, who stepped down before her term was due to expire in January.

While he is known for a proposal authored before joining the administration that’s been dubbed the “Mar-a-Lago Accord” to address the U.S. trade deficit, another paper he cowrote in 2024 calling for the overhaul of the Federal Reserve is gaining more attention now.

In a note on Friday, JPMorgan analysts led by chief economist Bruce Kasman highlighted key proposals, such as giving at-will power to the U.S. president to fire Fed board members and Fed bank presidents, giving Congress control of the Fed’s operating budget, and shifting the Fed’s regulatory responsibility over banks and financial markets to the Treasury.

“There is little doubt that the consequence of these reforms would be to materially increase the influence of the president over US monetary and regulatory policy,” analysts wrote.

Such changes would require approval from Congress, and JPMorgan pointed out that it’s not clear support for such broad changes exists.

But what is clear is that Miran is joining the Fed board—armed with a reform agenda. His 2024 paper accused the Fed of suffering from “groupthink” and mission creep, arguing that changes to the Fed would actually help preserve its independence. JPMorgan doesn’t see it that way.

“The main threat to the Fed independence is not politically motivated turnover shifting the outcome of votes,” analysts said. “Rather, the appointment fuels an existential threat as the administration looks likely to take aim at the Federal Reserve Act to permanently alter US monetary and regulatory authority.”

The White House didn’t immediately respond to a request for comment.

How the Fed could play defense

Congress has the power to modify the central bank’s authority and mission. Wharton finance professor Jeremy Siegel flagged this potential last month, when he told CNBC that Powell may need to resign in order to preserve the Fed’s long-term independence.

His reasoning: if the economy stumbles, then Trump can point to Powell as the “perfect scapegoat” and ask Congress to give him more power over the Fed.

“That is a threat. Don’t forget, our Federal Reserve is not at all a part of our Constitution. It’s a creature of the U.S. Congress, created by the Federal Reserve Act 1913. All its powers devolve from Congress,” Siegel explained. “Congress has amended the Federal Reserve Act many times. It could do it again. It could give powers. It could take away powers.”

Sen. Bernie Moreno, R-Ohio, signaled willingness last week to amend the Federal Reserve Act, including the interest it pays on bank reserves and its dual mandate, though he said he believes in central bank independence.

JPMorgan said the Fed still enjoys support in the Senate, where changes to the Federal Reserve Act would need 60 votes to overcome a filibuster.

Still, the Fed will also take the threat to its independence seriously and actively protect it, which could mean “some accommodation” toward demands from the White House and Congress, analysts predicted.

“While dramatic shifts are not expected, the coming pressure on the Federal Reserve Act could bias Fed policy dovishly and regulatory decisions in a direction that lightens burdens,” they said.

A tilt toward monetary easing would come amid relentless pressure from the White House to cut rates, which have remained unchanged as Fed officials eye inflationary pressure from Trump’s tariffs.

Independence is meant to insulate the Fed from such political pressure. But Fed independence is a tricky concept, as it largely derives from a mix of laws, norms, informal agreements and traditions, Michael Pugliese, senior economist at Wells Fargo, told Fortune in an earlier interview.

He thinks it’s highly unlikely Congress will amend the Federal Reserve Act to allow for more explicit influence from the White House.

That’s because Democrats wouldn’t go along with it, and Republicans probably wouldn’t get rid of the filibuster rule in the Senate to immediately erode the Fed’s independence, he said.

“Getting rid of the filibuster would probably open the door to tons and tons and tons of other policy discussions on a lot of different issues, not just the Federal Reserve Act,” Pugliese explained. “The filibuster has stuck around as long as it has because both parties have had reasons and cause to not change it. And maybe that changes one day, but I would be very surprised if the thing that changed it was the Fed.”

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