Federal Reserve Governor Stephen Miran on Tuesday called for the central bank to make aggressive interest rate cuts this year.
“I’m probably looking for a little bit more than a point of interest rate cuts over the course of the year,” Miran told FOX Business Network’s Maria Bartiromo on “Mornings with Maria.”
Miran, along with Fed Governor Christopher Waller, was a dissenter at the Federal Open Market Committee’s (FOMC) latest meeting on Jan. 28. In a 10-2 vote, the central bank left rates unchanged at its current range of 3.5% to 3.75% after three successive 25 basis point rate cuts in September, October and December. Miran and Waller were in favor of a quarter-point cut.
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Miran has been supportive of deeper cuts than the FOMC has favored since he joined the board while taking leave from his role in the Trump administration. His term at the Fed technically expired on Jan. 31, though he may remain in his role as governor until his successor is confirmed.
Waller last dissented from an FOMC decision in July, when the Fed held rates steady and was viewed as a contender for the Fed chair nomination before President Donald Trump nominated former Fed Governor Kevin Warsh to lead the central bank. Warsh may fill the vacancy created by the expiration of Miran’s term.
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Although the market currently views two 25 basis point rate cuts as the most likely outcome this year per the CME FedWach tool, Miran said that he thinks 100 basis points of cuts are needed this year.
“When I look at underlying inflation, I don’t see a lot of strong supply-demand imbalances of the type that monetary policy should respond to. So I think we’re keeping rates too high, mostly because of quirks of how we measure inflation rather than actual price pressures themselves,” he added.
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When asked about Atlanta Fed President Raphael Bostic suggesting there may not be a need for interest rate cuts this year, Miran said that the Fed has a “very strong diversity of views.”
“I think we’re being fooled by quirks of how we calculate inflation rather than actual price pressures in the economy. I think that’s leading us to leave our fed funds target rate too high,” he said. “Everyone’s got their own view. At the end of the day we’re a committee and we take votes. I’m just one member of that committee, but I’ll continue arguing for my view because I think it’s right.”
Miran was asked about Warsh’s nomination to lead the central bank, telling Bartiromo that “I think Kevin Warsh is a fantastic choice for Fed chairman.”
He went on to say that Warsh is well respected by Wall Street, the investment community and policymakers, and added that “I’m very excited to see the things that he’s going to do with the Federal Reserve.”
