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Fed Governor Miran Backs Rate Cuts, Sees 1% Drop This Year

Federal Reserve Governor Stephen Miran continued to advocate for interest rate cuts in a recent interview, forecasting a reduction of approximately one percentage point over the next year. He argued that short-term energy price increases, such as oil rising above $100 a barrel, should not alter monetary policy without signs of persistent inflation. Miran noted that inflation expectations remain stable, with no evidence of wage-price spirals. The current fed funds rate is 3.5%-3.75%, and markets expect no changes soon. Miran's term has expired, and he remains in office pending Kevin Warsh's confirmation. Warsh is nominated to take over as chair when Jerome Powell's term ends in May.

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Fed Governor Miran Backs Rate Cuts, Sees 1% Drop This Year

Federal Reserve Governor Stephen Miran reiterated his support for interest rate cuts on Monday, predicting a reduction of about one percentage point over the next year and dismissing short-term energy price spikes as a policy concern.

Miran's Stance on Rate Reductions

  • Miran stated that interest rates could be "about a point easier, gradually done over the course of a year."
  • The current target range for the fed funds rate is 3.5% to 3.75%.
  • Market indicators suggest no rate changes are expected before the end of the year.

Energy Prices and Monetary Policy

  • He downplayed the impact of oil prices exceeding $100 per barrel and gasoline price increases of over $1 per gallon.
  • Miran emphasized that monetary policy operates with a lag and is not designed to address short-term market volatility.
  • He cited well-anchored inflation expectations, with no current evidence of a wage-price spiral or rising inflation expectations.

Dissent and Succession

  • Miran has dissented at every Federal Reserve meeting since September 2025.
  • His term as governor has expired, but he continues to serve while Kevin Warsh's nomination is pending Senate confirmation.
  • If confirmed, Warsh is expected to assume the chair role when Jerome Powell's term concludes in May.
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