WASHINGTON — Federal Reserve Gov. Stephen Miran said the central bank is keeping monetary policy too tight and should move more aggressively to cut interest rates this year as inflation pressures ease.
In an interview with Fox News, Miran said recent data suggest underlying inflation is cooling and that maintaining restrictive policy risks unnecessarily slowing the economy. He argued that steeper rate cuts–up to 100 basis points–would better align policy with current conditions, particularly as price increases show signs of moderating.
“The economy doesn’t need policy to be this tight,” Miran said in the interview, adding that the Fed should be prepared to adjust more decisively if inflation continues to trend lower.
The Debate Over Timing & Pace
The remarks come as the Federal Reserve weighs the timing and pace of potential rate reductions following a prolonged period of elevated borrowing costs aimed at bringing inflation back toward the Fed’s 2% target. While inflation has receded from its post-pandemic peak, policymakers remain divided over how quickly to ease.
The comments made by Miran, who said he is not in the running to become the next Fed chair, place him among officials who have signaled concern that holding rates high for too long could dampen growth and labor market momentum, analysts have noted. Other Fed policymakers have emphasized the need for additional confirmation that inflation is sustainably moving lower before cutting rates.
Looking for Clues
Markets have been closely tracking Fed communications for clues on when the first cut might occur and how deep reductions could be this year. Miran said the central bank should remain data-dependent but warned that waiting too long could increase the risk of an unnecessary economic slowdown.
The Fed’s next policy decision is scheduled for later this month.
