Fed’s Miran Repeats View That Policy Remains Too Restrictive

Core Viewpoint - Federal Reserve Governor Stephen Miran advocates for more aggressive interest rate cuts, arguing that current monetary policy is too restrictive and does not align with his optimistic outlook on inflation [1][2]. Summary by Sections Monetary Policy Stance - Miran believes that the Federal Reserve's current policy is overly restrictive, suggesting that the neutral rate is significantly lower than the current policy [1]. - He has consistently called for looser monetary policy, dissenting against the recent quarter-percentage point rate cuts in September and October, favoring half-point reductions instead [2]. Recent Rate Cuts - The Federal Reserve cut its benchmark rate by a quarter-point for the second consecutive month, bringing the target range to 3.75% to 4% [3]. - Fed Chair Jerome Powell indicated that another rate cut in December is uncertain, reflecting ongoing concerns about the labor market [3]. Inflation Concerns - Some Fed officials express worries that lowering rates too quickly could keep inflation elevated, with Chicago Fed President Austan Goolsbee prioritizing inflation concerns over labor market issues [4][5]. - San Francisco Fed chief Mary Daly emphasized the need to balance inflation and employment mandates while considering future rate cuts [5]. Credit Market Insights - Miran pointed out recent stress in credit markets as a sign that monetary policy may still be too tight, indicating potential underlying issues that have been previously overlooked [5]. - He noted that the emergence of uncorrelated credit problems suggests a need for reevaluation of the current monetary stance [6].