Fed Governor Stephen Miran: I do think uncertainty potentially explains first half weakness

Economic Uncertainty & Policy - Uncertainty over policy, including potential tax hikes and global trading policy rearrangements, contributed to a weaker labor market in the first half of the year [1][2][3] - China's reneging on earlier trade deals introduces a new tail risk, potentially increasing downside risks to growth [3][4] - The balance of risks has shifted, necessitating policymakers to consider the implications for policy [5][6] Monetary Policy & Neutral Rate - Urgency to move to a more neutral policy stance quickly, as current policy is considered restrictive and vulnerable to shocks [7][8] - The speaker's view on the pace of reaching a neutral rate is somewhat out of consensus, advocating for a quicker move due to less concern about upside inflation [9][10] - Neutral policy rate is the rate at which monetary policy is neither restrictive nor accommodative, but it's difficult to observe directly and models provide wide confidence bands [11][12] - Significant shocks to the economy in recent years, such as changes in immigration policy, have likely caused substantial shifts in the neutral rate [13][14][15] Economic Indicators & Market Reaction - The economy was weaker in the first half of the year, potentially related to trade and uncertainty around trade and taxes [17][18] - The housing market is moribund due to high mortgage rates, representing a significant transmission channel for monetary policy [19] - Bond market reaction to rate cuts differs this year compared to last year, with long yields slightly down by 4-5 basis points in the 18 trading sessions since the cut, contrasting with a 30 basis points increase in the same period last year [22]