Fed Governor Stephen Miran says more than 100 basis points in rate cuts justified this year

Federal Reserve Governor Stephen Miran said the central bank should move more aggressively on interest rates this year, arguing that rate reductions totaling more than 100 basis points are justified as underlying inflation pressures continue to fade.

In an interview with Maria Bartiromo on FOX Business’ “Mornings with Maria,” Miran said inflation is already running close to the Federal Reserve’s 2% target once temporary measurement distortions are stripped out. He said current policy remains clearly restrictive and could be holding back economic growth, making substantial rate reductions appropriate for 2026.

“I think we’ve got to cut more than 100 basis points this year,” Miran said. “Once you adjust it for quirks like the housing thing… once you adjust it for quirks like the portfolio management services… once you adjust it for those things, underlying inflation is running within noise of our target.”

Miran pointed specifically to housing inflation data, which he described as “backward-looking” and not reflective of current market conditions, noting that market rents have been growing at a slower annual rate even as official measures still show higher housing costs tied to post-pandemic disruptions.

He also cited distortions in portfolio management services data, arguing these figures continue to add to core inflation readings even as fees charged to investors have been declining, which he said exaggerates inflation pressures and supports a faster pace of easing.

The Federal Reserve cut interest rates three times last year, bringing the benchmark federal funds rate to a range near 3.50% to 3.75%. Markets are now largely expecting policymakers to hold rates steady at their next meeting later this month.

However, Miran argued additional easing will ultimately be needed, pointing to a labor market that is gradually cooling and an unemployment rate that has edged higher.

Beyond inflation, Miran pointed to a labor market that is gradually cooling, with the unemployment rate edging higher. He said maintaining overly tight policy risks stalling growth just as underlying economic conditions are improving. 

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“I think policy is clearly restrictive,” Miran said, “And holding the economy back and with underlying inflation… I think that… well over 100 basis points of cuts are going to be justified this year.”

Miran said the persistence of lagging inflation measures risks leaving policy unnecessarily restrictive. As underlying price pressures fade and the labor market cools, he argued the Fed should move faster to cut rates to avoid slowing growth more than needed.

President Donald Trump nominated Miran, currently chair of the White House Council of Economic Advisers, to the Federal Reserve Board of Governors in 2025 to fill the remainder of a term ending January 31, 2026, after former Governor Adriana Kugler resigned.

Miran told Bartiromo Tuesday that he has not spoken with Trump about serving as the next Fed chair.

“It’s not something I’ve put myself forward for,” he said.