Newly appointed Federal Reserve Governor Stephen Miran warned Monday that the central bank’s refusal to aggressively slash rates could put the U.S. job market at risk unnecessarily.
In remarks to the Economic Club of New York, Miran broke from his new colleagues and said that the Fed’s key interest rate should be much lower than its current 4.1% level, suggesting that it should instead be closer to 2.5% due to sharp declines in immigration, rising tariff revenue and an aging population.
“I view this policy as very restrictive, and I believe it poses material risk to the Fed’s employment mandate,” he said, according to the New York Post. “I believe the appropriate funds rate is in the mid 2% area, almost two percentage points lower than the current policy … leaving short-term interest rates roughly 2 percentage points too tight risks unnecessary layoffs and higher unemployment.”
Miran’s comments highlight the differing perspective he brings to the Fed’s continued debate over interest rate policy, but his appointment has not been without controversy. Following his confirmation by the Senate last Monday, he has taken unpaid leave from and kept his position as the head of the White House’s Council of Economic Advisers.
Sen. Lisa Murkowski, R-Alaska, joined all Democrats in voting against Miran’s confirmation, which squeaked through the Senate in a 48-47 vote.
He replaces Adriana Kugler, a Biden appointee who stepped down last month and will serve out the rest of her term, which expires on Jan. 31, 2026. Miran has suggested he would return to his White House role at that point, although he could remain on the board until a replacement is chosen.
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