Stephen Miran, currently serving on the Federal Reserve’s Board of Governors since being appointed by President Donald Trump. His uncommon perspective on the U.S. economy is making his peers do a double take. Appointed in September to temporarily fill a vacated seat, Miran’s approach includes advocating for significant interest rate cuts based on his interpretation of Trump’s economic policies.
Miran says the new economic climate calls for a new perspective on monetary policy. Perhaps most interestingly, he believes we’re already seeing the effects of recent borrowing costs weigh on the economy more than most Fed officials understand. His views on the economy stand in stark contrast with those of most Fed officials. He did this by saying during his first two meetings exactly what he was thinking by voting publicly against the majority of the board.
A Departure from Conventional Thought
Trump’s tariffs won’t bring inflation, despite what some economists are forecasting, according to Miran. This belief underlines his logic for continuing to make deep cuts to interest rates. Rather, he argues that persistently high inflation is about to fall dramatically because of “massive disinflation” in the pipeline. In his first major address following his swearing in, Miran expressed his views on the consequences of President Trump’s policies. He argues they would raise the lower “neutral rate of interest,” giving additional reasons to lower borrowing costs.
Perhaps Miran’s most controversial claim found in his testimony is that mass deportations would take pressure off the housing market. He implies that this might help bring down the plan’s overall rates of return, which are assumed to play a role in the expected disinflation. While this line of thinking is certainly novel, it has not gained much traction among his contemporaries.
“If you keep policy this tight for a long period of time, then you run the risk that monetary policy itself is inducing a recession.” – Stephen Miran
We’ve been told by many analysts that his positions are “out of consensus.” This has produced an atmosphere of cynicism or skepticism around his proposals. David Seif, an economist, acknowledged the unconventional nature of Miran’s arguments, stating, “It’s more of a debate on the inputs that he’s putting into his economic modeling, which are controversial.”
Dissenting Voices Within the Fed
During the central bank’s October policy meeting, Miran made headlines by dissenting against the decision to implement a quarter-point interest rate cut, instead advocating for a half-point reduction. This course of opposition reveals his deep rooted conviction to a much ruder contradiction monetary character, right in line with Trump’s fiscal philosophy.
Critics within the Federal Reserve have already taken to the op-ed pages to voice skepticism of Miran’s plans. Michael Feroli, another economist, remarked, “We find some of his arguments questionable, others incomplete and almost none persuasive.” This seeming disenchantment is part of a bigger worry among Fed officials about what his Wall Street-y policy views might mean.
Miran has heard the pushback and still continues to hold these beliefs. Most prominently, he has gone on the record to downplay the risks of inflation. For now, he has no cause for concern.
“I don’t see a reason to run that risk if I’m not concerned about inflation on the upside.” – Stephen Miran
Bridging Perspectives on Immigration and Labor
Miran’s approach to immigration policy is of particular interest because of where it overlaps with the evolving world of labor market dynamics. Even as an official of the Federal Reserve, Lisa Cook conceded that federal immigration considerations are important when determining their effects in local labor markets. She highlighted the importance of immigration as a major factor to be considered in economic policy.
Miran’s first month as a central banker though has certainly been one of deep dive outreach. He engaged in more than a dozen events and media interviews to help clearly communicate the administration’s economic vision. This early, proactive outreach very well could be an indication of a genuine desire to lay the groundwork for acceptance of his unconventional approaches among a larger economic constituency.
Miran is delving into the intricacies of Federal Reserve policymaking. His tenure will be guaranteed to produce robust discussion and vigorous examination.