Donald Trump’s first Federal Reserve appointee, Steve Miran, is once again pressing for deep rate cuts, saying current monetary policy is now too tight and getting tighter by the day. In a lengthy interview aired on Bloomberg, Steve said he wants the Fed to cut rates by 125 to 150 basis points this year, warning that delaying action will raise the chances of rising unemployment and a failure to meet the Fed’s employment mandate. According to the interview, Steve said, “The longer that policy stays excessively restrictive, the greater the risks to the downside for the economy.” When asked about how it felt walking into his first FOMC meeting, Steve said he’d been briefed beforehand, but still found the experience unexpectedly warm. “Everyone was extremely friendly and collegial,” he said, describing the Fed as a group that makes decisions based on the strength of policy arguments. He emphasized that persuasion, not politics, is what moves the needle in the room. “We make policy by persuasion,” he added. Steve links rate path to changes in migration and savings Steve argued that the neutral rate has fallen because of sharp changes in both fiscal policy and immigration. Last year, he says, neutral was higher due to massive national borrowing and a spike in population growth. But those conditions have reversed. “We had the biggest positive population growth shock in my lifetime, and now it’s turned into the biggest negative population growth shock in my lifetime,” he said. He believes the Fed hasn’t moved fast enough to adjust to this reversal. “These policies didn’t change overnight; they’ve been kicking in over the course of the year,” he explained. As the neutral rate moves lower, keeping rates where they are becomes more damaging. “Policy is becoming tighter every day as these policies continue to kick in.” On market conditions, Steve pushed back against arguments that financial conditions are still loose. “Look at the housing market,” he said. “It’s in a very different state than financial markets.” Steve pointed out that while asset prices may not reflect it, the structure of the economy has changed. Lower investment taxes and deregulation may be boosting capital markets, but that’s not a reason to delay rate cuts. “Attributing all changes in financial assets to monetary policy is a mistake.” Steve wants fast action before labor market breaks For Steve, urgency matters. “My view is that policy’s quite restrictive. I’d like to adjust quickly to get back to a more neutral area,” he said. He supports a series of 50 basis point cuts to bring policy closer to balance. The reason for speed isn’t a prediction of collapse—it’s to avoid one. “If you wait to see the result of that, you’ve waited too long,” he warned. Asked how the Fed should react if inflation spikes again, Steve said it depends on the cause. “If inflation is much higher because there’s a significant expansion in national borrowing, that might be more persistent,” he explained. But if it’s due to one-time tax changes like a VAT or tariff, the Fed should hold steady. “Monetary policy shouldn’t respond to fiscally mandated price changes,” he said, adding that global central banks often look through such moves. Housing also plays into his inflation outlook. “If you’re increasing the demand for housing by dramatically increasing population growth without more supply, you get upward pressure on shelter inflation,” he said. But now, with declining migration and steady housing construction, the opposite is happening. He cited work by economist Albert Saiz, saying, “A 1% increase in the number of immigrant renters leads to a one percentage point change in the rents.” Steve doesn’t think immigration is a short-term story either. “I have good reason for expecting that the immigration story is going to persist at least for another three and a half years,” he said. Asked if he’d like to stay in his role after this year, Steve kept it brief. “I love this country and I’m happy to serve this country in any way that I’m asked to do so,” he said. “But personnel decisions are not decisions that I make.” If you're reading this, you’re already ahead. Stay there with our newsletter .
