Monetary Policy Debate Heats Up: Fed Governor's Rate-Cut Views Spark Controversy

In a bold move that stirred debate, Federal Reserve Governor Stephen Miran is pushing for more significant interest rate cuts, arguing that current U.S. monetary policies are too stringent. His stance, unveiled at the Economic Club of New York, challenges the consensus of fellow Fed members.

Miran's views are heavily influenced by policy shifts under former President Donald Trump, including tightened immigration and deregulation, which he believes lower the so-called 'neutral' rate of interest. This unobservable rate, Miran argues, requires monetary policies to adapt and prevent economic contraction.

His perspective diverges from the median Fed outlook, which suggests milder rate adjustments. Despite concerns about potential inflation, Miran underscores the urgency of aligning policy with updated economic conditions to prevent unnecessary job losses and optimize growth.

(With inputs from agencies.)