Washington (United States) (AFP) – US Federal Reserve Governor Stephen Miran has scaled back his expectations of how much the central bank should lower interest rates this year, he said in an interview published Thursday. “The labor market came in a little bit better than I came to expect over the last few months,” he told The Peg, a Substack page run by journalist Izabella Kaminska. “There’s been some signs of even more firming in goods inflation,” he added in the interview which took place on Wednesday. “And so those two things combined would make me undo what I did in December,” Miran said.
In December, Miran projected that rates should fall below 2.25 percent by end-2026. But he now leans towards a return to his September position, which saw rates hovering below 2.75 percent. Miran is one of seven governors on the board of the Fed, who along with five regional Fed presidents comprise the committee that votes on interest rates. He still remains among the most “dovish” Fed officials, meaning one who tends to favor lower interest rates to boost the economy rather than higher levels to fight inflation.
But this could point to a shift between Miran’s position and that of President Donald Trump’s, with the US leader repeatedly calling for substantially lower rates. Miran was nominated by Trump to the Fed’s board of governors last year to finish out the term of Adriana Kugler, an appointee of former president Joe Biden who stepped down early. He previously chaired the White House Council of Economic Advisers (CEA) and initially took an unpaid leave of absence from the body when he joined the Fed, drawing scrutiny from critics.
But Miran resigned from the CEA this month, upholding a pledge he made to the US Senate during his confirmation process — that he would depart if he remained in his role at the central bank. While the Fed term he fills expired at the end of January, he can stay on at the bank for now until the Senate confirms his successor. For now, Trump is widely anticipated to appoint Kevin Warsh — his choice for the next Fed chairman — using this vacancy.
© 2024 AFP
