Monetary Matters with Jack Farley Fed Governor Miran: The Case For Big Rate Cuts | Miran on Deterioration in Labor Market, the Neutral Rate of Interest, and Fed Balance Sheet Policy
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Nov 6, 2025 Stephen Miran, a member of the Federal Reserve Board, advocates for more aggressive rate cuts, arguing that the current policy is too restrictive. He highlights the weakening labor market and changing demographic trends that are pushing down the neutral interest rate. Miran also discusses how imputed prices may inflate CPI readings and the impact of tariffs on national saving. He emphasizes the limited upside risk of inflation and the need for the Fed to reach neutrality quickly, all while maintaining the importance of central bank independence.
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Measured Inflation Is Partly Phantom
- Stephen Miran sees inflation as partly backward-looking and expects meaningful disinflation ahead, especially from shelter.
- He views many measured inflation components as imputed or lagging and therefore less threatening to future price pressures.
Shelter Inflation Will Converge Down
- Miran emphasizes shelter inflation lags market rents and expects measured shelter to converge downward soon.
- Falling net migration also reduces housing demand, accelerating shelter disinflation.
Neutral Rate Has Fallen Rapidly
- Miran argues neutral rate (r-star) moved down sharply this year due to fast-moving drivers.
- He believes policy is now more restrictive because neutral fell faster than many colleagues expected.