Fed Governor Miran: Policy Tighter Than Implied, Inflation Not a Concern; Cuts Still Justified

Fed Governor Stephen Miran warned Feb 12 that current monetary policy is tighter than implied by official statements, potentially constraining U.S. growth that otherwise benefits from Trump-era policies like tax cuts. He argues inflation is not a problem and that low shelter inflation can offset higher inflation elsewhere. "As long as inflation remains manageable, underwriting the labor market with looser monetary policy makes sense, especially as supply growth outpaces demand, supporting growth without inflation," Miran said. He advocated for further easing despite Fed policymakers leaving rates at 3.50%-3.75% in January, with a 10-2 vote against reductions. Dallas Fed President Lorie Logan, host of the event, favors maintaining restrictive policy, citing persistent inflation as the bigger risk than labor-market pressures.