(Bloomberg) - Federal Reserve Governor Stephen Miran said monetary policy remains restrictive and that he will continue to advocate for outsize interest-rate cuts.
“The Fed is too restrictive, neutral is quite a ways below where current policy is,” Miran said Monday in an interview on Bloomberg Television. “Given my rather more sanguine outlook on inflation than some of the other members of the committee, I don’t see a reason for keeping policy as restrictive.”
Miran has repeatedly called for looser monetary policy, dissenting against policymakers’ decisions to lower the Fed’s policy rate by a quarter-percentage point in September and again in October in favor of half-point reductions.
Fed officials cut their benchmark rate last week by a quarter-point for a second month in a row after a sharp slowdown in hiring over the summer raised concerns about the labor market. Fed Chair Jerome Powell, speaking to reporters Wednesday after the decision, said another cut in December was “not a forgone conclusion.” The rate cut brought the target range for the benchmark rate to 3.75% to 4%.
A handful of other Fed policymakers have since voiced their concerns that the central bank risked allowing inflation to remain high by moving too far in lowering rates.
Miran added a new wrinkle to his case for lower rates, saying recent signs of stress in credit markets could be an indicator that monetary policy remains too tight.
“When you have a series of seemingly uncorrelated credit problems that had been masked for a while and then suddenly come to light, it tells you something about the stance of monetary policy,” he said.
Miran has faced criticism for his decision to take a leave of absence from his post as chair of the White House Council of Economic Advisers for a temporary role at the Fed, sparking concerns about his independence from the Trump administration.
“The longer you keep policy restrictive the more you run the risk that monetary policy itself causes a downturn in the economy,” Miran said.
By Enda Curran
With assistance from Jonathan Ferro, Lisa Abramowicz and Annmarie Hordern
