Fed Governor Stephen Miran Says Over 100 Basis Points Of Cuts Needed In 2026
Miran’s comments come after other officials said this week that interest rates may now be close to the neutral level that neither boosts nor restrains economic growth.
Photographer: Victor J. Blue/Bloomberg
Federal Reserve Governor Stephen Miran said the US central bank will need to cut interest rates by more than a percentage point in 2026, arguing monetary policy is restraining the economy.
“I think it’s very difficult to argue that policy is about neutral. I think policy is clearly restrictive and holding the economy back,” Miran said Tuesday during an appearance on the Fox Business Network. “I think that well over 100 basis points of cuts are going to be justified this year.”
Fed officials cut interest rates last month for a third consecutive time, but signaled additional near-term reductions aren’t guaranteed. Policymakers are split over the outlook for inflation and the labor market and penciled in one cut for 2026, according to the median estimate in their latest projections.
Miran’s comments come after other officials said this week that interest rates may now be close to the neutral level that neither boosts nor restrains economic growth. Miran has been calling for aggressive rate cuts since September, when he went on leave from his post as chair of the White House Council of Economic Advisers to fill a Fed governor term that ends this month.
Richmond Fed President Tom Barkin, in comments earlier Tuesday, nodded to the current level of rates being “within the range of its estimates of neutral,” referring to the projections published in December. Minneapolis Fed chief Neel Kashkari, speaking Monday, said his guess was that “we’re pretty close to neutral right now” given resilient economic growth.
The central bank’s benchmark is currently within a 3.5% to 3.75% band, and the estimates of the neutral level among the 19 policymakers on the rate-setting Federal Open Market Committee range from 2.6% to 3.9%, though the median estimate is 3%.
“Going forward, policy will require finely tuned judgments balancing progress on each side of our mandate,” Barkin said Tuesday in his remarks to the Raleigh Chamber of Commerce.
“With the hiring rate low, no one wants the labor market to deteriorate much further; with inflation above target now for almost five years, no one wants higher inflation expectations to get embedded. It’s a delicate balance.”
