Fed's Miran: Fed Should Deliver Big Rate Cuts in 2026

Federal Reserve Governor Stephen ⁠Miran, whose term at the U.S. central bank ends later this month, said Tuesday aggressive U.S. interest rate cuts are needed this year to keep the economy moving forward.

"I think policy is clearly restrictive and holding the economy back," Miran said. "I think that, ‍you know, well over 100 basis points of cuts are going to be ‍justified this year," he said. Miran's term as a Fed governor ends on January 31.

Miran said underlying inflation is basically at the Fed's 2% target ⁠and he expects the economy to grow robustly this year, arguing on Fox Business that a failure by the Fed to lower short-term borrowing costs could upend that outlook.

He is controversially serving ​at the Fed while on leave from his role as a top economic advisor to President Donald Trump, who has repeatedly pressed the central bank to deliver big rate cuts.

The Fed lowered its benchmark overnight interest rate ‍by three quarters of a percentage point last year, including a 25-basis-point cut in December that left the ⁠rate in the 3.50%-3.75% range.

Miran dissented against that move in favor of a 50-basis-point cut. He has used his time at the Fed to argue that huge changes in immigration related to the Trump administration's crackdown on immigrants will help lower inflation, and that the Fed needs to get ahead of that ⁠development by cutting rates.

The Fed lowered rates ​three times last year to ⁠help offset rising job market weakness. Many of its policymakers, however, are still wary of inflation that remains well above the ‍2% target, largely due to Trump's aggressive tariff hikes.

Fed officials have currently penciled in one rate cut for this year.

Philadelphia Fed ‌President Anna Paulson, who is a voting member of the rate-setting Federal Open Market Committee this year, said on Saturday that "some modest further adjustments to the policy rate would likely be appropriate later in the ⁠year" if ​her economic expectations are realized.

Miran said he did not believe he was a contender to succeed Fed Chair Jerome Powell, whose term as central bank chief ends ‍in May. "It's not something I put myself forward for. I think the president has a slate of extremely qualified candidates in front of him," Miran said.