Federal Reserve member Stephen Miran has withdrawn his previous expectations regarding the depth of interest rate cuts this year.
Miran stated that recent economic data shows the labor market is more resilient than expected and goods inflation is more persistent than anticipated. Following these developments, he indicated that aggressive interest rate cuts, as he advocated two months ago, may no longer be appropriate.
Speaking in an interview, Miran said, “The labor market has performed a little better than I expected in the last few months. There are also some signs of renewed strength in goods inflation.” He stated that the combination of these two factors led him to revise his projection of faster and deeper interest rate cuts, which he had outlined in December.
In the Fed’s December dot plot, Miran predicted that the policy rate could fall below 2.25% by the end of the year. However, his recent statements indicate a shift to a more cautious stance. Miran’s new approach suggests a more limited decline in interest rates and the adoption of a less aggressive easing path.
*This is not investment advice.