Following Surprising Non-Farm Payroll Data in the US, the Most Dovish Member Stephen Miran Spoke: “Interest Rates Must Be Cut”

Federal Reserve Board member Stephen Miran, in his statements regarding monetary policy, argued that the current policy is too tight and called for interest rate cuts.

Miran stated that the Fed’s current approach is too tight for the economy and that the policy interest rate should be lowered to a neutral level.

Miran stated that the Fed generally does not react directly to fluctuations in oil prices. However, he noted that if the recent oil shock weakens demand, it could bring down core inflation. In such a scenario, he said, the Fed would be more inclined to adopt a more dovish monetary policy.

A FED official stated that he believes the neutral interest rate is between 2.5% and 2.75%, adding that the central bank should first lower interest rates to this level and then reassess economic conditions. Miran also indicated that he might vote against the FED’s decision if it does not cut interest rates this month.

On the other hand, Miran also made statements regarding his term of office, saying that it is difficult to make plans in the current climate of uncertainty and that he plans to continue in his position until the name of his successor is officially approved.

Miran’s remarks came after weak data from the US labor market. According to the released figures, the US economy experienced unexpected job losses in February. Non-farm payrolls fell by 92,000 people, while the unemployment rate rose to 4.4 percent.

*This is not investment advice.