By Howard Schneider
WASHINGTON, April 16 (Reuters) – Federal Reserve Governor Stephen Miran, by far the U.S. central bank’s most aggressive advocate for fast and immediate interest rate cuts, said on Thursday he may again scale back the pace at which he thinks rates should fall because inflation is proving more persistent than expected.
Miran, in comments at an economic forum in Washington, said he thought U.S. inflation dynamics had become “a little bit less favorable” even before the U.S. war with Iran pushed up the global price of oil, and he dropped his rate outlook at last month’s policy meeting from an aggressive six cuts by the end of 2026 to just four.
With a key measure of U.S. price increases expected to hit 3.2% as of March, versus the Fed’s 2% target, “I might have three (rate cuts), I might have four, I haven’t made up my mind,” Miran said, noting that while he still expects the Fed to hit its inflation target next year, the Iran war had reshaped the risks around the outlook.
“I think we’ll net out to being pretty close to target a year from now,” Miran said, adding that he would still support a rate cut at the U.S. central bank’s April 28-29 meeting, given his concerns about a slowing job market.
But at the same time, he said, “the energy developments have changed the distribution of risks … and they’ve increased the risks of higher inflation.”
Miran’s comments, coming from the central bank’s most dovish policymaker and the official most aligned with President Donald Trump’s call for dramatically lower interest rates, show how the Middle East conflict has muddled a monetary policy outlook that already was difficult for Trump’s Fed chief nominee, Kevin Warsh.
Trump has said he is confident Warsh will cut rates, but there has been little support among Fed officials – besides Miran – for the sort of immediate reductions the president has advocated.
Investors have taken a dim view as well, with contracts tied to the Fed’s policy rate anticipating it will remain steady in the current 3.50%-3.75% range until perhaps June of 2027.
(Reporting by Howard Schneider, Editing by Franklin Paul and Paul Simao)
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