Outgoing Federal Reserve Governor Stephen Miran said Thursday that he is looking for 150 basis points of interest-rate cuts this year to boost the U.S. labor market.
Miran, whose term ends this month, told Bloomberg Television’s Surveillance program that Fed officials had room to reduce rates more given his view that underlying inflation was likely running at 2.3%.
“I’m looking for about a point and a half of cuts. A lot of that is driven by my view of inflation,” Miran said. “Underlying inflation is running within noise of our target, and that’s a good indication of where overall inflation is going to be going in the medium term.”
Rate Was Cut at December Meeting
According to Reuters, his comments offered a more precise view of his target for rate cuts this year. On Tuesday, Miran told the Fox Business Channel that “well over 100 basis points of cuts are going to be justified this year.”
Reuters reported that his call for 150 basis points of cuts is in line with the lowest projection for the appropriate funds rate by the end of 2026 among the Fed’s 19 policymakers that was released at the end of December’s rate-setting meeting. That anonymized estimate saw the fed funds rate at 2.00%-to-2.25% as opposed to the current level of 3.50%-to-3.75%. It also is 50 basis points below the next lowest estimate.
NBC News reported that the U.S. economy added just 50,000 jobs in December, capping off the worst year for hiring since 2020, when the Covid-19 pandemic brought the global economy to a haltl.
Save for 2020, last year now ranks as the poorest year for job creation since 2009 and the global financial crisis.
Miran is serving at the Fed while on leave from his role as a top economic advisor to President Donald Trump, who repeatedly has pushed the central bank to deliver big rate cuts.
On Dec. 1O, the Fed voted to cut its rate by a quarter point.
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