Fed Official Says Trump's Deregulation Will Boost Growth

Summary

Fed Governor Stephen Millan argued that the Trump administration’s deregulation agenda justifies further interest rate cuts.Zhitong He posits that deregulation will boost productivity and growth without inflation, estimating it could lower inflation by 0.5 percentage points by eliminating 30% of regulations.Sina Finance This supports his consistently dovish stance, where he has advocated for aggressive cuts of over 100 basis points in 2026 to avoid economic contraction, a view that contrasts with other officials.Zhitong+ 2 This comes amid warnings from business leaders like Jamie Dimon that political pressure on the Fed could backfire, raising inflation expectations and long-term rates.Wallstreetcn

Impact Analysis

This is Millan providing the economic justification the White House needs to push for aggressive rate cuts.Zhitong He’s framing deregulation as a positive supply shock that’s disinflationary, creating room for the Fed to ease policy significantly—he’s floated over 100 bps in cuts.Sina Finance+ 2 But this isn’t a simple economic argument; it’s happening while the administration is actively attacking the Fed’s independence.Zhitong The real signal is the growing internal and external conflict. While Millan’s dovishness is music to the market’s ears, CEOs like Jamie Dimon are flagging the key risk: this politicization could un-anchor inflation expectations and ultimately drive long-term yields higher.Wallstreetcn The market is focused on the cuts, but the bigger story is the risk to Fed credibility. This sets up a classic yield curve steepener trade—the front end rallies on cut expectations while the long end sells off on rising inflation risk premium.