Fed Governor Miran Leans Toward Three Rate Cuts This Year, Calls Blaming Inflation on Tariffs "Unfounded"

Fed Governor Miran stated, he leans toward supporting three rate cuts this year, but the Federal Open Market Committee (FOMC) might cut rates four times. For now, only three rate cuts are likely to be seen for the remainder of the year. Miran pointed out that even before the war broke out, the underlying components of inflation had become more challenging for the Fed. However, his expectation that core goods prices and housing inflation will continue to decline remains reasonable. One year from now, the 12-month PCE inflation rate is expected to approach the 2% target. Compared to pre-war levels, energy shocks have not altered expectations for the inflation outlook over the next 12 to 18 months. There is currently no evidence of an upward "wage-price spiral," and long-term inflation expectations remain stable. Nevertheless, he acknowledged that the war has increased the risk distribution around the baseline forecast. On the issue of tariffs, Miran stated that blaming goods inflation on tariffs is unfounded, and attributing a range of price-increasing factors to tariffs is irresponsible. Regarding the labor market, Miran believes there is no reason to think the cooling trend in the labor market will not continue. He currently believes the Fed should move toward a neutral rate, estimated as low as 2.5%. Additionally, the correlation between economic growth and the unemployment rate is not as tight as in the past; the reason remains uncertain but may be related to artificial intelligence. Although the United States is an energy exporter, changes in consumer spending driven by energy prices still weigh on economic growth. More content is being updated continuously. Risk Disclosure and Disclaimer Investing involves risk; caution is advised. This article does not constitute personalized investment advice and does not account for individual investors' specific goals, financial situations, or needs. Users should consider whether any opinions, views, or conclusions presented herein align with their specific circumstances. Investments made based on this content are at the user's own risk.