Fed Governor Miran: Still backs cuts, rates 'about a point' lower

Federal Reserve (Fed) Governor Stephen Miran told CNBC’s “Squawk on the Street” on Monday that he still supports cutting interest rates and that policy could be about a percentage point lower over the course of this year. He warned that market volatility tied to the Iran conflict should not by itself derail a path toward easing if underlying inflation and labor dynamics permit.

Miran emphasized concerns about the U.S. labor market, noting wage growth has moderated and that the Fed is, in his view, restraining labor demand more than necessary. He argued there is no current evidence of a wage-price spiral or an oil-driven inflation shock that would justify abandoning cuts, reiterating prior comments that at times he has looked for larger easing—previously mentioning as much as 150 basis points in communications earlier this year.

Market reaction to Miran’s remarks was modest but meaningful: futures traders kept some probability of rate cuts priced in for later in the year, short-term Treasury yields eased slightly, and commodity-sensitive assets were closely watched as oil prices rose. Miran also noted that Fed balance-sheet reduction has a tightening effect and that lowering short-term rates can be used to offset that tightening — a point that complicates the transmission of policy to markets.

Taken in a broader context, Miran’s stance highlights the split within the Fed over timing and scale of cuts amid geopolitical shocks. While the Federal Open Market Committee (FOMC) held the federal funds rate steady at 3.5%-3.75% on March 18, Miran’s comments underscore that some governors view policy as still restrictive and see scope to ease as inflation trends toward target. Geopolitical developments and energy prices remain key upside risks to mediate.

Looking ahead, strategists say Miran’s public support for cuts could keep markets biased toward easing, but actual moves will depend on upcoming CPI and payrolls data and on whether oil-induced price pressures feed into inflation expectations. If core inflation continues to decelerate and labor market slack increases, the Fed could move toward the kind of cumulative easing Miran envisions; if not, the committee may delay or scale back cuts. Investors will therefore watch both data releases and FOMC commentary for confirmation.