Federal Reserve board of governors member Stephen Miran on Monday criticized his fellow central bankers for setting interest rates too high and touted several Trump administration policies he believed justified steep cuts.
In his first speech since leaving the White House to join the Fed board, Miran defended his consensus-breaking vote for lower interest rates last week and said the bank was threatening the U.S. job market with its current level.
Miran said that while the Fed’s current interest rate range may seem close to a level that neither stimulates nor restricts the economy, President Trump’s massive changes to taxes, trade and immigration have pushed down the true neutral level of interest rates.
In other words, Miran argued, Trump has changed the economy in such a way that it requires much lower interest rates in order to keep growing.
“It should be clear that my view of appropriate monetary policy diverges from those of other FOMC members,” Miran said, referring to the Federal Open Market Committee (FOMC), the panel of Fed officials responsible for setting interest rates.
“I view policy as very restrictive, believe it poses material risks to the Fed’s employment mandate, and would like to explain why.”
The FOMC voted 11-1 last week to cut interest rates by 0.25 percentage points, reducing borrowing costs for the first time this year. Only Miran, who until last week served as Trump’s top White House economist, opposed the move and instead called for a 0.5 percentage point cut.
Miran is on temporary leave from his position as chair of the White House Council of Economic Advisers (CEA) while serving out the remaining four months of a vacated term on the Fed board of governors. Democrats and some economists have described Miran’s presence on the Fed board and refusal to resign from CEA as clear violations of the bank’s independence.
Throughout his Senate confirmation process, Miran insisted he would make interest rate decisions exclusively based on his own view of the economy, not Trump’s frequent calls for lower rates and tirades against other Fed officials.
But the overlap between Miran’s view of the economy and his work for Trump was clear in his maiden speech as a Fed governor, in which he credited administration policies for reshaping the economy and cited research produced by the CEA under his watch.
Miran said the combination of Trump’s mass deportations of undocumented immigrants and higher tariff revenues would sap enough energy from the economy to require significantly lower interest rates.
He cited the steep declines in hiring and job openings since the start of 2025, which other Fed officials have also attributed to Trump’s immigration policy, and estimated 2 million undocumented immigrants could be deported before the end of the year.
“Labor market statistics and anecdotal evidence suggest border policy is exerting a major impact on the economy. While the effect would likely normalize over time, this reduced level of population growth is also consistent with zero net immigration in 2026 and 2027,” Miran said.
Even when accounting for expected increases in investment driven by Trump’s tax law and deregulation, Miran said the net result justifies the Fed cutting interest rates to somewhere between 1.5 percent and 2 percent — far lower than the bank’s current range of 4 percent to 4.25 percent.
“To be clear, I don’t want to imply more precision than I think is possible in economics. Assumptions and approximations abound. Nevertheless, I must stake out a position, and this is my best ballpark estimation,” Miran said.
“The upshot is that monetary policy is well into restrictive territory. Leaving short-term interest rates roughly 2 percentage points too tight risks unnecessary layoffs and higher unemployment.”
