New Federal Reserve Governor Stephen Miran said the Fed’s target interest rate is roughly 2 percentage points too tight, risking unnecessary layoffs and higher unemployment.
Employment Concerns: In his first speech since being sworn in as Fed governor last week, Miran said the appropriate federal funds rate is roughly mid-2%, which is almost 2 percentage points lower than current policy. Miran said he is committed to bringing inflation sustainably back to 2% but that leaving monetary policy so restrictive poses risks to the Fed's employment mandate.
Recent Fed Vote: The Federal Open Market Committee last week voted to lower target interest rates by 25 basis points to a range of 4.0% to 4.25%. Miran voted against the action, saying he preferred a 50-point cut.