Chicago Fed President Austan Goolsbee, speaking on CNBC, highlighted the central bank’s dilemma: “You see this uptick in inflation and particularly the uptick in services inflation, which is probably not coming from tariffs,” Goolsbee, a voting member this year, said. “I’m a little wary about front-loading too many rate cuts and just counting on the inflation going away.”
Dallas Fed President Lorie Logan, speaking separately at the University of Texas at Austin, echoed Goolsbee’s caution. “We need to be very cautious about rate cuts from here and make sure that we appropriately calibrate policy so that you don’t ease conditions too much and only to have to reverse course, which would be very painful in terms of restoring price stability,” Logan said.
Fed Vice Chair for Supervision Michelle Bowman, who supported a smaller rate cut at the last meeting, has since warned that the Fed risks falling behind in supporting the labor market. Meanwhile, Chair Jerome Powell recently noted that there was “not widespread support at all for a 50-basis-point cut,” underscoring the lack of consensus within the central bank.
Miran’s rationale and outlier position
Miran argued that the so-called neutral interest rate—the level at which policy is neither restrictive nor stimulative—has declined, meaning current policy is tighter than it appears. He pointed to tight housing finance conditions as evidence, despite buoyant financial markets.
Miran also addressed concerns about tariffs, stating he was “not seeing broad based inflation increase” from them and that Americans could manage the impact through demand elasticity. He reiterated that his role at the Fed is to “bring out of consensus ideas” and that he will “speak my mind if I believe the ideas are right.”