In his first public speech as a member of the Federal Reserve Board, Stephen Miran dissented sharply with his colleagues, calling for aggressive interest rate cuts and warning that current monetary policy is “very restrictive”.
Miran Argues Real Neutral Rate Is ‘Near Zero’
Speaking at The Economic Club of New York, Miran argued that the appropriate federal funds rate is in the “mid-2 percent area,” nearly two percentage points below its current level, and that failing to act poses “material risks to the Fed’s employment mandate”.
Miran, in remarks dated Sept. 22, made it clear that his view “diverges from those of other FOMC members”. He contended that policymakers are insufficiently accounting for powerful nonmonetary forces that are depressing the neutral rate of interest.
He expressed that the rate is neither expansionary nor contractionary. His …