Miron: "US policy rate needs to be cut by more than 1 percentage point this year"

Stephen Miron, a member of the Board of Governors of the US Federal Reserve (Fed) and a close aide to US President Donald Trump, forecast that “the total amount of benchmark rate cuts this year will be slightly more than 1 percentage point.”

In an interview with Fox Business on the 3rd (local time), Miron said, “If you look at core inflation, it’s hard to say that very strong price pressures are actually emerging across the economy,” adding that this is why he holds that view. He added, “You don’t see much in the way of strong supply-demand imbalances of the type monetary policy needs to respond to,” and analyzed that “I think rates are being kept at an excessively high level due to issues with how inflation is measured rather than price pressures themselves.”

Miron stepped down from his post as chair of the White House Council of Economic Advisers (CEA) that day. President Trump nominated Miron to serve the remainder of the term of Fed Governor Adriana Kugler, who resigned midterm last August. Miron, who had remained CEA chair on unpaid leave while serving as a Fed governor, had pledged that if he continued working at the Fed after his official remaining term ended (on the 31st of last month), he would step down as chair.

The move came amid expectations that the confirmation process for former Fed Governor Kevin Warsh, whom President Trump nominated as the next Fed chair, will be delayed. Eleven Democratic members of the US Senate Banking Committee sent a letter to Committee Chair Tim Scott requesting that Warsh’s confirmation process be put on hold until the Department of Justice halts its investigations into Fed Chair Jerome Powell and Fed Governor Lisa Cook.

On the 24-member Senate Banking Committee, Republican Sen. Thom Tillis opposes confirmation, and at least 12 votes against are expected. In that case, the nomination cannot be brought to the full Senate floor. Miron will continue working at the Fed until Warsh is appointed and fills Miron’s seat.

Reporter Da-yeon Lim allopen@hankyung.com