Myron, Fed board member "Policy rate should be lowered by 2 percentage points"

JH Kim

Summary

Steven Myron, a Fed board member, said the current policy rate is about 2 percentage points above neutral and that aggressive cuts are necessary.
Myron emphasized that keeping the policy rate high could lead to unnecessary layoffs and a higher unemployment rate.
He said that because of the Trump administration's policy environment, the policy rate could be lowered to the low 2% range, drawing investors' attention to the future direction of monetary policy.

On the 22nd (local time), according to the breaking economic news channel Walter Bloomberg, Steven Myron, a U.S. Federal Reserve (Fed) board member, said the policy rate remains in a restrictive area about 2%percentage points above neutral and that aggressive cuts are necessary.

In a speech to the New York Economic Club, Myron emphasized the need for rate cuts, saying, "Keeping short-term rates about 2%percentage points above the appropriate level could cause unnecessary layoffs and a higher risk of unemployment."

He also assessed that, due to the Trump administration's tax policy, immigration policy, deregulation, and tariff revenues, an economic environment is being created that could allow the policy rate to be lowered to the low 2% range.

Myron's remarks came amid ongoing discussions within the Fed about the timing and magnitude of rate cuts, and are expected to focus investors' attention on the future direction of monetary policy.