Fed’s Miran: Current fed policy is more restrictive than people think because the neutral rate has fallen | FXStreet
Federal Reserve Governor Stephen Miran spoke at the Nomura Research Forum in Washington, DC. He stated that AI investment could lead to a higher neutral interest rate, and that recent policy changes, including immigration, have resulted in rapid shifts in the neutral rate.
Key Comments
AI investment could lead to a higher neutral interest rate.
Recent policy changes, including immigration, have produced fast changes in the neutral rate.
Current fed policy is more restrictive than people think because the neutral rate has fallen.
Difference with policy views of colleagues is more based on speed of cuts than destination.
Have a more sanguine view of inflation, mostly due to expectations about housing costs.
In coming quarters there will be a material decline in services inflation driven by housing.
Put less weight on the value of changing policy gradually.
If data comes in hotter than expected would have to reevaluate.
If housing in particular does not show falling inflation would have to question outlook.
Feel confident that shocks like immigration are large enough to influence policy.
No evidence in the data that tariffs are raising inflation; arguments otherwise are based on prior trends.
Key categories of imported goods are not seeing price increases that different from other goods.
Goods inflation rates in the US are comparable to those in other countries.”
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