Fed’s Miran Adds Deregulation to His Argument for Rate Cuts

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(Bloomberg) — Federal Reserve Governor Stephen Miran said the Trump administration’s deregulatory agenda offers the central bank an additional reason to continue lowering interest rates.

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“I believe that the sweeping deregulation underway in the United States will significantly boost competition, productivity and potential growth, allowing faster economic growth without putting upward pressure on inflation,” Miran said Wednesday at an event in Athens. 

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Miran is serving at the Fed while on unpaid leave as one of President Donald Trump’s top White House economic advisers. Since joining the central bank in September, he has repeatedly argued for a quick series of outsize rate cuts and said the Fed’s policy stance is unnecessarily restraining the economy.

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He has made his case by pointing to various factors, including his expectation that shelter inflation will ease and his low estimate for the so-called neutral rate — the level at which Fed policy would neither stimulate nor restrain the economy.

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“This would support continued easing of restrictive monetary policy, but ignoring these effects would result in monetary policy that is needlessly contractionary,” he said, referring to deregulation.

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Miran said he estimates that, based on the pace of the Trump administration’s deregulatory efforts in the first part of 2025, 30% of the regulatory restrictions in the Code of Federal Regulations will be eliminated by 2030. 

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“On balance, I believe the substantial deregulation that has occurred in 2025 will continue over at least the next three years and be a large positive shock to productivity that will put downward pressure on prices,” Miran said. “On net, this supports a more accommodative stance of monetary policy.” 

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Fed officials cut their benchmark interest rate three consecutive times in the final months of 2025 by a total of 75 basis points, but have signaled they may hit pause at their next meeting on Jan. 27-28. 

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Policymakers are divided about the outlook for inflation and employment. Some are more worried about signs of fragility in the labor market and support more cuts, while others are urging caution on further reductions given that inflation has lingered above the Fed’s 2% goal.

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Criminal Probe

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During a question-and-answer session following his remarks, Miran also said he doesn’t expect the Department of Justice’s criminal investigation into the Fed and Chair Jerome Powell to affect the inflation outlook. The Fed last week was served with DOJ subpoenas threatening criminal indictment, prompting forceful pushback from Powell. The subpoenas are related to an ongoing renovation of the Fed’s headquarters in Washington and congressional testimony Powell provided about the project last year. 

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Miran was asked whether he agrees with JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon who suggested the investigation has the potential to undermine the Fed’s independence, and to raise inflation expectations and interest rates over time. 

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“I don’t really buy that. I think that inflation is very much headed in the right direction,” Miran said. “Inflation’s on the right trajectory. It’s coming down. The mechanics of all the components are in the right place. And you know, this other stuff is just noise.” 

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Miran was also asked for his reaction to a statement released by several global central bank chiefs, including those at the European Central Bank, Bank of England and the Bank of Canada, expressing solidarity with Powell in the wake of the subpoenas. 

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“I don’t think it’s appropriate for central bankers to get involved in non-monetary policy issues in their own country, and I think it’s even less appropriate in other countries,” Miran said. “That’s all I’ll say.”

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