Wall Street rejects Miran's Fed call

Federal Reserve Governor Stephen Miran may still hope to persuade his central bank colleagues that there’s a case for dramatic reductions in interest rates.

- MOLLY SMITH

But he hasn’t convinced many on Wall Street.

Economists poured cold water on Mr Miran’s first major policy speech, in which he argued that the Trump administration’s policies — on trade, immigration, taxes and regulation — have significantly lowered the level of interest rates needed to guard against inflation.

That suggests the Fed’s benchmark rate is now far too high, Mr Miran said, arguing policymakers have been slow to recognise this fundamental change.

“We find some of his arguments questionable, others incomplete and almost none persuasive,” JPMorgan Chase & Co's Michael Feroli wrote in a note to clients.

Mr Miran was confirmed to the Fed's Board of Governors just in time for the central bank's Sept 16-17 meeting, at which policymakers cut interest rates by a quarter percentage point after keeping them on hold all year. He dissented in favour of a larger half-point reduction, and gave his first public address last week in support of his argument.