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In a wide-ranging interview, Stephen I. Miran discussed why he thinks concerns about inflation are overblown and his worries about the economy if the Federal Reserve does not rapidly lower interest rates. Here is a full transcript.

Nov. 1, 2025, 5:02 a.m. ET

On Oct. 31, 2025, Stephen I. Miran, the newest member of the Federal Reserve’s Board of Governors, spoke with The New York Times. Below is a full transcript of his remarks during the 30-minute interview. It has been edited for brevity and clarity.

Colby Smith: I want to start with Wednesday’s policy decision. The quarter-point cut was widely expected, but there were definitely some surprising elements to the meeting. We saw dissents in opposite directions, and based on Chair Powell’s description, there seemed to be a very lively discussion about what to do next. How would you characterize the nature of the debate and the dividing lines? Was it mostly about different forecasts, risk tolerances or something else?

Stephen Miran: There are some folks who think that tariffs are driving a material amount of inflation. That’s not my view. And there are people who are then worried about second-round effects from those tariffs. And again, that’s not something that I worry about, either. First of all, I don’t really see tariffs as having thus far driven a meaningful amount of inflation, although that could change in the future.

And then, even if there were to be a meaningful amount of inflation from tariffs, in my mind it would be something that you would want to look through in the same way that you would look through a fiscally driven price change. It’s not the type of thing that monetary policy would respond to, because monetary policy typically responds to supply-and-demand imbalances and managing aggregate demand.

I am much more sanguine on more material shelter disinflation coming down the pipeline. There’s a couple of reasons for that. One is the end of the catch-up period between the way that rents are registered in the inflation data versus when they’re registered in the market as a whole. You don’t reset your lease every day. You reset your lease every six months, every year, every couple of years, depending on what the structure of your lease is. That means that when there’s a change in market rents, there’s a lag between when there’s a change in market rents and when you experience it, because you only experience it when you move or renew your lease. That means that the Consumer Price Index data and the Personal Consumption Expenditures data only catch up to the market data on rents with a lag.

That period of catch-up has lasted some years, but when you look at levels, it seems to me that that period of catch-up is done, which means that the inflation data should now catch down to where the market rents are. When I look at market rents, I see an effective increase in the run rate of market rents of about 1 percent a year, which is actually quite a bit lower than before the pandemic.

I think it should be relatively rapid because of the state of the economy, and I also think that it should be relatively rapid because of the change in border policy. I’ve been very attentive to how population growth affects things like housing.

In most markets, population growth moves supply and demand by about the same amount. If you have an additional person, either because there’s a birth or an immigrant, that person works, and they also consume. And by consuming, they create demand for goods and services, so they move labor supply and labor demand by roughly similar amounts.

The exception to that is something that’s a very long-lived durable good like housing. You have a relatively fixed supply of housing. In the short run, if you have more people, you will put upward pressure on rents. If you have fewer people, you put downward pressure on rents.

So the change in population growth that has occurred in recent years strikes me as something that’s going to accelerate the catch-down of measured inflation rents to market rents.

There’s a lot more I want to get into that’s bigger and broader than this. But just on immigration and housing, what do you make of the fact that large portions of the immigrant population work in the construction industry and that this can disrupt supply and counter what you are expecting?

It is true that immigrants disproportionately work in some sectors like construction, but it hasn’t always been the case. If you’re looking for slack in the labor market, the pockets of the labor market where you will see the most slack are in the cohorts that are most substitutable labor with immigrant labor.

If you look at Americans 16 to 20 years old, the unemployment rate is closer to 13 percent. If you look at Americans 20 to 24 years old, the unemployment rate is going to be closer to 9 percent. Those are the cohorts with the most slack. They are also the cohorts that are the most substitutable with immigrant labor. Builders may have stopped or forgotten how to recruit from those populations for various reasons related to the abundance of immigrant workers.

But if immigrant workers are no longer abundant, I don’t understand why it wouldn’t be the case that you’d be able to tap labor supply from other parts of the labor market. This is something that has been the case in the past, and I don’t see a reason they couldn’t work in construction again.

Just taking a step back here in terms of the meeting itself, you dissented on the rate decision in favor of a half-point cut. Could you just flesh out a little bit more your reasoning beyond what you’ve already said in terms of having a more sanguine view on inflation?

I’m not really concerned about material upside risk to inflation with the set of economic data and shocks that I see in front of us right now. I’m more concerned about downside risk to the labor market, in part because policy is so restrictive. Because I’m not so concerned about upside inflation risk and I am concerned about downside risk to the labor market, I don’t see why policy should stay this restrictive for a long period of time.

My perspective is that policy has in part passively tightened over the course of the year, as the neutral rate has drifted lower from a series of changes in the economy, like that of population growth. I emphasize that we have had 30 years’ worth of changes to population growth in three years, and that happened in both directions.

There are lags with which monetary policy influences the economy. So it’s not the case that if policy tightens over the course of the year that you immediately step into a recession. However, if you keep policy this tight for a long period of time, then you run the risk that monetary policy itself is inducing a recession. I don’t see a reason to run that risk if I’m not concerned about inflation on the upside.

Therefore, it makes sense to me to get closer to neutral in a faster way. The major difference between myself and most of my colleagues is not necessarily a big divergence on the endpoint. It’s on how fast you get there. The reason I want to get there more quickly is because I just don’t see any point in running the risk if I don’t have to.

Do you feel as though you’ve been able to persuade anyone in the room?

I think a lot of people in the room are very data dependent, so it’ll take the data realizing my forecasts in order for them to come along.

I think that’s been happening over the course of the year. People have been moving in my direction on tariffs all year long. You go back to April and there were all sorts of predictions from a number of outside forecasters for recession and for inflation spikes worse than what we experienced after Covid, which is just mind-boggling that anyone would predict that.

Even within the Fed, people expected a much bigger and faster increase in inflation and a much bigger downturn in economic growth. Those haven’t happened. I think people have been moving in my direction over the course of the year, and I think that’ll continue.

I think the latest inflation print that we got for September solidified my forecast, because what drove the little downtick in inflation was shelter.

The reason I bring up persuasiveness is just because it seems like there was a big group of officials that moved in the opposite direction, and Chair Powell had to say that there are strongly differing views about how to proceed in December. That has raised the possibility that maybe that cut is not necessarily going to go through. Do you believe it will be a policy mistake if the Fed doesn’t cut at all at that point?

Chairman Powell is absolutely correct that there were differing views around the table, and his press conference reflected that, as did the dissent from Jeffrey Schmid, president of the Federal Reserve Bank of Kansas City.

There absolutely are differing views around the table; however, I think we have to pay attention also to the distribution of votes at the table. As former Speaker of the House Nancy Pelosi was fond of saying, votes are the “currency of the realm.”

So you think that there’s enough support to move forward with December?

I can’t speak for anyone but myself, but unless we get data showing us that our forecasts are wrong, I would expect us to stick to the policy path implied by our forecasts, which in my mind would indicate another cut.

A lot of people are data dependent, and you should be data dependent if you don’t really have any confidence in your forecast. I have pretty good reasons for having some confidence in my forecast. I think a lot of my economic claims over the course of the year have been pretty decent on issues like inflation, tariffs and growth. If we don’t get data, then people will have to rely on their forecasts.

As I said before, monetary policy works with lags; therefore, it has to be forward looking. If you’re data dependent, you’re backward looking because the data are a function of what’s happened over the course of the last year. You want to be forward looking and making predictions about where the economy is going to evolve based on various shocks and economic dynamics.

We’ve heard from lots of companies that they have been able to absorb some of the added costs from tariffs. We hear about running down inventories and margin compression. But many have started to warn that it is just a matter of time before they are having to make tougher decisions and test the strength of their customers by raising prices. What is your response to that?

For me, it goes back to the tax incidence theory from public finance, which is a basic, noncontroversial theory that the more inelastic, or more inflexible, party bears the burden of an economic policy, whether it’s a tax, subsidy, regulation or anything like that. That’s because the more flexible party can change his or her behavior to avoid the burden.

In the context of international trade, if you’re an importer and you’re more elastic or flexible, what would that look like? That would look like being able to change your import patterns across countries to take advantage of tariffs and say, “You’re going to lower your prices, or I’m going to import from somebody else or make it at home.”

The exporter is the more inelastic party because the factory can’t move across borders. The factory is stuck where it is. If that’s the case, then it stands to reason that over time, the exporter will bear the burden of these tariffs.

To put that in the context of the way that you asked the question, a lot of the incidence appears to be falling on importers. Not retail. And when I say importers, I don’t mean the United States. I mean the actual company that’s doing the trade between the U.S. and the exporter — the wholesaler.

But isn’t that in the United States?

It is, but we don’t really know who owns the wholesaler. In a number of cases, the wholesaler could be the U.S. subsidiary of a foreign organization — a European or Japanese automaker is selling to their U.S. subsidiary, who then in turn goes on and sells those cars to dealers.

If that’s the case, that incidence gets passed up through losses or lower profits from the U.S. subsidiary to the parent company abroad. If the importer is an American company, then you have to wait and see if that tariff is going to be passed on to the consumer or if it is going to be pushed back to the exporter through a renegotiation of contracts. That’s what a lot of conversations have been ignoring.

There’s an assumption that just because the wholesaler is paying the tariff now and facing reduced margins as a result, that in the end they’ll have to pass that on to the consumer. I don’t really expect that to happen. I expect the wholesaler will go back to the exporting country and say, “You’re going to cut your prices, or else I’m going to have to import from somebody else.”

But what happens if all the other sources of supply are also foreign-based? There are some products that you cannot produce in the U.S.

The threat of moving among them is part of what gives you the bargaining leverage.

There are some things that you absolutely can’t produce in the U.S. In those items, the U.S. would be the more inelastic party. Those could be natural resources or things that we will never have the ability to replicate that require huge amounts of unskilled labor.

Those will result in what I would consider relative price changes, not inflation, which is an increase in the overall index. For most items, I think that we have a good shot of being able to produce them, and that threat gives you the leverage and says we’re going to force the burden of the tariff onto somebody else.

On the point about watching the data, if we don’t see housing inflation decelerate as significantly as you expect it to, or the labor market stabilizes, how would you change your views on what to do regarding policy?

A lot of my forecast is dependent on housing inflation catching down where new market rents have been running for a couple of years now. If there’s something that tells me that that’s not going to happen, then I’ll have to change my forecast. And if my forecast changes, then I have to change my policy outlook.

That would be some sort of shock that’s housing specific or economic-growth specific that would make me think that rents would move higher. Or it could be some natural disaster that takes a lot of housing supply offline. I’m just trying to think about what would make me change my housing inflation forecast because my perspective is that we’re going to get enough disinflation from housing that it can offset whatever pockets of inflation there are in other parts of the index.

Right now, though, do you expect to dissent again at the December meeting for a half-point cut?

There’s a lot of time between now and then. Who knows what data we’ll get, if any, between now and the next meeting? I certainly hope that we get all the data that can be produced, because it is very helpful for making policy. If things continue to go along as I forecast and the rest of the committee does not support a half-point cut, I probably would dissent again for that.

What do you think is at risk if the Fed ends its cutting cycle now or only goes by a quarter-point in December?

If policy stays restrictive, it makes the economy more brittle to different shocks. The way that a shock will hit the economy if policy is very accommodative can be much different than the way that a shock will hit the economy if policy is restrictive. Keeping policy restrictive is to run risks that we don’t need to run, in my opinion.

One of the big points of contention across the committee is just how restrictive rates are. A big part of your call for lower rates rests on the idea that neutral is lower. If neutral were really as low as you believe it is, why haven’t we seen more strain in the economy beyond the housing market?

First of all, I want to emphasize that my view of neutral is not out of bounds of the range of everyone else’s. I’m at the bottom of the range, but I’m not out of bounds of the range. Last year, I would have been at the top of the range and, again, not out of bounds of the range.

The difference between me and the rest of the committee is that I think neutral has whipped around a lot faster than I think a lot of my colleagues do. Part of that is because I view the shocks as having been much faster than they normally have been.

I’ve given the example of population growth. That usually moves extremely slowly, with very long-term changes in fertility rates and from cultural and medical technology changes. As a result, neutral moves very, very slowly. However, the last few years have been an exception to that. We crammed 30 years’ worth of changes to the population growth rate into three years and, as I said before, in both directions. So if that’s the case, then it stands to reason to me that neutral would move around a lot more quickly than it previously did, and if we didn’t have those shocks, then neutral wouldn’t move.

If those shocks reversed, let’s say with a new administration, would that change your view back toward a higher neutral rate?

Absolutely. If we started experiencing much higher population growth, I would say that that would push neutral up.

My framework has a couple of implications. One is that neutral was higher last year, meaning policy was not as tight as many believed it was last year. Neutral has come down over the course of this year, meaning policy now is tighter than many believe. That passive tightening of policy has occurred over the course of the year as neutral has drifted down.

Now, as I said before, there’s a lag with which monetary policy hits the economy. It’s not the case that if policy is so restrictive right now that I necessarily would have expected to see that materialize in a sharp downturn in the economy. I expect a sharp downturn to materialize in the future if policy remains this restrictive.

The committee is doing the right thing by lowering rates, and therefore we should absolutely continue to lower rates. The only difference between me and the rest of the committee is I don’t see a reason in getting there slowly. I’d rather get there more quickly to eliminate this downside risk.

I don’t see a point in running this downside risk. We’re not doing it for any good reason.

Not to belabor the point on immigration — and you can pick any other aspect of the neutral rate argument that you’ve laid out — but I’m struggling to understand the mechanism with which those policies translates to a lower neutral rate. Is this because on net these changes lead to lower potential growth?

For example, population growth can affect the neutral rate, and there’s plenty of indication from the literature about that. All else equal, a shift in population growth will affect the potential growth rate.

However, all else is not equal, and there are other countervailing forces that may push potential output higher. Those can be things like deregulation. Those can be things like incentives such that each worker is providing more labor than they were otherwise providing. Things like no taxes on overtime is something that I would expect to give a boost to the number of hours that are worked in the future. So it could be that there are sources improving potential G.D.P., that are unrelated to the decline in population growth.

But just thinking back to the late 1990s, when there was this big investment boom and we saw productivity gains tied to the tech sector, I believe estimates of neutral were around 5 percent. So what’s different about today?

For one thing, I think productivity growth was actually quite a bit higher then, wasn’t it? I don’t really see productivity growth as having surged. It’s better, but I don’t see it as having surged.

The other thing that I would say is that some of that is already baked into my cake, because I said last year I had the neutral rate being higher, and this year it’s lower. So by starting from a higher point, I’ve already baked into the cake some of those elements, like higher productivity growth from A.I. — which I don’t feel, by the way, that anybody really understands.

Economists are not good futurists, so I tend to view with skepticism precise numbers about A.I. when it comes to thinking about the economy and growth.

One more point on neutral. You tie tariff revenues to a lower deficit, so two things on that. Estimates from the Congressional Budget Office show much higher deficits going forward, even taking into account tariff revenues. What you think about the longer-term trend? And then second to that, tariffs are currently being litigated before the Supreme Court. Would you then change your view if tariffs were either scaled back through negotiations, or they were just struck down by the courts?

On the first one, I’m a much bigger believer in the translation of supply-side effects into long-term economic growth. Those C.B.O. forecasts you’re talking about are long-term forecasts, and there’s several elements of that. There’s taxes, but there’s also regulations and energy costs and things like that. I view all of those as putting the economy on a better growth trajectory into the future, which in turn reduces the deficit.

Some organizations are underappreciating the power of regulations in shaping the supply side of the economy. We talk a lot about taxes and economic growth, but most tax changes are finite changes. You’re talking about the difference between a 20 and 30 percent marginal tax rate, whereas regulations are infinite taxes.

If you can’t build there because there’s a snail, that’s an infinite tax. And that affects the supply side of the economy. You won’t have buildings. You won’t have the industrial ecology. You won’t have the industries if you regulate them out of existence. As a result, I think that that’s very, very powerful in determining the supply side of the economy, and I think it’s an underappreciated channel.

On the question about tariffs, if there’s a dramatic change to the amount of tariff revenue that I’d expect to come in coming years — or other changes to deficits — then I would absolutely change my calculations.

I don’t really expect that to happen as a result of the court case, because I suspect that there are numerous statutory authorities that could result in the same tariff arrangements that we have now. So I don’t expect any material changes in tariff rates.

Just on the balance sheet, in the context of quantitative tightening ending soon, I’m wondering what your assessment is of the Fed’s balance sheet policy, and if you believe there needs to be closer coordination with Treasury on that front.

The Fed should do what it wants to do for monetary policy implementation practices, and that includes balance sheet operations. The Treasury has discretion over the distribution of debt held by the public. Unless you’re in a crisis-like environment where the zero lower bound is binding, the only way to keep the economy from sliding into a depression is to change the distribution of debt held by the public. There’s not a legitimate monetary policy reason for interfering with that.

My perspective is that the Fed should do the right thing from a monetary policy perspective on the balance sheet and on the level of reserves in the system. If the Treasury Department wants to offset what the Fed is doing and therefore alter the distribution of debt that it’s selling, that’s up to the Treasury Department to do. The Fed should be taking monetary policy decisions, and the Treasury should be taking fiscal policy decisions.

On the issue of independence, I wanted to ask about your decision to take only a temporary leave of absence from your position as chair of the Council of Economic Advisers, because it generated a lot of questions about your willingness to act independently in this position. So much of the Fed’s credibility rests on people perceiving it as independent, so I just wonder if you think this arrangement has altered that perception at all.

The people who have made those criticisms, they’d be making exactly the same claims about me if I had fully resigned from C.E.A. It would just be different reasoning. I don’t think that any of the people who are criticizing that would have come out swinging in my favor. Their minds were already made up.

Second, there’s a very short tenure to the seat. My expectation is still at the moment that I will be leaving at the end of January. If that’s the case, the confirmation process is lengthy and stressful. I’ve already gone through it twice. I don’t have any desire to go through it a third time, if I don’t have to. In the 1980s, it took three days from nomination to confirmation. If that were the case today, I would say, ‘Who cares?’ But that’s not the case today. It’s a very lengthy, very strict and very stressful process. There’s nothing more to it than that.

Do you plan to stay on beyond January if it takes President Trump time to pick a successor?

I am not going to speak to hypotheticals at the moment. My expectation is that I leave at the end of January.

Would you want to stay longer if you had the opportunity to?

I don’t make personnel decisions. At the moment, my expectation is that I leave at the end of January.

And just to wrap up, I’m wondering how your experience at the Fed so far has compared to what you thought going in?

Everyone has been extremely collegial and extremely kind, and I really appreciate that. I’ve likewise been collegial. Even though we have differing views about the economy and policy, we all discuss them in very collegial terms.

I would say one of the biggest surprises has been the slowdown in pace. My last job was nonstop boom, boom, boom, boom every day. The Fed has been a much more deliberative pace, which has been something that I’ve enjoyed. It’s allowed me to dive into some subjects that I might otherwise not have time to do.

Before taking on this role, you had written a lot about how the Fed should be reformed. Now that you have seen how the place works to some degree, how do you now think about some of those ideas?

I think the Fed is making policy for monetary purposes, and I think that’s a good thing.

We’ve in the past paid insufficient attention to certain economic channels, like deregulation. That’s underappreciated. And thinking about the consolidated balance sheet of the U.S. government and its effect on financial markets and thereby the economy is another one that I would like to pay a lot more attention to.

So I think that the Fed should be making policy for monetary purposes, but be paying attention to all sorts of policies and all sorts of shocks that hit the economy and giving them due attention.

This ties into your earlier question about independence. The independence of the Federal Reserve is of critical importance for securing good, long-term economic outcomes. That requires that we stick to our knitting and make policy for monetary purposes and monetary purposes alone, and not delve into fiscal subjects, not delve into climate subjects, not delve into social politics subjects. That’s what the Fed will be doing.

Colby Smith covers the Federal Reserve and the U.S. economy for The Times.

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