Trump appointee has frequently urged the central bank to consider supersized cuts
Federal Reserve governor Stephen Miran called for a more urgent pace of interest rate cuts, citing fresh trade tensions with China as a growing risk to the United States economic outlook.
Speaking at the CNBC Invest in America Forum in Washington, DC, Miran said the latest impasse in trade talks and China’s move to restrict access to rare earth materials have heightened uncertainty for growth.
“There’s now more downside risks than there was a week ago, and I think it’s incumbent upon us as policymakers to recognize that should get reflected in policy,” Miran said.
“However, with the change to the balance of risks, I think it becomes even more urgent that we get to a more neutral place in policy quickly."
Miran, who joined the Fed board just last month, has advocated for an additional 1.25 percentage points in cuts on top of the quarter-point move the Federal Open Market Committee (FOMC) approved in September.
“To the extent that I think policy is quite restrictive right now, that sets us up to be vulnerable to shocks,” he said.
“If you hit the economy with a shock when policy is very restrictive, the economy will react differently than it would if policy was not as restrictive.”
The FOMC is widely expected to approve another quarter-point reduction at its next meeting on October 28–29. Miran said expecting two more rate cuts this year “sounds realistic,” aligning with the median projection from the Fed’s 19 policymakers.
Trade tensions and mortgage market impact
The renewed US-China trade dispute, including threats of 100% tariffs on Chinese imports, has injected volatility into financial markets and raised concerns among mortgage professionals about future borrowing costs.
“I had been operating under the assumption that the uncertainty had dissipated, and therefore I felt more sanguine about some aspects of the growth outlook. Now, potentially, this is back because the Chinese are reneging on deals that were already made,” Miran said.
Mortgage lenders and brokers have paid close attention to the Fed’s moves, since lower rates often mean cheaper mortgages and more refinancing. Still, if economic uncertainty grows and people lose confidence, demand for homes could drop.
Miran’s call for quicker rate cuts has fueled debate inside the Fed. While Chair Jerome Powell backed another small cut, Miran has pushed for bigger, faster action to address risks from trade disputes and a slowing global economy.
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