Fed Govenor Stephen Miran Talks Supply Shocks, Policy, Central Bank Tenure

Summary

Bloomberg Talks – Fed Governor Stephen Miran Talks Supply Shocks, Policy, Central Bank Tenure

Date: May 14, 2026
Host: Bloomberg Interviewer
Guest: Fed Governor Stephen Miran

---

Episode Overview

This episode features an in-depth exit interview with Federal Reserve Governor Stephen Miran, as he prepares to leave his post. The conversation dives into his experiences inside the Fed, his unique policy positions—particularly on supply-side regulation and monetary policy lags—his dissenting votes for interest rate cuts, and his perspective on current Fed dynamics, including leadership transitions and the specter of “groupthink.”

---

Key Discussion Points & Insights

1. Internal Reception at the Fed

• Environment Inside the Fed: Despite external controversies, Miran was surprised by how warmly he was received internally.
  • He highlighted the value and openness to intellectual debate within the institution.
  • Quote:

    “I've been received internally, I think, very, very politely, very cordially and very kindly. …folks largely enjoyed some of the intellectual conversations, some of the challenges that I've… leveled against some of the ways that there had been thinking beforehand.”
    — Stephen Miran [00:54]

2. Shaping Ongoing Debates: Supply-Side Regulation

• Regulation as Economic ‘Infinite Tax’: Miran shifted Fed conversations to focus on how regulation fundamentally shapes supply-side economic conditions—arguing that regulatory limits are more impactful than marginal tax rates.
  • Prior to Miran, regulatory impacts played a minor role in models and forecasts.
  • Continuity: His emphasis on regulation and supply shocks is now embedded in Fed discourse.
  • Quote:

    “Regulations are often infinite taxes, and being told you're not allowed to do something versus you are allowed to do something is a very strong difference. …I came in and really hammered that idea and I think sort of moved it forward.”
    — Stephen Miran [01:26]

3. Population Growth and Inflation Dynamics

• Demographic Shocks Are Disinflationary: Miran challenges the notion that negative population growth leads to hotter inflation, offering historical evidence that shrinking populations are “unambiguously disinflationary or even eventually deflationary.”
  • Lower population growth reduces the needed number of new jobs (break even payroll growth)—mildly hawkish.
  • But it also lowers the neutral interest rate, and tames inflation in long-lived assets like housing.
  • Shelters/rents have slowed to 1% annual growth, key to softening inflation indexes.
  • Quote:

    “If you have declining population growth, …that very inflationary tailwind gets taken away and ceases to be a major driver [of] inflation.”
    — Stephen Miran [03:41]

4. Rate Cuts, Policy Lags, and Supply Shocks

• Monetary Policy Lags Are Under-Appreciated:
  • Miran consistently advocated for rate cuts at every Fed meeting, arguing that current inflation shocks are not addressable by immediate monetary policy due to lags of 12–18 months.
  • Advocates looking past short-term supply shocks and sticking to traditional monetary frameworks.
  • Quote:

    “Monetary policy doesn't hit the economy right now. If we changed interest rates today, it wouldn't flow through into the economy until 12 to 18 months from now…You need to think about what the effect in the next 12 to 18 months is.”
    — Stephen Miran [04:57]

5. Market Disagreement and Fed-Treasury Relations

• Market ‘Hall of Mirrors’: The market’s lack of alignment with Fed policy is often self-reinforcing, reflecting how the Fed communicates its backward-looking stance.
  • The size of the Fed’s balance sheet raises questions about independence and the potential need for clearer separation from Treasury functions.
  • Supports a smaller balance sheet to reduce fiscal entanglements.
  • Quote:

    “If we own a huge chunk of debt, then…we're impinging on decisions that traditionally are the realm of the fiscal authority. …I would favor having a smaller balance sheet.”
    — Stephen Miran [06:54]

6. Lines of Coordination with the Administration

• Miran explains that coordination with Treasury should remain minimal and functionally separate, even while periodic alignment (e.g., reserve management operations) may occur out of necessity.
  • On direct political influence: He affirms that he did not receive private communications or directives from the President, emphasizing his policy independence.
  • Quote:

    “He [the President] doesn't tell me anything. …This president is very forthright with his views…and tells journalists all the time…So, no, I didn't. I'm not in receipt of any information that's not public.”
    — Stephen Miran [10:24]

7. Pushback Against Narrative of ‘Presidential Bidding’

• Miran addresses accusations that he served as an administration proxy. He strongly disputes this, highlighting occasions when his positions diverged from White House preferences, and reiterates his grounding in mainstream economics.
  • Quote:

    “I clearly do my own thing and have my views and they're all, I think, grounded in very traditional economics.”
    — Stephen Miran [11:20]

8. Institutional Transitions and Fed Leadership Changes

• With a leadership transition coming (Kevin Warsh set to become chair), Miran describes the institution as open—but slow—to internal debate and change.
  • Notes on Powell’s ongoing influence as chair-turned-governor: Powell built many processes currently in place, but his continued presence now may both help and complicate clear leadership transitions.
  • Importance of unity, undivided loyalty, and clarity during transitions.
  • Parallel: Miran compares the importance of mentorship during transitions to his own experience at the Council of Economic Advisers.
  • Quote:

    “Transitions are important…you want to have a place where there's no question about who's in charge and there's no talk of rival factions…unanimity and clarity. …it can be helpful to have help in transition. But I still think it's important that it is a transition.”
    — Stephen Miran [13:56]

9. Legacy: Intellectual Diversity and Ending ‘Groupthink’

• The host credits Miran for helping foster debate and end groupthink within the FOMC.
• Miran’s tenure saw the airing of deep intellectual disagreements, transforming the committee into a much less homogeneous decision-making body.
  • Quote:

    “It's very, very difficult right now to describe this committee and anyone working at the Federal Reserve as part of groupthink right now because everyone's expressing themselves in a much newer, fresher, more welcoming way.”
    — Bloomberg Interviewer [15:15]

---

Notable Quotes & Memorable Moments

• On Regulation vs. Tax in Economic Modeling:
  “Regulations are often infinite taxes.” — Stephen Miran [01:26]

• On Demographics and Inflation:
  “Population growth has a lot of moving parts, but the evidence is that it's unambiguously disinflationary.” — Stephen Miran [02:32]

• On Policy Lags:
  “Monetary policy doesn’t hit the economy right now…It wouldn’t flow through into the economy until 12 to 18 months from now.” — Stephen Miran [04:57]

• On Policy Independence:
  “I clearly do my own thing and have my views and they're all…grounded in very traditional economics.” — Stephen Miran [11:20]

• On Transitions at the Top:
  “Transitions are important…you want to have people’s loyalty…be very clearly one chairman.” — Stephen Miran [13:56]

---

Key Timestamps

• [00:54] — Miran on his internal welcome and Fed culture
• [01:26] — Regulatory supply shocks: Miran’s main intellectual legacy
• [02:32] — Population growth, demographics, and the inflation debate
• [04:57] — Policy lags and Miran's rationale for dissenting rate cut votes
• [06:54] — Market signals, balance sheet worries, and fiscal-monetary boundaries
• [10:24] — Assurance of no hidden presidential direction or inside channels
• [11:20] — Defending policy independence and rejecting “president’s bidding” narrative
• [13:56] — Importance and subtleties of leadership transitions at the Fed
• [15:15] — Broadening debate and ending “groupthink” at the Federal Reserve

---

Concluding Summary

In this frank conversation, Stephen Miran presents himself as an independent and thoughtful policy voice who pushed for deeper analysis of regulation and demographics within macroeconomic policy, while maintaining a staunch belief in traditional economic frameworks. He leaves a legacy of intellectual pluralism and debate at the Fed during a pivotal historical moment, as the institution prepares for a leadership transition and grapples with both persistent inflation shocks and fundamental questions about its balance sheet and policy transmission. Through open debates and his dissenting votes, Miran contributes to a culture that prizes rigorous argument over conformity—a change acknowledged and appreciated by the host at the episode’s close.

Transcript

[Indiana University Announcer]

Indiana University strengthens tomorrow's workforce with practical, real world experience. IU grads make a difference in your community, serving as teachers, nurses and engineers who rise to tomorrow's challenges and meet them.

[Stephen Myron]

Learn more at iu.

[Indiana University Announcer]

Edu Impact

[Bloomberg Audio Studios Host]

Bloomberg Audio Studios Podcasts Radio

[Bloomberg Interviewer]

News we begin this hour with stocks adding to record highs at a pivotal moment for the Federal Reserve. Rising inflation, complicating the rate outlo as a new regime takes hold at the top of the central bank tomorrow. Joining us now in his final broadcast interview is a member of the Federal Reserve Board of Governors, Stephen Myron. Governor Myron, good to see you, sir.

[Stephen Myron]

Good to see you. Thanks for having me back.

[Bloomberg Interviewer]

We've got a moment to step back and sort of reflect on your experience at this institution. We talked lots about how you've been received externally. Can we just start with how you've been received internally over the last few months?

[Stephen Myron]

Sure. This has actually been one of the biggest surprises, you know, given all the drama at the beginning. I've been received internally, I think very, very politely, very cordially and very kindly. And I think folks largely enjoyed some of the, some of the intellectual conversations, some of the challenges that I've, I've leveled against some of the ways that there had been thinking beforehand. And I think that the overall response has been, you know, very welcoming and very kind. And that's one of the things that I'm most grateful for.

[Bloomberg Interviewer]

What are the kind of ideas that have been received well that are shaping debates right now that will linger and continue beyond your departure?

[Stephen Myron]

Yeah, sure. So one, you know, so an example of one of those things is the importance of regulations for determining the supply side of the economy. I mean, we spent a lot of time, you know, out in the financial world, out in policy, discussing the effects of a 33 versus 35% marginal tax rate. But the truth is that regulations are often infinite taxes, and being told you're not allowed to do something versus you are allowed to do something is a very, very strong difference. And this had played a very small role in a lot of the modeling discussions happening at the Fed and a lot of the outlooks that I sort of, that I heard people present and I came in and really hammered that idea and I think sort of moved it forward. And now a lot of people talk about it very often internally and externally and, you know, sort of talk a lot about supply shocks. This is a POS supply shock that is unfolding and continues to unfold and will, I hope, mitigate some of the negative supply shocks we also get hit by.

[Bloomberg Interviewer]

Let's talk about another supply shock. And I think it's been central to some of the arguments you've made on the committee and that's population growth, the negative population growth that we've seen, which is lowered the break even rate for the labor market and contributed to arguments in some places for hotter, stickier inflation. You've taken the other side of that. Can you just explain that for us?

[Stephen Myron]

Yeah. So I think this is a really subtle issue with a lot of moving parts now at a very high level. What I would say historically is that we've seen the lot of countries in different places have declines in population growth rates and stagnant populations or shrinking populations. And I think the cross country and historical evidence is that it's unambiguously disinflationary or even eventually deflationary. Now there's a few, there's a few ways that that works. One is by reducing, sorry, there's a few consequences of lower population growth. One is it does reduce the break even in payroll growth rate. So the number of jobs you need to create every month to hold the unemployment rate constant, that does come down. That's a mildly hawkish implication because it means you shouldn't get so concerned about very job creation rates. However, there's also, there's also dovish implications as well which are that it lowers the neutral rate, it brings interest rates down over time. And we've sort of seen that across countries and historically, historically to be the case. And it's also disinflationary through long lived capital and consumer goods. And if you think about something like housing, right, the supply of houses is relatively fixed in the short run. And if you throw millions of new people into an economy, you're going to drive up the price of rents because they need places to live, right. You're going to create inflation. And that inflation is very, very persistent because of the way that housing inflation is calculated. It's very, very sticky. If you have declining population growth, you don't need as much, you don't need as much home price growth. And that very inflationary tailwind gets taken away and, and ceases to be a major driver inflation. And I think you sort of, you've been seeing that start to play out in the data market. Rents in this country have been growing at a 1% rate for the last few years. This is one of the biggest components of the inflation indices. And I think you're going to continue seeing measured, measured PCE and CPI and measured PC and CPI shelter inflation continue to converge down to those very low levels. So I think there's one hawkish implication, which is the lower break even payroll rate. But there's also some very dovish implications because it reduces the neutral rate and it brings down inflation through some of these long lived capital and investment goods.

[Bloomberg Audio Studios Host]

This is a longer term structure for how to think about inflation and the benchmark rate of the Federal Reserve and how it sort of works with the sort of long term inflation rate. Near term, though, one thing that you've been known for, a hallmark of your time on the Fed, was that you voted, voted to cut rates at least once at every single meeting. Do you think that that still holds even though in the short term it does seem like the inflationary shock is overwhelming, potential structural changes that could lead to disinflation?

[Stephen Myron]

I do. And I think, I think this is, I think this is maybe one of the biggest differences between me and a lot of other folks is that I take very seriously the idea of monetary policy lacks very, very seriously. Monetary policy doesn't hit the economy right now. If we changed interest rates today, it wouldn't flow through into the economy until 12 to 18 months from now. Right now there's some disagreement over exactly how long those lags are, But I think 12 to 18 is the consensus view. And therefore for any shock that's hitting the economy today, you can't think about what the effect in the next few months is. You need to think about what the effect in the next 12 to 18 months is. And sorry, the effect 12 to 18 months out. So if oil goes higher, it's a supply shock. Straits of Hormuz are closed. Right? That's going to boost the oil price today. And with it a bunch of other stuff that's very tightly tied to energy prices, like airfares, right? Going to go higher very quickly within the course of a few months. And we've been living through that. And that is very real. Right? There's no way that that is very real inflation, but it is not inflation that monetary policy can affect. Monetary policy can affect 12 to 18 months from now. So there's got to be a reason that you think airfares and oil prices are going to be moving higher in the summer of 2027 and the fall in the fall of 2027, not the summer and fall of 2026. And so it's those lags that really should be driving where you think about forward looking monetary policy should be. And that's a lot of what I've tried to hone into when thinking about population growth and deregulation and saying that the traditional view that we should look through an oil shock should prevail. This is very vanilla basic, sorry, traditional monetary policy.

[Bloomberg Audio Studios Host]

Part of the problem is that the market doesn't agree, at least not in terms of where longer dated bonds are trading and where yields are shifting, where you see them shifting higher even as the front end stays where it is. Do you think that in this type of environment it's imperative to have some sort of Fed treasury accord akin to what people have been talking about, where the treasury steps in to sort of influence the long end while the Fed cuts rates on the short end.

[Stephen Myron]

So let me, let me address this separately. So the market not agreeing is in part a hall of mirrors issue. Because if you have, if the Fed says we're very backward looking and inflation over the last 12 months is going to determine policy that affects 12 to 18 months from now, meaning the economy in 2027 is affected by data in 2025 in that world. Right. So very, very backward looking. If that's how the Fed communicates that it's setting policy, then the market is going to start to reflect that. And so the market reflecting a lack of interest rate cuts. Right. Is in part because the Fed is telling them we're backward looking. Right. And so that's going to create a self reinforcement problem now on the Fed treasury accord. So first of all, I won't be involved in that if it happens. But you know, I have done some work on the balance sheet and I do think it is important that the, one of the problems with having a very large balance sheet and lots of securities, lots of treasury securities on the Federal Reserve's balance sheet is it does start to get the Fed involved in questions that have some fiscal implications. Right. If we own a huge chunk of debt, then that means that we're impinging on decisions that traditionally are the realm of the fiscal authority. What is the distribution of public debt, public debt that it issues that are, that's held by the public. And so I do think it is important that if you have a large balance sheet, there needs to be, there needs to be you know, certain some clear delineation about who's doing who's doing what. And to me these questions are really murky and they, you know, they implicate independence to an extent. And therefore it's one of the reasons among many that I would favor having a smaller balance sheet.

[Bloomberg Interviewer]

How close do you think the Fed should work with the treasury to achieve that? How closely should The Fed work with the administration.

[Stephen Myron]

Yeah. So my view is that the Fed having a big balance sheet starts to implicate a lot of those lines and becomes problematic. So the Fed should strive to have a smaller balance sheet as it can to achieve its goals and implementation framework. And if we can improve that implementation framework and make it smarter to reduce the minimum size of the balance sheet that we need, then that's a great thing. And that was a major thrust of the paper that I wrote in the spring with Alessandro Barbarino and Anthony Dirks and Alyssa Anderson. And so that was a major thrust of that work that was really important. Now, in terms of coordinating, right, the Fed should do what it should do for monetary policy and the treasury should do what it should do in terms of fiscal policy. And the level of coordination should, I think, should I think, be sort of separate. Right. They should be doing what they, what they want to do for each of their own priorities. However, there are times when there is going to be, when there is going to have to be that type of coordination. So, for example, you know, right now we're doing the reserve, these reserve management purchases where we're, we're expanding our balance sheet to sort of provide a minimum level of reserves into the economy to meet reserve demand. We're, you know, we're, we're buying treasury bills, we're letting mortgages continue to mature off of our balance sheet and replace them with treasury bills. Right. Like, in theory, if we did enough, you know, sort of conversion of our balance sheet of our existing balance sheet into treasury bills, we might be absorbing all of the supply. Right. And then some. So this is an example of a time where there would have to be very tight coordination.

[Bloomberg Interviewer]

We've got an administration right now very interested in financial markets. The President often looks at where the index level is in the equity market. We've got a Treasury secretary that used to trade this stuff. Did you speak to them in your time at the Federal Reserve, did the President ever pick up the phone and say, hey, Steve, what's happening? Tell me what you're seeing in the market and the economy.

[Stephen Myron]

Yeah, so I spoke to the President when I got, when I went to go resign from the Council of Economic Advisers, I went to bring my, bring my, sorry, my resignation letter. But, you know, he doesn't tell me anything. He doesn't tell the whole world. Right. This president is very forthright with his views and he tells journalists all the time, including Bloomberg journalists. Exactly, you know, exactly what's on his mind about policy and where and where it should be. So, no, I didn't. I'm not in receipt of any information that's not, that's not public.

[Bloomberg Interviewer]

Because we've started this conversation by talking about how you were received internally, externally, I thought unfairly at times. Basically, everything you said about interest rates and on the economy was always described as just doing the President's bidding at the institution, at the Federal Reserve. Did people see it that way internally? When you put your hand up and said, I want to rate cut 25 basis points, I'm dissenting. Was there a roll of the eyes? Here we go. This is the President's guy doing the President's bidding.

[Stephen Myron]

Well, thank you. Thank you for those words. I do think it's clear that I've disagreed with lots of people on policy on lots of times. There have been times when there have been signals out of the White House that they wanted policy rates lower than I had my dots. And there have been times when there's been signals out of the White House where they thought that I was too dovish. Right. So, for example, the NEC director, after my first vote said that he would have preferred a 25 basis point cut. Right. So. So I clearly do my own thing and have my views and they're all, I think, grounded in very traditional economics. And we were talking about population growth before. Like, this is not new. Right. Like six years ago, we all would have been talking about, is everybody becoming Japan? You know, that would have come up several times a week, right. Like, none of this is new. None of this is heterodox economics. None of this sort of says we need to discard with the entire framework. It's all within the traditional framework. And this is part of why I think the reception internally has been generally pretty good, is because I'm engaging with folks on, on, on their ground, right. Like I'm, I'm within the world of normal economics. And we're talking about what drives the interest rate and does the neutral interest rate and does population growth drive it and is it inflationary or disinflationary? This is all, well within sort of normal.

[Bloomberg Interviewer]

We're trying to figure out what kind of an institution Kevin Walsh is walking into, how he'll be treated, how difficult will be to get people on his side as he starts to think about changing this institution, particularly when the former Fed chair will be sitting there as a governor on the board of governors. Can you help us understand that from a man inside the building what that might look like in the next few months?

[Stephen Myron]

Yeah, So I think one Thing that's important to understand is that people at the Fed are responsive to arguments. And as I said before, you know, I've been hammering deregulation, among other things since the day I got there. And, you know, they start to respond, but it takes time. Right. You know, it's a bit of a slow moving process.

[Bloomberg Interviewer]

Powell being there make it harder.

[Stephen Myron]

Well, you know, I don't know about that. You know, certainly Chairman Powell built a lot of the institutions and processes that exist there. And so, you know, so that dynamic may sort of may play into it, I don't know. But that'll be an issue for Chairman designate Warsh to, to deal with when he gets.

[Bloomberg Interviewer]

When you heard the chairman in the news conference present to the press and to the world that he was staying on as a governor, was that the first time you heard of it? Or did he tell the Board of governors ahead of time that that was his plan?

[Stephen Myron]

No, he didn't. He didn't tell me ahead of time that that was his plan. But he'd always said that, you know, publicly and privately, there's something that it's something he might do. And so it wasn't, it wasn't entirely a surprise.

[Bloomberg Interviewer]

What was your reaction to it?

[Stephen Myron]

You know, look, my reaction to that is that when I was the incoming chairman of the Council of Economic Advisers last year, I was very grateful to the previous chairman, Jared Bernstein, for spending time with me on the phone, being very generous with his time, several hours over days and weeks, giving me advice for how to be a good CEA chairman. And I really appreciated that and sort of, how does the place run and what are your responsibilities and how do you do a good job? And I thought that was really generous of him and I was really appreciative of that. And then I went out of my way to make sure they very quickly put his portrait on the wall of former CEA chairman in the offices in the Eisenhower Building. You know, it's to make sure that happened, that happened quickly, without delay. And I was really grateful. So, look, transitions are important and I think that, you know, it is maybe helpful to have someone there to give advice. Here's how to be an effective chairman. Here's how to lead the committee. Here's, you know, here's how the building works. It may be a little bit different than it was 20 years ago. Right. I think that can be helpful. But I still think it's important that it be a transition because you want to have people's loyalty. Loyalty is undivided. You want to have there be very clearly one chairman. You want to have a place where there's no question about who's in charge and there's no talk of rival factions and things being split. I think you want to have a sense of unanimity and clarity. And so transitions are important and I think it can be helpful to have to have help in transition. But I still think it's important that it is a transition.

[Bloomberg Interviewer]

Stephen, it's good to see you. Thanks for being here. I just wanted to finish on this. I think a lot of people might describe your tenure at the Federal Reserve as somewhat controversial. I see it completely differently. I've seen this play out now over a number of months and I've said this repeatedly. You've had energized debate at the FOMC that spilled out publicly in a way that we haven't seen in a long, long time, if ever at the Federal Reserve, where people are being much more opinionated about where we are in this moment. And the one complaint, the consistent complaint I've had about the Federal Reserve is one that you've had too, which is a group think. And it's very, very difficult right now to describe this committee and anyone working at the Federal Reserve as part of groupthink right now because everyone's expressing themselves in a much newer, fresher, more welcoming way.

[Bloomberg Audio Studios Host]

It seems like right now no one could accuse this committee of groupthink given how fractured it is and frankly, all of the commentary coming out. So over to you, Kevin Wash to come in and have that debate.

[Bloomberg Interviewer]

Best of luck. Steve's good to see you.

[Stephen Myron]

Thanks.

[Bloomberg Interviewer]

Appreciate it, Steve. Fed Governor Stephen Marin.

[Indiana University Announcer]

A business gift should do more than check a box. It should reflect your brand and show someone they're appreciated, recognized and truly seen. 4imprint offers thousands of high quality customizable products like premium apparel, drinkware, tech and more, making it easy to create a gift that feels meaningful and on brand. And with 4imprint's expert support and their 360 degree guarantee, you can be 4imprint certain your order will arrive exactly as intended. Explore gifting with [e-mail] 4imprint. For certain.