Podcast Summary:

Bloomberg Talks
Episode: Fed Governor Stephen Myron Talks Rates & Outlook For 2026
Date: December 23, 2025
Guests: Stephen Myron, Federal Reserve Governor
Hosts: Bloomberg Interviewers

Overview

In this episode, Federal Reserve Governor Stephen Myron discusses his views on the current economic landscape, the direction of interest rates, internal debates within the Fed, and how upcoming fiscal policies might influence inflation and future Fed decisions. Myron, noted for his recent dissent favoring a more aggressive rate-cutting stance, delves into why he believes measured adjustment is critical, the risks and misconceptions tied to tariffs and stimulus, and offers candid insight into Fed dynamics and his own role as a dissenter.

Major Discussion Points and Insights

1. Current State of Inflation and Data Distortions

[00:40–02:31]

• The Fed is facing imperfect inflation data, especially due to distortions from the government shutdown, which have delayed and skewed economic indicators.

• Myron highlights that shelter inflation data was both downward-biased in recent months (due to shutdown effects) and had upward biases for much of the year due to statistical lags.

  • Quote [01:02]:
    "When you sort of get to... the ultimate PC print... it's probably ultimately going to be in the neighborhood of two, ten of a point. Maybe a tenth of that is going to be shelter and tenth of the other stuff is going to be, you know, calendar stuff like prices like data were collected in the second half of the month around Black Friday..." — Stephen Myron

• Rejects the notion of selectively adjusting for data quirks only when it supports a particular policy narrative, warning against "deeply biased" approaches.

2. Fed’s Internal Deliberations and the Importance of Dissent

[02:31–05:32]

• Interviewers question whether some Fed members are “cherry-picking” inflation data. Myron asserts data has been cooler than expected and unemployment edging up, backing a dovish policy.

• He questions: If policymakers do not update their policy recommendations in response to dovish data, "what does that say about the reactiveness of policy?"

  • Quote [02:39]:
    "We've had data that should push people into a dovish direction... If you see those data coming out and you don't adjust your policy prescriptions in a dovish direction, what does that say, the reactiveness of policy to the economy?... reflects very poorly upon the institution." — Stephen Myron

• On his dissents: Myron says he’s simply transparent, not strategic, and believes dissent brings value by avoiding “groupthink,” fostering better policy through diverse viewpoints.

  • Quote [04:44]:
    "One positive benefit of me potentially dissenting like this is that it introduces a wider variety of views... if you fall into groupthink, you stop questioning where you could be wrong." — Stephen Myron

3. Labor Market and Recession Risks

[03:08–04:09]

• The rise in unemployment, typically a prelude to recession, is discussed.
• Myron doesn’t foresee an imminent recession, partly because the Fed is actively lowering rates. He warns, though, that failure to adjust policy downward could eventually trigger a recession.
  • Quote [03:29]:
    "If we don't adjust policy down, then I think that we do run risks of rising recession... But at the moment it's not my base case, in part because... we will end up... continuing to adjust interest rates down." — Stephen Myron

4. Fiscal Policy, Stimulus, and Inflation Dynamics

[05:32–08:07]

• Discussion turns to the Biden administration’s fiscal measures (tariffs, refunds) and whether more consumer cash could stoke inflation.

• Myron distinguishes between stimulus occurring when supply can grow (neutral), versus when demand is boosted with supply constrained (inflationary).

  • Quote [05:47]:
    "If you push out the demand side while you're putting the brakes in the supply side, you get inflation. If you push out supply and demand at the same time, it doesn't really have an effect on prices." — Stephen Myron

• On the $2,000 tariff dividend and similar policies, he notes their impact depends on both demand and supply conditions at the time.

• Discusses past stimulus: During the American Rescue Plan (2021), “throwing more economic support” on top of already rapid demand growth did push prices up. The current environment is different, with both supply and demand evolving.

5. Tariffs and Inflation: Misconceptions and Data Analysis

[08:07–10:09]

• Myron challenges the common belief that tariffs are a major driver of inflation.
  • Cites his Columbia speech, noting his analysis shows:
    • Imported goods inflation tracks overall core goods inflation (no outlier effect from tariffs).
    • International comparison places U.S. core goods in the middle of the pack; CPI core goods bottomed out before tariffs took effect.
  • Quote [08:36]:
    "It’s actually quite complacent for people to ascribe all this inflation to tariffs. And indeed, if you look at CPI core goods... bottomed out in the middle of last year... seven or eight months before tariffs were implemented." — Stephen Myron

6. Rate-Cutting Path, Upcoming Meetings, and Myron’s Role

[10:09–11:41]

• Myron remains undecided whether to push for a 25 or 50 basis point rate cut in the next meeting, citing the need for new data and noting prior cuts have lessened the urgency for aggressive slashing.

  • Quote [10:18]:
    "I haven't yet decided whether I'm going to push for 25 or 50 next meeting. I think it depends on a variety of factors. So I could see voting for 25, but I do think it's important that we continue steadily reducing the policy rate." — Stephen Myron

• Suggests a willingness to “micromanage” via smaller cuts as the stance becomes less restrictive.

• Discusses his own tenure uncertainty, noting he will stay until a successor is confirmed.

7. Evaluating Fed Leadership and Committee Dynamics

[12:04–13:42]

• Offers high praise for potential Fed chair nominees Kevin Hassett and Christopher Waller:
  • Quote [12:23]:
    "They're both supremely talented economists and extremely effective individuals... the country would be very lucky to have either of them." — Stephen Myron
• Reflects on Chair Powell’s difficult job achieving consensus, especially among those wary of rate cuts, and describes the process as "cat herding":
  • Quote [13:04]: "You have to give Chairman Powell... credit for having wrangled three cuts out of these guys in succession... it's a cat herding task." — Stephen Myron

Notable Quotes & Memorable Moments

• “It's inappropriate to say, okay, well we have to adjust for the downward bias, but we're going to accept the upward bias. That itself is a deeply biased position. We've got to be clear, right, about both.” — Stephen Myron [01:49]
• “I'm just transparent and say what I think and always have and that gets me in a lot of trouble.” — Stephen Myron on dissent [04:26]
• “If you push out supply and demand at the same time, it doesn't really have an effect on prices.” — Stephen Myron [05:47]
• “I think we've seen that over and over this year.” (on dangers of groupthink) — Stephen Myron [04:52]
• “It's a cat herding task.” — Stephen Myron on Chair Powell’s role [13:42]

Timestamps for Key Segments

• [00:40] – Data quirks and inflation measurement distortions
• [02:31] – Fed policy reactiveness and dangers of cherry-picking data
• [03:08] – Labor market analysis and recession risks
• [04:09] – Value of dissent and groupthink at the Fed
• [05:32] – Tariffs, tax refunds, and their inflationary impacts
• [08:07] – Counterfactuals and tariffs’ actual effect on inflation
• [10:09] – The upcoming Fed meeting: cut size debate
• [12:04] – Fed chair candidates and leadership qualities
• [13:04] – Assessment of Powell and efficacy at building consensus

Tone and Language

Myron was characteristically candid, analytical, and sometimes wry, robustly defending his dissent while emphasizing the need for humility and open debate in policymaking. The hosts pursue pointed lines of questioning but maintain a neutral, curious stance throughout.

This summary captures the substance, key arguments, and tone of the discussion, providing a comprehensive reference for listeners and non-listeners alike.