Bloomberg Talks: Federal Reserve Governor Stephen Miran Talks Rate Cuts, Inflation, Future at Fed

Date: January 8, 2026
Host: Bloomberg
Guest: Fed Governor Stephen Miran

Episode Overview

In this episode, Bloomberg interviews Federal Reserve Governor Stephen Miran, known for his dovish and transparent stance within the Fed. The discussion focuses on Miran’s outlook for interest rate cuts, his view on inflation metrics (especially shelter inflation), implications for job growth and policy, and his take on possible changes to the Fed's approach in 2026. The conversation also delves into Miran’s perspective on forecasting, risk, and his future at the central bank.

Key Discussion Points & Insights

1. Miran's Forecast: Advocating Aggressive Rate Cuts

• Rate Cut Stance: Miran is the most dovish on the Fed’s “dot plot,” expecting around 1.5 percentage points of rate cuts in 2026.
  • Quote:

    “I’m unsurprisingly, the lowest... I’m looking for about a point and a half of cuts. A lot of that is driven by my view of inflation.” (00:33)

• Rationale: He bases this on his outlook for inflation and labor market slack.

2. Dissecting Inflation Data: The Role of Shelter and Market Quirks

• Shelter Inflation "Quirk": Miran argues much of the above-target inflation is due to how shelter is measured, which lags behind actual market rents.

  • Quote:

    “Almost all of the excess inflation over target is due to quirks of how we calculate inflation...” (00:33)

• Portfolio Management Fees: He points to higher stock market valuations inflating measured inflation due to technical calculation methods, despite fee compression in asset management.

• Underlying Inflation: By abstracting from shelter quirks and fees, Miran estimates underlying inflation at 2.3%, close to the Fed's 2% target.

  • Quote:

    “Underlying inflation is running at 2.3%. That’s with the noise of our target.” (01:30)

3. Policy Rationale: Boosting Employment Without Excess Risk

• Labor Market Slack: Unemployment at 4.6% is about a million jobs above the “natural rate”—Miran argues the Fed can create those jobs without fueling inflation.
  • Quote:

    “There’s about a million Americans who don’t have jobs who could have jobs without causing unwanted... inflation.” (01:42)

• Critique of Current Policy: He believes policy has been too tight, restraining growth unnecessarily.
  • Quote:

    “Because we've kept policy tighter than I think it ought to be, that makes me mark down our growth forecast for the future...” (01:56)

4. Conditional Forecasts and Policy Dependence

• On Dots and Projections: Miran makes clear that his GDP and inflation forecasts are conditional on achieving the accommodative policy he advocates.
  • Quote:

    “If I don’t get my policy projection because the rest of the committee is more hawkish than I am, then… we'd underperform [my forecasts].” (02:33)

  • His GDP forecast is 2.6% for the next few years, possibly higher with looser policy.

5. Data Dependence & Willingness to Revise

• Adapting to New Data: Miran notes his projections would shift if unemployment or inflation does not follow his expectations.

  • Quote:

    “If the data come in a little bit better, yeah, of course I’m going to adjust my expectation…” (05:26)

• Shelter Inflation as Pivot Point: His dovish stance pivots on shelter inflation coming down—if rents rise again, he’d revisit his forecasts.

  • Quote:

    “Where would I be wrong? Because so much of my disinflation forecast is based upon shelter. I'm going to be wrong if market rents pick up again.” (05:01, see also 09:12)

6. Debate on “Neutral” Rate and Policymaker Mindset

• On Neutrality: Miran strongly challenges the idea that current policy is “neutral,” citing ongoing labor market softening and inflation near target.

  • Quote:

    “It’s really difficult to argue that policy is neutral, especially when we’ve been on this course of gradual loosening… for a couple of years.” (06:04)

• Risk and Speed: He firmly argues there is no reason to remain restrictive, likening excessive caution to “selling options for nothing.”

  • Quote:

    “We're running unnecessary risks on the labor market by being so restrictive... We're selling options for nothing.” (06:59)

7. Humility, Forecasting, and Pandemic Lessons

• Response to Calls for Caution: Defends his forecast as grounded and acknowledges the need for humility, but points to his prior correct inflation calls.
  • Quote:

    “I was right about inflation coming out of the pandemic... We didn’t think it [COVID] merited that type of package. We were concerned about inflation picking up.” (07:54)

• Confidence in Shelter Inflation Modeling: Cites statistical relationships as giving unusual forecasting power for this component—less confident about goods inflation.

8. Housing & Yield Curve Dynamics

• If Rate Cuts Fail to Lower Yields: Miran would look to market signals but stresses they need to be clear and persistent before changing course.
  • Quote:

    “If the bond market is giving you a very clear signal... then I think, yeah, you want to take that signal and... rethink my framework.” (10:08)

9. Personal Future at the Fed

• On His Own Path: Miran is noncommittal about his future at the Fed, awaiting word from the administration.
  • Quote:

    “I don’t know anything about my future. So I would, I would, I wouldn’t mind it.” (11:15)

Notable Quotes & Memorable Moments

• On Policy Approach:

  “I just don't think that makes a lot of sense… to tell those people that they shouldn't have jobs because we're just mechanically calculating inflation in some silly way.” (C, 01:52)

• On Model Confidence:

  “Shelter is a mechanical thing from market rents to measured inflation. And therefore it's in my mind appropriate to have that high degree of confidence.” (C, 09:12)

• On Fed Work-Life:

  “You’re going to miss this when it’s all over. It feels like you’re enjoying this.” (B, 10:56)
  “Well, you know, that's not part of my forecast.” (C, 11:03)

Key Timestamps for Major Segments

• 00:33-01:33 – Miran’s inflation breakdown and rationale for aggressive rate cuts.
• 01:42-02:27 – The employment argument for accommodation.
• 03:44-05:01 – Conditional forecasts; what would cause Miran to change his mind.
• 06:04-06:59 – The argument against the “neutral” rate.
• 07:54-09:12 – Addressing humility in forecasting and lessons from COVID.
• 09:50-10:56 – Market signals, mortgage rates, and housing.
• 11:03-11:33 – Miran on his future at the Fed.

Summary Takeaway

Stephen Miran offers a strong, consistent case for significant rate cuts in 2026, emphasizing technical quirks in inflation measurement (especially shelter), the need to reduce unnecessary unemployment, and a conviction that current policy is too tight. He is intellectually flexible, open to responding to new data, but firmly believes his shelter inflation modeling grants the Fed enough confidence to act. Miran stands out as one of the most dovish voices in the FOMC, willing to challenge the prevailing consensus and reframe the risk calculus for Fed policy in the post-pandemic era.