Podcast Summary: Is Business Broken?
Episode: Federal Reserve Governor Stephen Miran on Tariffs, Inflation, and Deregulation
Host: Boston University Questrom School of Business
Date: March 12, 2026

Episode Overview

In this live-recorded episode, host Kurt Nickish sits down with Federal Reserve Governor Stephen Miran to explore the interplay between U.S. tariffs, inflation measurement, and the nuanced impacts of deregulation. Miran, known for his dissents on Federal Reserve rate decisions and a central role in shaping U.S. trade policy, offers out-of-consensus views on current economic phenomena. Their wide-ranging conversation addresses how recent policy shifts are affecting inflation, labor markets, bank regulation, and the international role of the dollar, with Myron emphasizing the importance of regulatory and measurement reforms.

Key Discussion Points and Insights

1. Tariffs and Inflation: Reassessing Common Narratives

• Miran's Out-of-Consensus Stance:
  Miran challenges prevailing views that recent tariffs are a main factor driving goods inflation, arguing that data don't support this:

  "My view is that we haven't seen significant tariff-induced inflation thus far...if you thought tariffs were a very material driver...you'd expect imported core goods to be experiencing significantly higher inflation than overall core goods. And you don't see that." — Miran (02:04)

• Double Comparison Approach:
  He compares (1) U.S. imported core goods inflation with overall core goods, and (2) U.S. core goods inflation with other countries. He finds no evidence that U.S. inflation is an outlier due to tariffs.
  (02:04–03:58)

• Broader Global Factors:
  Points to global trends—like export controls and pandemic-induced supply chain shifts—as more significant drivers of inflation than tariffs alone.

  "There's a lot going on that could be causing core goods inflation...it's just a little bit too easy to blame that on tariffs in the last year." — Miran (04:06)

2. Inflation Measurement: Structural Biases

• Critique of Current Metrics:
  Miran argues that measurement quirks overstate current inflation, especially regarding:

  • Portfolio management fees:

    "...these have contributed over a quarter of a point of excess inflation...But what this series does is basically just track the stock market...actual fees...have been in outright deflation for 20 years." — Miran (06:51)

  • Shelter inflation:

    “...it's basically recording the real estate market of 2021–2023...not the real estate market of 2026, let alone 2027.” — Miran (07:55)

• Conclusion:
  Once you strip out anomalies, underlying inflation is close to the Fed’s target.

  "Underlying inflation is growing within noise of our target...We did have a big inflation problem in prior years, but we don't have a big inflation problem now." — Miran (09:06–10:18)

3. Labor Market Concerns and Rate Policy

• Push for Lower Rates:
  Miran consistently advocates for lower rates to address hidden labor market slack, specifically for part-time and younger workers.

  "I do think it's appropriate to have significantly lower policy rates than we do now." — Miran (06:51) "There’s labor market slack that can be accommodated by looser policy...I don't see an inflation problem." — Miran (19:28)

4. Deregulation: Dual-Edged Sword

• Deregulation as Growth Driver:
  Regulations are described as barriers to entry; deregulation, therefore, can boost productivity and competition.

  "Regulations are often barriers to entry that inhibit...competition...we absolutely want more competition. It's disinflationary." — Miran (13:01)

• Potential Risks:
  Acknowledges the balance: deregulation can heighten risks (e.g., financial or environmental crises) and inadvertently empower incumbents.

  “There's always that worry that as you deregulate, you raise the risks of the next financial crisis...how do you keep [incumbents] from working the system to their advantage?” — Nickish (12:24)

• Advances in Regulatory Quantification:
  Cites AI and machine learning as tools for better analyzing the effects of regulation. (11:15)

5. Bank Regulation and the Fed's Balance Sheet

• Regulatory Dominance:
  Expanded bank regulation has led banks to hold more reserves, making it harder for the Fed to shrink its balance sheet.

  "The reason this happens is because of regulations, the banking system regulations that have gradually accumulated since the global financial crisis...that limits our ability to reduce the balance sheet." — Miran (17:26)

• Fed’s Footprint:
  The larger the balance sheet, the greater the Fed’s market impact—potentially distorting markets.

  "The larger balance sheet we have, the bigger our footprint in the financial markets and the greater the chances that we're distorting them somehow." — Miran (18:59)

• Policy Reforms Needed:
  Reducing the balance sheet and interest rates simultaneously is feasible, but contingent on broader regulatory changes. (19:28–20:24, 24:15)

6. Fed Independence and Political Dynamics

• Technocratic Mandate:
  Stresses the necessity of Fed political independence and focus on its narrow mandate.

  "To maintain its independence...the Fed stick to its core mission, stick to its knitting, and also strive to be seen as non-political and nonpartisan." — Miran (20:48)

7. Global Perspective: The Dollar and Trade Deficits

• Reserve Currency Status:
  Miran sees the dollar’s global reserve role as a net positive, but acknowledges risks from persistent deficits and international borrowing.

  “I think there's no question about it that it's an enormous net positive...we have a net international investment position about minus $25 trillion...that would pose a financial stability risk.” — Miran (22:13)

• Reducing Deficits:
  Optimistic about recent policy changes (tariffs, productivity growth, AI) improving fiscal sustainability without deep entitlement cuts.

  “...tariffs are going to raise about $4 trillion over a 10 year period...I think you probably can get at least a couple of points of GDP off of the primary deficit...” — Miran (28:13)

Audience Q&A Highlights

• Reducing the Balance Sheet vs. Lowering Rates:
  Miran says the Fed can offset tightening from balance sheet reduction by adjusting short-term rates, depending on wider financial conditions. (24:15)
• Price Stability vs. Affordability Crisis:
  The Fed stabilizes prices but restoring pre-pandemic price levels would require a damaging recession.

  "The affordability crisis is a product of the price level shift that occurred in prior years, but now prices are relatively stable at a higher level." — Miran (25:22)

• Dollar Devaluation:
  Dollar policy is Treasury's domain; Fed is mostly concerned with macroeconomic inputs, not currency manipulation. (26:54)
• Restoring Faith in Markets:
  The best antidote to skepticism about capitalism is successful policy and good outcomes.

  "The best thing for policymakers to do...is to do our job and make sure that we're creating the best economic outcomes that we possibly can." — Miran (30:00)

Memorable Quotes

• On Tariffs and Inflation:

  “I have had an out of consensus view on tariffs all along, and I think people have been very gradually moving towards my view.” — Miran (02:04)

• On Measuring Inflation:

  “There are a lot of ways that inflation is measured that are not as modern and contemporary as they could be, and that's affecting how inflation is being viewed.” — Nickish (08:54)

• On Deregulation:

  “Regulations...as barriers to entry...restrict competition. And so that's why very often you end up with incumbents favoring regulations, because they can keep upstarts out.” — Miran (13:01)

• On the Fed’s Changing Role:

  “We actually have regulatory dominance going on in the balance sheet.” — Miran (18:15)

Important Timestamps

• [02:04] Miran discusses tariff-induced inflation & comparative analyses
• [06:51] Critique of inflation measurement, especially portfolio management fees & housing
• [09:06] On achieving price stability and challenges with metrics
• [10:49] Deregulation’s role in GDP and underappreciated impacts
• [13:01] Regulations as barriers to entry; supporting competition
• [15:04] Bank regulation and the Fed’s balance sheet constraints
• [19:28] What the Fed should do if Miran’s policy preferences were dominant
• [20:48] On Fed independence and staying nonpolitical
• [22:13] Reserve currency status, trade deficits, and financial stability
• [24:15] Balancing rate cuts with reducing the Fed's balance sheet
• [28:13] Strategies to reduce the federal deficit without cutting entitlements
• [30:00] Restoring public faith in the economic system

Conclusion

This episode offers a candid, data-driven look at the hidden mechanics and policy debates inside the Fed. Miran challenges established inflation narratives, highlights the often-overlooked economic power of deregulation and measurement reforms, and warns of the regulatory dominance affecting the Fed’s operation. Listeners seeking nuanced insights into how monetary and regulatory policies shape both macroeconomic stability and the business landscape will find this discussion essential.