Federal Reserve policymaker Stephen Miran emphasized on Friday that monetary policy should remain forward-looking, cautioning against over-reliance on backward-looking data. Speaking on inflation dynamics, Miran highlighted housing costs as the central driver and reiterated that inflation expectations are “reasonably well anchored.”
Key remarks
- Access to timely data is critical for guiding policy; the Fed hopes to have needed data by the next FOMC meeting.
- Housing costs remain paramount in the inflation outlook, with shelter pressures expected to ease.
- Anticipates significant disinflation in services inflation tied to demographic and population shifts.
- Neutral rate is at the lower end of estimates, meaning policy is effectively tight despite loose financial conditions.
- Deregulation could expand the economy’s potential.
- Inflation expectations remain well anchored, with the public confident in the Fed’s ability to achieve low inflation.
- Will update policy stance if easing shelter inflation fails to materialize.
- Tariffs are not seen triggering broad-based inflation, as demand elasticity allows households to adjust.
Market implications
Miran’s comments underscore the Fed’s preference to base decisions on forward-looking assessments rather than lagging indicators, particularly as the government shutdown disrupts official economic data releases. His outlook suggests policymakers remain focused on easing shelter inflation as a key driver for broader disinflation trends.
