Fed’s Stephen Miran Says Trade Uncertainty Is Rising, Urges Faster Pace of Rate Cuts

Federal Reserve official Stephen Miran spoke at a policy forum attended by academics and market participants, noting that trade uncertainty has risen markedly. He said firms’ confidence in future orders, the tariff environment, and supply-chain stability has weakened and is already showing up in investment plans and hiring intentions. In his view, with inflation gradually easing and inflation expectations remaining anchored, the Fed should “lower policy rates at a faster pace when the data allow,” to cushion the potential drag on domestic demand and employment from external shocks.

Miran highlighted three main areas of trade-related policy uncertainty:

• Potential increases in tariffs and trade barriers are prompting more conservative pricing and inventory strategies among firms;
• Key components and intermediates face renewed risks of delivery delays, lengthening lead times and raising operating costs;
• Weaker overseas demand is exerting increasing marginal pressure on exports, weighing on new manufacturing orders.

He stressed that “elevated real rates and episodically tighter financial conditions” could amplify the lagged effects of these shocks. If monetary policy adjusts too slowly, companies may cut capex and hiring to guard against margin compression and cash-flow strains, potentially building into broader growth risks.

On inflation, Miran said core inflation has fallen significantly from last year’s peak, but services inflation remains sticky. The priority now is to “avoid imposing an excessive growth cost due to policy lag while maintaining a credible commitment to price stability.” He supports a “meeting-by-meeting, data-dependent” approach but believes that when the balance of risks tilts toward growth, policymakers should lower nominal rates more decisively to bring down real rates.

Market reaction
Following Miran’s remarks, rates markets repriced quickly. Fed funds futures showed investors increasing their expectations for cumulative rate cuts this year; the 2-year Treasury yield fell about 3–6 basis points intraday, with the 10-year yield also moving lower. The dollar index weakened, gold advanced, and growth and rate-sensitive sectors gained. Some analysts noted that if upcoming labor and inflation data corroborate this view, the Committee’s dovish tilt could gain more support.

Views from different camps

• Dovish take: Rising trade uncertainty is a forward-looking negative signal for demand. When leading indicators soften, preemptive easing helps reduce hard-landing risks.
• Hawkish concern: Services inflation and wage growth remain elevated; cutting too quickly may re-stoke inflation expectations and undermine policy credibility.
• Neutral assessment: If financial conditions ease significantly without rate cuts, the actual pace of easing must still stay aligned with incoming data to prevent over- or under-transmission.

What to watch next

• Data: Nonfarm payrolls, core CPI/PCE, ISM new orders in manufacturing and services, import price index;
• Trade and supply chain: Tariff policy developments, port congestion and freight rates, corporate capex guidance;
• Policy communication: Upcoming FOMC minutes and dot plot shifts; whether other voting members echo these remarks.

Context
In recent months, global trade frictions and supply-chain reconfiguration have intensified. On earnings calls, companies have frequently cited “lower demand visibility” and a “longer inventory destocking cycle.” Meanwhile, U.S. inflation has come down from its peak, but services and housing-related components remain sticky. Debate between “soft landing” and “second-wave inflation” has ebbed and flowed, keeping the policy path uncertain.