Miran resigns from Fed Board, successor Kevin Warsh named
Stephen I. Miran has submitted his resignation from the Federal Reserve Board. His departure is effective upon or shortly before the swearing-in of his successor, Kevin Warsh.
Rethinking inflation and policy lags
Stephen I. Miran advocated for the Federal Reserve to better account for nonmonetary forces influencing monetary policy.
He identified lower population growth from reduced immigration and the disinflationary effects of supply-side deregulation as powerful forces that lead to lower interest rates.
Miran emphasized the need for forward-looking policymaking to incorporate these effects, given inherent monetary policy lags.
He also stressed a critical approach to inflation data, which he described as a constructed measure with inevitable biases.
Miran highlighted portfolio management fees and software composition/quality adjustment issues, exacerbated by AI, as particularly salient biases.
He argued that unadjusted errors in inflation measurement effectively reduce the Fed's inflation target, risking higher unemployment by fighting 'fake rather than real inflation'.
Streamlining bank regulation
On the regulatory front, Miran supported Vice Chairwoman Michelle Bowman's efforts to correct excess regulation in the banking sector, aiming for a more efficient system.
Regulatory adjustments released over $100 billion of capital back into the banking system and reduced leverage constraints.
Miran noted these changes enable banks to extend credit to American households and businesses, and to hold safe assets like U.S. Treasuries without penalty.
He also expressed pride in supporting the removal of reputational risk as a functional channel, which he argued prevented regulators from imposing political preferences on banks' customers concerning issues like firearms or climate.