Federal Reserve Governor Stephen Miran spoke at the Managed Funds Association event in New York. He highlighted that the current calm in the U.S. bond market supports a swift reduction in interest rates. (Source: Reuters)
Bond Market Signals
Miran emphasised that market reactions to Fed policy changes provide valuable feedback. He pointed out that last year the bond market supported higher rates, while this year, it indicates that aggressive easing is appropriate.
Call for Aggressive Rate Cuts
Miran advocated for more aggressive rate cuts than those delivered by the Federal Open Market Committee at the recent policy meeting. He noted that moderating inflation and changes in the economy justify a swift pace of easing. The muted response of the bond market to the Fed’s latest policy signals further supports this approach.
Government Data and Quality Concerns
Despite a government shutdown, U.S. government data continue to be the “gold standard.” Miran acknowledged some deterioration in quality in recent years due to declining response rates. He stressed that people must trust the data to reflect the true state of the economy rather than being influenced for political outcomes.Leadership and Accountability
Miran highlighted the importance of democratic accountability in government agencies. Appointing capable leadership ensures continuous improvement over time. He noted, however, that this responsibility falls outside the Federal Reserve’s domain.
(Disclaimer: This slideshow has been sourced from Reuters)
as a Reliable and Trusted News Source