Fed Governor Stephen Miran Talks Rates & Outlook For 2026

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Bloomberg Talks 15 min 4 speakers 4 chapters transcribed 2 months ago
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Annmarie Hordern 1:00
Cleveland Fed President Beth Hamek, among those preferring to hold rates higher for longer, while our next guest is taking the other side, voting for a 50 basis point cut at the Fed's last meeting. Joining us now is Federal Reserve Governor Stephen Myron. Very good morning to you, Stephen. Thank you so much for joining us.
Stephen Miron 1:14
Good morning. Thanks for having me back.
Annmarie Hordern 1:16
So let's start with Beth Hammack. She came out over the weekend, then we heard for Williams as well on Friday, saying that potentially where we are right now, rates should be steady, and they're looking at what's going on, inflation. Even the Fed chair was talking about maybe you need to look at inflation, the data we had, with some grain of salt because of the government shutdown. How are you viewing that side of the Fed's mandate right now?
Stephen Miron 1:37
Yeah. So I gave a speech on the inflation outlook last week. And, you know, and I still believe everything I said last week in light of this week's print, last week's print. I mean, look, there were a couple of anomalies in last week's print related to consequences of the government shutdown, which have distorted and delayed economic data that we need to make policy. But, you know, those consequences, I think, are not huge there when you sort of get to when you get to sort of the ultimate PCE print, which is what the Fed targets, it's probably ultimately gonna be in the neighborhood of two tenths of a point. Maybe a tenth of that is gonna be shelter, and a tenth of the other stuff is gonna be calendar stuff, like prices, like data were collected in the second half of the month around Black Friday stuff.
Stephen Miron 2:17
But we'll have to sort of see when we get the PCE data. It is true that the shelter stuff was somewhat distorted by some of the quirks of recovering from the shutdown, but it's also true that the shelter data were distorted for most of the year because of really long lags with which shelter inflation is calculated. If you look at market rents, they've been running at about a 1% rate for about two years now. That's not indicative of any price pressures in housing whatsoever, but it takes a really long time for measured shelter inflation to catch up to that just because of various quirks of the statistical measurement process that I got into my speech last week. So I do think there was maybe some downward bias in last week's print, but at the same time, there's been tons of upward bias in data for the entire year, and it's inappropriate to say, okay, well, we have to adjust for the downward bias, but we're going to accept the upward bias.
Stephen Miron 3:03
That itself is a deeply biased position. We've got to be clear about both.
Annmarie Hordern 3:06
Well, do you feel like, and yourself included, but do you feel like members of the Fed are cherry picking what about inflation they like or dislike?
Stephen Miron 3:15
Well, I mean, you know, I think that for the last few months, we've had data come out in accordance with, I think, my view of the world. The inflation data have steadily come in cooler than expectations. The unemployment rate has poked up potentially above where people thought it was going to go.

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