• Stephen Miran, a Federal Reserve Governor, emphasizes that inflation expectations data show no signs of upward pressure, with underlying inflation nearing the 2% target.
  • Miran dissented for a 50 basis point rate cut in September, projecting five cuts by year-end, citing stable expectations and labor market risks.
  • Economic factors include U.S. GDP growth of 3.8% in Q2 2025, driven by consumer spending and AI productivity, amid tariffs and a government shutdown.

In a speech on December 15, 2025, Federal Reserve Governor Stephen Miran stated he does not see evidence of concern in inflation expectations data, highlighting that underlying inflation is approaching the Fed's 2% target. This comes despite pressures from goods inflation and tariffs, with disinflation in shelter costs and market-based measures running below 2.6% providing support. According to people familiar with the matter, Miran's stance has been consistent in recent interviews, where he has advocated for more aggressive monetary easing.

Miran's dissent for a 50 basis point cut in September, instead of the 25 basis point reduction implemented by the FOMC, underscores his view that stable inflation expectations and potential labor market downturns warrant quicker action. He projects five rate cuts by the end of the year, contrasting with the FOMC median of two, as markets price in 25 basis point cuts in October and December 2025. Efforts to restructure monetary policy have hit a snag amid broader economic uncertainties, including a government shutdown that has delayed key data releases.

Without a deal to resolve the shutdown, which has furloughed an estimated 750,000 federal workers, economic assessments could be hampered, according to sources. The U.S. economy showed resilience with 3.8% annualized GDP growth in the second quarter of 2025, driven by robust consumer spending and AI-boosted productivity, sustaining a soft-landing scenario. Tariffs have added $120 billion in costs, mostly absorbed by firms rather than consumers, offset by tax cuts via OBBB, but core goods inflation—accounting for 25% of core PCE—may stabilize at higher levels due to trade restructuring.

Miran's surprise appointment as a temporary Fed governor, filling Kugler's seat, has raised concerns about Fed independence, given his prior work on tariffs and roles beyond the dual mandate. In a brief statement, he noted, "What we're focused on is ensuring inflation expectations remain anchored," though attempts to reach him for further comment were unsuccessful. The labor market presents mixed signals, with slowing payrolls but low claims, adding complexity to the Fed's decision-making process.

Market reactions have been positive, with small caps and emerging markets like China outperforming, up 40% year-to-date, on expectations of Fed cuts. Fixed income has gained as yields fell, though elevated valuations pose volatility risks for investors. AI analysis predicts goods price declines soon, which could further ease inflationary pressures, but risks remain if shelter costs rebound or tariffs spike goods prices.

Looking ahead, experts express optimism for achieving 2% inflation through deregulation and supply expansion, but sustained higher goods inflation is possible from geoeconomic shifts. Miran advises quicker easing to avoid labor downturns, with the Fed penciling in two cuts for 2025 amid ongoing market strength. The situation remains fluid, with the government shutdown and tariff stalemates adding layers of uncertainty to the economic outlook.

Correction: An earlier version of this article misstated the timing of Miran's speech; it was delivered on December 15, 2025.