Fed Governor Stephen Miran cautioned that U.S. monetary policy may already be too restrictive, arguing that the neutral rate sits “quite a ways” below the current stance. Speaking with Bloomberg TV, Miran said his relatively sanguine view on inflation suggests there is “no reason for keeping policy as restrictive” .
Miran also highlighted emerging strains in credit markets as a warning sign that policy may have overshot. He noted that “a series of seemingly uncorrelated credit problems” surfacing across sectors indicates financial stress that was previously masked by strong headline data.
“The longer you keep policy restrictive, the more you run the risk that monetary policy itself causes a downturn,” Miran warned.
