Fed Miran: I think we need to cut rates more than a point this year

Industrial production fell 1.2% from November to December 2025, accentuating the predominantly negative trend observed since September 2025, a period in which it accumulated a ...

Thanks for that kind introduction. Today, I want to share my views on the economy, as well as my sense of where it’s headed. These are my thoughts only and not those of anyone else on the Federal Open Market Committee (FOMC) or in the Federal Reserve System. The Fed has a dual mandate from Congress: stable prices and maximum employment. If either part of our mandate moves too far from its target, our job is to guide the economy back home. That’s what happened coming out of the pandemic. Inflation spiked, helping us remember a painful lesson from the ’70’s — just how much we all hate inflation. It feels unfair, it creates uncertainty, and frankly it’s just exhausting to have to negotiate with suppliers or customers or to shop around for better prices. As you would hope, the FOMC did the job Congress has asked us to do: We moved to bring inflation under control, raising the federal funds rate over 5 percentage points in 17 months. The steepness of this hiking cycle made many people worry that addressing high inflation would come at a severe cost to the economy. You may have heard it called the most predicted recession in history. Instead, inflation started falling back toward our 2 percent target while the economy and the labor market remained impressively resilient. We seemed to be headed back home. BARKIN: RATE CUTS SO FAR HAVE HELPED INSURE HEALTH OF JOB MARKET WHILE FED COMPLETES "LAST MILE" OF RETURNING INFLATION TO TARGET FED FBARKIN ECONOMY REMAINS "REMARKABLY RESILIENT" || GIVEN GROWTH, LOW UNEMPLOYMENT RATE, HARD TO IMAGINE EITHER BUSINESSES OR CONSUMERS MOVING TO THE SIDELINES BARKIN: RISE IN PRODUCTIVITY SUGGESTS FIRMS CAN BEAR HIGHER INPUT COSTS WITHOUT PRESSURE TO RAISE PRICES || FIRMS SAY DEMAND IS FINE AND ARE NOT DOING LAYOFFS "AT SCALE" ...