Miran's "big face change": Last year criticized interest rate cuts as the "biggest mistake," now claims Trump's policies have brought "deflation."
Stephen Miran once criticized the Federal Reserve's interest rate cuts as the "biggest mistake," but now he claims that Trump's policies have led to "deflation," raising concerns about his shift in stance. Miran believes that Trump's supply-side reforms will suppress inflation, changing his view on Federal Reserve policy and suggesting that the conditions for interest rate cuts are now ripe. This shift is interpreted as Trump attempting to influence Federal Reserve policy and challenge its independence
The "New Federal Reserve News Agency" and Wall Street Journal reporter Nick Timiraos revealed through a series of tweets the contradictory policy positions of Trump's Federal Reserve nominee, Stephen Miran. Last year, he criticized interest rate cuts as the "biggest mistake," but now claims that Trump's policies have led to "deflation." This rapid shift seems to carry a strong political undertone.
Timiraos pointed out that Miran had repeatedly criticized the Federal Reserve's interest rate cut decisions. In September of last year, he angrily denounced the Fed's rate cuts as "the biggest policy mistake since 2021," arguing that such actions would entrench high inflation and suggesting there were "political motives" behind them.
However, Miran's recent views have taken a 180-degree turn. He asserts that the current situation is vastly different because the "significant supply-side reforms" being implemented by Trump will bring about anti-inflationary or even "deflationary" effects. Therefore, his concerns about the Fed being "too dovish" last year are no longer valid in 2025.
The core logic of this dramatic shift is that it is not the effectiveness of the Federal Reserve's policies that matters, but rather that Trump's policies are suppressing inflation and creating conditions for interest rate cuts. Miran directly links the shift in monetary policy to Trump's governance agenda, which the market interprets as a clear signal that Trump intends to inject "MAGA economics" into the Federal Reserve, challenging its policy independence.
