Asks where the Governor's dot plot forecast is for the year.
Host
Stephen Miran
Forecasts about 1.5 percentage points (150bps) of cuts. View driven by quirks in inflation calculation, specifically shelter inflation which lags market rents. Underlying inflation is running at 2.3%, within noise of target.
Notes that 2.3% inflation sounds like an argument for neutral policy, but the Governor is arguing for accommodation. Asks why.
Host
Stephen Miran
Unemployment at 4.6% means about a million Americans without jobs who could have them without causing inflation. Policy has been too tight, marking down growth forecasts. Appropriate policy would yield higher growth (2.8-2.9%).
Asks what data would change his view, specifically if unemployment dropped to 4.4%.
Host
Stephen Miran
Forecast is conditional on shelter inflation coming down, aligned with Goldman Sachs research. Acknowledges two-sided risk: could undershoot target if wrong on tariffs. Would be wrong if market rents pick up again.
Asks if he's made inroads convincing colleagues who think policy is close to neutral.
Host
Stephen Miran
Difficult to argue policy is neutral when unemployment is ticking up and inflation data improving. Policy is still materially above neutral.
Questions the strong conviction needed for aggressive cuts, suggesting post-pandemic humility and a slower, meeting-by-meeting approach.
Host
Stephen Miran
Claims he was right about inflation post-pandemic, advocating for smaller stimulus. High confidence on shelter due to mechanical relationship from market rents to measured inflation. Less confident on goods inflation.
Asks how he would interpret a signal from the bond market (rising 10-year yield) if the Fed cuts aggressively.
Host
Stephen Miran
Would not jump to conclusions. Would analyze carefully. If the bond market gives a clear, sustained signal the move was wrong, would reconsider the framework.