Federal Reserve Governor Stephen Miran continued to advocate for lower interest rates on Monday. He made it clear that policymakers should ignore the current surge in energy prices caused by the conflict with Iran unless there are clear signs that such a rise will have a lasting impact.

Milan believes there is no need for a policy response to the energy shock at present.

Milan points out: "I would only be concerned if I saw a wage-price spiral or if inflation expectations started to rise significantly. There is no such evidence yet. You can adjust monetary policy rates at will, today or tomorrow, but it will not affect inflation in the coming months."



He added that monetary policy has a significant lag effect and is not designed to address short-term market volatility. Therefore, the Federal Reserve does not need to take immediate action in response to the current surge in energy prices.

Inflation expectations remain stable

Milan cited market-based indicators, stating that despite oil prices rising above $100 per barrel and gasoline prices at gas stations increasing by more than $1 per gallon, inflation expectations remain well anchored. He believes there is currently no evidence that rising energy prices are translating into broader inflationary pressures.

Milan continues to advocate for a gradual easing of policies.

Since September 2025, Milan has voted against the Federal Open Market Committee (FOMC) at every meeting he has attended. He still believes the Fed can gradually ease policy rates by about 100 basis points, completing this adjustment over a period of about a year.

The target range for the federal funds rate remains at 3.5%-3.75%. Market pricing indicates that the likelihood of the Federal Reserve taking any action in any direction before the end of this year is low.

His term as Milan has ended but he remains in office; Walsh's nomination is blocked.

Milan's term as a governor has expired, but he is continuing to perform his duties. This is primarily due to the obstruction faced by former Federal Reserve Governor Kevin Warsh's nomination for chairmanship by the Senate Banking Committee. If Warsh's nomination is ultimately confirmed, he will succeed Powell as Federal Reserve chairman after Powell's term ends in May.

In summary: Calls for interest rate cuts persist within the Federal Reserve, and the policy direction remains to be seen.

Overall, Federal Reserve Governor Milan reiterated his disagreement with the current high-interest-rate policy. He believes that without signs of a wage-price spiral or runaway inflation expectations, the Fed should not tighten or maintain high interest rates due to short-term energy price increases, but should instead consider gradually easing monetary policy to support economic growth.

Milan's statement further reflects differing opinions within the Federal Reserve regarding its policy path. As the impact of the Iranian conflict on energy prices continues, the market will closely watch the Fed's subsequent policy signals and whether inflation expectations will undergo substantial changes. In the short term, the likelihood of the Fed maintaining the current interest rate range remains high, but the long-term policy direction remains uncertain.