Fed’s Miran says he may trim rate cut outlook, citing inflation

Federal Reserve Governor Stephen Miran, speaking at an economic forum in Washington, D.C., said Thursday he is reconsidering his rate cut outlook for the year, trimming his projection from four cuts to potentially three and acknowledging the inflation picture had become more complicated even before war with Iran began.

The remarks came just days after Treasury Secretary Scott Bessent also took a slight turn from his earlier stance on monetary policy.

Cuts should come eventually, Bessent said at a Washington conference, but waiting for clarity on the Iran situation makes sense. He also suggested the market could wait for President Donald Trump’s pick to helm the Fed, Kevin Warsh, to lead the next rate cycle.

That marks a difference from where he stood earlier this year, when he described rate reductions as the single missing ingredient for stronger economic growth and argued the Fed had no reason to delay.

Trump himself has been more direct on the subject. He has repeatedly called on Fed Chair Jerome Powell to lower borrowing costs, arguing that high interest rates were an unnecessary drag on an otherwise strong economy.

The Fed cut interest rates three times last year but has held them steady so far in 2026.

The shift comes as energy prices have surged following the outbreak of war with Iran, pushing headline inflation higher while core inflation has remained relatively contained. Consumer prices rose 3.3% year over year in March.

It also comes ahead of a pivotal leadership transition at the Fed.

Warsh is scheduled for a confirmation hearing before the Senate Banking Committee on April 21, but his path forward is far from clear. Sen. Thom Tillis, a North Carolina Republican whose vote the party needs to advance the nomination, refuses to support any Fed nominee while the Justice Department pursues a criminal investigation into Powell.

The probe is focused on Powell’s congressional testimony about the cost of renovating the Fed’s aging headquarters. A federal judge quashed the subpoenas in March, finding no credible evidence of wrongdoing and writing that the effort appeared designed to harass Powell into resigning. Prosecutors say they’ll appeal, but that legal battle will likely take months if not longer.

Under Fed regulations, the chair can serve “pro tempore” if a successor hasn’t been installed. Powell served in that capacity for several months in early 2022 while awaiting confirmation to his second term. He has also said he intends to stay on as governor until the Justice Department investigation is cleared.

Trump said Wednesday he was prepared to fire Powell if he doesn’t step down when his term expires on May 15.

“I’ll have to fire him, OK, if he’s not leaving on time. I’ve held back firing him. I’ve wanted to fire him, but I hate to be controversial,” Trump said in an interview on Fox Business.

Write to Nicole Goodkind at nicole.goodkind@barrons.com