By Matt Grossman

Federal Reserve governor Stephen Miran dialed back his calls for how deeply the Fed should cut rates this year, telling an interviewer that recent data have reflected a stronger economy than he had expected.

The latest figures suggest that employment has held up better than Miran anticipated, while goods inflation has appeared more stubborn, he said in an interview with The Peg, a Substack blog run by journalist Izabella Kaminska. As a result, Miran said, he no longer believes the Fed should plan on cutting rates as much this year as he thought two months ago.

"The labor market came in a little bit better than I came to expect over the last few months," Miran said in the interview. "There's been some signs of even more firming in goods inflation," he added. "And so those two things combined would make me undo what I did in December."

In the Fed's quarterly dot plot in December, Miran had projected rates falling to below 2.25% by end of year; he now favors returning to the less-aggressive position he held in September, which would put rates below 2.75% at the end of 2026.

Miran's new position, which implies a full percentage point of rate cuts this year from the current level of 3.5% to 3.75%, still leaves him among the Fed's most dovish officials, contrasting sharply with the median official's projection that the Fed should cut rates by just a quarter point this year.

Yet the interview is notable because it suggests more distance between Miran and the economic-policy views of the White House, where Miran previously led the Council of Economic Advisers. In particular, Miran has warned that a failure to cut rates deeply could harm the economy, and has previously rejected concerns about goods inflation, arguing that price increases caused by tariffs aren't likely to become an entrenched pattern.

Miran's appointment to the Fed by President Trump in September drew scrutiny because he took leave from the CEA instead of resigning, an unusual arrangement that led some Fed watchers to suggest Miran's decision making could be unduly influenced by Trump's strong preference for lower interest rates.

Earlier this month, Miran resigned from his White House role, a step that kept his commitment to Senate Democrats to leave the Trump administration if his time at the Fed extended beyond February. Miran was appointed to the Fed to fill the final months of a term left vacant by another governor's resignation, and though the term has now expired, he can stay on the job provisionally until the Senate confirms a successor.

President Trump is expected to use the vacancy to appoint Kevin Warsh, his choice to succeed Chair Jerome Powell, to the Fed's board, a move that would displace Miran. Another seat on the board may open later this year, however, if Powell follows a custom and resigns from the Fed once his term as its chair wraps up in May.

Miran has dissented in favor of lower interest rates at all four of the Fed policy meetings he has joined. He did not say in the Substack interview how he plans to vote at the Fed's next meeting in March, where traders widely expect the Fed to hold rates steady, extending a pause they decided on last month.

Write to Matt Grossman at matt.grossman@wsj.com

(END) Dow Jones Newswires

February 19, 2026 14:32 ET (19:32 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.