- Key takeaway: Federal Reserve Gov. Stephen Miran presented a number of contributors currently propping up goods inflation, including volatility in price data and lingering post-pandemic effects.
- Expert quote: "I accept I don't know what's driving higher goods inflation currently." — Fed Gov. Stephen Miran.
- What's at stake: Looking ahead to next year, inflation remains a top concern for some members of the Fed's rate-setting committee, raising the prospect of future dissents over cuts to short-term interest rates.
Federal Reserve Gov. Stephen Miran said Monday he is unsure what is driving higher goods inflation, but continued to defend the Trump administration's tariff policies.
Speaking at Columbia University's School of International and Public Affairs, Miran said goods inflation could remain elevated because of a longer-term restructuring of global trade, a potential outcome he described as "unsavory."
Miran, an architect of the current tariff regime, said higher goods prices could be the trade-off for easing national security and geo-economic risks.
"Higher global goods inflation could result from a longer-term trend of trade restructuring that encompasses much more than tariffs, including a reduced willingness to rely on unfettered access to exports in favor of national security and geo-economic concerns," Miran said Monday. "Attention to supply chain security and resilience — which predates this year's tariffs — may mean higher core goods inflation for a longer period, though perhaps not this high."
Miran cited several other possible explanations, including volatility in price data and lingering post-pandemic effects.
"I accept I don't know what's driving higher goods inflation currently," he added.
He noted that tariffs should lead to a one-time increase in price levels and could even offset deflation over the long term.
"Although I do not yet see meaningful tariff-driven inflation, it may materialize. But over time, short-run elasticities would converge with long-run elasticities," he said. "Not only would the increase in inflation be transitory, but likely so would the increase in the price level, meaning subsequent offsetting deflation."
Miran also
"We must be thoughtful in considering genuine underlying inflationary pressures," said Miran. "Excess measured inflation is unreflective of current supply-demand dynamics. Shelter inflation is indicative of a supply-demand imbalance that occurred as much as two to four years ago, not today. Given monetary policy lags, we need to make policy for 2027, not 2022."
Since his confirmation to the Federal Reserve in September, Miran has repeatedly called for the central bank to cut interest rates more aggressively, arguing inflation is lower than commonly perceived.
Miran also commented on the
"One thing the Reserve Banks do is they give you a local window into what's happening in regional economies and that is so valuable because economic data is important," Miran said. "I was delighted to have the opportunity to vote like that and I think the Reserve Bank presidents are doing a great job."
The unanimous vote came as a surprise to some Fed observers, as expectations had been building that the confirmation process for regional Fed presidents could become the next political flashpoint in tensions between the White House and the central bank. Some had anticipated at
Miran's term as Fed governor is
