Fed's Miran ties rising unemployment to current setting of monetary policy - Fox Business

Federal Reserve Governor Stephen Miran said in a television interview on Tuesday that a deteriorating job market was happening because of where the central bank has set it short-term interest rate target.

We have to recognize that the unemployment rate has been drifting higher, and that is a function of monetary policy being too tight, Miran said in an interview on Fox Business.

My concern is that if we don't continue cutting rates and do so at a reasonably quick pace the jobless rate will continue to rise and "we will be the source of continuing increases in unemployment, which is not a good thing."

In the interview, the Fed governor, who is controversially on leave from the Trump White House to serve at the central bank, reiterated that he favored aggressive rate cuts given that he expected still high inflation pressures to abate over time.

Miran did not comment on the size of the action he would like to see from the Fed at its next meeting, but he said in the interview that "I think the economy calls for large interest rate cuts to get monetary policy to neutral".

The most recent jobs data, for September, showed that while payroll gains were larger-than-expected, the unemployment rate ticked up to 4.4 percent, from 4.3 percent in August.

The Federal Open Market Committee is set to deliberate on interest rates at its December 9-10 meeting. Financial markets expect to see a quarter percentage point cut to what is now a 3.75 percent to 4 percent federal funds target rate range.

Reuters