Fed's Miran Says Core Inflation Likely Close to 2% Target

01:34 PM EST, 12/15/2025 (MT Newswires) -- Federal Reserve Governor Stephen Miran said Monday that core inflation is likely closer to the US central bank's 2% target than what official data suggest.

The President Donald Trump ally was one of the three Federal Open Market Committee members who dissented from the majority in last week's move to cut interest rates by 25 basis points. He preferred a 50-basis-point reduction, while Chicago Fed President Austan Goolsbee and Kansas City Fed President Jeffrey Schmid voted in favor of a no-change stance.

In prepared remarks for a Columbia University event, Miran outlined his assessment and outlook for inflation, arguing that "a better measure of underlying inflation would account for distortions from shelter and imputed prices."

"Removing imputed phantom inflation like portfolio management, market-based core inflation is running below 2.6%," he said. "If we further remove housing and look at market-based core ex shelter, underlying inflation is running below 2.3%, within noise of our target."

The Fed's preferred inflation gauge that excludes food and energy slowed to 2.8% annually in September from 2.9% in August, based on the personal consumption expenditures price index, the Bureau of Economic Analysis said earlier this month.

The Fed reiterated its views about the economy last Wednesday, saying activity has been expanding at a "moderate" rate and inflation continued to be somewhat elevated.

"We must be thoughtful in considering genuine underlying inflationary pressures," Miran said. "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."

Miran cautioned that keeping monetary policy unnecessarily tight will likely lead to job losses.

"Experience suggests that labor market deterioration can occur quickly and nonlinearly and be difficult to reverse," he said. "In part because monetary policy lags several quarters, a quicker pace of easing policy -- as I have advocated -- would appropriately move us closer to a neutral stance."

Separately, New York Fed President John Williams said Monday the Fed's policy is "well positioned" and that he expects inflation to ease to just under 2.5% next year.

"My assessment is that in recent months, the downside risks to employment have increased as the labor market has cooled, while the upside risks to inflation have lessened somewhat," he said in remarks prepared for delivery in New Jersey.

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