Federal Reserve Board member Milani still supports interest rate cuts, stating that this year the rate could be lowered by about one percentage point.

Huitong Finance APP News—Federal Reserve Governor Stephen Miran continued to call for lower interest rates on Monday. He said clearly that policymakers should ignore the sharp rise in energy prices currently driven by the Iran conflict, unless there are clear signs that this increase will have a lasting impact.

Milan believes there is currently no need to respond to the energy shock with policy

Milan noted: “If I see a wage-price spiral rising, or if I see inflation expectations beginning to rise clearly, then I would be concerned about that. There is no evidence of that yet. You can adjust monetary policy interest rates as you like, today or tomorrow, but it won’t affect inflation in the coming months.”

He added that monetary policy has a clear lag and is not intended to address extreme short-term market volatility. Therefore, the Federal Reserve does not need to take action immediately in response to the current surge in energy prices.

Inflation expectations remain stable

Citing market-based indicators, Milan said that although oil prices have risen above $100 per barrel and gasoline prices at filling stations have also increased by more than $1 per gallon, inflation expectations remain well-anchored. He believes there is currently no evidence that the rise in energy prices is translating into broader inflationary pressure.

Milan continues to advocate a gradual easing of policy

Since September 2025, Milan has cast a dissenting vote at every Federal Open Market Committee meeting he has attended. He still believes the Federal Reserve can gradually lower the policy rate by about 100 basis points and complete the adjustment within about a year.

Currently, the target range for the federal funds rate remains at 3.5%-3.75%. Market pricing shows that the likelihood of the Federal Reserve taking action in any direction before the end of this year is low.

Milan remains in office after his term ends; the Warsh nomination is blocked

Milan’s term as a governor has expired, but he is still carrying out his duties. This is mainly because the former Federal Reserve governor Kevin Warsh’s nomination as chair has run into obstacles at the Senate Banking Committee. If Warsh’s nomination is ultimately approved, he would take over as Fed Chair after Powell’s term ends in May.

Summary: Continued rate-cut voices within the Fed, policy direction still under observation

Overall, Fed Governor Milan once again clearly expressed his dissent toward the current high-interest-rate policy. He believes that, in the absence of signs of a wage-price spiral or inflation expectations getting out of control, the Fed should not tighten or maintain high rates due to a short-term rise in energy prices, and should instead consider gradually easing monetary policy to support economic growth.

Milan’s remarks further reflect differing views within the Fed regarding the policy path. As the Iran conflict continues to affect energy prices, the market will closely watch the Fed’s subsequent decision signals, and whether inflation expectations will undergo substantive changes. In the short term, the likelihood that the Fed will keep the current rate range remains relatively high, but there is still uncertainty about the long-term policy direction.

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Editor: Guo Jian