Stephen Miran (CAS’05) returned to Boston University on February 9. The Federal Reserve governor and former chair of the White House Council of Economic Advisors spoke with Tarek Hassan, BU professor of economics. Through the interview, Miran defended positions that have made him one of the more controversial voices at the Fed. The discussion showed how even technical monetary policy decisions often carry political consequences.

Over the last year, policy circles in the US have debated inflation and trade, with some, like President Trump, pushing the Fed to lower interest rates, protect employment, and promote economic growth, while others alert about the economic risks of both decisions. The Fed's interest rate currently sits around 3.6 percent, a rate that they expect to help control inflation without weakening the job market. However, Miran has repeatedly voted to cut it, often in the minority, as he believes it affects job growth. His stance closely mirrors President Trump’s public pressure on the Fed to lower rates, a dynamic that raises uncomfortable questions about central bank independence, especially given that Trump appointed Miran. “The job of the Fed is to keep prices stable. It’s not to reduce the price level,” Miran said, pushing back against calls to reverse post-pandemic price increases. “If we were to cause a massive recession to get the price level down, it would improve affordability, but it actually would hurt the economy a lot, because we tighten so much and lots of people lose their jobs.” 

Why can’t economists agree on the right decision? Monetary policy relies on data about inflation and employment, but those numbers are not perfect. Miran argues that current inflation may be overstated due to measurement lags, particularly in housing, meaning the Fed could be reacting to price pressures that have already cooled. If that is true, keeping rates high risks slowing job growth unnecessarily. Critics, however, worry that cutting rates too soon could bring back inflation and damage the Fed’s credibility. The disagreement is less about the facts themselves and more about how to interpret uncertain data and which risk, inflation or unemployment, deserves more importance. 

The political tension surrounding that tradeoff was also evident. While avoiding direct comment on outside pressure, Miran said, “The best thing that the Fed can do… is to just stick to the straight and narrow. … Don’t politicize yourself.” That statement carries particular weight given public pressure from President Trump to lower rates and the broader debate over Fed independence. 

Ultimately, the discussion highlighted that economics is a social science, not a perfect math. Data is imperfect, and policy choices involve tradeoffs. Improving one outcome often worsens another, which is why central bank independence is crucial, since it eliminates political interests in the decision-making.

Barlow, R. (2026, February 11). Federal Reserve Governor, and alum, Stephen Miran, in visit to BU, says inflation is under control. Boston University. 

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