Federal Reserve Board Director Michael Mylan said monetary policy remains suppressive and will continue to push for significant interest rate cuts.
“The Fed is being overly pro-cyclical and its level of neutrality is well below current policy,” Mylan said on Bloomberg Television on the 3rd. “Given my more optimistic outlook on inflation than some members of the Federal Open Market Committee (FOMC), I see no reason to keep monetary policy suppressive.”
Mylan Fed Director
Source: Pete Kiehart
He has repeatedly called for further easing of monetary policy. At the September and October FOMC meetings, the Bank advocated a 0.5 percentage point cut and voted against the decision to cut rates by 0.25 percentage point.
It said there have been recent signs of stress in credit markets, which could indicate that monetary policy remains too tight. He also added a new perspective to his rationale for rate cuts.
“Credit issues that have been hidden for some time have suddenly come to the fore. Seemingly unrelated issues keep happening. This suggests something about the stance of monetary policy.”
Director Mylan speaking on Bloomberg Television (video, 3rd)
Source: Bloomberg
Mylan has been criticized for taking a leave of absence from her role as chair of the Council of Economic Advisers (CEA) to serve on the Fed’s board, and has also raised concerns about her independence from the Trump administration.
“The longer monetary policy remains suppressive, the greater the risk that monetary policy itself will put downward pressure on the economy,” he said.
Original title:Fed’s Miran Repeats View Policy Remains Too Restrictive (1) (excerpt)
— Coverage cooperation Jonathan Ferro, Lisa Abramowicz and Annmarie Hordern
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