NEW YORK—Federal Reserve Governor Stephen Miran said inflation pressures facing the U.S. economy are increasingly distorted by lagging and poorly measured components, arguing that underlying inflation is closer to the Fed’s 2% target than headline data suggest—a view with clear implications for interest-rate policy and financial institutions.
Speaking Monday at Columbia University’s School of International and Public Affairs in New York, Miran said shelter inflation, one of the largest drivers of recent price increases, reflects housing supply-demand imbalances from several years ago rather than current conditions. With market rents having cooled sharply and demographic pressures easing, Miran said he expects shelter inflation in the Fed’s preferred PCE index to fall faster in coming months, providing meaningful disinflation even if other components remain noisy.
Miran also downplayed concerns about persistently high core non-housing services inflation, noting that wage growth has slowed alongside a loosening labor market. He criticized imputed components—particularly portfolio management fees—for overstating inflation pressures. Those fees added roughly 30 basis points to core PCE over the past year, he said, even as industry data show asset-management fees continuing to fall.
“It would be foolish of us to chase statistical quirks rather than focus on actual consumer prices,” Miran said.
On goods inflation, Miran pushed back on claims that tariffs are a major driver, arguing most of the burden is likely absorbed by exporters rather than U.S. consumers and that international comparisons do not show the U.S. as an inflation outlier. Even if tariffs raise prices temporarily, he said, central banks should “look through” one-time price-level effects rather than treat them as persistent inflation requiring tighter policy.
Taken together, Miran said market-based measures of inflation—excluding shelter and imputed prices—are already running close to target, warning that keeping policy too restrictive based on backward-looking or distorted data risks unnecessary job losses. With shelter inflation poised to normalize and labor markets cooling, he reiterated his view that a quicker move toward a neutral policy stance would better balance the Fed’s inflation and employment mandates.