A couple of years ago, Stephen Miran was just another guy I followed on Twitter. He was a mostly peripheral voice in the daily back-and-forth of economics-focused FinTwit. Now, he’s the Chairman of the Council of Economic Advisors in the Trump administration and is about to join the Federal Reserve Board of Governors. And because of this, a couple of years ago he was able to participate in a friendly give-and-take of ideas, whereas now the Abundance-sphere screams “BOOTLICKER” and seeks to “Well Ackshually” him whenever they can.
This all being said, the substance of his latest Well Ackshually controversy is actually pretty important for decoding Federal Reserve policy.
In a recent X.com post (they will always be Tweets to me), Miran highlighted some recent research that shows that goods prices are rising, independent of tariffs. This would be an important slap in the face to his political opposition, for whom rising prices from tariffs are a fait accompli.
However, if this research is correct, this would mean that the Fed’s rationale for looking through a rise in inflation would be wrong.
To complicate things, Ernie Tedeschi, a former Chairman of the Council of Economic Advisors, finds that tariffs are causing goods inflation in the US.
So where does this leave the Fed? Probably in the same place where they already are.
Waller On Where We're Going
I have been consistently saying that if you want to understand where Federal Reserve policy is going, you should watch what Christopher Waller thinks.
It seems to me that the Fed’s position is crystalizing around, “regardless of current inflation, inflation expectations remain anchored, and therefore are a less pressing concern that the potential for rapid labor market weakening.” And on that latter point:
Disclaimer: The information provided on this blog is for informational purposes only and should not be considered investment, financial, or other professional advice. Nothing on this site constitutes a recommendation or solicitation to buy or sell any securities. You should consult with a qualified financial advisor before making any investment decisions. Investing involves risks, including loss of principal.