Federal Reserve Governor Milan said he will remain in office until Waller is confirmed and supports a one-percentage-point rate cut this year.
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On Monday local time, Federal Reserve Governor Stephen Milan said in an interview with CNBC that he will continue serving until Kevin Walsh, President Trump’s nominee for Fed Chair, is confirmed. Before that happens, he will likely be able to attend one more Fed policy meeting. Currently, Milan’s term as Fed Governor has expired.
When asked about the uncertainty surrounding Walsh’s confirmation due to opposition from US Senator Thom Tillis, Milan acknowledged there is indeed uncertainty, but he still expects Walsh to be confirmed. Milan also said he hopes Walsh will be confirmed soon because he really wants to take a vacation, ideally before the end of this month.
On the same day, Milan continued to call for lowering interest rates. He supports cutting interest rates by about one percentage point within this year to boost the cooling US labor market. He stated that unless there are signs that the current surge in energy prices will have more lasting effects, Fed policymakers should disregard this factor:
If there is ever a time when markets are bound to be extremely volatile, it’s during wartime. I prefer not to overinterpret this.
If I see a wage-price spiral, or evidence that inflation expectations are beginning to rise, then I’ll be concerned. At the moment, there’s no such evidence. Regardless of how monetary policy rates are adjusted today or tomorrow, it won’t affect inflation in the coming months. Milan expects inflation to return to target levels in a year.
Monetary policy has a lag effect; it does not target short-term market volatility.
Milan cited market-based indicators, saying that although oil prices have risen above $100 per barrel, and gas station price shocks have pushed gasoline prices up by over $1 per gallon, inflation expectations remain stable. He noted there’s no sign that oil prices have triggered an inflation shock, nor has he noticed any other Fed colleagues adjusting their policy stance based on oil price changes.
Milan said he still worries about the labor market and believes the Fed can balance these concerns. He pointed out that wage growth is slowing, and the Fed’s current restraint on labor demand is now out of step.
Milan stated that the Fed’s balance sheet is too large, and he hopes to reduce it. The Fed can offset the tightening effects of shrinking its balance sheet by lowering short-term interest rates, and emphasized that gradualism is essential during the balance sheet reduction process.
Milan noted that current financial conditions have seen unexpected tightening, which could impact US economic growth. Rising oil prices could accelerate the cooling of the labor market, and the current monetary policy remains in restrictive territory.
Milan also stated that private credit does not mean the US faces economic risk now.
Milan believes major central banks should not hinder AI (artificial intelligence) from creating jobs.
Since September 2025, Milan has cast dissenting votes at every FOMC meeting he has participated in. On Monday, he still believes “we can gradually ease rates by about one percentage point in a year.”
Currently, the target range for the US federal funds rate is 3.5% to 3.75%. Market pricing shows there is no expectation for rates to rise or fall before the end of this year.
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