MNI BRIEF: Miran Says Fed Is Biggest Risk To U.S. Growth

Federal Reserve Governor Stephen Miran said Thursday the biggest risk to growth in the United States is the Fed and interest rates need to be lower, additionally because there is a role for the central bank to help reduce pockets of slack that remain in the labor market. 

"I think it's us," Miran said in Q&A at a Dallas Fed event, when asked about the biggest risk to growth. "The biggest risk I think to the economy is that we're misconstruing just how tight monetary policy is."

Miran also said there are some remaining signs of slack in the labor market, with people working part time for economic reasons, longer time spent on unemployment, and some who are marginally attached to the labor force. "I still see some pockets of slack in labor market that can be accommodated by monetary policy," he said. 

"I don't think that we have an inflation problem. I think that we had a big run up in prices and prices are now roughly stable at a higher level than they used to be," he said. "I see prices as roughly stable." (See: MNI INTERVIEW: Fed To Keep Cutting On Jobs Weakness - Tilley) 

The Fed governor said he expects the fiscal deficit to decline, which will serve to lower the neutral rate of interest. "I'm more optimistic on the deficit, than I was say one or two years ago," Miran said, pointing to tariffs that could raise around USD400 billion a year, greater tax revenue due to faster growth, and lower inflation. 

Miran repeated that he believes the U.S. dollar will remain the world's reserve currency forever.