Fed Governor Milan warns: Trade uncertainty intensifies, urgency for rate cuts increases

PANews reported on October 16th that according to Jinshi, Federal Reserve Board Governor Stephen Miran stated that recent trade tensions have heightened uncertainty about the economic growth outlook, making it even more important for policymakers to accelerate the pace of interest rate cuts. Miran said at a CNBC event on Wednesday: "Downside risks are more pronounced today than they were a week ago, and I think policymakers need to recognize that and reflect that in their policies. The heightened uncertainty surrounding trade policy has created new tail risks. It's not that I expect lower interest rates now than I did a week or a month ago, but as the balance of risks shifts, I think it's even more urgent to get policy to a more neutral stance as quickly as possible."

On Wednesday, he said that expecting two more rate cuts this year "sounds realistic." "I think policy is pretty tight right now, and that leaves us vulnerable to shocks. If you have a shock to the economy when policy is very tight, the economy will react differently than if policy is less tight," he said. "I think it's more important now than it was a week ago that we quickly move to a more neutral stance." At another event in Washington later on Wednesday, Milan said it would be appropriate to stop shrinking the central bank's balance sheet "in the near future," echoing Powell's comments on Tuesday.