Fed board contenders Miran, Bullard say Trump’s tariffs are not causing inflation

Two economists who are under consideration for positions at the Federal Reserve have stated that they do not believe tariffs cause inflation, aligning with President Donald Trump’s desire for the central bank to lower interest rates. Stephen Miran and James Bullard, in separate interviews with CNBC, rejected the notion that tariffs would lead to long-term price increases, contrary to the views of many other economists.

Miran, who has been nominated to fill a vacant position on the Fed’s board, and Bullard, who is being considered to potentially succeed Jerome Powell as Chair, both emphasized their support for Trump’s pro-growth agenda. They also echoed the president’s belief that inflation is not a significant concern at the moment.

Despite not committing to specific interest rate decisions, both economists praised the data that shows Trump’s tariffs have not caused inflation. Bullard even predicted that the Federal Open Market Committee would begin cutting rates in September, potentially reducing the benchmark interest rate by a full percentage point over the next year.

The issue of Fed independence was also highlighted by Miran and Bullard, acknowledging the challenges faced by policymakers in the face of public pressure from the president. Trump has been vocal in his criticisms of Powell and his calls for rate cuts, even demanding a 3 percentage point reduction.

While acknowledging Trump’s right to express his views on monetary policy, Bullard emphasized the importance of diverse perspectives in decision-making. He stated that Trump’s real estate background influences his focus on borrowing at low rates, but that a variety of viewpoints are necessary in the policymaking process.

Overall, both economists emphasized the need for data-driven decision-making at the Federal Reserve, ensuring that policy choices are based on evidence rather than political pressures. Their perspectives on tariffs, inflation, and Fed independence provide valuable insights into the ongoing debates surrounding monetary policy in the United States.