Stephen Miran exits the Fed. How he set the stage for Kevin Warsh.

• Miran dissented at every Fed meeting since joining in September 2025, favoring aggressive rate cuts - he currently supports rates three-quarters of a point lower than colleagues due to beliefs about deregulation's disinflationary effects
• Both Miran and incoming Chair Warsh believe the Fed should 'look through' supply shocks like tariffs and oil price spikes, focusing only on underlying inflation trends rather than one-time price changes
• Miran may return to the Fed before Trump's term ends, particularly if outgoing Chair Powell leaves early, which would provide Warsh with a key ally for institutional change

Summary: Stephen Miran Exits Fed as Kevin Warsh Takes Chair

Key Developments:

Federal Reserve Governor Stephen Miran is departing after serving the shortest tenure in 71 years (since September 2025), making way for newly confirmed Fed Chair Kevin Warsh, who was confirmed Wednesday. The two will not overlap but share similar policy views.

Miran's Track Record:

• Dissented at all six Fed meetings he attended, consistently favoring lower interest rates
• Initially called for 100 basis points (1 percentage point) of cuts this year—three more quarter-point cuts than the median Fed member
• Currently advocates for rates 75 basis points lower than colleagues, citing one fewer cut due to recent inflation concerns
• Previously served as Chair of White House Council of Economic Advisers under President Trump

Core Policy Arguments:

Miran championed three main ideas:

1. Deregulation impact: Estimates it could reduce future inflation by 0.5 percentage points
2. Software inflation distortion: Co-authored research arguing technical factors artificially inflate headline inflation numbers
3. Supply shock response: Advocates the Fed should "look through" temporary price spikes from tariffs and geopolitical events (Iran war oil shock), focusing only on persistent inflation trends

Market Implications:

Warsh shares Miran's approach to supply shocks and underlying inflation, signaling potential policy continuity. However, three recent Fed dissenters expressed inflation concerns, suggesting internal resistance. Miran acknowledges institutional change at the Fed is "glacial" and requires consensus-building.

Looking Ahead:

Miran expressed interest in returning to the Fed if a seat opens, potentially when outgoing Chair Jerome Powell departs (term runs until January 2028). His return would provide crucial support for Warsh's policy agenda.