Federal Reserve Governor Stephen Miran on Wednesday sharply challenged the widespread view that tariffs are a significant cause of inflation, stating he sees no evidence in the data that they are a “material driver” of rising consumer prices.

Tariffs Not A ‘Material Driver’ For Inflation

Speaking at the MFA Policy Outlook 2025 conference, Miran outlined a data-driven case against the tariff-inflation link.

He argued that if tariffs were a major factor, goods subject to import duties should show higher inflation than domestically produced goods—a divergence he says doesn’t exist in the data. He also noted that U.S. core goods inflation has not meaningfully separated from trends in other developed nations that have not enacted similar tariffs.

“I would expect if tariffs were a material driver of inflation to see… a higher rate of inflation than imported core goods. And I do not see that in the data,” Miran stated.

This skepticism is a key pillar of Miran's more optimistic, or “sanguine,” view on the overall inflation outlook, which underpins his argument for a looser monetary policy. His forecast is also heavily reliant on a predicted cooldown in housing costs, which he believes will “drown out” other price pressures.

See Also: Trump’s ‘Sock Puppet’ At The Fed, Says Elizabeth Warren On Stephen Miran’s Dissenting Vote: ‘Intended To Send A Signal,’ Says This Economist

Miran Claims Vindication As Bond Market’s Muted Reaction

Miran also pointed to the bond market’s reaction as validation for recent rate cuts.

He contrasted the sharp rise in 10-year Treasury yields after cuts last year—which he viewed as a “penalty”—with the much milder reaction this year.

The current market behavior, he said, “is again bearing out my argument” that policy easing is the correct move.

Miran Flags ‘Deterioration In Quality’ Of US Government Economic Data

Beyond his immediate policy views, Miran expressed concern over a “deterioration in quality” of U.S. economic data.

He cited declining survey response rates that have led to larger-than-usual revisions, suggesting the declining reliability of initial data presents a growing challenge for policymakers trying to steer the economy.

Price Action

The CME Group's FedWatch tool‘s projections show markets pricing a 95.1% likelihood of the Federal Reserve cutting the current interest rates in its October meeting.

The SPDR S&P 500 ETF Trust ( SPY ) and Invesco QQQ Trust ETF , which track the S&P 500 index and Nasdaq 100 index, respectively, fell on Tuesday. The SPY was down 0.37% at $669.12, while the QQQ declined 0.53% to $604.51, according to Benzinga Pro data.

The futures of the S&P 500, Dow Jones, and Nasdaq 100 indices were trading higher on Wednesday.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.