Federal Reserve Governor Milan once again calls for more aggressive interest rate cuts: Credit pressure indicates that current policies are overly restrictive.

Federal Reserve Board member Stephen Milan said that monetary policy still has limitations, and he will continue to advocate for a more substantial rate cut. In an interview on Monday, Milan said, "The Fed's policy is too restrictive, and the neutral interest rate level is much lower than the current policy rate. Given that I am more optimistic about the outlook for inflation than other committee members, I see no reason to maintain such a restrictive policy." Milan has repeatedly called for looser monetary policy. At the September and October meetings, he opposed the decision to lower the Fed policy rate by 25 basis points and instead advocated for a larger 50 basis point cut. Concerns about a sharp slowdown in hiring over the summer have raised worries about the labor market, leading Fed officials to cut the benchmark rate by 25 basis points for the second consecutive month last week. Fed Chairman Powell said in a press conference after the decision that a December rate cut is "not a foregone conclusion." The target range for the benchmark rate has now been lowered to 3.75% to 4% after this cut. Several Fed policymakers have expressed concerns that aggressively cutting rates too quickly may lead to sustained high inflation. Chicago Fed President Charles Evans said in an interview later on Monday that his current concerns about inflation outweigh his concerns about the labor market. San Francisco Fed President Mary Daly said at an event in West Palm Beach that officials should "keep an open mind" about a December rate cut when balancing the dual mandate of inflation and employment. Credit market Milan supplemented his argument for a rate cut with new evidence, pointing out that recent signs of pressure in credit markets may indicate that monetary policy is still too tight. He said, "When a series of seemingly unrelated credit problems are suddenly exposed after being hidden for a while, it in itself highlights the stance of monetary policy." Milan faced criticism for temporarily leaving his position as chairman of the White House Council of Economic Advisers to take on a temporary role at the Fed, raising concerns about his independence from the Trump administration. Milan said, "The longer policy remains restrictive, the greater the risk that monetary policy itself will lead to an economic downturn."