Milan's first policy debut calls interest rates too high, Trump's confidant explains why there is a need for a large and rapid interest rate cut.

Federal Reserve board member Stephen Milan stated that interest rates were too high and explained the necessity of a significant rate cut in the coming months to protect the labor market. In his first policy speech since being appointed as a Federal Reserve board member by President Donald Trump, Milan explained the reasons for the recent decline in the neutral interest rate that neither stimulates nor constrains the economy. Milan suggested that the neutral interest rate, which may have been overestimated in the past, has declined recently due to tariffs, immigration restrictions, and tax policies. He said that this means interest rates should be significantly lowered to prevent damage to the economy. "The result is that monetary policy has become severely restrictive," Milan said in a prepared speech at the New York Economic Club on Monday, "keeping short-term rates at a level of about 2 percentage points above the overly tight level has brought unnecessary risks of layoffs and rising unemployment."