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Fed Governor Stephen Miran pushes case for central bank to slash key interest rate

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11 months ago

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Less than a week after taking his seat, Federal Reserve Governor Stephen Miran on Monday outlined the reasons why he thinks the central bank’s benchmark interest rate is far too high and should be lowered aggressively.

Changes in tax and immigration policy along with easing rental costs, deregulation and incoming revenue for tariffs are creating a different economic landscape that allow the Fed to cut its benchmark rate by nearly 2 percentage points from its current level, the central banker said in remarks before the Economic Club of New York.

“The Federal Reserve has been entrusted with the important goal of promoting price stability for the good of all American households and businesses, and I am committed to bringing inflation sustainably back to 2 percent,” he said. “However, leaving policy restrictive by such a large degree brings significant risks for the Fed’s employment mandate.”

Miran sees the confluence of policy changes from the White House lowering the neutral level of interest that neither restricts nor promotes growth. In remarks heavy with data and citations on theory and interest rate models such as the Taylor Rule, Miran said current monetary policy is significantly more restrictive than the prevailing attitude among his fellow policymakers.

Using standard policy rules, Miran thinks the federal funds rate, a level that banks charge each other for overnight lending but that influences a wide variety of other rates, should be in the low-2% area. The current funds rate following last week’s reduction is targeted between 4%-4.25%.

“The upshot is that monetary policy is well into restrictive territory,” he said. “Leaving short-term interest rates roughly 2 percentage points too tight risks unnecessary layoffs and higher unemployment.”

The views, however, put Miran well outside consensus on the Federal Open Market Committee, where the current approach advocates more caution and a tepid move lower in rates over the next several years.

At its meeting last week, the FOMC voted 11-1 to lower by a quarter percentage point. Miran was the sole dissenter, opting for a half-point cut and putting his individual dot on the committee’s “dot plot” of expectations in a place that would imply another 1.25 percentage points in reductions this year.

Earlier Monday, St. Louis Fed President Alberto Musalem, who like Miran is a voter on the FOMC this year, said he sees little room for further cuts. Likewise, Atlanta President Raphael Bostic — who doesn’t vote this year — also told The Wall Street Journal he would not support further reductions this year.

President Donald Trump appointed Miran to the Fed position following former Governor Adriana Kugler’s surprise resignation in early August. Like Trump, Miran has been a harsh Fed critic, though he and others described the air at the meeting as collegial and professional.

Miran pressed his case Monday for lower rates, insisting that inflation is on its way down, particularly in the housing market where cooling rents that had not shown up in the data now will become more apparent.

Though pushing for cuts, Miran said he is optimistic about economic growth, two positions that under conventional thinking would be at odds.

“My view is that policy is roughly 2 points too restrictive, which is considerably restrictive,” he said during a question-and-answer session after his speech. “Even though I am expecting growth to be a little better in the future, that could get derailed unnecessarily so and create an output gap where one need not exist if we don’t get policy closer to neutral.”

He further cited other administration policies, such as its clamp down on immigration, its move to lower business regulations and cut taxes, and the revenue that will be generated from tariffs and its impact on the budget deficit as disinflationary factors.

“Labor market statistics and anecdotal evidence suggest border policy is exerting a major impact on the economy,” he said. “America’s regulatory patchwork has become a material impediment to growth.”

Economists at the Fed and elsewhere continue to worry that Trump’s tariffs will have a longer-term upward push on inflation. However, Miran said “relatively small changes in some goods prices have led to what I view as unreasonable levels of concern.”

Recent inflation readings, though, have shown prices moving higher and further away from the Fed’s 2% inflation mandate.

Miran is expected to fill the remainder of a term that expires in Jan. 31, 2026, then move back to his position as chair of the Council of Economic Advisers. He peppered his speech with references to CEA research.

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Cross-Border Settlement Innovation and Real-Time Payment Architecture

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13 hours ago

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August 15, 2026

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The global banking system is undergoing a comprehensive modernization of cross-border payment infrastructure. Driven by real-time settlement networks, open banking APIs, and interoperable messaging standards, financial institutions and multinational corporations are eliminating multi-day delays and reducing transaction costs associated with legacy international wire transfers.

Transition to Real-Time Gross Settlement Networks
Historically, international business-to-business (B2B) payments relied on complex correspondent banking relationships involving intermediary fees and processing delays. In 2026, the widespread adoption of ISO 20022 messaging protocols alongside interconnected Real-Time Gross Settlement (RTGS) systems allows direct, end-to-end processing of cross-border transfers.

Commercial banks are providing corporate clients with continuous, 24/7 payment clearing capabilities. Real-time transaction confirmation and automated FX rate locking allow international businesses to settle cross-border trade obligations within minutes, significantly reducing counterparty risk.

Central Bank Digital Currency (CBDC) Interoperability
Wholesale Central Bank Digital Currency (CBDC) pilot initiatives are reaching operational maturity across several key financial centers. Collaborative multi-CBDC platforms enable participating central banks and commercial institutions to settle foreign exchange and international trade transactions directly on shared distributed ledgers.

These wholesale digital currency networks eliminate traditional clearinghouse delays and minimize foreign exchange slippage. Enterprise treasury departments benefit from enhanced liquidity management, as cross-border cash balances can be deployed and repatriated instantaneously.

Corporate Treasury Transformation
For enterprise treasurers, instant cross-border settlement transforms cash management strategies:
– Working Capital Optimization: Reduced transaction float allows companies to lower precautionary cash reserves and optimize short-term liquidity investments.
– Automated Reconciliation: Enriched data formats embedded in ISO 20022 payment messages streamline automated general ledger posting and invoice matching.
– Reduced Processing Overhead: Account-to-account (A2A) real-time clearing bypasses costly intermediary correspondent banking fees.

Strategic Financial Priorities
1. Upgrade Treasury Systems: Ensure internal core enterprise software supports real-time ISO 20022 payment messaging standards.
2. Leverage Instant Clearing Rails: Utilize direct payment networks to lower cross-border transaction fees and eliminate settlement delays.
3. Evaluate Multi-Currency Liquidity: Modernize liquidity management frameworks to capitalize on 24/7 real-time settlement capabilities.

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Private Credit Expansion and Regulatory Oversight in 2026 Capital Markets

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6 days ago

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August 9, 2026

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The global private credit market has solidified its role as a fundamental pillar of enterprise finance, expanding rapidly across middle-market lending, asset-backed finance, and infrastructure financing. As non-bank financial institutions capture a larger share of corporate debt origination, global regulatory bodies are increasing oversight to evaluate market transparency and systemic risk interconnections.

Growth Drivers in Direct Lending
Direct lending platforms have continued to attract substantial institutional allocations from pension funds, sovereign wealth entities, and insurance companies seeking attractive risk-adjusted yields. Private debt funds offer corporate borrowers customized financing structures, faster execution timelines, and confidentiality compared to syndicated loan markets.

In 2026, private credit managers are increasingly financing larger corporate transactions, providing multi-billion-dollar credit facilities for buyout deals and corporate restructurings. The flexibility of private debt contracts—featuring unitranche pricing and tailored covenant packages—has made direct lending the preferred capital source for middle-market enterprise sponsors.

Regulatory Scrutiny and Systemic Risk Assessment
The rapid growth of non-bank intermediation has drawn heightened scrutiny from financial regulators in North America and Europe. Because private debt agreements are negotiated privately without public exchange disclosures, central banks are evaluating potential vulnerabilities related to asset valuation consistency and fund liquidity profiles.

Regulatory agencies are introducing guidelines aimed at improving reporting standards for private investment vehicles managing institutional assets. Key focus areas include monitoring leverage ratios within private credit funds and evaluating indirect credit exposures between commercial banking institutions and private debt funds.

Navigating Elevated Refinancing Costs
With benchmark interest rates remaining elevated, private debt borrowers face higher debt service obligations on floating-rate credit facilities. Financial advisory firms report an increase in proactive liability management strategies, including payment-in-kind (PIK) interest options, equity infusions from sponsors, and covenant modifications.

Private credit managers with deep operational capabilities are actively working alongside portfolio companies to optimize working capital and maintain cash flow coverage ratios during periods of higher borrowing costs.

Key Financial Takeaways
1. Mainstream Asset Class: Private credit has expanded beyond niche alternative asset status into a core corporate finance solution.
2. Enhanced Transparency Standards: Regulatory frameworks are evolving toward greater disclosure requirements for private debt managers.
3. Proactive Risk Management: Lenders and sponsors must prioritize debt sustainability and active portfolio monitoring amid high benchmark rates.

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Venture Capital and Startup Valuations in 2026: Focus on Unit Economics and Sustainable Growth

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1 week ago

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August 5, 2026

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The global venture capital (VC) ecosystem is operating under a disciplined investment framework in 2026. Following years of valuation adjustments and shifting liquidity environments, venture capital firms and private equity investors are prioritizing proven unit economics, positive cash flow pathways, and capital efficiency over rapid, unconstrained user acquisition.

The Shift Toward Disciplined Startup Valuations
Early-stage and growth-stage startup valuations have stabilized at sustainable historical averages. Venture capital partners are conducting rigorous due diligence processes before deploying capital, scrutinizing gross margins, customer acquisition costs (CAC), net revenue retention (NRR), and lifetime value (LTV) metrics.

While total capital deployed remains robust, seed and Series A funding rounds are taking longer to finalize. Founders are expected to demonstrate clear product-market fit and defensible intellectual property rather than relying on top-line revenue projections unsupported by strong underlying economics.

M&A Activity and Liquidity Solutions
The market for venture-backed exits is seeing renewed momentum through strategic mergers and acquisitions (M&A) and secondary market liquidity facilities. Established corporate enterprises are acquiring high-performing technology startups to integrate proprietary artificial intelligence models and specialized software solutions into their product ecosystems.

Simultaneously, secondary market transactions have become an essential liquidity mechanism for early employees and institutional investors. Specialized secondary funds are purchasing pre-IPO shares at discounted valuations, providing liquidity opportunities while companies remain private for longer durations.

Sector Allocation: Deep Tech, Clean Energy, and Enterprise Automation
Venture capital investment is heavily concentrated in deep technology and capital-intensive engineering sectors. High-growth investment themes include:
– Next-Generation Semiconductors: Hardware startups designing specialized AI processors and energy-efficient microchip architectures.
– Clean Technology: Battery chemistry innovations, carbon capture solutions, and grid-scale energy storage startups.
– Enterprise Process Automation: Software platforms that automate complex workflows in healthcare, financial services, and industrial logistics.

Key Insights for Entrepreneurs and Investors
1. Prioritize Capital Efficiency: Startups focused on achieving operational profitability receive higher valuation premiums from institutional investors.
2. Strategic Exit Planning: Corporate M&A is serving as a primary exit route for venture-backed startups navigating prolonged IPO windows.
3. Focus on High-Moat Technologies: Deep tech and proprietary software architectures are securing the majority of growth-stage capital allocations.

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