FOMC officials see structural shifts driven by AI; Kashkari and Miran back two rate cuts this year 🔎

Stephen Miran

Miran said economic uncertainty has eased and growth may improve, but monetary policy must remain forward-looking given its delayed effects. He warned that both excessive and insufficient tightening carry risks, adding that he is more confident than others that inflation will continue to moderate as rent and housing pressures fade. He estimated the neutral interest rate at around 0.5%, noting that the development of artificial intelligence could push it higher, though the evidence remains inconclusive.
Miran, sworn in in September 2025, dissented at the most recent FOMC meeting, favoring a 50 bp rate cut instead of the 25 bp move adopted by the Committee.

Neel Kashkari (Minneapolis Fed)

Kashkari said it is too early to assess the full impact of tariffs on inflation but noted that recent data show symptoms similar to stagflation. He supports two additional 25 bp rate cuts this year, arguing that preemptive easing could balance the growing risk of rising unemployment. He believes the neutral interest rate has likely risen to around 3.1%, meaning Fed policy may not be as restrictive as previously thought.
Kashkari added that the Fed could accelerate rate cuts if the labor market weakens, pause them if inflation remains stable, or even raise rates again if price pressures return — though he sees the probability that tariffs alone could push inflation above 3% as low.

Raphael Bostic (Atlanta Fed)

Bostic focused on the impact of artificial intelligence on the labor market, noting that it often supports workers but can also replace them when economically viable — making reskilling (learning new skills) essential. He described this as “the most difficult period to forecast” amid structural transformation but emphasized that “no one believes disaster is on the horizon.” He also explained that government guarantees through Fannie Mae and Freddie Mac are helping keep U.S. mortgage rates lower. Bostic did not comment on current monetary policy.

Mary C. Daly (San Francisco Fed)

Daly described artificial intelligence as potentially transformational and productivity-enhancing, adding that there is no evidence of mass job losses. She rejected fears of an “AI bubble” as a financial threat, calling it instead a “good bubble” that drives productive investment. Daly also stressed that the labor market remains the best indicator of consumer strength and did not comment on current monetary policy.