In a week marked by high-stakes debate and rare dissent within the U.S. central bank, newly confirmed Federal Reserve Governor Stephen Miran made waves by breaking from his colleagues and calling for a more aggressive interest rate cut. Miran’s stance, his rapid ascent to the board, and the broader questions he raised about the Federal Reserve’s core mission have sparked spirited discussion among economists, policymakers, and Wall Street alike.
The Federal Reserve, on Wednesday, September 17, 2025, lowered its benchmark interest rate by a quarter percentage point—a move intended to stave off rising unemployment and support the U.S. economy as signs of labor market weakness mount. Yet, in a notable display of independence, Miran, who had only just been confirmed by the Senate two days prior, dissented from the decision. He argued instead for a half-point cut, citing what he sees as mounting risks to employment and the broader economy.
“I don’t see material inflation from tariffs,” Miran told CNBC during his first public remarks as a monetary regulator, referring to the Trump administration’s broad tariff measures. “The longer borrowing costs remain very restrictive, the greater the risks accumulating regarding the employment mandate.” According to CNN, Miran’s comments marked a sharp departure from the measured consensus typically seen among Fed governors, and signaled his willingness to advocate for bolder policy shifts if he believes the data demand it.
Miran’s appointment itself has become a flashpoint. Selected by President Donald Trump in August 2025 to fill the seat vacated by former Governor Adriana Kugler, Miran’s term is set to last until January 31, 2026. His rapid Senate confirmation—backed strongly by Republicans—came just in time for the crucial two-day policy meeting. Miran took the oath as governor an hour before the meeting began, and, as reported by CNBC, received a congratulatory call from President Trump. Despite speculation about political pressure, Miran insisted, “Everyone was extremely welcoming,” adding that the president did not ask him to “commit to any specific actions.” He emphasized his intention to formulate independent views on the economy, noting, “This was a very collegial atmosphere, and I sincerely appreciated it, especially with regard to [Governor Lisa] Cook.”
Yet, the context of Miran’s appointment is impossible to ignore. Critics have raised concerns that Trump’s influence—having nominated three of the seven current Fed board members—poses a threat to the central bank’s independence. The controversy deepened after Trump claimed to have fired Governor Lisa Cook, only for a federal appeals court to rule that he lacked the authority to do so. The White House has announced plans to appeal that decision to the Supreme Court.
As the dust settled from the Fed’s latest move, attention turned to the substance of Miran’s dissent. The labor market, by several indicators, has softened in 2025. Job growth has slowed, the unemployment rate now exceeds the number of open positions, and in August, the share of unemployed Americans out of work for more than 26 weeks reached its highest level since late 2021. Despite these signs, most of the Fed’s voting members favored a more cautious approach. Fed Chair Jerome Powell described the quarter-point cut as a “risk-management step,” telling reporters, “Although it’s worth noting that the unemployment rate is 4.3%. The economy is growing around 1.5%. So this is not a bad economy, or something like that. We have already faced much tougher economic times.”
Powell acknowledged the importance of the unemployment rate in the Fed’s decision-making. “The problem is that if layoffs begin, there won’t be many new opportunities for employment,” he warned at his post-decision press conference. While the situation is not yet dire, the Fed is clearly watching labor market trends closely, wary of repeating past mistakes where delayed action led to deeper downturns.
But Miran’s impact extended beyond rate policy. During his Senate confirmation, he reignited a long-dormant debate about the Federal Reserve’s mandate. While most Americans—and even many experts—refer to the Fed’s “dual mandate” of price stability and maximum employment, Miran pointed out that, according to the Federal Reserve Act of the 1970s, there’s a third, often-overlooked pillar: moderate long-term interest rates. “Congress wisely tasked the Fed with pursuing price stability, maximum employment, and moderate long-term interest rates,” he recalled, as reported by Fortune.
This assertion raised eyebrows on Wall Street and in academic circles. Some economists admitted to Fortune that they had forgotten about the third mandate entirely, while others argued it was largely vestigial—a relic from an era before the Fed targeted the federal funds rate. Joe Brusuelas, chief economist at RSM U.S., told Fortune that the innovation of targeting short-term rates effectively fulfills all three parts of the mandate, as changes in the federal funds rate influence financial conditions throughout the economy. Professor Kent Smetters of the Wharton School added that long-term rates are heavily influenced by government debt and fiscal policy, areas where the Fed’s independence could be threatened if it pressed too far.
Fed Chair Powell, for his part, addressed the issue head-on during his September 18 press conference. “We always think of it as the dual mandate, maximum employment and price stability … because we think moderate, long-term interest rates are something that will result from stable inflation—low and stable inflation and maximum employment,” he explained. “So we haven’t thought about that for a very long time as a third mandate that requires independent action.”
Still, experts warn against dropping the third mandate from the Fed’s agenda. Professor Smetters cautioned that removing the responsibility for moderate long-term rates could signal to markets that the U.S. is “taking its hands off the wheel” regarding national debt, undermining confidence in the bond market. Dr. Steve Kamin, a senior fellow at the American Enterprise Institute, echoed this sentiment, telling Fortune, “This thing isn’t broke, and any attempts by Congress to meddle with it would probably make it worse, not better.”
Despite the debate, the consensus among experts remains that the Fed, under Powell’s leadership, continues to fulfill all three elements of its mandate—even if the third is rarely mentioned explicitly. Elyse Ausenbaugh, head of investment strategy at J.P. Morgan Wealth Management, told Fortune that the Fed’s measured approach to fiscal questions and its clear distinction between monetary and congressional responsibilities are reassuring signals for investors.
As the Federal Reserve faces mounting economic headwinds, Miran’s arrival has injected a new sense of urgency and perspective into the institution. Whether his calls for more aggressive action will sway the board in the months ahead remains to be seen. But one thing is clear: the debate over the Fed’s mandate, its independence, and its response to shifting economic conditions is far from settled. The coming months promise to test the central bank’s resolve—and its ability to balance competing pressures—in ways that could shape the U.S. economy for years to come.
