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Economy Slowdown: Fed’s Miran Challenges Trump

Breaking NewsEconomy Slowdown: Fed’s Miran Challenges Trump

 

Key Takeaways

  • Fed Governor Stephen Miran warns the labor market has weakened.
  • He blames policy uncertainty, including tax changes and tariffs.
  • He notes the “biggest tax hike” and trade shifts hurt growth.
  • Miran finds two interest rate cuts “realistic” to boost the economy.

Fed Governor Speaks Out on Economy Slowdown

At a major finance forum, Federal Reserve Governor Stephen Miran said the U.S. economy has lost speed. He spoke at CNBC’s Invest in America event. He avoided naming the president. Yet his words directly contrast the White House’s upbeat tone. While the administration calls the economy “the best ever,” Miran sees less strength. He pointed to a weaker labor market in the year’s first half. He also flagged uncertainty over new taxes and trade moves.

Why the Economy Slowdown Hurts Growth

Miran highlighted that businesses held off on hiring and spending due to policy questions. He called the recent tax changes “maybe the biggest tax hike in history.” Firms waited to see how the new rules would land. As a result, investment stalled. He added that trade tensions made things worse. Uncertainty over tariffs paused decisions on new plant openings and equipment purchases. In turn, that contributed to the economy slowdown.

Trade Tensions Add to the Economy Slowdown

The governor noted a major shift in global trade policy. He said it was “the biggest rearrangement in half a century.” During negotiations, firms paused import and export plans. They waited for clarity on tariff rates. Now, China has announced new export limits. That move responds to threats of 100 percent U.S. duties on Chinese goods. In his view, these back-and-forth actions raise further downside risks. Thus, the economy slowdown could deepen.

Policy Uncertainty and Its Impact

Miran stressed that uncertain rules can freeze decisions. When companies can’t plan, they delay hiring and research. Moreover, consumers may spend less if they fear higher prices. He warned that ongoing uncertainty harms confidence. And that confidence plays a big role in economic health. In short, uncertainty over tax and trade policy fueled the economy slowdown earlier this year.

Expectations for Interest Rate Cuts

Like the president, Miran wants lower interest rates. He said two more cuts “sounds realistic.” Lower rates can encourage borrowing and spending. That helps businesses expand and hire more workers. He urged policymakers to reflect the rising risks in their decisions soon.

Contrasting Messages on the Economy

President Trump has repeatedly said, “America has the best economy we’ve ever had.” He also claims to have “defeated inflation.” Yet independent data shows inflation remains steady. Grocery and gas prices keep climbing. Tariffs on steel, aluminum, and other goods add to those costs. Miran’s comments pull back the curtain on these tensions. He makes it clear that policy choices come with trade-offs.

Looking Ahead

With fresh trade disputes and steady inflation, the outlook has darkened. Policymakers will debate how to tackle these challenges. Will cuts in interest rates be enough to reverse the economy slowdown? Or will further clarity on taxes and trade prove more powerful? Both questions loom large for the months ahead.

Frequently Asked Questions

What is the main cause of the economy slowdown?

Fed Governor Miran points to uncertainty over tax hikes and trade moves as the chief culprits. Businesses delayed hiring and investments while waiting on clearer rules.

How have tariffs contributed to the economy slowdown?

Tariffs on imports and threatened duties on Chinese goods have stalled trade. Companies paused decisions until they knew final rates, slowing overall growth.

Why does Governor Miran support interest rate cuts?

He believes lower rates will encourage businesses and consumers to borrow and spend more. That boost in activity could help counter the slowdown.

Will the economy rebound soon?

Much depends on policy clarity. If lawmakers and trade partners ease tensions, confidence may return. Otherwise, risks could keep the economy on shaky ground.

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