Federal Reserve Governor Stephen Miran has signaled that the central bank should still implement four quarter-point interest rate cuts this year, despite recent strong job growth in January, as he emphasized that the labor market still needs support and there is no ‘all clear’ for inflation.

Strong Job Growth, But Risks Remain

Miran, speaking on Fox Business’s ‘Mornings with Maria,’ said that while the January jobs report was ‘a really good thing,’ the Fed still had a responsibility to support the labor market due to lingering risks.

‘I think it’s way too early to sort of sound an all clear that the labor market doesn’t need more support from the Federal Reserve,’ Miran said, adding that the central bank should continue to provide stimulus through rate cuts.

The January jobs report showed the U.S. added 203,000 jobs, the most in nearly two years, and the unemployment rate fell to 3.7 percent. However, Miran argued that this does not mean the labor market is fully healthy, and that further support is necessary to ensure sustained economic growth.

Inflation Still a Concern

Miran also cautioned that while inflation has cooled, it is not yet at the Federal Reserve’s 2 percent target. Recent inflation readings, which have been a percentage point above the target, are expected to slow, but the Fed must remain vigilant.

‘I really do not think that we have an inflation problem,’ Miran said, but added that the central bank should not become complacent. ‘I definitely think the labor market can be supported by the Federal Reserve further,’ he emphasized, backing the case for four rate cuts this year.

The Fed has already cut its benchmark interest rate by 1.25 percentage points in 2024, bringing it down to a range of 5.25% to 5.5%. Miran’s comments suggest that the central bank is considering additional reductions, likely in the range of 0.25 percentage points per meeting, to further stimulate the economy.

Analysts have noted that Miran’s remarks align with the broader Federal Reserve’s cautious approach to monetary policy. The central bank has been balancing the need to support the labor market with the risk of reigniting inflation, which has been a major concern since the pandemic.

What’s Next for the Fed

The Federal Reserve is expected to meet again in March, where officials will review the latest economic data and decide on the next steps for monetary policy. The central bank has not yet set a specific timeline for the remaining rate cuts, but Miran’s comments suggest that the path for further reductions is still open.

Economists have estimated that the Fed could cut rates by a total of 1.0 percentage point in 2024, bringing the benchmark rate down to around 4.25% to 4.5% by the end of the year. However, this will depend on how the labor market and inflation data evolve in the coming months.

With the economy showing signs of resilience and the labor market continuing to strengthen, the Fed faces a delicate balancing act. Miran’s comments highlight the central bank’s commitment to maintaining stability while supporting employment and economic growth.

‘The Federal Reserve has a dual mandate of maximizing employment and maintaining price stability,’ Miran said. ‘I believe we are making progress on both fronts, but there is still work to be done.’

As the central bank continues to monitor the economic landscape, the path of interest rates will remain a key focus for policymakers and investors alike. With Miran’s support for further rate cuts, the Fed appears to be leaning toward a more accommodative stance in the near term.