Federal Reserve Governor Milan said that the Federal Reserve needs to cut interest rates by more than 1 percentage point in 2026, and believes that the current monetary policy is limiting economic growth. In an appearance on Fox Business Channel on Tuesday, Milan said, “I think it's hard to argue that the policy is close to neutral. I think the policy is clearly restrictive and is hindering economic development. I think it is reasonable to cut interest rates by more than 100 basis points this year.” Federal Reserve officials cut interest rates for the third time in a row last month, but hinted that there is no guarantee that they will cut interest rates further in the short term. Policymakers are divided over the outlook for inflation and the labor market; according to their latest median estimate, they expect to cut interest rates only once in 2026. Prior to Milan's remarks, other officials said this week that interest rates may now be close to a “neutral level” that neither promotes nor limits economic growth.

Federal Reserve Governor Milan said that the Federal Reserve needs to cut interest rates by more than 1 percentage point in 2026, and believes that the current monetary policy is limiting economic growth. In an appearance on Fox Business Channel on Tuesday, Milan said, “I think it's hard to argue that the policy is close to neutral. I think the policy is clearly restrictive and is hindering economic development. I think it is reasonable to cut interest rates by more than 100 basis points this year.” Federal Reserve officials cut interest rates for the third time in a row last month, but hinted that there is no guarantee that they will cut interest rates further in the short term. Policymakers are divided over the outlook for inflation and the labor market; according to their latest median estimate, they expect to cut interest rates only once in 2026. Prior to Milan's remarks, other officials said this week that interest rates may now be close to a “neutral level” that neither promotes nor limits economic growth.