A notable shift is emerging around U.S. monetary policy. After months of pressure from the Trump administration for lower interest rates, two figures closely aligned with the White House are now signaling that waiting may be more justified than previously argued.
Federal Reserve Governor Stephen Miran said on Thursday, during an economic forum in Washington, D.C., that he is reconsidering his expectations for interest rate cuts this year. Instead of the four cuts he had previously projected, Miran said the total could be reduced to three, acknowledging that the inflation picture had become more complicated even before the war with Iran began.
The comments are significant because they suggest a more cautious tone is taking hold, even among officials and policymakers who had been associated with a more openly dovish stance. They also arrive at a politically delicate moment, with the Federal Reserve facing leadership uncertainty, inflation pressure tied to higher energy costs, and continuing public pressure from President Donald Trump.
Miran’s remarks reflect a more cautious rate view
Miran’s comments suggest that the case for aggressive rate cuts is becoming harder to defend. While he did not rule out easing altogether, his message was that the inflation backdrop now requires more caution than previously expected.
That change matters because rate-cut expectations are highly sensitive to shifts in inflation. If inflation becomes less predictable or proves more persistent, policymakers typically prefer to move more slowly. By reducing his expected number of cuts from four to potentially three, Miran is effectively acknowledging that the path toward easier policy may not be as smooth as earlier hoped.
This adjustment is also notable because it comes from a figure seen as close to the broader policy direction of the Trump administration. In that sense, it signals that even political allies of the White House may be softening their expectations for rapid monetary easing.
Treasury Secretary Bessent has also changed tone
Miran is not alone in striking a more measured position. Treasury Secretary Scott Bessent also appears to have shifted his public stance on monetary policy.
Speaking at a conference in Washington, Bessent said that interest rate cuts should eventually happen, but that waiting for more clarity on the Iran situation makes sense. He also suggested that markets may be able to wait for President Donald Trump’s nominee to lead the Federal Reserve, Kevin Warsh, before the next rate-cutting cycle begins.
That marks a clear change in emphasis. Earlier this year, Bessent had described rate reductions as the one major ingredient still missing for stronger economic growth and argued that the Fed had little reason to delay. Now, the message is more restrained. Cuts are still seen as desirable, but no longer necessarily immediate.
This subtle shift is important because it suggests the economic and geopolitical backdrop is starting to override the administration’s earlier urgency on rates.
Trump remains more openly aggressive on rates
While Miran and Bessent have adopted a somewhat more patient tone, President Donald Trump has remained much more direct in his pressure on the Federal Reserve.
Trump has repeatedly called on Fed Chair Jerome Powell to lower borrowing costs, arguing that high interest rates are an unnecessary burden on what he continues to describe as a fundamentally strong economy. In Trump’s view, tighter policy is holding back growth more than necessary.
That public pressure has become a recurring feature of the relationship between the White House and the Fed. But now, with inflation again looking more complicated and geopolitical tensions feeding into commodity prices, the administration’s broader messaging appears less unified than before.
Trump still wants lower rates. But some of the people around him now appear more willing to accept delay.
Inflation is becoming harder to interpret
A major reason for this shift is the changing inflation picture. The outbreak of war with Iran has pushed energy prices higher, lifting headline inflation even as core inflation has remained relatively more contained.
According to the article, consumer prices rose 3.3% year over year in March. That level is not catastrophic, but it is high enough to keep policymakers cautious, especially when energy costs are once again becoming a meaningful source of pressure.
This creates a difficult environment for the Fed. On one hand, there may still be longer-term arguments for lower rates if growth slows or if inflation moderates again. On the other hand, rising fuel and energy costs can quickly distort the outlook, especially when markets begin worrying that inflation could stay sticky for longer.
That is exactly the type of environment in which central bankers tend to hesitate. The more uncertain the inflation path becomes, the less willing they usually are to commit to a rapid pace of cuts.
The Fed has already paused after cutting last year
The central bank had already started to ease policy before this latest shift in tone. The Fed cut interest rates three times last year, but it has kept them unchanged so far in 2026.
That pause now looks more understandable in light of the evolving inflation backdrop. With energy prices moving higher and geopolitical risks clouding the picture, maintaining current rates may look safer than signaling rapid easing too early.
Miran’s updated thinking therefore fits into a broader policy pattern: the Fed is not necessarily abandoning cuts, but it is becoming more careful about timing and magnitude.
Leadership uncertainty is adding another layer of complication
The debate over rate cuts is unfolding just as the Federal Reserve approaches a potentially pivotal leadership transition. Trump’s nominee to lead the central bank, Kevin Warsh, is scheduled to appear before the Senate Banking Committee for a confirmation hearing on April 21.
But his path remains uncertain. According to the article, Senator Thom Tillis of North Carolina is refusing to support any Fed nominee while the Justice Department continues its criminal investigation into Jerome Powell.
This dispute has turned what might have been a standard transition into something much more unstable. Markets are not only watching the outlook for inflation and rates. They are also trying to understand who may actually be leading the Fed in the months ahead.
That matters because changes in leadership can influence not only policy tone, but also market confidence in the independence and continuity of the institution.
Powell remains under legal and political pressure
The legal pressure on Powell is tied to his congressional testimony about the cost of renovating the Federal Reserve’s aging headquarters. A federal judge quashed the subpoenas in March, saying there was no credible evidence of wrongdoing and writing that the effort appeared designed to harass Powell into resigning.
Prosecutors have said they will appeal, but that process is likely to take months or longer.
Under Federal Reserve rules, the chair can continue serving on a pro tempore basis if a successor has not yet been installed. Powell himself previously served in that capacity for several months in early 2022 while awaiting confirmation to his second term. He has also said he intends to remain as governor until the Justice Department matter is resolved.
This means the leadership picture could remain uncertain even if political pressure intensifies.
Trump says he is prepared to fire Powell
The political backdrop became even more charged when Trump said on Wednesday that he was prepared to fire Powell if he does not step down when his term expires on May 15.
In an interview on Fox Business, Trump said he would have to fire Powell if he was not leaving on time, adding that he had wanted to remove him before but had held back because he did not want to be controversial.
That statement adds another layer of instability around the central bank at a time when the inflation outlook is already becoming more difficult. For markets, the combination of inflation uncertainty, geopolitical stress, and leadership conflict at the Fed is not ideal.
It also means that the debate over interest rates is no longer purely economic. It is now deeply tied to institutional and political tension as well.
Federal Reserve Governor Stephen Miran’s suggestion that he may reduce his expected number of rate cuts from four to three signals a more cautious approach as inflation becomes harder to read and energy costs rise. Treasury Secretary Scott Bessent has also softened his earlier push for immediate easing, suggesting that waiting for more clarity on Iran may be appropriate.
At the same time, President Trump continues to pressure Jerome Powell aggressively, while the Federal Reserve faces legal scrutiny and uncertainty over Kevin Warsh’s nomination. The result is a monetary policy environment shaped not only by inflation and growth, but also by unusual political conflict around the central bank itself.
For now, the message is clear: the path to lower rates is still open, but it is looking less straightforward than it did just a few months ago.
