U.S. Federal Reserve President Stephen Milan attends the Nomura Research Forum during the International Monetary Fund (IMF) and World Bank Fall Meetings on Wednesday, October 15, 2025 in Washington, DC, USA.
Samuel Corum | Bloomberg | Getty Images
Federal Reserve President Stephen Milan on Monday advocated further interest rate cuts as a way to head off potential further economic weakness.
In an interview with CNBC, central bank officials remained adamant that the Fed should move faster than its traditional quarter-point rate cuts.
He advocated a 50 basis point (0.5 percentage point) rate cut, as he did at the previous two Federal Open Market Committee meetings, but said it needed to be eased by at least a quarter of a percentage point.
“Nothing is certain. Now and then we may have data that changes our minds,” Millan said. “But we failed with new information, so we’ve updated our forecast to look ahead. Well, I think 50 is a good number, as always, but we need at least 25.”
The FOMC opted to cut rates by a quarter of a percentage point in September and October, despite Mr. Milan’s push for bigger moves. Mr. Millan voted against both of these moves, but none of his colleagues agreed. Kansas City Fed President Jeffrey Schmidt voted “no” in October simply because he wanted no interest rate cuts.
Although there were only two votes against the proposed cuts in October, public statements from multiple officials indicate that opinions among officials are widely divergent.
Federal Reserve Chairman Jerome Powell hinted at the disagreement in a recent press conference, saying another rate cut in December was not a foregone conclusion. Some policymakers have expressed hesitancy to cut rates, based on data showing that inflation remains well above the Fed’s 2% target, while those who favor cutting rates worry about further deterioration in the labor market.
Milan said it would be short-sighted not to continue easing.
“What are you producing data for? If you’re making policy based on current data, that’s backward-looking because it takes 12 to 18 months to have an impact on the economy. So you need to make policy based on what the economy is going to be a year to 18 months from now.”
During government lockdowns, policymakers are handcuffed by a lack of official economic indicators. Milan said available statistics show both inflation and the labor market softening, which in itself should make the Fed more dovish than its September consensus forecast, which suggested at least three total rate cuts this year.
According to CME Group’s FedWatch, the market has priced in about a 63% chance of a third interest rate cut in December, but that probability has gradually declined since the Fed’s meeting in October.
