Federal Reserve Governor Stephen Milan said Friday he didn’t expect President Donald Trump’s tariffs to have an inflationary effect on the US economy.
“I’m in a minority who clearly don’t worry about inflation from tariffs,” he said on CNBC’s “Money Movers.” “But that was also true in 2018-2019. I think we probably got a bit of a victory over that.”
“There is always a relative price change, but whether monetary policy is the type of macroeconomically important inflation to respond to is another question,” he added.
His comments came after the Fed governor was the sole opponent among 12 Federal Open Market Committee voters from the central bank’s decision on Wednesday, then cut the benchmark lending rate by 1/4% points and instead called for a half-point cut.
When explaining the reason for his decision, Milan said he “doesn’t see material inflation from tariffs.”
“We don’t see any evidence that it happened,” the policymaker said. “If you think tariffs are making inflation higher, you’d think imports are increasing discriminatoryly at a higher pace.”
Milan further cited the inflation of US core products and “identifiable trend differences” in other countries. “If I think tariffs are driving material inflation in the United States, I’ll look for evidence,” he continued.
However, most measures show inflation operating beyond the Fed 2% target this year, indicating that the committee’s forecast will not return to that level until 2028.
Later this year, Milan expects growth to be stronger as he said economic headwinds, such as uncertainty over Trump’s trade policy, and first half growth will be weaker than he hoped. He also believes Trump’s immigration policy will bring divergence to the economy.
“If we add millions of new immigrants to the country in a short period of time, we’ll raise the prices of shelters,” he said. “If you close that border and then there’s a migration of negative debt… that would have a very non-conflict effect.”
The Senate confirmed Milan with the Fed President on Monday the day before this week’s policy meeting began. He was elected President Donald Trump in August and filled the seat of former governor Adriana Kugler after her sudden resignation.
Milan is scheduled to serve on the board of directors for the remainder of Coogler, which expires on January 31, 2026. He said at a confirmation hearing earlier this month that he would not resign entirely, but would take unpaid leave from his position as chairman of the White House Economic Adviser Council while serving his term.
