Federal Reserve Governor Stephen Milan said Friday he doesn’t think President Donald Trump’s tariffs will affect inflation 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 come after the Fed governor was the only opponent among 12 FOMC voters from the central bank’s decision on Wednesday, seeking a half-point cut instead, a quarter-point cut.
When explaining the reason for his decision, Milan said “I will not 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.
Looking forward to the second half of this year, we expect Milan to grow stronger. He said economic headwinds, such as uncertainty over Trump’s trade and tax policies, have become weaker than growth in the first half wanted. 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’s 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.
