This morning, Governor Stephen Miran delivered a speech in Athens titled "Regulations, the Supply Side, and Monetary Policy." Two months ago, he gave another speech on "Regulatory Dominance of the Federal Reserve Balance Sheet." These speeches address entirely different subjects — yet both arrive at the same destination. Understanding how requires separating two distinct arguments that are easily confused.
We can do this because we have the documents.
The FOMC Insight Engine—a semantic search system spanning 83 years of Federal Reserve records—allows us to test official statements against the internal documentary record. When we queried whether the Fed ever acknowledged that Treasury debt levels constrained their policy options, the system returned forty years of suppressed institutional knowledge.
And a single, devastating directive.
The Directive
— Jane Ihrig, Federal Reserve Staff
This was not inference. This was not interpretation. This was an explicit institutional decision to suppress information about the connection between Federal Reserve balance sheet policy and Treasury financing from public view.
The rationale was equally explicit. In September 2011, the Committee discussed how "attacks on LSAP policy—the claims that we're monetizing the public debt—would generate two bad consequences: One, it would undercut the effectiveness of policy, and two, it would undermine our credibility."
So they chose silence.
What They Knew
The documentary record shows the Federal Reserve has understood the fiscal-monetary connection for four decades:
E. Gerald Corrigan, Minneapolis Fed President: "We can't have the government soaking up 50 percent of the credit in the whole economy and expect that the economy is going to work well. It's an intolerable situation."
Henry Wallich, Governor: "There's some limit to the volume of government bonds that the public is willing to hold and that, therefore, necessarily a continuing deficit leads to monetization."
Stanley Fischer, Vice Chairman: "The amount of government debt in the hands of the public is lower as long as we're holding a portfolio of a given size, and that's what the nonneutrality is—it's on the size of the government debt."
Narayana Kocherlakota, Minneapolis Fed President: "I think of this kind of policy intervention as really more akin to a fiscal policy intervention."
The thread extends across forty years. Each identified the same dynamic: the Federal Reserve's balance sheet decisions directly affect the government's financing costs and the public's holdings of federal debt.
This was not monetary policy in isolation. This was fiscal support by another name.
Two Speeches, Two Regulations
To understand what Miran is doing, you must first understand he is talking about two entirely different things.
November 2025 addressed banking regulations — the capital requirements, liquidity coverage ratios, and leverage rules that the Federal Reserve itself writes. These rules require banks to hold "high-quality liquid assets," meaning Treasuries and Fed reserves. This creates structural demand for a large Fed balance sheet.
"For all the talk about fiscal dominance of monetary policy, the reality is that the size of the balance sheet is a result of regulatory dominance."
— Governor Stephen Miran, November 2025
January 2026 addressed something completely different: economy-wide regulations — environmental rules, licensing requirements, labor laws, land use restrictions. These are not Fed regulations. They are the target of the current administration's deregulation agenda. Miran argues removing them will boost productivity and lower prices.
"I believe that the sweeping deregulation underway in the United States will significantly boost competition, productivity, and potential growth, allowing faster economic growth without putting upward pressure on inflation. This would support continued easing of restrictive monetary policy."
— Governor Stephen Miran, January 14, 2026
Two different types of regulation. Two different arguments. But watch where both lead:
| November 2025: Banking Regulations | January 2026: Economic Regulations |
|---|---|
| Fed's own rules on banks (LCR, capital ratios) | Government-wide rules on businesses |
| "Regulations force us to maintain large balance sheet" | "Deregulation is deflationary" |
| Therefore: Can't shrink Fed's footprint | Therefore: Fed should cut rates |
| Policy outcome: Accommodation | Policy outcome: Accommodation |
Different regulations. Different logic. Same destination.
The Convergence
This is where it gets interesting. The November speech says the Fed can't tighten (balance sheet constrained by banking rules). The January speech says the Fed shouldn't tighten (deregulation is deflationary, so cutting rates is appropriate).
One argument is about capacity. The other is about justification. Together, they form a complete framework for continued accommodation regardless of circumstances:
If inflation rises? "Deregulation will bring it down — we should cut rates to accommodate the transition."
If Treasury issuance surges? "Banking regulations require us to maintain reserves — our hands are tied."
If markets question Fed independence? "This isn't fiscal dominance, it's regulatory dominance — blame the rules, not the debt."
Every road leads to accommodation. The only question is which justification to deploy.
What the Documents Show
Our analysis of forty years of Fed deliberations suggests this convergence is not coincidental. The documentary record reveals the Fed understood the fiscal constraint long before it designed the banking regulations that now "force" a large balance sheet.
Consider the sequence:
Governor Wallich warns: "There's some limit to the volume of government bonds that the public is willing to hold."
Fed designs post-crisis banking regulations requiring banks to hold Treasuries and reserves as "high-quality liquid assets."
Vice Chairman Fischer admits: "The amount of government debt in the hands of the public is lower as long as we're holding a portfolio of a given size."
Staff directive: "Minimize public communications on issues associated with this topic."
Miran publicly names "regulatory dominance" — but frames it as constraint, not design.
The regulations that now "dominate" the balance sheet were written after the Fed understood the fiscal constraint, and before they were willing to discuss it publicly. Whether by design or convenient accident, banking regulations now serve as both the mechanism of fiscal accommodation and the excuse for it.
The Pattern
Our analysis identified four phases in Fed communications:
| Phase | Period | Strategy |
|---|---|---|
| Denial | 2009-2014 | "That's the appearance" — defensive posture |
| Suppression | 2015-2019 | "Minimize public communications" — active hiding |
| Reframe I | 2025 | "Regulatory dominance" — blame banking rules for balance sheet |
| Reframe II | 2026 | "Deregulation is deflationary" — justify rate cuts via supply side |
We are witnessing phases three and four unfold simultaneously.
What This Means
For market participants, the implications are significant:
First, the Fed now has two independent justifications for accommodation. If one is challenged, deploy the other. Banking regulations explain why the balance sheet can't shrink. Economic deregulation explains why rates should fall. Together, they provide intellectual cover for any policy path that leads to easier money.
Second, watch for the arguments to be deployed selectively. When Treasury issuance spikes and the Fed must absorb it, expect "regulatory dominance." When inflation concerns arise and rates need to stay low, expect "deregulation is deflationary." The justification will match the moment.
Third, the underlying constraint remains unaddressed. Neither argument acknowledges the $36 trillion elephant: someone must hold the debt. Banking regulations ensure banks do. If those regulations are relaxed, either yields rise to attract other buyers, or the Fed buys directly. The fiscal reality doesn't change — only the vocabulary used to describe it.
The Question Neither Speech Answers
If banking deregulation frees banks from holding Treasuries, and economic deregulation justifies rate cuts, who finances the federal debt at what price?
The two arguments together create a closed loop: whatever happens, accommodation is justified. But the debt remains. And debt must be financed.
The Documentary Record
The FOMC Insight Engine surfaced 57 sources across four decades documenting the Fed's internal awareness of fiscal constraints — awareness that predates the banking regulations now blamed for "dominating" the balance sheet.
Staff memos calculated "the primary surplus needed to stabilize debt." Committee members debated whether balance sheet policy was "really more akin to fiscal policy intervention." Leadership worried about "the impression that the Federal Reserve was effectively financing government spending."
And then they decided to hide it. Until now.
Governor Miran's two speeches mark a new phase — not transparency, but strategic repositioning. The constraint is acknowledged through one lens (banking regulations) while a new justification (economic deregulation) is constructed through another. Both point toward accommodation. Neither names the underlying cause.
The quiet part is being said out loud. But only part of it.
We have the documents that show what they knew, when they knew it, and what they chose not to say.
Read the Full Investigation
Our white paper documents the complete forty-year arc of institutional knowledge and suppression—from Corrigan's 1982 warning to Miran's 2026 confession.
Download White Paper