The Position

On an evening in early February 2026, Federal Reserve Governor Steven Miran sat across from Tom Falk at the Dallas Fed's Global Perspectives series and laid out the most comprehensive dissenting framework any sitting FOMC member had offered in years.

The occasion was unremarkable — a moderated conversation before a regional audience of business leaders and bankers, the kind of event the twelve Reserve Banks hold routinely. But the content was not routine. Miran, who had joined the Board five months earlier after serving as Chair of the Council of Economic Advisers and a stint as senior strategist at Hudson Bay Capital, used the evening to explain his January dissent: a vote for a 25-basis-point rate cut against the committee's consensus to hold. He did not merely register disagreement. He presented a unified theory of why the Federal Reserve was too tight — a framework built on five interlocking claims about measurement, methodology, structural change, and the nature of the data the committee receives.

The argument ran as follows. The neutral rate has fallen faster than the committee recognizes, driven by a reversal in population growth and declining fiscal deficits, which means holding the policy rate constant constitutes passive tightening. Measured inflation overstates true price pressures because portfolio management fees in core PCE conflate asset quantity with service price, and because shelter inflation reflects the housing market of three to four years ago rather than current conditions. The appropriate response to these measurement distortions is not data dependence but forecast dependence — acting on what the data will become, not what it currently shows. The supply side is expanding through AI, deregulation, and capital-deepening incentives, creating an output gap that monetary policy can safely accommodate. And tariffs are not generating meaningful inflationary pressure because tax incidence falls on the inelastic foreign exporter, not the elastic American consumer.

Each claim is analytically literate. Several are genuinely insightful. The portfolio management fee observation, in particular, reflects technical precision that few of his colleagues have matched. Miran publishes his calculations. He names his elasticities. He invites challenge. "There's never any shame in being wrong," he told the Dallas audience. "There's only shame in remaining wrong."

These are testable claims. The FOMC Insight Engine contains 194,000 searchable passages from Federal Reserve transcripts, Tealbooks, staff memoranda, minutes, and speeches spanning 1936 through 2026. The archive does not take positions. It returns what the institution said, when it said it, who disagreed, and what happened next. We put each of Miran's five arguments into the archive and let the documentary record respond.

We went into the archives.

The Forecast

The methodological claim is the keystone of Miran's framework. Every other argument depends on it. If the committee should respond to what the data currently shows, then above-target PCE readings, labor market indicators, and asset price signals all counsel caution. The case for cutting requires the committee to look past what is measured and act on what is anticipated. Miran's argument for this move is direct: given twelve-to-eighteen-month policy transmission lags, "if you're excessively data dependent, you're excessively backward looking and you're guaranteeing that you're gonna be behind the curve." The time for data dependence, he argues, is only when uncertainty is genuinely radical — the pandemic, the financial crisis. When you have a defensible forecast, you should be forecast-dependent.

The archive identifies three episodes where the FOMC pursued exactly this strategy — acting on anticipated disinflation or anticipated supply-side expansion before the data confirmed it. One succeeded. Two failed catastrophically.

The success was Alan Greenspan's productivity wager of 1996 through 2000. Greenspan challenged the staff's traditional models, which predicted inflation as unemployment fell below conventional NAIRU estimates. He argued that an acceleration in productivity had rendered those models obsolete and held rates below the levels the Taylor Rule prescribed. The data eventually confirmed his intuition. Productivity growth doubled its annual rate. The economy achieved higher growth and lower unemployment without inflation. Greenspan's forecast dependence — his willingness to override the staff's Phillips Curve — was the right call.

The first failure was Arthur Burns in the mid-1970s. Burns relied on what the archive calls "relatively optimistic" price projections justified by recent wage behavior, while privately acknowledging he questioned those projections himself. The result was the entrenchment of a long-run inflationary trend that required Paul Volcker's wrenching intervention to reverse. In August 1975, Burns himself had warned the committee of the danger:

He then proceeded to do precisely what he warned against — accommodating price increases on the basis that the underlying trend would soon improve. The forecast did not arrive.

The second failure was Jerome Powell in 2021. The committee maintained extraordinary accommodation based on the expectation that inflation was transitory — a forecast grounded in staff analysis of supply-chain bottlenecks and "idiosyncratic" price movements. Powell later admitted the error directly: through the end of 2021, FOMC participants continued to forecast that inflation was likely to subside fairly quickly, and when the evidence showed otherwise, they hiked 525 basis points. Governor Bowman subsequently identified the structural flaw: the accommodative forward guidance adopted in late 2020 "pushed the mandated goals out of balance and contributed to the delay in the removal of monetary policy accommodation in 2021."

The archive's verdict on forecast-dependent easing is unambiguous. Cleveland Fed President Loretta Mester, scoring a perfect prescience rating in the Engine's analysis, delivered the retrospective diagnosis:

One success in three attempts is a base rate, not an invitation. And the conditions that distinguished Greenspan's success from Burns's and Powell's failures are specific: the supply-side expansion Greenspan identified was real, it was measurable, and it was already appearing in the data. He was not projecting a structural break. He was recognizing one that the staff's models had failed to capture. Burns and Powell, by contrast, were projecting disinflation that had not yet arrived — acting on what the economy would become rather than what it was. Miran's framework requires the same leap. His anticipated shelter convergence, his projected supply-side expansion, his hypothesized R-star decline — none have fully materialized in the aggregate data. He is in the Burns and Powell position, not the Greenspan position. The archive does not tell him he is certainly wrong. It tells him the base rate for this strategy is one in three.

The Precedent

Because the methodological keystone does not hold unconditionally, the argument must shift to specific ground. If forecast dependence is justified only when the supply-side expansion is real, Miran's framework requires that the current expansion — AI, deregulation, capital deepening from full expensing — be genuine and large enough to alter the economy's productive capacity. He frames this in mechanical terms: the economy is "increasing the horsepower of the engine" rather than running it hot. A given growth rate that might have generated inflation under the old capacity constraint is now non-inflationary because the constraint has moved.

The closest historical precedent is the very Greenspan episode the archive surfaced as the sole success case for forecast dependence. Dallas Fed President Robert McTeer articulated the logic in 1996 in terms Miran would recognize: "If you regard rapid growth as being demand-driven, you worry about excess demand and its inflationary implications. If you regard the same rapid growth as supply-driven, it's consistent with falling inflation." The question the archive forces is not whether this logic is sound — it is — but what happened when the committee applied it beyond the period where the supply gains were confirmed by data.

The answer is the 2001 through 2003 episode, and the documentary record is severe. Following the recession, the committee used upwardly revised potential output estimates — driven by the same productivity thesis that had served Greenspan well — to justify keeping rates at one percent. The revisions were substantial and self-reinforcing. Staff private memos show potential output estimates boosted by half a percentage point in each of three consecutive years. Richmond Fed President Alfred Broaddus noted the mechanism at the September 2003 FOMC meeting:

The archive identifies this as circular logic: low rates fuel asset prices, which are interpreted as wealth or demand, which requires more supply to satisfy, which implies a larger output gap, which justifies lower rates. Miran's framework runs on the same circuit. AI and deregulation expand supply; the expanded supply creates slack; the slack justifies rate cuts; the rate cuts support the investment that deepens the capital stock; the deepened capital stock expands supply further. There is no node in this loop that produces "hold."

The consequences of the 2001–2003 application were identified in real time by Kansas City Fed President Thomas Hoenig, who as early as November 1998 had warned of exactly what the productivity-driven accommodation would produce:

Hoenig scored 0.95 on the Engine's prescience scale. The dot-com bubble peaked and crashed. The committee's continued application of the productivity framework to the 2001–2003 recovery — filling the "gap" between actual and potential output with ultra-low rates — contributed to the housing imbalances that produced the financial crisis. The archive's conclusion is that "potential output" is an unobserved and highly volatile variable, and that relying on upward revisions of potential to justify "slack filling" creates a circular logic that trades short-term growth for long-term systemic instability.

The difference between the 1996–2000 success and the 2001–2003 failure maps precisely onto the distinction that matters for Miran's framework. In the late 1990s, Greenspan was responding to productivity that was actually showing up in the numbers. Vice Chairman Roger Ferguson later confirmed that labor productivity had doubled its annual growth rate from 1.5 percent to 3 percent. In the early 2000s, the committee was projecting forward from a trend that was already cresting, and staff privately admitted by 2001 that the productivity acceleration "now explains only a smaller part of the favorable inflation experience." Miran's AI productivity gains have not materialized in aggregate data. His deregulation effects are hypothesized, not measured. His capital deepening from full expensing depends on legislation whose investment effects operate on multi-year timelines. On the archive's own terms, he is in the 2001 position, not the 1996 position.

But if the supply-side expansion cannot yet be confirmed in the data, the argument must shift ground again. Perhaps the data itself is misleading. Perhaps the instruments the committee uses to measure inflation are returning a distorted signal. This is, in fact, Miran's most sophisticated move — and the one where the institution has the deepest and most uncomfortable history.

The Fine Reasons

Miran's inflation case rests on a specific technical claim: measured PCE inflation overstates true underlying price pressures because of identifiable methodological distortions. Shelter inflation reflects lease renewal lags that embed the housing market of three to four years ago. Portfolio management fees track equity valuations through assets-under-management imputation, conflating quantity consumed with price charged. If you adjust for these artifacts, he argues, inflation is essentially at target. Failing to adjust means the committee is implicitly moving the inflation target — reacting to a number that no longer represents what it purports to measure.

The archive's response to this class of argument begins not with Miran's specific claims but with a finding about the institutional pattern they belong to. In September 1994, Minneapolis Fed President Gary Stern addressed the committee with a warning that has not lost a syllable of relevance in thirty-one years:

The archive documents a recurring institutional cycle. In each era, the committee identifies technically defensible reasons to discount the inflation readings it receives. In the 1970s, it was energy shocks and administered prices — exogenous factors that Burns argued should be accommodated rather than fought with monetary policy. In the 1990s, it was the Boskin Commission's finding that CPI overstated true inflation by half a percent to a percent and a half due to substitution bias and quality adjustment — a genuine measurement insight that Greenspan used to justify treating inflation as lower than the published figures showed. In the 2010s, it was "idiosyncratic" components — cellular data plan price drops, Medicare payment changes — and the assumption that expectations would remain anchored regardless of what actual inflation did. In 2021, it was "transitory" supply-chain effects. Now, from Miran, it is portfolio management fees and shelter lags.

Every single one of these was technically correct at the time it was offered. The CPI measurement bias Boskin identified was real; the BLS subsequently corrected it. The cellular data plan price drop was real. Supply-chain disruptions were real. And Miran's portfolio management fee distortion and shelter lag are real. The archive's finding is not that these technical observations are wrong. It is that the institution has a persistent tendency to use correct technical observations to justify incorrect policy conclusions — specifically, to justify accommodation when the data is signaling restraint. The "fine reasons" are always valid in isolation. They become dangerous when assembled into a framework that systematically discounts every signal pointing in the direction the committee does not wish to go.

The structural flaw in this pattern was identified internally by Vice Chairman William Dudley in October 2015, in a critique of the Fed's own models that the archive treats as among the most prescient observations of the post-crisis era:

Dudley identified circularity: if your model assumes expectations stay anchored regardless of what you do, the model will never tell you to tighten. It will always find room to ease. Miran's framework depends on the implicit assumption that cutting rates while headline PCE remains above target will not de-anchor expectations. That assumption is load-bearing. And Dudley identified it as a structural defect six years before it failed catastrophically.

The archive maps the information dilution that connects technical staff findings to committee conclusions to public messaging. Staff identify a specific anomaly — portfolio management fees track AUM rather than actual service prices. The committee reframes the specific finding as a broader measurement bias that justifies discounting headline inflation. Public communication softens the risk further by describing the data as "noisy." By the time the information reaches the public, the Engine estimates that the "cost of being late" — the risk that the committee is making a policy error by discounting data — has suffered eighty percent dilution. The audience at the Dallas Fed heard a confident governor explaining why inflation is essentially solved. They did not hear the institutional history of every previous governor who said the same thing with equally sophisticated technical justifications.

The argument has now been forced off two pieces of ground. Forecast dependence succeeds one time in three. Supply-side accommodation works when the expansion is measured, not when it is projected. "Fine reasons" to discount inflation data have a poor base rate because they are always technically correct and usually operationally misleading. What remains is the specific mechanism — the claim that R-star has fallen and that the committee is passively tightening — and the empirical assertion about tariff incidence. These are where Miran's framework must stand or fall on its own terms rather than on institutional precedent.

The Mechanism

The passive tightening argument is the structural core of Miran's dissent. If the neutral rate has fallen while the policy rate has not, the gap between them has widened, and the committee is tightening without intending to. Miran identifies two drivers: a reversal in population growth — high immigration followed by very low immigration — reducing potential output growth, and declining fiscal deficits reducing net national borrowing. "The biggest risk to the economy," he argues, is that the committee is misconstruing just how tight monetary policy actually is.

Of all Miran's claims, this is the one the archive most directly validates — and the one where the validation comes with the sharpest caveat.

The FOMC debated exactly this question for nearly a decade. Staff models produced R-star estimates as low as negative 1.90 percent in October 2012, while the actual real federal funds rate was negative 1.47 percent — meaning that even with rates at the zero lower bound, policy was technically tight relative to the short-run neutral rate. Members who argued for a lower R-star were eventually vindicated by persistent inflation undershooting. St. Louis Fed President James Bullard was the most vocal and the most prescient, challenging the mean-reversion bias embedded in the staff's Holston-Laubach-Williams model:

Bullard was right. The committee repeatedly marked down R-star estimates over the following years. The median SEP long-run rate fell from above two percent to 0.5 percent. By July 2020, John Williams — the architect of the very model Bullard had critiqued — acknowledged his own estimate was zero. The 2018 rate hikes, conducted against the private warnings of Bullard and Dallas Fed President Robert Kaplan that the neutral rate was lower than the median, produced a sharp market correction in December 2018 and a forced policy reversal in early 2019. The archive scores the late 2018 episode as a "predictable failure" — the consequence of ignoring the narrowing gap between the funds rate and private R-star estimates.

Miran is positioning himself as the Bullard of this cycle, and the archive lends that positioning real institutional weight. The passive tightening mechanism is not speculative. It is documented. It has happened before. The dissenters who warned about it were vindicated.

But the archive also reveals something Miran does not acknowledge. Every instance of validated passive tightening the Engine surfaces occurred in a disinflationary environment. The signal that R-star had fallen was precisely that the committee could not generate enough inflation despite years at the zero lower bound. The data and the theory pointed in the same direction: inflation too low, R-star must be lower than estimated, policy is passively tight. Miran is deploying this framework in the opposite environment. PCE is above target. The standard diagnostic for passive tightening — persistent inflation undershooting — is absent.

The archive also documents what happened when the institution finally adopted the lower-R-star framework. The committee accepted that R-star was near zero, adopted Flexible Average Inflation Targeting to compensate, and committed to staying lower for longer. Within eighteen months, the adaptation contributed to the worst inflation overshoot in four decades. Bullard himself — the most prescient R-star dove in the documentary record — became one of the most hawkish voices calling for rapid tightening by early 2022. He reversed the very position his analysis had helped institutionalize. Miran's framework, as presented in Dallas, contains no comparable pivot mechanism. It runs in one direction.

On tariff incidence, the archive delivers its most direct verdict. Miran argues that tax incidence theory predicts foreign exporters will absorb the tariff burden because American demand can redirect across borders while foreign factories and workforces are immobile. He told the Dallas audience he was "always a seller of the idea that tariffs were gonna have really enormous negative consequences." He reports that core goods inflation in the United States is indistinguishable from core goods inflation in other countries — that in a blind chart test, you cannot pick the tariffed economy out of a lineup.

The Federal Reserve's own internal analyses, conducted during the 2018–2019 tariff episodes — the very policy regime Miran helped design while at the Council of Economic Advisers — reached the opposite conclusion. Boston Fed President Eric Rosengren reported in September 2018 that firms were receiving "little resistance to passing on price increases." By July 2019, staff were modeling risk scenarios where tariffs boosted PCE inflation to 3.5 percent. By July 2025, the committee had reached a consensus finding:

Nearly complete pass-through to domestic prices. Minimal foreign absorption. The institution Miran now serves reached this conclusion based on its own staff research and empirical observation. The Engine scores his core incidence claim — that exporters bear seventy to eighty percent of the tariff burden — at 0.1 on its prescience scale, the lowest rating in this investigation. His secondary observation about trade rerouting bias in pass-through studies scores higher, at 0.6 — the rerouting happened, as FOMC data confirmed a twenty percent drop in Chinese imports alongside surging imports from Mexico and emerging Asia. But rerouting does not change the incidence conclusion. Domestic prices still rose. The burden still fell on domestic buyers regardless of which country's port the goods transited through.

Miran acknowledged in Dallas that his tariff position had created "problematic political optics for the Federal Reserve." The archive suggests the optics are problematic for a reason more fundamental than politics: the Fed's own research contradicts his central claim, and his persistence in asserting it from a position of institutional authority creates a gap between the governor's public statements and the institution's internal findings that the documentary record does not support.

The framework has now been tested on four of its five pillars. The methodology is historically risky. The supply-side precedent ended badly when applied to projected rather than measured expansion. The "fine reasons" to discount inflation match a thirty-year institutional pattern that precedes policy errors. The R-star mechanism is real but historically specific to conditions that do not currently obtain. The tariff analysis is directly contradicted by the speaker's own institution. What remains is Miran's strongest, most technically original claim — the one where the archive must deliver its most careful verdict.

The Measurement

Miran's argument about portfolio management fees is the most analytically precise claim any sitting FOMC member has made about the distortions embedded in the committee's preferred inflation gauge. The BEA imputes financial services consumption based on assets under management. When equity markets rise, the imputed value of portfolio management services rises with them, registering in core PCE as a price increase even though actual fee rates — expense ratios, advisory fees, brokerage commissions — have been in secular compression for two decades as the industry shifted from active to passive management. Miran quantifies the distortion: portfolio management services have contributed approximately 36 basis points to core PCE inflation in the recent period, against a long-run historical average of roughly 6 basis points. The index, as he told the Dallas audience, "basically just tracks the stock market and conflates a quantity with a price." In a December speech he formalized the point: what ought to be recorded as an increased quantity of services consumed is instead recorded as increased prices.

The archive scores this observation at 1.0 — the highest prescience rating the Engine awards, matched in this investigation only by Loretta Mester's 2017 warning about stop-and-go cycles. The Engine validates the specific mechanism, confirms that the divergence between core PCE and other inflation measures corroborates Miran's diagnosis, and notes that Fed staff had privately acknowledged the underlying problem. A 2018 staff memorandum admitted that "the bulk of the revisions to PCE prices typically come from the non-market components, most of which are imputed and noisy." The institution knew its preferred inflation measure was susceptible to distortions from components that did not reflect actual consumer price pressures. Miran saw the specific channel through which that susceptibility was operating and named it publicly. On this point, his analytical contribution is original and correct.

The shelter lag argument stands on similarly firm technical ground. The archive documents the institutional recognition chain in detail. Chairman Powell, in November 2022, noted that private rent measures were signaling a turning point but that "that point is well out from where we are now." Governor Christopher Waller identified the gap between CPI rent measures and market rent movements as early as March 2022. Vice Chair Philip Jefferson formally utilized CoreLogic and Zillow data as leading indicators in 2024. By mid-2024, the Fed's Monetary Policy Report stated explicitly that market-rate rent data "can help predict future changes in the PCE price index for housing services." The mechanism Miran describes is not controversial. It is now part of the Fed's own analytical framework.

What the archive delivers on timing, however, turns the diagnosis into a cautionary finding. Governor Waller projected in October 2022 that shelter disinflation "might not be seen until later next year" — meaning 2023. The convergence did not appear in the PCE data until mid-2024, a full year later than his baseline. The archive scores Waller at 0.7: directionally correct, operationally premature. The July 2024 Monetary Policy Report confirmed that the large pandemic-era increase in market rents was "still being passed through to existing rents" and would "keep housing services inflation elevated for a while longer." Every previous Fed official who predicted imminent shelter convergence was right about the direction and wrong about the timeline.

The archive identifies the structural reason. In periods of extreme price shocks, the gap between spot prices and average sitting-tenant prices creates a multi-year tail of inflation that leading indicators cannot accurately time. The lease renewal catch-up is more powerful than the leading indicator of new leases. Miran tells the Dallas audience that renewal leases have caught up to new lease levels, capping landlord pricing power, and that shelter inflation should decelerate sharply over the coming year. The mechanism he describes is the same one Waller described in 2022. The confidence in the timeline is the same confidence Waller expressed. The archive's finding is that structural lags are not constants, and that the forecast-dependent approach the first section of this investigation showed to be historically unreliable applies with particular force to shelter, where the transmission from market rents to measured inflation has consistently surprised the institution by taking longer than projected.

The archive surfaces one more finding that bears directly on Miran's measurement case. In September 2018, staff proposed adopting the Trimmed-mean PCE index as the primary core inflation measure. The committee rejected the proposal. The Engine's retrospective assessment is that this rejection was consequential: the trimmed-mean measure would have naturally filtered out the extreme outliers in both shelter and portfolio management fees that plagued standard core PCE during 2022 through 2024. The rationale for rejection was that the trimmed-mean index "tended to rise faster than the total PCE price index over the past 20 years." The committee rejected a more accurate measure partly because it would have produced a more hawkish reading. (The Measure documented a parallel instance of this institutional tendency — the Fed's choice of inflation gauge serving convenience rather than analytical rigor.)

This finding cuts in a direction Miran might not expect. If the cleaner measure the committee rejected runs higher than standard PCE, then his argument that measured inflation overstates true pressures depends on which "measured" inflation he is referencing. The trimmed-mean PCE — the instrument the archive identifies as the better diagnostic — might show more inflation, not less.

The recognition scene is now complete. Miran's portfolio management fee diagnosis is technically correct and analytically original. His shelter mechanics are sound and increasingly consensus. The archive validates both observations. But the archive also shows that the institution had a tool — the trimmed-mean PCE — that would have addressed both distortions, and chose not to adopt it. It shows that every previous forecast of imminent shelter convergence has been premature. And it shows that technically correct measurement observations, when assembled into a framework that systematically discounts inflation readings, belong to a pattern the institution's own members identified thirty years ago as a precursor to policy error.

The diagnosis survives. The prescription — cut rates now, on the basis that measured inflation will converge to the forecast — requires the same leap of faith the archive has documented failing in the 1970s and 2021, the same forward-looking accommodation of projected supply gains that failed in 2001–2003, and the same confidence in timing that Waller's shelter forecast failed to deliver in 2022–2024.

The Position