Federal Reserve Board Governor Miran says US deregulation could lower prices and justify further monetary policy easing

The Federal Reserve Board published a speech by Governor Stephen I. Miran arguing that the recent and expected rollback of US economic regulation is likely to boost productivity and potential output, putting downward pressure on prices and supporting a more accommodative monetary policy stance. He cautioned that failing to incorporate these supply-side effects could leave policy “needlessly contractionary,” and said recent policy had been tighter than warranted given deregulatory momentum. Miran highlighted measurement challenges in capturing aggregate regulatory burden but pointed to emerging natural language processing and machine-learning approaches and cited evidence of a substantial drop in rules in 2025. He referenced the Administration’s “one-in-ten-out” policy and estimated that 30 percent of regulatory restrictions in the Code of Federal Regulations could be eliminated by 2030, implying a cumulative reduction of roughly 3 percent in the consumer price level through 2030 relative to a no-deregulation baseline. The speech framed deregulation as increasing potential output more than actual output in the short run, widening the output gap and supporting rate cuts even as it may raise the neutral rate; it also cited model-based work suggesting policy should offset deregulation-driven disinflation to avoid an unnecessary downturn, drawing an analogy with Greece’s reforms and accommodative European Central Bank policy. Miran said he has raised these considerations with Federal Open Market Committee colleagues and expects to continue doing so, and noted his deregulation estimates could be updated as new Unified Agenda data become available.