WASHINGTON (Reuters) -Federal Reserve Governor Stephen Miran said it is wrong to put too much emphasis on the strength of equity and corporate credit markets in assessing monetary policy that he feels remains too restrictive and is heightening the risk of a downturn.
“Financial markets are driven by a lot of things, not just monetary policy,” Miran said on the Bloomberg Surveillance television show, in explaining why he dissented last week against a quarter-point rate cut in favor of a half-point reduction.
Rising equity prices, narrow corporate credit spreads, and other factors “doesn’t necessarily tell you anything about the stance of monetary policy” at a moment when interest-sensitive sectors like housing are less buoyant and some parts of the private credit market appear under stress.
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