Fed board contenders Miran, Bullard say Trump’s tariffs are not causing inflation

Two economists who are figuring in prominently for vacancies at the Federal Reserve said Tuesday they don’t believe tariffs cause inflation, a view that would be in line with President Donald Trump’s desire for the central bank to cut interest rates.

In separate CNBC interviews, Stephen Miran and James Bullard rejected the idea espoused by many non-White House economists that the duties will lead to longer-term higher prices.

Trump has tapped Miran to fill out the remaining few months of the term of former Governor Adriana Kugler, who left the position Friday. Bullard’s name has surfaced in reports this week as being one of at least a half dozen contenders to fill Chair Jerome Powell’s seat when his term expires next May. Bullard also is a former St. Louis Fed president.

Both did not commit to how they would vote on interest rates. However, they praised Trump’s pro-growth agenda and also made comments in line with the president’s stand that inflation is not a problem.

“There just still continues to be no evidence whatsoever of any tariff-induced inflation,” said Miran, chair of the White House Council of Economic Advisers. “Lots of folks who were expecting … doom and gloom, it just hasn’t panned out, and it continues to not pan out for them.”

The comments came after the Bureau of Labor Statistics reported that inflation as measured by the consumer price index was at 2.7% for July, still above the Fed’s 2% target but a shade below Wall Street expectations.

Bullard said data continues to show that Trump’s aggressive tariffs have not led to inflation. He predicted the rate-setting Federal Open Market Committee would begin cutting in September and likely lop off a full percentage point from its benchmark interest rate over the next 12 months, which he said would get the rate “close to” neutral.

“The committee put their rate-cut program on pause when the tariff situation arose six months ago, and now you have six months of evidence,” he said. “I don’t really think tariffs cause inflation. Taxes don’t cause inflation. So what you’re seeing in the data is very muted effects that are one-time increases in the price level.”

Both Miran and Bullard also stressed the importance of Fed independence, an issue that has been tested during both Trump terms as he has publicly and aggressively berated policymakers for not lowering. After the CPI data, Trump again took to Truth Social to repeat his attacks on Powell and his demand for easing. The president has said the Fed should cut by 3 percentage points.

“The damage [Powell] has done by always being Too Late is incalculable,” Trump wrote. “Fortunately, the economy is sooo good that we’ve blown through Powell and the complacent Board.”

Bullard said Trump “is entitled to his views.”

“He’s got long experience in real estate markets. It’s all about borrowing money at the lowest rate possible,” Bullard said. “Good for him. He’s got views, but a lot of people have views, and you know, if you don’t want to hear that, this is probably the wrong job.”