Miran: private credit not yet worrying from a macro perspective

Miran: private credit not yet worrying from a macro perspective

Miran: Private Credit Not Yet Worrying from a Macro Perspective

Federal Reserve Governor Stephen Miran has signaled that private credit markets, while expanding, do not currently pose significant macroeconomic risks. In a recent speech on inflation dynamics, Miran emphasized that broader financial system stability remains intact despite growing private credit activity. His remarks align with a broader Federal Reserve focus on inflationary pressures rather than credit-driven risks.

Miran highlighted that inflationary pressures are more closely tied to structural factors such as housing costs and labor market dynamics than to credit expansion. For instance, he noted that shelter inflation—driven by lagging rent adjustments in official metrics— remains a key disinflationary force as market rents normalize. Similarly, core nonhousing services inflation, which includes labor-intensive sectors like healthcare and education, has shown little upward momentum despite wage growth moderation.

While private credit growth has accelerated in recent years, Miran did not single it out as a concern. Instead, he critiqued statistical anomalies in inflation measurement, such as imputed prices for portfolio management services, which artificially inflate core PCE readings. These distortions, he argued, risk misguiding monetary policy by conflating genuine supply-demand imbalances with accounting artifacts.

Miran also underscored the role of deregulation and trade policy in shaping credit dynamics. For example, he noted that loan guarantees and foreign investment pledges— amounting to over $3 trillion—could boost credit supply without destabilizing interest rates. Such measures, he suggested, may support long-term growth while keeping inflation anchored.

The Fed's current focus remains on recalibrating policy to address persistent inflation, with Miran advocating for a more neutral stance to avoid unnecessary employment risks. While private credit's role in the economy warrants monitoring, his analysis suggests it is not yet a material threat to macroeconomic stability. Investors should remain attentive to evolving policy frameworks and data revisions, which could reshape risk assessments in the coming months.

(https://www.federalreserve.gov/newsevents/speech/miran20251215a.htm): Miran, Stephen I. (2025), Speech on Inflation Outlook, Federal Reserve.
[引用越界:14]: Morningstar Manager Research (2024), How Fund Fees Are Evolving in the US.