Fed’s Miran leans dovish, urges support as labour softens and oil shock dismissedSummary:Miran downplays inflation, cites measurement issuesLabour market seen weakening over extended periodFed policy may need to provide additional supportOil price surge acknowledged but seen as temporaryCentral banks should look through energy shocksDovish stance contrasts with inflation risksMiran seen as political appointee pushing easing biasFederal Reserve Governor Miran struck an emphatically dovish tone in a fresh round of remarks, arguing that inflation risks remain contained while calling for additional monetary support, a stance that is likely to face scrutiny given his perceived political alignment within the central bank.Miran suggested the inflation side of the Fed’s mandate has been “less problematic” than headline readings imply, pointing to measurement issues and arguing that market-based inflation expectations have shown little reaction to the recent surge in oil prices. He characterised the pass-through from higher energy costs as effectively negligible, stating there has been “zero bleed through” into expectations so far.He also dismissed the risk of a wage-price spiral, reinforcing the view that underlying inflation pressures remain contained despite the recent geopolitical-driven rise in commodity prices.Instead, Miran placed greater emphasis on the labour market, which he described as being on an extended weakening trend. Against that backdrop, he argued that the economy could benefit from additional monetary policy support, reinforcing expectations that he would favour an easing bias or at least resist further tightening.While acknowledging that the recent oil price spike has unsettled sentiment, Miran maintained that central banks should typically look through such shocks, viewing them as transitory and not warranting a policy response.He also pointed to easing regulatory burdens as a potential positive supply-side development, suggesting this could help offset inflation pressures over time.However, Miran’s comments are likely to be viewed through a political lens. As a recent appointee seen as aligned with pushing for lower rates, his credibility on inflation risks may be questioned by markets, particularly given the broader uncertainty surrounding energy-driven price pressures. This article was written by Eamonn Sheridan at investinglive.com.