Federal Reserve Governor Stephen Miran has sparked debate with claims that President Donald Trump’s stricter immigration policies will significantly reduce rent inflation and overall consumer prices. However, economists caution that Miran may be overstating the impact.
Miran’s argument draws from research by MIT economist Albert Saiz, who has long studied immigration and housing markets. Saiz’s findings show that a 1% rise in a city’s population from immigration leads to about a 1% increase in rents. By extension, reversing immigration inflows could ease rental costs slightly. But Saiz notes the effect on national inflation is minimal—at most 0.1 percentage points—given the overall U.S. population base. “Population growth impacts housing prices, but not enough to justify major policy shifts,” Saiz explained.
In his debut speech, Miran instead based calculations on the U.S. renter population of 100 million, not the total 340 million, inflating the projected impact nearly threefold. He suggested rent inflation could fall two percentage points by 2027, reducing the Fed’s preferred inflation measure, the personal consumption expenditures index, by 0.4 percentage points. Miran argued this would justify cutting interest rates by half a point, contending the Fed’s current stance is “fully 2 percentage points too high.”
Miran cited Saiz’s 2003 study on the Mariel boatlift, which examined Cuban immigration’s impact on Miami’s rental market. Yet later research, including Saiz’s 2007 paper and other international studies, points to more modest or even opposite effects, such as deportations reducing construction supply and pushing housing costs higher.
The Fed quietly updated Miran’s speech to clarify that his estimate stemmed from a unique “quasi-random immigration shock.” Still, his stance underscores growing political pressure on the Fed as Trump pushes for rate cuts and seeks to reshape its leadership. With Miran’s term ending January 31, his window to influence monetary policy is narrow, but his arguments highlight the contentious intersection of immigration, housing, and central banking.