Federal Reserve Governor Stephen Milan has announced that he will resign from the central bank's board, either shortly after or before incoming Chair Kevin Warsh is formally sworn in.
As Warsh is set to take over his seat on the Federal Reserve Board, Milan's departure has been widely anticipated by the market.
In his resignation letter, Milan also criticized the Fed's approach to measuring inflation, pointing out that if the central bank "does not correct these errors, it will unnecessarily raise unemployment while responding to 'false inflation' rather than actual inflation."
Milan also expressed enthusiasm for the reform initiatives Warsh plans to advance at the Fed, including reshaping the Fed's communication mechanisms and its balance sheet policy framework.
Milan joined the Fed in September of last year. Initially, upon taking up his role, he applied for unpaid leave from his White House position and formally resigned from the White House in February of this year. As a well-known dovish official, Milan consistently voted in favor of interest rate cuts during his tenure as a policymaker, often dissenting and advocating for larger rate reductions than his colleagues agreed to.
The Senate narrowly confirmed Kevin Warsh as the next Fed Chair on Wednesday, clearing the way for his swift swearing-in after current Chair Jerome Powell's term ends on Friday.
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