Federal Reserve Director Milan stated that the Federal Reserve will need to cut interest rates by more than one percentage point in 2026, and believes that current monetary policy is constraining economic growth. Appearing on Fox Business on Tuesday, Milan said, “I think it’s hard to argue that policy is close to neutral. I think policy is clearly restrictive and is holding back economic development.I think it’s reasonable to expect more than 100 basis points of rate cuts this year.” Federal Reserve officials cut rates for the third consecutive time last month but signaled that further cuts are not guaranteed in the near term.Policymakers are divided over the outlook for inflation and the labor market; based on the median estimate of their latest projections, they expect only one rate cut in 2026. Prior to Milan’s remarks, other officials said this week that interest rates may currently be close to a “neutral level” that neither stimulates nor restricts economic growth.