Federal Reserve Governor Stephen Miran argues that President Donald Trump’s immigration crackdown will ease inflation by reducing housing demand.
However, an economist whose work inspired Miran’s view says the impact is overstated.
Saiz’s Critique
Albert Saiz, an MIT expert on immigration and housing, says Miran’s estimate is too high. Saiz’s research shows a 1% population increase from immigration raises rents by 1%.
Reversing that would lower rents slightly, but not enough to shift Fed policy.
Calculation Flaw
Miran used 100 million renters as the base, implying a 1% immigration drop cuts rent inflation by 1 point.
Saiz uses the full U.S. population of 340 million, yielding 0.29%. With housing at one-third of the CPI, the overall inflation drop is just 0.1 point.
Research Context
Miran cited Saiz’s 2003 study on the 1980 Mariel boatlift’s Miami rent spike. Later 2007 work and 2023 research on deportations show smaller effects.
A 2023 study found deportations raised housing prices by shrinking construction labor.
Updated Speech
The Fed revised Miran’s September 22, 2025, speech to note the “large quasi-random immigration shock” from the boatlift. Miran still projects a 2-point rent inflation drop by 2027, cutting overall PCE inflation by 0.4 points, justifying a 0.5-point rate cut.
Miran’s View
Miran calls his outlook “optimistic” but believes forecasters undervalue immigration’s rent impact. He sees Fed policy 2 points too tight, a view not shared by other Fed members.
Trump’s Influence
Miran’s Harvard PhD and role as Trump’s economic advisor raise questions about Fed independence.
Trump pressures for rate cuts and seeks to fire Governor Lisa Cook, with the Supreme Court reviewing the case.
Miran’s term ends January 31, 2026, but he could stay until a replacement is named.
Broader Debate
Saiz acknowledges immigration affects housing but says the scale doesn’t warrant major policy shifts. The discussion highlights tensions between economic theory and political priorities in 2025.
