By Bryan Mena, CNN

Washington (CNN) — Central bankers are underestimating how much pressure interest rates are putting on America’s labor market, said Federal Reserve Governor Stephen Miran, a staunch ally of President Donald Trump, in prepared remarks Monday.

“I view policy as very restrictive, (and) believe it poses material risks to the Fed’s
employment mandate,” Miran is set to say during his first speech in his new role, at an event in New York. Miran was previously head of Trump’s Council of Economic Advisers, but has taken leave from that position to serve a vacated term on the Fed’s Board.

The Fed last week lowered borrowing costs for the first time since December to prevent the labor market from deteriorating, according to Chair Jerome Powell in a post-meeting news conference. But Miran says the Fed has a lot of catching up to do.

In his speech, Miran argues that the neutral rate of interest — a theoretical level of borrowing costs that neither stimulates or nor dampens activity — is actually lower than the consensus of economists suggests, meaning that interest rates are exerting too much pressure on the economy.

This story is developing and will be updated.

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