Investing.com -- Federal Reserve Governor Stephen Miran on Monday said he still supports cutting interest rates by about a percentage point over the course of this year to support a cooling labor market, despite market bets on a Fed rate hike following the start of the Iran war.

"If there's a time when markets are going to be volatile, it's in the middle of a war...I'm disinclined to read too much into that," Miran said on CNBC, adding that higher oil prices are not yet pushing up inflation expectations or starting a wage-price spiral.

Miran said there is no evidence of a wage-price spiral and that inflation expectations have not yet been affected by higher oil prices. He noted that there is no evidence of an inflation shock from oil and no sense that other Federal Reserve colleagues are moving their positions based on oil prices.

The Fed governor said he remains concerned about the labor market and believes the Fed can accommodate that concern. He noted that wage growth has been coming down and the Fed is holding back labor demand inappropriately. Miran said the Fed could be about a point easier over the course of the year and that inflation is heading back to target a year from now.

Miran said the Fed's balance sheet is too big and he would like to shrink it. He added that the Fed can lower short-term interest rates to offset the tightening effect of reducing the balance sheet, noting it is important to go slowly on balance sheet reduction.

The governor said there has been an unwanted tightening of financial conditions, which could have an effect on economic growth. He added that higher oil prices could accelerate cooling in the labor market and that monetary policy is still restrictive.

Miran said he will stay at the Fed until Kevin Warsh, President Donald Trump's nominee to succeed Jerome Powell as Chair of the Federal Reserve, is confirmed, which he expects to happen, and that he will probably get another Fed meeting.

During its latest vote on March 18, the Federal Reserve voted to hold its key interest rate steady. The Federal Open Market Committee voted 11-1 to keep the benchmark federal funds rate in a range between 3.5% to 3.75%.