Federal Reserve Governor Stephen Miran has called for a 50 basis point rate cut at the Federal Reserve’s December meeting, stating that a 25 basis point reduction should be the minimum. Speaking in a CNBC interview, Miran emphasized that the central bank needs to act based on future economic projections rather than solely on current data.
Miran has been the sole dissenter on the Federal Open Market Committee (FOMC) this year. He voted against the smaller 25 basis point cuts implemented at both the September and October meetings, advocating for larger reductions. He pointed to signs of weakness in both inflation and employment, urging policymakers to focus on where the economy will be in 12 to 18 months, as monetary policy changes typically take over a year to fully impact the economy. “If you’re making policy for what the data are now, you’re backward looking,” Miran explained.
Market expectations currently favor another rate cut in December. According to CME FedWatch data, there is a 62.6% probability of a 25 basis point reduction at the December 10 FOMC meeting. Meanwhile, there is a 37.4% chance that rates will remain unchanged.
### Split Among Fed Officials
Federal Reserve Chair Jerome Powell has made clear that a December rate cut is not guaranteed. Fed officials remain divided on whether to hold rates steady or ease further. Some are concerned about persistent inflation, while others are focused on signs of a softening labor market.
San Francisco Fed President Mary Daly highlighted the need for an open mind ahead of the December meeting. In an essay, Daly pointed to the shifting balance of risks between inflation and labor market conditions. She noted that although inflation has gradually declined, it remains elevated, while the labor market has softened significantly this year. While Daly did not specify her stance on the upcoming decision, her comments suggest she is weighing both sides of the debate.
### Divergent Views on the Pace of Policy Easing
Fed Governor Chris Waller supports further rate cuts but believes that the Fed’s current pace of quarter-point reductions is appropriate. Unlike Miran, Waller does not see the need for larger cuts at this time.
So far this year, the Fed has cut interest rates twice, each by 25 basis points—once in September and again in October. The October reduction, made just two weeks ago, set the stage for December’s meeting to be a critical decision point for the central bank’s monetary policy.
Miran acknowledged that his position could change depending on new economic data. He noted that information released between now and the December meeting could influence his views.
### Looking Ahead to December 10
Market odds for a December rate cut have declined slightly in recent days but still remain above 60%. The FOMC meeting on December 10 will be a decisive moment, as Fed officials review fresh economic data before determining whether to implement a third rate cut this year.
As the Fed weighs the complex balance between controlling inflation and supporting employment, investors and observers will keenly watch for signals on the central bank’s next move.
https://coincentral.com/fed-governor-miran-calls-for-50-bps-rate-cut-in-december/