US President Donald Trump's new Fed governor, Stephen Miran, has taken a clearly dovish line in his latest assessments of monetary policy.
Miran said neither an aggressive interest rate cut was necessary nor was there a need to make up for steps not taken in the past.
Miran said, “There's no need for a 75 basis point interest rate cut. Similarly, I don't see a need to make up for the inadequacy of previous cuts.”
Miran, noting that there are differing opinions within the Fed regarding the magnitude of interest rate cuts, stated that he wants to reach neutral interest rates with 50 basis point steps, while many of his colleagues prefer gradual cuts of 25 basis points.
Miran used cautious language when stating that a rate cut in December was highly likely. Speaking to the Monetary Matters podcast, he said:
“Unless there are any surprises, I expect we will cut interest rates in December. The distribution of votes on the table is actually different from the distribution of opinion. Therefore, based on current information, I anticipate a rate cut in December, but nothing is a 100% guarantee.”
*This is not investment advice.
