Fed’s Miran Says Rate Cuts Are ‘More Urgent’ Now Due To Recent Trade Tensions: Report

Federal Reserve Governor Stephen Miran on Wednesday reportedly batted for “more urgent” rate cuts now due to the rising trade tensions.

During an interview with CNBC, Miran stated that the recent flare-up in trade tensions with China has resulted in increased uncertainty about the U.S. economy, making it necessary for the Fed to adopt a more neutral monetary policy more quickly.

“There’s now more downside risks than there was a week ago, and I think it’s incumbent upon us as policymakers to recognize that should get reflected in policy,” Miran said during the interview. However, he noted that this does not mean he wants even lower rates than he did a week or a month ago.

“However, with the change to the balance of risks, I think it becomes even more urgent that we get to a more neutral place in policy quickly, as opposed to waiting for downside data to materialize,” he added.

“If you hit the economy with a shock when the policy is very restrictive, the economy will react differently than it would if the policy was not as restrictive. So, I think it’s even more important now than I did a week ago that we move quickly to a more neutral stance,” he explained.

Earlier this month, Miran called for a series of 50-basis-point rate cuts and said that his forecast for inflation is more optimistic than some of his colleagues’. He stated that he expects a limited impact on inflation from President Donald Trump’s tariffs. As such, he sees less conflict between the central bank’s dual mandate of stable inflation and maximum employment.

According to data from the CME FedWatch tool, there is a 96.7% probability of a 25 basis point interest rate cut.

Meanwhile, U.S. equities rose in Wednesday morning’s trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was up 0.84%, the Invesco QQQ Trust ETF (QQQ) surged 1.25%, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) gained 0.53%. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘bullish’ territory.

The iShares 7-10 Year Treasury Bond ETF (IEF) was up 0.02% at the time of writing.

Also See: Scott Bessent Says US Has ‘Things That Are More Powerful’ Than China’s Rare Earth Export Controls: Report

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