Federal Reserve's Miran Advocates for Substantial Rate Cuts Amid Crypto Traders' Conservative Bets

Federal Reserve Governor Stephen Miran has called for more than 100 basis points (bps) in interest rate reductions this year, contrasting with crypto traders who are betting on only a 50 bps cut. In a FOX Business interview, Miran emphasized the need for substantial cuts, citing that current monetary policy remains restrictive. He argues that inflation concerns are overstated and expects data to support further reductions. However, Fed Governor Chris Waller has expressed a more cautious approach, noting the labor market's weakness but cautioning against hasty cuts.

Miran's Advocacy for Aggressive Cuts

As Miran's term concludes this month, he continues to champion significant rate cuts, having previously dissented in favor of a 50 bps reduction at several FOMC meetings. He is likely to support a similar cut at the upcoming January FOMC meeting. Despite his stance, crypto traders remain conservative, pricing in a 50 bps cut spread across the year, likely as two 25 bps reductions. Polymarket data reflects a 27% probability of such cuts, with lower odds for more substantial reductions.

Tom Barkin on Economic Outlook

Richmond Fed President Tom Barkin highlighted the delicate balance required in monetary policy at a recent speech in North Carolina. He noted that while inflation has eased, it remains above target, and unemployment is historically low. Barkin anticipates key data releases, including the December CPI report, which may influence future policy decisions. November's report suggested cooling inflation, but potential distortions from the government shutdown were noted by New York Fed President John Williams.