Federal Reserve member Stephen Miran has delivered strong signals in recent statements indicating a shift toward a more dovish monetary policy stance as the year comes to a close. His remarks have heightened expectations that the Fed may consider an interest rate cut ranging from 25 to 50 basis points, particularly at the December meeting.
Miran began by emphasizing that all data received since September suggests the need for a rate reduction. He elaborated, stating, “Easing monetary policy is now essential.” When assessing the labor market, Miran noted several key trends: the unemployment rate is rising, employment figures are softening, and “full employment levels have not yet been reached.”
On the inflation front, Miran highlighted that core personal consumption expenditures (PCE) inflation is moving closer to the Fed’s 2% target. He also cautioned that some colleagues may be overlooking “lagged inflation effects.” Nevertheless, he acknowledged that the latest data appears “stable and on a downward trend,” supporting the case for a more dovish approach compared to September.
Regarding the upcoming policy decision, Miran remarked, “A 50 basis point cut would be appropriate, at least 25 basis points” at the December meeting.
Supporting this dovish outlook, data released by US price-tracking firm OpenBrand coincided with the Fed member’s comments. The report showed that inflation in durable goods and personal care products slowed for the first time in three months during October. Prices in this category rose by just 0.22% last month, significantly below the 0.48% increase seen in September.
OpenBrand’s analysis is comprehensive, drawing from data collected across both online stores and physical retail locations. The firm noted that price increases decreased across every category except for communications equipment in October.
The recent historic government shutdown has delayed the release of official economic data, leading to increased interest in alternative metrics such as those provided by OpenBrand.
*This article is for informational purposes only and should not be considered investment advice.*
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