Key takeaways
- Fed Governor Miran favors a 50 basis point cut, arguing that current data warrants faster easing.
- The internal debate at the Fed continues as Powell signals no firm commitment on the December decision.
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Federal Reserve Governor Stephen Miran said the U.S. central bank should act more aggressively to cut interest rates to avoid falling behind a flagging economy.
In an interview with CNBC today, Miran again called for a 50 basis point cut, saying even a 25 point cut would be the bare minimum. He expressed his disagreement at meetings in September and October, where the Fed opted instead for quarter-point measures.
“If you make policy based on current data, you look backwards,” Miran said, adding that monetary effects take 12 to 18 months to propagate through the economy.
Miran said available data already shows signs of slowing inflation and the labor market. He said that should make the Fed more dovish than its September forecast, which called for three total cuts for the year.
Although the market odds of a December decline remain above 60%, they are trending lower. Fed Chairman Jerome Powell stressed that a further cut was not guaranteed, as officials remain torn between keeping rates steady to fight inflation or further easing to support employment.
