He suggested that a cumulative rate reduction of around one percentage point during the year could represent a reasonable policy trajectory. Miran also noted that continuing the rate-cutting process at the Federal Reserve’s March meeting would likely be an appropriate step given the current data.

Geopolitical Tensions Have Not Changed the Outlook

Despite rising geopolitical tensions in the Middle East, Miran’s policy outlook appears largely unchanged. Over the weekend, the United States and Israel carried out strikes targeting Iran, a development that immediately triggered volatility in global energy markets. Oil prices reacted with a noticeable increase as investors priced in potential supply risks and broader regional instability.

These developments prompted some market participants to reconsider expectations regarding the pace of monetary easing in 2026. Higher energy prices can feed into inflation expectations, which in turn could complicate the Federal Reserve’s (Fed) efforts to bring inflation closer to its long-term target.

However, Miran emphasized that the available economic data does not yet suggest a significant shift in the broader outlook. From his perspective, the recent geopolitical events have not produced measurable changes in labor market conditions or inflation projections that would justify altering the Fed’s current policy direction.

A Gradual Approach to Monetary Easing

Miran favors a gradual and measured approach to policy easing rather than aggressive rate reductions. His proposal involves lowering interest rates by approximately 25 basis points at each policy meeting until the policy rate approaches what economists refer to as the “neutral” level — a point where monetary policy neither stimulates nor restrains economic growth.

Once that level is reached, Miran believes policymakers should reassess the economic landscape before deciding on additional steps. This strategy aims to balance economic support with financial stability by avoiding abrupt shifts in policy.

Diverging Views Within the Federal Reserve

The debate over the appropriate path for monetary policy continues within the Federal Reserve itself. Some policymakers prefer to wait for clearer evidence that inflation is sustainably moving toward the central bank’s 2 percent target before supporting further rate cuts.

Miran, on the other hand, argues that labor market indicators should be interpreted carefully and that current conditions suggest the economy could still benefit from additional policy support. In his view, the present environment allows room for a more accommodative stance without undermining economic stability.

This content does not constitute investment advice.

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FED Lorie Logan: “Conditions Do Not Support a Cut in December”

Lorie Logan, known for her hawkish stance, made it clear that she does not support a rate cut at the upcoming meeting. Logan had already opposed a reduction in October, citing persistent inflation risks, and her latest comments reaffirm that stance.

According to Logan, recent data does not provide convincing evidence that inflation is easing fast enough. She emphasized that price pressures remain above target and that the downward trajectory is not yet strong or sustained.

Logan stated:

“When I look toward the December meeting, I would need to see strong evidence that inflation is falling faster than expected or that the labor market is cooling more significantly than the gradual slowdown we have observed. Without that, it is difficult to support another rate cut.”

FED Stephen Miran: “Recent Data Supports a More Dovish Approach”

In contrast, Fed official Stephen Miran argues that the economic indicators since September have shifted in favor of easing monetary policy. Miran believes the data now presents a compelling case for a more accommodative stance.

He pointed out that inflation has performed better than anticipated and that the labor market has weakened in a noticeable way. For Miran, these factors suggest that a tighter policy posture is no longer necessary.

“All the data we have received supports a more dovish view. Under these conditions, we should be moving toward easing rather than the opposite,” he said.

CME FedWatch Data: Market Expectations Tilt Slightly Toward a Hold

The latest CME FedWatch Tool projections illustrate how traders are pricing in the upcoming decision. With 25 days remaining until the December 10 FOMC meeting, probabilities stand as follows:

• 350–375 bps: 44.4%

• 375–400 bps (no change): 55.6%

• 400–425 bps: 0%

These figures indicate that markets currently see a hold as the most likely outcome.

As the meeting approaches, the divergence between Logan and Miran will continue to shape market sentiment, signaling that the Fed’s internal debate may be far from settled.

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Waller: “A 25 Basis Point Cut Is on the Table”

Federal Reserve Governor Christopher Waller indicated that a 25 basis point rate cut could be a realistic option. Highlighting ongoing uncertainty in the economic outlook, Waller stated, “We can take a small step and see what happens to get a better sense of direction.”
He also noted that internal Fed discussions are progressing smoothly and that there has been little change in the overall economic picture. “Lowering rates seems like the right move; not much has changed in the last six weeks,” he added, signaling support for a cautious easing approach.

Miran: “The Disinflation Process Has Begun” So Rate Cuts?

Meanwhile, Fed official Miran expressed confidence that the U.S. economy is entering a period of meaningful disinflation. “We expect to see a significant disinflation process over the next year,” Miran said. He further suggested that two more rate cuts this year would be a realistic scenario, reinforcing expectations that the Fed is gradually pivoting away from its tight policy stance.

Markets Price in an October Rate Cut

According to CME Group’s FedWatch Tool, markets are overwhelmingly betting on a 0.25% rate cut at the October 29 meeting, assigning it a 96.7% probability. The likelihood of rates remaining unchanged stands at only 3.3%.

These projections make it clear that investors are already pricing in a rate cut, with market sentiment leaning strongly toward monetary easing. With just 13 days left until the next FOMC meeting, all eyes are now on how the Fed will balance its commitment to price stability with growing pressure to support economic momentum.

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The post Fed Officials Signal Rate Cuts: What Are Markets Expecting? appeared first on Coin Engineer.