A notable signal has come from the Federal Reserve System. Fed governor Steven Miran said his outlook allows for a 1.5 percentage point reduction in the target range for the federal funds rate - one of the boldest projections voiced by a sitting Fed official in recent months, DKNews.kz reports.
Policy still “well above neutral”
Miran reiterated his long-standing argument that current monetary policy remains well above the neutral level. In his view, interest rates are still restraining the economy more than necessary, even as inflation shows signs of easing and economic momentum cools.
This stance contrasts with the more cautious tone adopted by some of his colleagues, who favor gradual and limited rate cuts to avoid loosening policy too quickly.
Why markets are listening closely
A potential cut of this magnitude would be significant for global markets. If investors begin to price in such a scenario, it could have wide-ranging effects:
- stronger support for equities,
- lower government bond yields,
- renewed appetite for risk,
- and potential pressure on the US dollar.
That is why even forward-looking comments from Fed officials are now scrutinized as carefully as formal policy statements.
Uncertainty about his future at the Fed
Adding another layer of intrigue, Miran acknowledged that it is still unclear whether he will remain at the central bank once his term expires. The remark has drawn attention, as it hints at internal debate within the Fed and suggests his views may not fully align with the prevailing consensus.
Analysts note that such candid comments often reflect deeper discussions taking place behind closed doors about the future direction of monetary policy.
Early signal or a lone voice?
For now, markets are treating Miran’s remarks as an important signal rather than a policy commitment. Still, history shows that shifts in Fed rhetoric often begin with individual voices before turning into a broader narrative.
As investors await fresh economic data and further guidance from other Fed officials, the idea of a 1.5-point rate cut - once seen as radical - may gradually enter the mainstream debate over the next phase of US monetary policy.
