FED Board Member Stephen Miran made a critical statement in the interest rate cut discussions as the December meeting approaches.
Speaking to Bloomberg TV, Miran said he would support a 25 basis point cut if he was in a decisive position in the vote, despite having previously dissented in favor of a half-point (50 basis point) cut in two previous meetings.
“If I had the ‘marginal’ votes to secure a 25 basis point cut, I would definitely support it. To do otherwise would be to inflict real damage on the economy, and that’s not my style,” Miran said.
Miran’s flexible message suggests that a decision to cut interest rates further at the December meeting may be dependent on a very narrow majority. Recently, regional Fed presidents, in particular, stated that they were not open to further cuts because inflation was still running approximately 1 percentage point above target.
Miran, who took office in September, opposed two consecutive 25 basis point rate cuts by the FOMC, arguing in both votes for a larger cut of 50 basis points. He argues that current high inflation readings are not permanent and that employment data support a looser monetary policy.
Miran, drawing particular attention to the delayed September employment report released yesterday, said, “Looking at the inflation outlook, there is no need for a restrictive stance as restrictive as the current one.”
Meanwhile, the US Bureau of Labor Statistics (BLS) announced that it has completely canceled its October Consumer Price Index (CPI) report due to the government shutdown. The agency stated that due to the inability to collect some data retroactively, October figures will only be released in the November CPI report, where available. The November CPI report will be released on December 18th.
The FED’s December interest rate decision will be announced on December 11.
*This is not investment advice.
