Key Statements from Fed
Today, crucial Non‑Farm Employment and Unemployment figures were not released. The ongoing shutdown has left these data points unavailable, paving the way for optimism in cryptocurrencies, especially Bitcoin, which has soared past $120,000. With the job market’s deterioration, inflation remains limited, reinforcing the justification of Trump’s calls for interest rate cuts.
During a recent address, Fed member Miran discussed the current situation and stated the following points.
Miran’s Perspective
Miran emphasized that Fed policy should be forward‑looking. He expects a significant decline in services inflation linked to demographic shifts. Specifically, services inflation driven by the housing sector is anticipated to see a considerable drop.
Contrary to some beliefs, Miran does not consider the neutral interest rate to be zero. It has fallen to the lowest bounds of projections. He notes that deregulation could enhance the economy’s potential. These low neutral rate predictions stem from forward‑looking projections.
Relying on retrospective data is misguided. Minor changes in measured inflation often go unnoticed by households, as inflation expectations remain reasonably stable. Decreasing fiscal deficits could further help lower the neutral rate. The expectation of reduced services inflation is linked to housing factors, allowing Americans to navigate tariffs more effectively. The adverse effects of tariffs are felt predominantly by foreign entities, and a broad‑based inflation surge is not anticipated. Miran does not consider his stance on interest rates extreme but seeks a quicker achievement of neutral levels.
Projected figures for 2026 and 2027 align closely with the Federal Open Market Committee’s forecasts. Notably, Miran confirmed he has not been involved in discussions regarding the Fed chairmanship.
Meanwhile, the European Union Council has extended sanctions on Russia for another year. Expectations for the upcoming interest rate decision indicate a 96.7% probability of a 25‑basis‑point cut.