Fed Governor Stephen Miran has again called for rapid cuts as the October FOMC meeting approaches. This time, he alluded to the rising U.S.-China trade tensions as the reason why they need to move fast on making more Fed rate cuts. The FOMC is expected to cut rates again this month, which could impact the crypto market.
Stephen Miran Urges Quick Fed Rate Cuts Amid Trade Tensions
According to a Bloomberg report, the Fed governor said that recent trade tensions have increased the uncertainty around the economic growth outlook, making it more necessary for them to lower rates quickly. He noted that there are more downside risks than there were a week ago, alluding to the uncertainty around trade between the U.S. and China, which Miran claimed has introduced a new tail risk.
As CoinGape reported, Trump recently announced a 100% tariff on China, starting November 1, raising concerns that a full-blown trade war may be on the horizon. Miran, who has been calling for more Fed rate cuts for a while now, noted that there has been a change to the balance of risks, which makes it expedient for them to get to a more neutral place in monetary policy quickly.
This comes even as the Fed is likely to make lower interest rates again at the upcoming October FOMC meeting. CME FedWatch data shows that there is a 96.7% chance that the Fed will make a 25 basis points (bps) cut at the October 29 meeting.
Notably, Miran said that he sees two more Fed rate cuts this year as being realistic. Other Fed officials, including Fed Governors Chris Waller and Michelle Bowman, have also shown support for two additional cuts by year-end.
Fed Chair Jerome Powell also indicated yesterday that they will likely make another cut this month. He noted that the outlook hasn’t changed much since their September meeting, when they made the first cut of the year due to the weakening labor market.
Source: https://coingape.com/stephen-miran-calls-for-rapid-fed-rate-cuts-amid-u-s-china-trade-tensions/
