Fed Governor Miran Sees Two More Rate Cuts This Year as “Realistic”: What That Means for Markets

Washington, D.C. In remarks that immediately grabbed investor attention, Federal Reserve Governor Stephen Miran said Wednesday that two more interest rate cuts this year sounds realistic, pointing to shifting risk dynamics, trade uncertainty, and expectations of disinflation.

Addressing reporters after a CNBC appearance, Miran argued that with the balance of economic risks tilting downward, it is “even more urgent to get to a neutral rate quickly.” He flagged trade uncertainty and their impact on growth as one of several tail risks the Fed must weigh.

He added that disinflation is expected to gather strength over the next year, predicting inflation will gradually decelerate toward the Fed’s 2 percent target within roughly 18 months.

Miran also cautioned that the U.S. economy is increasingly vulnerable to shocks under the current restrictive policy stance, suggesting the path to neutral may need to be faster than the pace some policymakers prefer.

Why Miran’s View Matters (And What’s Shifting)

Aligns with market expectations
Financial markets have been betting on more easing. Miran’s view reinforces the narrative of Fed rate cuts this year gaining broader institutional support.
Adds weight to internal Fed debate
Some officials are cautious about premature easing if inflation sticky. Miran’s dovish stance introduces more urgency into internal deliberations.
Trade risks as a catalyst
By highlighting trade uncertainty as a key factor, Miran is signaling that exogenous external pressures (like U.S.–China tensions) could tilt the balance in favor of more aggressive easing.
Disinflation as the backdrop
His forecast of substantial disinflation over the next year gives a narrative basis for cuts not just fear-based easing, but easing backed by softening price pressures.
Execution & timing are everything
Two more cuts is a projection, not a guarantee. The pace and magnitude will depend heavily on data (especially inflation, employment) and the resilience of the economy.

Potential Scenarios & Risks

Base case: The Fed cuts 25 basis points in October and again in December, reaching perhaps 3.50–3.75 percent by year-end (depending on starting level).
More aggressive easing: If labor markets soften sharply or growth slows, the Fed might cut deeper (e.g. 50 bps) or more frequently.
Delayed or stalled cuts: Strong inflation or unexpected economic resilience could delay cuts, making Miran’s projection optimistic.
Market misread: If investors price in too much easing too soon, disappointment can trigger volatility.

FAQs

Q1: Did Miran really say two more cuts this year are realistic?
A1: Yes. Governor Miran publicly stated that expecting two more interest rate cuts this year sounds realistic in light of recent shifts in economic risk.

Q2: What conditions must hold for those cuts to happen?
A2: Lower inflation, weakening labor markets, manageable growth, and lack of major shock (e.g. trade war, credit crisis). Tight policy or sticky inflation could derail the plan.

Q3: Could the Fed cut more (or faster) than two times?
A3: Yes in a downside scenario where conditions worsen, the Fed might accelerate cuts or cut deeper. But they’ll proceed cautiously given their dual mandate.

Q4: How does Miran’s view compare with other Fed officials?
A4: Some like Governor Michelle Bowman also expect two cuts by year-end. Others worry about inflation. Miran’s vocal support for quicker easing adds pressure.

Q5: Will markets move on this?
A5: Absolutely. Bond yields, stock valuations, and long-duration assets respond fast to expectations of easing. Miran’s comments may fuel short-term moves.

Q6: Is this an official Fed forecast?
A6: No it’s Miran’s personal view as one governor. The FOMC sets policy collectively. His voice is influential but not determinative.