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Stephen Miran, a member of the Board of Governors of the Federal Reserve, said on Wednesday that another two interest rate cuts this year seem realistic for the economy. He made his remarks amid rising tensions in U.S.-China trade policies, which began last week.
Miran believes that the labor market began to weaken this year due to the uncertainty over trade policies. He also argued that there may have been the biggest tax hike in history, and firms were probably holding off on investing until the recent tax bill (Trump’s One Big Beautiful Bill) was established.
U.S.-China’s re-ignited trade war fuels Fed policy decisions
Stephen Miran:
"The labor market continued to weaken in the first half of this year.”
— Spencer Hakimian (@SpencerHakimian) October 15, 2025
The economist noted that the U.S. had the biggest rearrangement of global policy in half a century. He also argued the Fed held off in making decisions in the first half of the year as deals were being made on policies.
Miran acknowledged that uncertainty led to the weakness seen in the first half of 2025. He also said that until last week, he had been operating under the assumption that a lot of that uncertainty had dissipated, since the tax bill had become law and trade deals had been settled for most of the U.S.’s large trading partners.
The Fed governor also believes that China decided last week that the deals made earlier in the year in Geneva, London, and Madrid were no longer bound to them. Miran said his assumption that the growth outlook was positive changed after China reneged on the deals that had been made.
“And so I think it’s incumbent upon us as policymakers to think about the introduction of a new tail risk. The left tail has become a little fatter , as we might say, and we have to recognize that. There potentially is some difference now versus where we thought things were a week ago.”
–Stephen Miran, Member of the Board of Governors of the Federal Reserve.
Miran believes it’s incumbent upon the Fed as policymakers to recognize that the change should be reflected in policy. According to him, it would be reasonable for the central bank to consider two additional rate cuts at the upcoming Fed meetings.
The Fed will hold its next meeting on October 28-29, with its final meeting scheduled for mid-December. At the time of publication, the CME FedWatch tool shows a 96.7% probability that the Fed may cut interest rates on October 29 and a 95.8% chance for another rate cut on December 10.
Michelle Bowman, a member of the U.S. Federal Reserve Board of Governors, said on Tuesday that she still anticipates two more rate cuts from the Federal Reserve at its final two meetings of 2025. She also argued that the central bank will continue to be on a path of lowering rates as long as the labor market and other economic data evolve as the Fed expects.
Central bank seeks to balance the labor market and inflation
The central bank cut interest rates last month by a quarter of a basis point to 4.00%-4.25%, its first cut since December. Bowman and Fed Governor Christopher Waller championed last month’s rate cut at the previous meeting in July, saying that they believe Trump’s trade policies will not lead to persistent inflation and that the balance of risk is tilted toward the job market.
Federal Reserve Chair Jerome Powell said last month that the central bank is trying to balance against two risks that could call for competing policy decisions: the weakness in the job market and rising inflation. As Cryptopolitan previously reported, Powell also warned on Tuesday that a slowdown in hiring poses a growing risk to the U.S. economy.
Powell noted that despite the federal government shutdown cutting off official economic data, the outlook for employment and inflation didn’t seem to change much since September’s meeting. He also highlighted that the Fed is slightly worried about the job market than its other congressional mandate, which is to maintain stable prices.
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