Miran says half-point cut 'appropriate' for December, but Fed should at least reduce by a quarter point

Core Viewpoint - Federal Reserve Governor Stephen Miran advocates for further interest rate cuts to prevent potential economic softening, suggesting a more aggressive approach than the traditional quarter percentage point reductions [1][2]. Group 1: Interest Rate Cuts - Miran supports a 50 basis point reduction, with a minimum of 25 basis points, despite the Federal Open Market Committee (FOMC) opting for quarter-point cuts in September and October [2][4]. - There was a lack of consensus among Fed officials, with only two votes against the October cut, indicating a wide range of opinions on the matter [3]. - Markets are currently pricing in a 63% chance of a third rate reduction in December, although this probability has been decreasing since the October meeting [6]. Group 2: Economic Outlook - Miran emphasizes the need for forward-looking policy decisions, arguing that current data may not accurately reflect future economic conditions, which could take 12 to 18 months to manifest [5]. - He notes that available data shows a softening in both inflation and the labor market, suggesting that the Fed should adopt a more dovish stance than previously indicated [5].