Fed Governor Stephen Miran Expects U.S. Interest Rate Cut in December 2025

In a noteworthy development for the U.S. central-bank policy outlook, Stephen Miran, a governor of the Federal Reserve, told the Monetary Matters podcast that he expects another interest-rate reduction in December 2025 unless an unexpected economic surprise changes the trajectory. 

What Did Miran Say?

Miran, who has emerged as a dovish voice on the Fed board, made the remarks while underscoring that nothing is guaranteed. He said:

“I expect us to cut in December unless there’s some sort of surprise. When you look at the distribution of votes around the table, it’s different than the distribution of views. And so … I would expect based on current information that we end up cutting in December, but nothing is absolutely guaranteed at the end of the day.” 

 

He emphasised that although many non-voting policymakers may prefer to wait, the voting configuration and current economic data suggest that a cut is likely given no major inflation or employment shock.

Why the December Rate Cut Signal Matters

1. Markets pricing and expectations: Miran’s public expectation adds weight to expectations that the Fed will ease. Markets may adjust long-term interest rates, bond yields, equities and risk assets accordingly.
   
   

2. Policy shift indication: The remark signals a possible shift from higher-for-longer to more accommodative policy especially significant given Miran’s earlier calls for steeper easing. 
   
   

3. Labor market and inflation balance: The decision to cut rates will hinge on how the Fed views the trade-off between weakening labour-market indicators and still-elevated inflation. Miran is emphasising risk of over-tightness. 
   
   

4. Market sectors and assets: If a December cut is indeed likely, sectors that benefit from lower borrowing costs such as housing, autos, and risk assets like stocks and crypto may gain early momentum.

Context: Fed Policy and Miran’s Approach

Miran joined the Fed board after vote of the Senate and has diverged from many of his colleagues in favour of more aggressive rate cuts. At the September 2025 policy meeting, he was the lone dissenter, arguing for a 50-basis-point reduction instead of the 25-basis-point cut that was implemented. 

In speeches, he has argued that structural changes such as declining population growth and shifts in the neutral interest rate justify a lower policy rate than the wider Fed consensus. 

What It Means For Investors and Markets

• Preparation for easing: Investors may begin positioning for looser monetary conditions. Bond yields could fall, while equities may rally on expectations of cheaper capital.

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  Inflation and employment data vigilance: Given Miran’s caveat (“unless there’s some sort of surprise”), market participants must closely monitor upcoming inflation, job-growth and wage data they could alter the cut timetable.
  
  

• Potential risk: If data surprise to the upside (i.e., inflation remains stubborn or employment remains strong), the Fed may hold off, creating a gap between expectation and reality which could lead to market volatility.

What to Watch Next

• FOMC meeting statements and dots: Progress toward a December cut will be clearer when the Fed publishes its dot-plot projections and forward guidance.
  
  

• Economic data releases: Key metrics such as CPI, PPI, non-farm payrolls and wage growth in the next few weeks will be critical.
  
  

• Market reactions: Treasury yields, the U.S. dollar and equity indices will test the credibility of the December-cut expectation.

Frequently Asked Questions (FAQs)

Q1: What did Stephen Miran announce about the December rate cut?
He said he expects the Fed to cut interest rates in December 2025, based on current vote distribution and economic data but emphasised that the outcome is not guaranteed.

Q2: Why is this expectation significant for financial markets?
Because it signals a possible easing of monetary policy, which could lower borrowing costs, boost risk assets and influence bond yields and currency values.

Q3: What could stop the Fed from cutting in December?
Economic surprises such as persistent inflation, strong wage growth, tight labour markets or other unforeseen shocks could prompt the Fed to delay or skip a cut.

Q4: How does Miran’s view compare with other Fed officials?
Miran is more dovish than many of his colleagues: he has advocated for larger cuts and more rapid easing, diverging from a more cautious Fed majority.

Q5: What should investors look for in the coming weeks?
Key data releases (CPI, jobs, wages), Fed dot-plot updates, and market pricing of rate-cut probability all will hint at whether December is likely.

Q6: If the Fed cuts in December, how might that impact the economy?
Lower interest rates can stimulate growth by reducing borrowing costs for consumers and businesses, supporting sectors like real estate and autos, and possibly boosting equity markets though inflation and employment dynamics must still be managed.