The Federal Reserve may be preparing for its biggest rate move since early 2020, as investors ramp up bets that the central bank will deliver a 50-basis-point FED cut before year-end.

Speaking to Fox Business, Fed Governor Stephen Miran said he would support a half-point cut at the next policy meeting, warning that keeping rates “as restrictive as they are” amid global trade tensions could worsen the downturn.

“If monetary policy stays this tight and you have a shock like this hit the economy, it does materially increase the negative consequences,” Miran said.

He pointed to China’s rare earth export curbs and the latest tariff impasse as new downside risks for US growth. Miran added that while the committee may prefer smaller 25-point moves, the balance of risks has shifted, making it “urgent that we get to a more neutral place in policy quickly.”

Miran, who joined the Fed Board last month, has previously argued for 1.25 percentage points of additional easing beyond the quarter-point cut approved in September.

Traders See Bigger Cuts Coming

Options linked to the Secured Overnight Financing Rate (SOFR) show a sharp rise in bets on a 50-point move by December.
Two-year Treasury yields have dropped to 3.5%, and the 10-year hovers just above 4%, both near multi-month lows.

While Fed Chair Jerome Powell reiterated that a quarter-point cut remains the “base case,” Miran’s stance and fresh hedging activity suggest that markets are bracing for a more forceful pivot — especially with trade tensions escalating and government data delayed by the shutdown.

Miran: Housing, Not Markets, Drives Policy

In a separate comment, Miran emphasized that the Fed’s focus shouldn’t be on “asset price bubbles,” but on housing conditions, which he described as “the most important financial factor for the economy.”


The Fed is edging closer to a major policy shift, with political pressure, global trade turbulence, and weakening data aligning for a potentially historic 50-basis-point rate cut by year-end.

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