Federal Reserve Governor Miran Advocates for December Rate Cut Amid Internal Fed Divisions

This analysis is based on the CNBC report [1] published on November 10, 2025, which covered Federal Reserve Governor Stephen Miran’s comments advocating for a December rate cut. Speaking to CNBC, Miran stated that a 50-basis point cut would be “appropriate” for the December FOMC meeting, while emphasizing that the Fed should at minimum reduce rates by 25 basis points [1].

The market response to Miran’s dovish commentary was notably positive, with major equity indices posting solid gains on November 10, 2025 [0]:

• S&P 500: +0.69% to 6,832.43
• NASDAQ Composite: +0.74% to 23,527.17
• Dow Jones Industrial Average: +0.58% to 47,368.63

Sector performance revealed divergent impacts from rate cut expectations, with Financial Services leading gains (+0.79%) while Technology (-0.87%) and Energy (-0.38%) declined [0].

Miran’s advocacy for larger rate cuts represents a significant dissenting voice within the Federal Reserve. The governor has consistently voted against the quarter-point cuts implemented at both September and October FOMC meetings, though no colleagues joined him in these dissenting votes [1]. This pattern reveals important internal dynamics:

• Miran’s Position
  : Advocates for 50-basis point cuts, emphasizing forward-looking policy based on 12-18 month economic outlook
• Majority Position
  : Has implemented more cautious 25-basis point cuts
• Additional Dissent
  : Kansas City Fed President Jeffrey Schmid also voted “no” in October, but for no cuts rather than larger cuts [1]

Fed Chair Jerome Powell has acknowledged “wide dispersion of opinion” among officials [1], suggesting the December decision could be particularly consequential for market positioning and policy direction.

Miran emphasized the critical importance of preemptive monetary policy, stating “you need to make policy now based on where you think the economy is going to be a year to a year and a half from now” [1]. This forward-looking approach creates potential policy misalignment risks if economic conditions evolve differently than anticipated, particularly given current data limitations.

Miran’s rate cut advocacy emerges amid several concerning economic indicators [1]:

• Signs of labor market deterioration
• Inflation remaining above the Fed’s 2% target
• Emerging strains in housing and private credit markets [2]
• Government shutdown limiting availability of official economic data

The government shutdown presents a particularly significant challenge, as it impairs the Fed’s access to reliable economic statistics, potentially leading to policy decisions based on incomplete information [1].

According to CME Group’s FedWatch tool, markets were pricing in approximately 63% probability of a December rate cut at the time of Miran’s comments [1]. This represents a gradual decline from the October FOMC meeting, suggesting growing uncertainty about monetary policy direction. The gap between Miran’s preferred 50-basis point cut and market expectations creates significant policy uncertainty.

1. Financial Services Outperformance
   : The sector’s strong performance (+0.79%) [0] directly correlates with rate cut expectations, as banks typically benefit from improved net interest margins and increased loan demand during accommodative monetary policy periods.

2. Technology Sector Pressure
   : The Technology sector’s decline (-0.87%) [0] reflects concerns about higher rate uncertainty, despite Miran’s dovish stance, suggesting investors remain cautious about the timing and magnitude of policy changes.

3. Defensive Positioning
   : Healthcare’s outperformance (+1.12%) [0] indicates investors are seeking defensive exposure amid economic uncertainty and policy ambiguity, even with potential rate cuts on the horizon.

1. Policy Credibility Risk
   : The “wide dispersion of opinion” within the FOMC [1] raises questions about the Fed’s ability to present a unified policy message, potentially undermining market confidence in monetary policy predictability.

2. Data-Driven Policy Limitations
   : The government shutdown’s impact on economic data availability [1] highlights the vulnerability of data-dependent monetary policy frameworks during periods of information scarcity.

3. Forward-Looking vs. Reactive Policy Tension
   : Miran’s emphasis on 12-18 month policy lags [1] creates tension with more data-dependent approaches, potentially leading to policy missteps if economic forecasts prove inaccurate.

1. Policy Implementation Risk
   : The significant gap between Miran’s preferred 50-basis point cut and the more likely 25-basis point reduction (or no cut) creates substantial policy uncertainty [1]. Market participants should be aware that the 63% implied probability of a December cut suggests significant risk of market disappointment if cuts don’t materialize.

2. Data Reliability Risk
   : Government shutdown-impaired data quality may lead to policy missteps based on incomplete information [1]. This creates an environment where monetary policy decisions could be disconnected from actual economic conditions.

3. Inflation Persistence Risk
   : With inflation still above the 2% target [1], aggressive rate cuts could reignite price pressures, potentially forcing the Fed into more aggressive tightening later.

4. Internal Fed Division Risk
   : The acknowledged “wide dispersion of opinion” among FOMC members [1] suggests potential for unexpected policy outcomes, increasing market volatility around the December meeting.

1. Financial Services Sector
   : Rate cut expectations, particularly if larger cuts materialize, could provide continued support for bank stocks through improved net interest margins and loan demand growth [0].

2. Defensive Positioning
   : Healthcare’s strong performance amid uncertainty [0] suggests opportunities in defensive sectors that can weather policy ambiguity and economic uncertainty.

3. Volatility Trading
   : The combination of internal Fed divisions and data limitations creates potential for increased market volatility around the December FOMC meeting, offering opportunities for volatility-based strategies.

: The divergence between Miran’s aggressive stance and the more cautious majority approach creates significant uncertainty about December policy outcomes [1]. Market participants should monitor additional Fed officials’ public statements for clues about the likely policy direction.

: The government shutdown has restricted access to official economic statistics [1], making it difficult to assess the true state of the economy and potentially increasing reliance on forward-looking guidance from officials like Miran.

: Current market pricing shows 63% probability of a December rate cut [1], suggesting room for both positive surprises (if larger cuts occur) and negative surprises (if cuts are delayed or smaller than expected).

: Financial Services appears positioned to benefit from rate cut expectations, while Technology faces pressure from rate uncertainty [0]. Defensive positioning in Healthcare may provide stability amid policy ambiguity.

:

• Additional Fed officials’ public statements on December policy
• Resolution of government shutdown and data availability
• Key economic releases (inflation, employment) when available

:

• Housing market data for signs of credit strain
• Private credit market conditions
• Consumer spending and business investment trends

:

• Fed internal dynamics and voting patterns
• Market pricing of December policy expectations
• International economic developments affecting U.S. monetary policy

The combination of data limitations and internal Fed divisions creates an environment of heightened policy uncertainty that could lead to significant market volatility around the December FOMC meeting. Market participants should prepare for a wider range of potential outcomes than typical, given the divergence between Miran’s aggressive stance and the more cautious approach of other officials [1].