Fed Governor Miran’s Near-Target Inflation Remarks and Market Reaction

This analysis is based on Federal Reserve Governor Stephen Miran’s remarks on Fox Business’ “Making Money” (December 19, 2025, 13:15 EST), where he stated underlying inflation is near the Fed’s 2% target [1]. Miran, a dovish governor serving Adriana Kugler’s remaining term, dissented from December 2025’s 25bps rate cut in favor of a 50bps reduction [3].

His claim aligns with November 2025 inflation data: headline CPI (2.7% YoY) and core CPI (2.6% YoY) were elevated, but the 3-month (Sep-Nov) average core CPI annualized to ~1.92%—very near the Fed’s target [5]. The U.S. equity market reacted positively, interpreting Miran’s comments as supportive of future rate cuts: S&P 500 +0.62%, NASDAQ +0.80% (led by rate-sensitive tech), Dow +0.33% [0]. Prior to his remarks, the CME FedWatch Tool showed 79.0% probability of steady rates in January 2026, but his comments may have shifted expectations toward two 25bps 2026 cuts (double the Fed’s median projection) [2][7].

1. Inflation Trend Disparity
   : The 3-month annualized core CPI (1.92%) contrasts with higher headline/core YoY figures, highlighting the importance of short-term trends in Miran’s assessment [5].
2. FOMC Divisions
   : Miran’s dissent underscores ongoing policy rifts (2 members preferred steady rates, Miran favored deeper cuts), raising concerns about future policy predictability [3].
3. Market Sentiment Shift
   : Investors prioritized near-term inflation trends over the Fed’s projections, signaling growing dovish expectations [0][2].
4. Data Uncertainty
   : A 43-day government shutdown may have distorted November CPI data [2], creating reliability gaps until the Fed’s preferred core PCE metric releases in January 2026.

1. Data Distortions
   : Shutdown-related CPI skews could undermine Miran’s inflation assessment [2].
2. Policy Volatility
   : FOMC divisions may lead to unexpected rate decisions, increasing market volatility [3].
3. Core PCE Surprise
   : A higher-than-expected November core PCE reading could reverse market optimism [6].
4. Fed Independence Concerns
   : Miran’s White House leave status has raised political influence questions [3].

1. Rate Cut Tailwinds
   : Near-target inflation could support further rate cuts, benefiting equity markets (especially tech) [0].
2. Clarity from Core PCE
   : The January 2026 core PCE release will resolve current inflation data uncertainties [6].

• Event
  : Fed Governor Miran’s December 19, 2025, Fox Business appearance on inflation [1].
• Inflation Metrics
  : 3-month core CPI (1.92% annualized), headline CPI (2.7% YoY), core CPI (2.6% YoY) [4][5].
• Market Impact
  : S&P 500 +0.62%, NASDAQ +0.80%, Dow +0.33% (Dec 19, 2025) [0].
• FOMC Context
  : Miran dissented for 50bps cut; FOMC remains divided [3].
• Monitoring Factors
  : November core PCE (Jan 2026), January 2026 FOMC, rental cost trends [6][7].