Stephen Miran, discussing economic trends, mentions that current border policies are impacting shelter prices. He expects negative net migration to lead to significant disinflation. Miran places himself at the lower end of the dot plot and plans to elaborate on his views in an upcoming speech. He believes that falling home prices will balance out strong economic growth, which will help reduce inflation. Miran disagrees with any assertion that he’s acting only in the White House’s interest and cautions that strict Federal Reserve policies could eventually hurt the job market.

Anticipated Economic Growth

Miran expects stronger growth in the year’s second half but doesn’t think it will significantly change monetary policy. He’s not worried about inflation from tariffs, arguing they cause a one-time price jump, unlike the lasting effects of 1.5 million migrants leaving the country. Signs show that decreasing home prices may lower inflation in the upcoming months. The latest Case-Shiller data from July 2025 revealed a slight decline—the first this year—which supports this idea. It indicates that a major inflationary pressure from the past few years might finally be changing. A significant factor appears to be a recent shift in migration patterns, which had previously increased rental demand and shelter costs. New reports for the second quarter of 2025 indicated negative net migration for the first time since the pandemic. This demographic change could lead to sustained downward pressure on shelter prices, a key part of the Consumer Price Index.

Economic Environment and Market Implications

Given these disinflationary trends, we should think about preparing for a more dovish Federal Reserve than the market currently anticipates. The August 2025 jobs report, showing job growth slowing to 150,000, reinforces the notion that the Fed’s strict policies are starting to strain the economy. This environment favors trades that benefit from lower future interest rates, such as buying SOFR futures for 2026 delivery. This scenario, where economic growth is strong but inflation drops, creates a positive environment for stocks. If the Fed indicates a policy shift soon, we might see a market rally, especially in rate-sensitive technology and growth stocks. Traders could consider buying call options on the Nasdaq 100 index (NDX) to take advantage of this potential market change. The main point is that home prices are expected to decline, so bearish positions on the real estate sector may be appropriate. Even if the broader market rallies due to lower rates, the root cause of disinflation is weakness in housing. Therefore, purchasing put options on major real estate ETFs, which have remained strong throughout much of 2025, might be a direct play on this forecast. Create your live VT Markets account and start trading now.

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