Federal Reserve governor Stephen Miran talked about recent monetary policies, highlighting the importance of looking ahead. Wage gains are slowing, and changes in border policy are believed to help lower inflation. Miran warns against using old data for making policy choices. Recent data since September suggests a more careful approach to monetary policy, which could lead to lower interest rates.

Performance of the US Dollar

The US Dollar had mixed results against major currencies. It rose the most against the British Pound, increasing by 0.18% against the euro and slightly gaining 0.02% against the yen. Analyzing the currency exchange table shows how the US Dollar performed compared to other major currencies. The changes are shown in percentages, with the US Dollar experiencing both rises and falls based on the currency pair. FXStreet offers insights into market trends, covering major currency behaviors. They emphasize that this information should not be seen as investment advice and suggest conducting personal research before making any financial choices. A key Federal Reserve official indicated that recent data supports interest rate cuts, promoting a forward-thinking monetary policy. This cautious stance is based on slowing wage gains and falling shelter inflation, which have driven price pressures. This signals that the central bank may soon shift towards easing policy. However, derivative markets appear to be behind, with Fed Funds futures showing less than a 50% chance of a rate cut at the December FOMC meeting. Surprisingly, the US dollar strengthened today, contrary to expectations of easing. This suggests the market hasn’t fully absorbed this forward guidance, creating a potential opportunity for traders.

Signals for Traders

The case for cuts is reinforced by the latest October jobs report, which showed the unemployment rate slightly increasing to 4.2%. More notably, average hourly earnings growth slowed to a 3.5% annual rate, a significant drop from the over 4% levels earlier in 2025. This indicates that wage-driven inflation is no longer a major concern for policymakers. Core inflation for October also came in below expectations at 2.8%, marking its third straight monthly decline. This aligns with the outlook on shelter disinflation, as national rental vacancy rates have reached a two-year high of 6.8%. These figures complicate the Fed’s case for maintaining its strict policy for much longer. Traders should consider preparing for lower short-term interest rates and a weaker US dollar in the coming weeks. Options strategies like buying interest rate futures puts or selling out-of-the-money dollar calls may be effective for positioning this expected policy shift. The current low chance of a December cut offers a valuable opportunity if this official’s viewpoint prevails. A similar situation occurred in late 2018 when the market was slow to recognize a Fed shift away from rate hikes. Traders who positioned themselves for the eventual easing cycle that began in 2019 were well rewarded. The present scenario, with a vocal Fed official advocating for easing in a skeptical market, feels very familiar. Create your live VT Markets account and start trading now.

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