Federal Reserve Board member Stephen Miran stated that recent data supports his belief that a recession is not on the horizon. He pointed out that the risk of a recession increases if interest rates are not lowered soon and expects a rate cut to happen. Miran also mentioned that tax refunds next year could provide a boost to the economy, and he feels less need to push for a significant rate cut over time. Additionally, he noted that he might stay on the Board if a successor is not confirmed by January 31. The US Dollar showed mixed results against major currencies. It was strongest against the Swiss Franc but weakest against others like the Euro and Canadian Dollar. The Dollar fell by 0.30% against the Euro and 0.43% against the Pound Sterling. These changes highlight how the Dollar’s strength or weakness compares to other currencies. Overall, the currency market remains complex and challenging for those tracking exchange rates.

Fed Official Signals Rate Cut

With a key Federal Reserve official indicating that a policy rate cut is likely, the outlook for the near future is clearer. He believes that not cutting rates raises the risk of a recession, sending a strong message to the market. This dovish approach has already put pressure on the US Dollar, which dropped against most major currencies today. Recent economic data supports this view. The November 2025 Consumer Price Index (CPI) report showed inflation cooling to 2.8%, suggesting that price pressures are easing. Job growth has also slowed, with the last report showing an increase of 150,000 jobs, indicating that the economy is cooling enough for the Fed to take action. The market is actively adjusting to this perspective. Fed fund futures now suggest an over 80% chance of a 25 basis point rate cut at the January 2026 FOMC meeting. This follows three rate reductions from the Fed earlier in 2025, indicating a clear trend toward easing.

Opportunities For Traders

For options traders, this clear trend suggests that positioning for a lower Dollar and a rise in equities could be beneficial. With the CBOE Volatility Index (VIX) currently low around 14, implied volatility is inexpensive, making long call options on indices like the S&P 500 attractive. Selling puts in interest rate-sensitive sectors could also be a way to earn premium while maintaining a bullish stance. In currency trading, shorting the US Dollar seems to be the easiest path. Buying call options on pairs like EUR/USD and GBP/USD fits well with the current trend. We should also keep an eye on USD/JPY, as a Fed easing cycle could significantly lower the pair’s value in the coming year. Gold is another area worth watching, recently reaching a new all-time high above $4,420 an ounce. A weaker Dollar and declining real interest rates create strong conditions for gold. Using call options or bull call spreads on gold futures can be a smart way to benefit from further price increases. Create your live VT Markets account and start trading now.

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