The US Senate Banking Committee will have a hearing on September 4 for Stephen Miran, a Trump nominee for the Federal Open Market Committee (FOMC). The goal is to confirm Miran before the FOMC meeting on September 16 and 17. Miran is currently the chair of the president’s council of economic advisers. He shares the president’s views on monetary policy, advocating for lower interest rates. Miran believes tariffs don’t affect inflation and favors giving the president more control over the Federal Reserve, including the ability to fire its leaders without limitations.

Market Reaction To Upcoming Events

The market is getting ready for the FOMC meeting on September 16-17, with Miran’s confirmation hearing happening just before. A key question is whether political pressure will lead to a rate cut, even if the economic data doesn’t support it. The CME FedWatch Tool shows this uncertainty, indicating a 55% chance of a quarter-point cut, rising from only 30% last month. However, the push for a rate cut faces tough numbers that suggest the Fed should keep rates steady. The July 2025 CPI reading was 3.1%, still above the 2% target. The latest jobs report indicated some slowdown, with 160,000 jobs added, but this isn’t enough to change policy right away. Political tensions with the Fed usually cause market jitters, indicating higher volatility ahead. A simple strategy is to consider call options on the VIX, as this could benefit from increased uncertainty around the hearing and the FOMC meeting. This isn’t about choosing a direction but rather anticipating larger market swings in early September.

Investment Strategies And Implications

If you have a strong opinion about the outcome, interest rate derivatives are a direct way to play it. You can express your belief in the political pressure leading to a cut by using SOFR futures contracts for the upcoming months. On the other hand, if you think the Fed will stick to the data and not cut rates, you might want to consider options on bond ETFs like TLT. There’s also a larger issue regarding the Fed’s independence, which hasn’t faced such direct challenge since 2019. If the market starts to see the Fed as a political tool, it could weaken the US dollar in the medium term. Traders might look at call options on currency ETFs for the Euro or Swiss Franc as a hedge against this possibility. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now