The US Senate will vote on Monday to confirm Stephen Miran as a member of the Federal Reserve Board. Miran is nominated by President Trump to take over for Kugler, who has recently stepped down. Most expect Miran to be approved along party lines. If confirmed, he will attend the Federal Open Market Committee meeting on September 16-17. A rate cut of 25 basis points is expected at the meeting, regardless of whether Miran is there.

Senate Voting Activity

Monday’s Senate session will feature a lot of voting. Recently, Republicans used the “nuclear option” to change Senate rules, allowing for a quicker confirmation process for President Trump’s nominees in the executive branch. This new rule lets the Senate confirm multiple nominees at once instead of one by one. The change passed with a 53-45 vote, making the confirmation process more efficient. With Stephen Miran’s vote coming up Monday, the immediate market response is predicted to be minor. A 25 basis point rate cut at the FOMC meeting on September 16-17 is already priced in, with over a 90% likelihood shown by the CME FedWatch Tool. Traders are primarily focusing on the future guidance and the dot plot that will come with the announcement, rather than the rate cut itself.

Longer-Term Rate Path

The real interest now is in the long-term rate direction with Miran joining the board. His appointment is expected to bring a more dovish voice, raising the chances of further easing by year’s end. This is already evident in SOFR futures, with contracts for December 2025 now reflecting almost a 45% chance of another rate cut, up from just 30% last week. Changes in the Fed’s leadership can shift market trends, similar to the Powell pivot in late 2018, which led to a significant rally after a tightening period. Miran’s confirmation is viewed similarly, suggesting a more pro-growth approach from the Fed through 2026. Traders are looking at longer-dated options on equity indexes, preparing for a prolonged low-rate environment. As we approach next week’s meeting, implied volatility is increasing. The VIX has jumped from 16 to just over 19 in recent sessions, showing uncertainty about the Fed’s announcement. Traders are purchasing short-term straddles on the SPY, anticipating a strong market move in either direction once the Fed’s comments are released. Create your live VT Markets account and start trading now.

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