Bessent has commented in his second interview with Semafor. He mentioned the likelihood of Miran being a voter at the September FOMC meeting.
Additionally, Bessent expressed his intention to draft a brief for the US solicitor general. This brief would support Trump’s tariffs.
Miran’s Decision On Interest Rates
Miran’s potential decision to maintain interest rates in September would be unexpected.
We’re seeing chatter that a new voter, Miran, could be on the September FOMC with a real chance of voting to hold rates. This is a significant development, as Fed Funds futures currently imply a 70% probability of a 25 basis point hike after the August CPI report came in at 3.4%. A surprise hold would catch a lot of the market offside.
We believe this uncertainty makes buying volatility attractive in the coming weeks. The MOVE index, a key measure of bond market volatility, has already ticked up from its summer 2025 lows of 95. Positioning through short-dated options on SOFR futures could provide an effective hedge against a surprise decision from the Fed.
The renewed discussion around tariffs adds another layer of complexity for us. Historically, like what we saw during the 2018-2019 period, broad tariffs can be inflationary, putting more pressure on the Fed to stay tight. This creates a conflicting signal if a new dovish member joins the committee, potentially leading to choppy action in currency pairs like USD/JPY.
Official News On Fed Governor Confirmation
Our immediate focus should be on any news from official channels regarding Fed governor confirmation hearings. The market has been anchored to the idea of one more hike this cycle, a view reinforced by Fed Chair Powell’s hawkish tone at the Jackson Hole symposium just last month in August 2025. Any credible report that Miran will be a voting member requires us to immediately re-evaluate our rate positions.
