Insights 
VT 
Miran, a Federal Reserve nominee, expressed contentment with the current Bureau of Labor Statistics data, stating there is no evidence of tariff-driven inflation. He noted that while data may sometimes have outliers, current price changes are relative rather than tariff-induced, with US cars and airfares not being tariff-affected.
Miran discussed inflation contributions, mentioning illegal immigrants might impact rising rents, and suggested possible service sector disinflation as immigration policies take effect. He highlighted that Consumer Price Index data is seldom revised and proposed incentive schemes to improve response rates.
Nomination Status
He refrained from commenting on his nomination status or current Federal Reserve policies, stating it depends on Senate timings. He mentioned that tariffs are a burden for the less flexible party and anticipates those tariffs will affect only the countries subjected to them.
Although unable to explicitly share his monetary policy opinions, it’s suggested that Miran supports immediate interest rate reductions. He is nominated for the Federal Reserve role, replacing Adriana Kugler, who left the board on August 8. Board members play a key role, having a permanent vote in all Fed interest rate meetings.
We are watching Fed nominee Miran’s comments closely, as he appears to be a solid dove. His view that inflation is well-behaved and that tariffs aren’t a domestic price issue is significant. This signals a greater chance for lower interest rates ahead.
His perspective aligns with the latest Consumer Price Index report released last week for July 2025, which showed a headline increase of only 0.1%, below the 0.2% we had anticipated. This slowdown, particularly in core goods, gives credibility to the idea that inflation is contained. We note that the core services component, however, remained somewhat sticky at 0.3%.
Interest Rate Derivatives
We should therefore consider positioning for a more dovish Fed through interest rate derivatives. Options on SOFR futures, particularly for the December 2025 and March 2026 contracts, are seeing increased call volume as traders bet on rate cuts. The market is now pricing in a nearly 60% chance of a rate cut by the December 2025 meeting, up from 40% last month.
We remember how the Fed was forced into aggressive rate hikes back in 2022 after initially underestimating inflation. This situation feels different, with a potential board member signaling a desire to cut rates proactively. This could prevent the kind of policy whiplash we saw from 2021 to 2023.
For equity derivative traders, this outlook may dampen long-term market volatility. We see traders selling VIX futures for contracts dated in late 2025, anticipating a calmer market environment if the Fed signals an easing cycle. This makes strategies like selling puts on major indices more attractive, assuming this dovish sentiment gets confirmed.
