Stephen Miran has been confirmed by the Senate with a vote of 48-47. He will fill the vacancy left by Adriana Kugler on the Federal Reserve Board.
Miran will be the first executive-branch official to join the central bank’s board since 1935. He will attend the Federal Open Market Committee meeting on September 16-17.
Pending Term of Service
Miran’s term is set to last until January. At that time, he is expected to return to his role as chairman of Trump’s Council of Economic Advisers.
Lisa Cook is also scheduled to attend the same FOMC meeting.
The confirmation of Stephen Miran to the Fed board is a major shift. He is expected to push for lower interest rates, adding a political angle to the FOMC meeting that starts today, September 16, 2025. This move challenges the Fed’s traditional independence from the White House, creating new uncertainties.
We’ve already seen a significant reaction in the derivatives market. Overnight, pricing for the CME’s FedWatch Tool shows the probability of a November rate cut has jumped from 35% to nearly 60%. This comes even after last week’s Consumer Price Index report for August 2025 showed core inflation holding stubbornly above the Fed’s 2% target at 3.1%.
Market Reactions and Predictions
Traders should consider positioning for lower rates in the coming weeks. We are seeing increased buying of December SOFR futures, pushing implied yields down, and long positions in 2-year Treasury note futures. Buying call options on bond futures like the ZN could be a lower-risk way to play this expected dovish shift.
This political pressure on the Fed is also bullish for equities, so we anticipate a move higher in S&P 500 futures. However, the break from tradition could also create short-term choppiness and uncertainty about the Fed’s credibility. Therefore, looking at VIX call options expiring in October might be a smart hedge against any unexpected fallout from the FOMC statement tomorrow.
A more politically influenced, dovish Fed will almost certainly weaken the U.S. dollar. We expect to see traders building short positions in Dollar Index futures, anticipating a drop below the 102 level it has held this quarter. This situation feels similar to what we saw back in the early 1970s, when political pressure led to an accommodative monetary policy that ultimately let inflation get out of control.
