Fed Official Argues for 100 Basis Point Rate Cut, Bitcoin's Trajectory in Focus

Federal Reserve Governor Stephen Miran recently suggested that a 100 basis point cut in the benchmark interest rate should be considered this year to alleviate the current overly tight monetary policy environment. He believes that the current interest rate level exceeds actual economic demand, and if maintained, it may excessively suppress the recovery of the job market and corporate investment, thereby dragging down overall economic balance.

Miran pointed out that the current so-called "neutral rate" (r-star) may be lower than the market generally expects, which means that even if interest rates are in a higher range, the actual policy is still tight. As core inflation gradually approaches the 2% target, especially as the lagging effects of housing costs gradually subside, further easing space is forming. He emphasized that as long as inflation continues to decline moderately and the labor market does not experience a rapid slowdown, a moderate rate cut will help achieve the dual goals of employment and price stability.

This view has triggered a reassessment of the Fed's future policy path in the market. If expectations of a rate cut rise, Treasury yields may come under downward pressure, and mortgage rates are also expected to gradually fall, thereby boosting risk asset sentiment. As a representative of safe-haven and interest rate-sensitive assets, Bitcoin's recent price has stabilized near $71,429, although it is below the 50-day moving average (approximately $77,048) and the 200-day moving average (approximately $96,782), the volatility remains around 4.5%, and the RSI is in the neutral range, indicating that the market is watching for policy signals. It is worth noting that Miran's position differs from that of some of his Fed colleagues. Other officials tend to believe that current interest rates are close to neutral and there is no need to rush to relax. Miran, on the other hand, is more concerned about the potential downside risks in the job market and advocates releasing policy flexibility in advance, provided that inflation continues to fall. This divergence also reflects the Fed's internal differences in judging the resilience of the economic recovery and the stickiness of inflation. As core inflation data continues to improve, the market is closely watching whether the September FOMC meeting will start a new round of easing cycle. If Miran's views gain more support, risk assets such as Bitcoin may usher in a new upward catalyst.