Federal Reserve Governor Stephen Miran stated that oil price fluctuations resulting from the US-Israel conflict with Iran are not sufficient to shake his baseline expectation of four rate cuts this year, and the Fed should wait for more information to settle before adjusting its policy outlook.
Miran said in an interview with Bloomberg on Monday, &#34;Before we truly change our outlook, we should wait for all the information to come in,&#34; adding, &#34;Looking ahead 12 months, it is still too early to form a clear judgment.&#34; His path of four rate cuts this year, set before the conflict, remains unchanged.
The Middle East conflict has driven oil prices significantly higher, leading to concerns about upward pressure on inflation, a drag on economic growth, and the labor market. The Federal Reserve maintained its benchmark interest rate unchanged for the second consecutive time last week, with Chairman Powell emphasizing that officials need to see more progress on inflation. Miran cast a dissenting vote on this decision, advocating for a 25 basis point rate cut.
Although Miran acknowledges that sustained high oil prices could eventually transmit to broader goods and services prices, his current statement indicates that short-term geopolitical shocks are not yet enough to prompt him to reassess the easing path for the year.
<h2>Fed Holds Steady, Miran Votes Dissent</h2>
The Federal Reserve held its benchmark interest rate steady for the second consecutive policy meeting last week, citing the high economic uncertainty stemming from the US-Israel conflict with Iran as a reason to maintain rates. Powell emphasized after the meeting that officials need to see further cooling in inflation before paving the way for rate cuts.
Miran cast a dissenting vote at this meeting, advocating for a 25 basis point rate cut. This stance is consistent with his overall dovish position – favoring an earlier move toward easing policy when most members opted for a wait-and-see approach.
<h2>Oil Price Shock and Inflation Spillover Risk</h2>
The surge in oil prices triggered by the Middle East conflict has reignited market concerns about the inflation outlook. Miran acknowledged that if oil prices remain high for an extended period, there is indeed a risk of transmission to other goods and services prices, creating broader inflationary pressure.
However, he currently categorizes this scenario as a potential risk rather than a baseline forecast. In his view, hastily adjusting the policy path amid high geopolitical uncertainty does not align with the principles of prudent decision-making. The Fed should remain patient and make judgments once the situation becomes clearer.

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Middle East conflict ignites oil prices, will the Federal Reserve's interest rate cuts change course? Fed Governor Miran believes that current short-term oil price fluctuations are not enough to shake his baseline expectation of four rate cuts this year, and the Fed should wait for more information before adjusting its policy outlook. Last week, the Federal Reserve kept its benchmark interest rate unchanged, and Miran cast a dissenting vote in favor of a 25 basis point cut

- Federal Reserve official Stephen Miran stated that oil price fluctuations due to the Middle East conflict are insufficient to alter the expectation of four rate cuts this year.  
- He emphasized waiting for more information before changing policy outlooks and noted that adjusting the rate path amid high geopolitical uncertainty does not align with prudent decision-making.  
- While acknowledging that sustained high oil prices could lead to broader inflation risks, Miran maintains that this scenario is a potential risk rather than a baseline prediction for the Fed.

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Fed Governor Miran: Geopolitical Shocks Not Enough to Change Expectation of Four Rate Cuts This Year