Despite limited data, the Fed cut interest rates by 25 basis points in December, as expected. However, rate cuts are expected to be paused in January.
The Fed is 80% priced in to keep interest rates steady at 3.5% to 3.75%, prompting speculation about whether it will pull a surprise move.
Statements from Fed members on this issue have been closely followed, with the latest statement coming from Fed Board Member Stephen Millan.
Milan said in an interview on Bloomberg TV that data from the past few months are consistent with his global outlook and he does not expect a recession in the short term.
“If policy is not adjusted, the risk of a recession could increase. However, we do not foresee a recession in the near future.”
Millan reiterated that the Fed should continue cutting rates, but said he had not yet decided whether to vote for a 25 basis point cut or an even larger 50 basis point cut at the next policy meeting.
“I think it is important to continue steadily lowering policy interest rates,” he said.
Milan also noted that inflation is approaching the Fed’s 2% target and said recent statistics should lead the Fed in a more dovish direction. He added that the latest data supports the view that interest rate cuts should continue.
Mr. Milan, who joined the Fed in the middle of this year, has voiced his opposition at every FOMC meeting he has attended, and each time he has advocated for significant rate cuts. Regarding the January 2026 meeting, Millan said interest rate decisions depend on a variety of factors and is awaiting data that will be delayed due to the government shutdown.
Mr. Millan also spoke about his term in office. At this point, Milan said, “If my successor is not appointed by January 31st, I will remain in the position.”
Stephen Millan was appointed by President Donald Trump to fill the remaining months of Adrianna Coogler’s 14-year term on the board, following her unexpected resignation in August.
His term ends on January 31, but Millan can continue to serve until his successor is confirmed by the Senate.
*This is not investment advice.