Fed’s Miran: The lack of data doesn't mean we don't have a forecast

💡 DMK Insight

Fed Governor Miran’s comments shift the narrative—forecast dependence could signal a more flexible monetary policy approach. This is crucial for traders as it suggests the Fed might react to economic projections rather than just hard data. If the Fed leans into forecasts, we could see increased volatility in both equity and forex markets, particularly affecting USD pairs. Traders should watch for any shifts in sentiment around upcoming economic reports, as these could lead to significant price movements. Keep an eye on the S&P 500 and major currency pairs like EUR/USD and USD/JPY, as they often react sharply to Fed guidance. If forecasts indicate a slowdown, we might see a risk-off sentiment emerge, impacting asset classes differently. However, there’s a flip side—if the Fed’s forecasts are overly optimistic, it could lead to a tightening that surprises the market. This could create a short-term rally in the dollar but might also lead to a swift correction in equities. Watch for the next Fed meeting and any statements that could clarify their stance on forecast dependence versus data reliance.