Summary
Analysis by Larry Greenberg of the September 17, 2025 FOMC meeting, at which the committee cut the federal funds target by 25 basis points to 4.0-4.25%. New Governor Stephen Miran (Trump appointee, sworn in the day before) dissented in favor of a 50 bps cut and projected rates at 2.875% by year-end — dramatically below the rest of the committee. Greenberg examines the risk of political influence over the Fed and the wide dispersion in the dot-plot projections.
Key Points
- Fed cut rates 25 bps to 4.0-4.25% (September 17, 2025); 11-1 consensus with Miran dissenting.
- Miran dissented for a 50 bps cut; projected year-end rate of 2.875% (vs. highest dot at ~4.25%).
- Statement acknowledged slower job creation and rising unemployment risk; deleted “labor market conditions remain solid.”
- Added phrases: “risks to employment have risen” and “shift in the balance of risks.”
- Import tariff inflation present but less than feared.
- Immigration policy shift partly explains jobs slowdown.
- Board of Governors: Trump has appointed enough governors that the majority of that sub-group are now his picks.
- Risk: legal path exists for White House to increase Fed influence by appointing district bank presidents through Board of Governors mandate change.
- Market reaction minimal; 4 bps drop in 10-year Treasury yield was the biggest move.
- Greenberg notes “reassuring” that Miran’s arguments didn’t persuade the committee despite political alignment.
Newsletter Angles
- Miran as a Trojan horse: a dissent of this magnitude (50 bps vs 25 bps, 2.875% vs 4.25% year-end projection) from a brand new Trump appointee signals what the White House wants from the Fed — dramatically looser policy regardless of inflation.
- The Fed independence stress test: markets didn’t panic partly because Miran lost this round. But the structural path for White House control of the Fed exists and is documented here.
- Crypto prices fell 0.3% on the day — Bitcoin is now correlated enough with macro that FOMC decisions move it, reflecting its growing role as a risk asset.
Entities Mentioned
- Federal Reserve — subject of the analysis; institutional independence at risk
- Jerome Powell — Fed chair (implied; press conference referenced)
- Donald Trump — appointing process for governors discussed
Concepts Mentioned
- Fed Independence — the core risk described in this piece
- Trade War Currency Dynamics — tariff inflation mentioned as a Fed input
- Nixon Shock — historical parallel: last time White House heavily influenced monetary policy decisions
Quotes
“Governor Stephen Miran, who was only sworn in yesterday… dissented in favor of a 50 basis point cut… His opinion is that the rate ought to be at 2.875% at the end of 2025. That’s 75 basis points lower than anyone else’s favored level.”
“There is a path for the White House to increase its influence over monetary policy in a substantial way over the coming year.”
“Prices for oil, gold and bitcoin fell but by 0.3% or less.”
Notes
Currency Thoughts is Larry Greenberg’s newsletter — a veteran FX/macro analyst. The analysis is measured and non-partisan. Bitcoin price appearing in the same sentence as gold and oil signals how mainstream the crypto-as-macro-asset framing has become.