Fed's Miran: there will always be relative price changes, but it's a different question if it's macroeconomically significant.

Fed's Miran: there will always be relative price changes, but it's a different question if it's macroeconomically significant.

The Federal Reserve's upcoming meeting, scheduled for September 16-17, is set to be one of the most consequential in recent history. Amidst a backdrop of mixed economic signals, political drama, and questions about central-bank independence, the Federal Open Market Committee (FOMC) will vote on potential changes to the federal-funds rate and provide updated economic projections .

The meeting is notable for the participation of Fed Governor Lisa Cook, who is currently embroiled in a legal battle with former President Donald Trump over allegations of mortgage fraud. Despite these circumstances, Cook is expected to attend the meeting and participate in policy discussions . Additionally, Stephen Miran, Trump's nominee to fill the vacant seat on the Fed board, is expected to be confirmed before the meeting, potentially influencing the Fed's policy direction .

Miran, who has served as the chair of the Council of Economic Advisers in the second Trump administration, is known for his support of looser monetary policy. His nomination has raised concerns about the Fed's independence, as he has previously proposed nationalizing the regional Federal Reserve Banks and making all board members at-will employees .

Analysts anticipate a quarter-point rate cut at the upcoming meeting, but some dovish members of the FOMC may push for a larger cut in response to recent economic data, such as the weak August jobs report . The Fed will also release updated economic projections, including the closely watched dot plot, which will provide insights into future policy moves .

Mixed economic signals will complicate rate decisions this month. While employment growth has weakened, other indicators remain healthy, including solid consumer spending and restaurant bookings. Inflation has also ticked up, but not enough to deter expectations of a rate cut .

The Fed will have to balance concerns about a cooling labor market against the risk of reigniting inflation pressures. Stocks are currently trading at or near all-time highs, suggesting investors expect the Fed to make the right decision .

In summary, the upcoming Federal Reserve meeting promises to be a pivotal moment for monetary policy. With the participation of Governor Cook and the potential confirmation of Stephen Miran, the meeting will be closely watched by investors and financial professionals alike.