The Mind of Miran
The Context.
Stephen Miran’s appointment to the Fed is a small but significant step in what is increasingly becoming the creation of an alternative US monetary financial system based on Stable Coin Dominance, Crypto Financing and Monetisation of international relations. This financial system matches the need of an isolationist but dominance seeking political system which will continue to run large fiscal and external deficits. However, such a system is unlikely to be either stable or, in the longer term, compatible with the US dollar’s current importance as a global reserve currency.
Investment Conclusion.
Miran’s beliefs are potentially disruptive to the way the Fed sets policy as well as to current trade and security policies. One given is that Miran is for lower rates and easier monetary policy to weaken the US$, which he sees as the root of all US evils. But beyond that, the closer Miran gets to the Fed’s seat of power the bigger the probability of policy being recast. Miran could become the tool to get Fed reform high on the Congressional agenda, which could mean reduced Fed independence.
Thus Miran’s involvement in the Fed is pro interest rate cuts and speaks to a weaker US$ as well as a steepening of the yield curve. But the extent varies with Miran’s job. At the moment Miran is an outside runner in the race to be the next Fed Chair. But watch this space. We remain short US 30 yrs Treasuries and the US$ - principally against the Yen.