Fed Governor Stephen Miran’s Dovish Tone Lifts Crypto Market Optimism

Federal Reserve Governor Stephen Miran’s renewed call for deeper interest rate cuts has sparked optimism across digital asset markets. 

The remarks came amid debate within the US central bank over how much policy should loosen after months of tight conditions. Investors see Miran’s stance as a sign that liquidity may expand sooner than expected — historically a bullish factor for cryptocurrencies.

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Miran Pushes for Faster Rate Cuts

Miran spoke at the Managed Funds Association’s Policy Outlook 2025 event in New York on Tuesday, October 7. He reiterated that the neutral rate — the level that neither stimulates nor slows the economy — has likely moved lower from a year ago. This shift, he said, makes monetary policy “more restrictive” and could weaken the economy if sustained for too long.

He warned that holding rates high for too long risks an unnecessary slowdown. Miran believes the federal funds rate should sit around the mid-2% range — well below the current 4.00%–4.25% target. His view, which contrasts sharply with other policymakers, stems from his belief that housing disinflation will continue easing price pressures.

“I’m more sanguine on inflation than a lot of other people are,” Miran said, adding that population shifts and slower growth could further lower the real neutral rate, which he estimates near 0.5%.

He acknowledged that this “theoretical” rate cannot be directly measured but said policymakers must remain humble in assessing it. Miran also noted that artificial intelligence could eventually push the neutral rate higher by improving productivity, though current data suggest the opposite trend.

The governor’s stance marks a sharp contrast from last year, when he opposed rate reductions. He attributed his policy pivot to changes in immigration and fiscal dynamics, which he said now justify a more accommodative stance.

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A day before his remarks, Bitcoin had reached $126,000. However, it fell 2.6% on the day of his speech, trading near $121,500. In contrast, Ethereum briefly climbed to $4,747 before easing to the $4,450 range on Tuesday. BNB jumped 7.1% from the previous day, showing strong momentum among major altcoins.

Liquidity Outlook Could Support Digital Assets

Analysts say Miran’s dovish tone could mark a turning point for crypto valuations. Lower rates typically weaken the dollar and enhance demand for non‑yielding assets like Bitcoin.

If additional rate cuts occur, stablecoin yields and decentralized‑finance lending rates may compress, yet increased liquidity could offset the effect by stimulating on‑chain activity. Traders also anticipate fresh institutional inflows into Bitcoin exchange‑traded products, which surpassed $14 billion in assets this quarter.

Crypto investors on social media quickly welcomed Miran’s comments, praising the potential for renewed liquidity and a softer policy stance across digital assets.

Still, not all Fed officials agree. Chair Jerome Powell and others warn that persistent inflation could delay easing, adding volatility to digital‑asset markets. Even so, Miran’s forward‑looking stance has already energized investors expecting a softer macro backdrop by year‑end.