Federal Reserve Board Member Milan recently made a significant statement: a 150 basis point rate cut is needed this year. The logic behind this proposal is quite interesting — he believes the labor market is tightening and requires policy support to ease the pressure.

Specifically, Milan pointed out that approximately 1 million Americans are currently unemployed. But there is an intriguing argument here: he believes that job market improvements will not necessarily trigger an inflation spiral. His assessment is that the core inflation rate may stabilize around 2.3%, which leaves room for policy adjustments.

From a monetary policy perspective, Milan thinks the current stance remains leaning towards tightening. In other words, rate cuts are not only possible but may become necessary measures.

Another detail worth noting is Milan’s ambiguous attitude toward the duration of his term. Market interpretation suggests that Trump might use this vacant seat to appoint a new candidate. Additionally, if Powell steps down as Fed Chair in May, the Fed will face another vacancy. These personnel changes actually reflect a game over the future policy direction of the Federal Reserve.

For traders focused on macroeconomics, these signals are worth pondering — the Fed’s policy tone is quietly shifting.