Stephen Miran, an economic adviser to the US President, stated that the administration’s policies focus on maintaining control over inflation.
He indicated that the President is allowing time to negotiate trade agreements and has not anticipated a significant recession occurring.
Miran emphasised the need to reduce regulations to expedite factory construction and asserted that current policies are effective in curbing inflation.
Current Economic Strategy
Miran’s comments give a fairly clear picture of how the administration views the current economic route—it’s a strategy that hinges on gradual shifts rather than abrupt moves. He suggests that inflation control measures are showing results, highlighting regulatory adjustments as a means to accelerate industrial build-out. The aim seems primarily directional: to ease supply-side bottlenecks without stirring broader market panic. His tone comes across as calm, perhaps deliberately so, given growing market anxiety about backsliding growth.
The fact that no severe contraction is expected—that’s noteworthy. Supports the idea that fiscal authorities don’t see current risks requiring sudden intervention. They appear measured in their response, signalling to markets that no major shock is foreseen in the immediate term. For those of us trading derivative products, this creates space to rethink near-term strategies that have leaned too heavily on volatility protection. If policymakers aren’t expecting instability, implied volatilities may reprice lower, especially in rates and cyclical sectors.
More to the point, the ongoing allowance for trade deal negotiations tells us the executive branch is leaving more macro levers in reserve. That opens up the potential for peripheral economies to remain under quiet scrutiny—any trade development could ripple through commodities or FX, particularly in EM-relevant pairs. Keeping duration exposure light in such areas where headline reactions can be sharp might be prudent.
Implications For Markets
When Miran brings up deregulation as a vehicle to push industrial growth, that’s meaningful for real asset pricing. In the near term, there’s delay between loosening red tape and physical output, but markets often anticipate. Expect select fixed-income instruments tied to capital investment or industrial build-up to attract quiet flows. We probably want to look at flatteners, particularly in curves that have been steepening too quickly based on pessimism that may now be overdone.
From our side, what this signals broadly is a preference for optionality that doesn’t bet too heavily on either end of the risk spectrum. Range-bound strategies, particularly those that take advantage of realised volatility falling below implied, are likely to find more favourable trade entries in coming sessions. The tone from Miran underscores a government outlook that’s more stabilising than stirring.
If execution risk in infrastructure rolls out as per intention, sectors like construction-linked equities and related credit structures may outperform—a subtle tailwind, but one with legs if policy commitment remains. So, instead of chasing short-term moves, it might be the season for structure, balance, and a close eye on data releases—particularly CPI baskets and production indicators that support or challenge Miran’s remarks.
We’d also do well to keep watching credit spreads. If the administration stays on this relatively tame trajectory, spreads that have been widening on recession speculation may rotate back toward compression, giving us tradable opportunities in instruments that benefit from carry without aggressive duration risk. It’s time to stay selective and alert without rushing.
