The US dollar firmed slightly against the euro and the pound sterling on Wednesday, effectively ignoring remarks from Federal Reserve official Steven Miran. Miran said the central bank would likely need to cut interest rates by more than one percentage point in 2026, as current policy is restraining the economy.

Miran said on Tuesday that it was difficult to argue policy was neutral, calling it clearly restrictive and a drag on the economy, and adding that cuts of more than 100 basis points this year would be warranted.

His view raises questions about the balance between fighting inflation, supporting economic growth, and sustaining the labor market. Miran argued that, while restrictive policy aims to curb price pressures, it is also weighing on consumer credit, investment, and overall business sentiment.

Given these tensions, Miran's call for deeper rate cuts appears reasonable to some observers. Such easing could relieve pressure on the economy, bolster the labor market and demand, and create a more favorable business environment.

Last month, Fed officials cut rates for the third consecutive time but signaled that further reductions were not guaranteed in the near term. Policymakers remain divided over inflation and labor-market prospects, and their median projection in the latest forecasts includes only one rate cut in 2026.

Miran's comments followed other officials this week who suggested that policy may now be near neutral. Richmond Fed President Tom Barkin hinted on Tuesday that the current policy rate sits within the range of neutral estimates published in December. Minneapolis Fed President Neel Kashkari said on Monday that, in his view, policy is reasonably close to neutral given steady economic growth.

The Fed's policy rate currently stands at 3.50% to 3.75%. Among the 19 members of the Federal Open Market Committee, estimates of the neutral rate range from 2.6% to 3.9%.

The technical outlook for the EUR/USD pair suggests that buyers should consider reclaiming 1.1715. That would open the way to test 1.1740. From there, a move to 1.1765 would be possible, though doing so without support from major players could prove difficult. The extended target is the high at 1.1800. On a decline, look for significant buying interest near 1.1670. If no buyers appear there, it would be prudent to wait for a new low at 1.1640 or to open long positions from 1.1616.

As for the GBP/USD pair, its buyers should aim to capture the nearest resistance at 1.3500. That would allow a move toward 1.3530, above which a breakout would be challenging. The extended target is the area around 1.3560. If the pair falls, bears will attempt to seize control at 1.3470. A break of that range would deal a heavy blow to bullish positions and could push GBP/USD down to 1.3440, with scope to extend to 1.3415.