Long before Stephen Miran was tapped by President Trump to join the Federal Reserve, the former hedge fund strategist proposed profound changes to the world’s most powerful central bank.
Among the most noteworthy ones in a detailed memo that he helped write in 2024 urged an end to the “revolving door between the executive branch and the Fed” on the basis that it was “critical to reducing the incentives for officials to act in the short-term political interests of the president.”
Mr. Miran, who most recently served as one of Mr. Trump’s top economic advisers, now finds himself on that exact journey. On Thursday, he began testifying in front of the Senate Banking Committee as lawmakers consider whether to confirm him as the newest member of the Fed’s Board of Governors.
Mr. Miran’s hearing was hastily scheduled to keep open the possibility that he could be in place before the Fed’s next meeting on Sept. 16-17. He was selected to fill a temporary position in August, after Mr. Trump unexpectedly got an opportunity to name a replacement for Adriana Kugler, a Fed governor who stepped down from her post five months before her term ended.
The hearing will offer lawmakers their best opportunity yet to dig into the Trump administration’s plans to overhaul the central bank amid a relentless pressure campaign from the president, who wants the Fed to slash interest rates.
Mr. Miran sought to get ahead of those inquiries, expressing his intent to uphold the political independence of the Fed in opening remarks that he delivered to lawmakers on Thursday. He stressed that, if confirmed, he would base policy decisions only on his “analysis of the macroeconomy and what’s best for its long-term stewardship” rather than hew to advice from “outsiders.”
Still, those assurances could ring hollow for many lawmakers on the committee given the extent of the attacks being waged on the Fed.
Mr. Trump is already embroiled in a legal battle with Lisa Cook, a governor he is trying to oust over allegations that she committed mortgage fraud. Ms. Cook, who has not been charged or convicted of any wrongdoing, has sued to prevent her removal, teeing up what is expected to be a prolonged fight over the president’s ability to remove a Fed official “for cause.” That is typically interpreted to mean professional neglect or wrongdoing.
Democrats on the Senate Banking Committee wrote a letter urging the chair, Senator Tim Scott, Republican of South Carolina, to postpone Mr. Miran’s hearing in light of Mr. Trump’s efforts to fire Ms. Cook.
“This action raises serious legal concerns and threatens the independence of the Federal Reserve, which could make mortgages, credit cards, auto loans and everyday goods more expensive for American families,” the senators wrote.
If Ms. Cook loses her case, Mr. Trump will have yet another opening on the Fed’s board to fill, tipping the balance of support further in his favor. The president will also get to nominate a new chair once the term of the current head of the Fed, Jerome H. Powell, ends in May.
If Mr. Trump has a majority of governors in his corner, he is likely to command greater sway over an institution that is supposed to operate independently from the White House.
As a governor, Mr. Miran would be able to vote on every major policy decision the Fed makes, including on interest rates and the rules that govern Wall Street. He would also be involved in deliberations related to the inner workings of the Fed and its staff.
While Mr. Miran spoke in his opening remarks about the need for policy decisions to be made solely based on what is economically beneficial as opposed to politically advantageous, he has been critical of the Fed’s independence in the past. In his 2024 memo, he argued that the current setup made it prone to policy errors and unaccountable to the very people it was supposed to serve.
As part of a radical reset, he called for shorter terms for top officials and the ability for the president to remove policymakers for any reason. Mr. Miran wanted the 12 regional reserve bank presidents to have more say in interest rate decisions, but to come under the control of state governors. He also sought to subject the central bank’s budget to the congressional appropriations process rather maintaining the Fed’s autonomy.
Before joining the administration, he also floated the idea of weakening the value of the U.S. dollar in a bid to make American imports more competitive, a proposal known as the Mar-a-Lago Accord. He also highlighted the costs of the dollar’s status as the world’s reserve currency, a position that stands in sharp contrast to how the Fed sees it.
Mr. Miran is likely to face a litany of questions about his past views and how he plans to reconcile them with the responsibilities he will soon be charged with if he becomes a governor.
The Fed, which is overseen by Congress, is obligated to set monetary policy in pursuit of low and stable inflation as well as a healthy labor market. The central bank’s longstanding inflation target is 2 percent, a level it has exceeded since consumer price growth accelerated in the pandemic.
Before Mr. Trump imposed tariffs on effectively all of the country’s major trading partners, inflation was easing. But price pressures have intensified again, leaving a divided Fed in a difficult spot in terms of what to do about interest rates. The labor market, meanwhile, has started to show more obvious signs of softening.
Officials are getting ready to restart cuts that were put on pause in January in recognition that the risks posed to the labor market are outweighing the risk of a persistent inflation problem. But policymakers are likely to move slowly once they get going again, keeping them at odds with the president’s demands for borrowing costs that are three percentage points lower than the current range of 4.25 percent to 4.5 percent.
Mr. Miran has been a vocal cheerleader of the president’s economic policies and is expected to press for what Mr. Trump wants at the Fed. But he would also have to careful about alienating himself from his soon-to-be colleagues. Decisions related to interest rates and the balance sheet, for example, are made by a 12-person committee of the governors and a rotation of five regional Fed presidents.
Colby Smith covers the Federal Reserve and the U.S. economy for The Times.
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