Trump set to appoint Stephen Miran, a key economic advisor, to the US Federal Reserve's board of directors
In a move that could potentially reshape the monetary policy landscape, US President Donald Trump has nominated Stephen Miran, the current Chair of the White House Council of Economic Advisers, to the US Federal Reserve's Board of Governors.
If approved by the US Senate, Miran, an accomplished economist with a Ph.D. in economics from Harvard, will serve until January 31, 2021, for a temporary period of four months. This appointment aims to fill the remaining term of Adriana Kugler, a Biden appointee who resigned early.
Miran's nomination has been met with mixed reactions. While some view his appointment as a means to promote a pro-growth agenda and increase transparency and accountability at the Fed, others express concerns about political influence on the central bank.
Miran, a major defender of Trump's income tax cuts and tariff hikes, is expected to push for lower interest rates if approved. This could shift the Fed's monetary policy towards more accommodative stances, at least temporarily. However, the long-term influence of this appointment on the Fed's policy trajectory may be limited due to its temporary nature.
The Fed does not directly set long-term interest rates for things such as home and car purchases. Instead, it sets the federal funds rate, which influences other interest rates in the economy.
Regarding the Fed’s independence, Miran’s close ties to the Trump administration and alignment with its economic priorities may raise concerns. Yet, Senator Scott’s emphasis on ensuring the Fed avoids politicization suggests an intent to preserve institutional independence. The actual effect will depend on Miran's actions and responses to political pressures once on the board.
It's worth noting that Trump's appointment gives him more control over the Fed, one of the few remaining independent federal agencies. However, the appointment does not guarantee an additional policymaker for Trump on the Fed's board, as Powell could remain on the board after stepping down as chair.
At the Fed's most recent meeting last week, the key interest rate was not changed. However, two Trump-appointed governors, Christopher Waller and Michelle Bowman, dissented from that decision, indicating a potential divide within the central bank.
In conclusion, the appointment of Stephen Miran to the US Federal Reserve's Board of Governors, if approved, could lead to a temporary shift towards more accommodative monetary policies. However, the long-term impact on the Fed's independence and policy trajectory remains to be seen.
This appointment of Stephen Miran, if confirmed, could influence the politics of monetary policy-and-legislation, as he is expected to advocate for lower interest rates, potentially shifting the Fed's policy towards more accommodative stances. The general news on this matter is that the temporary nature of Miran's term may limit his long-term influence on the Fed's policy trajectory, but his close ties to the Trump administration raise concerns about the Fed’s independence.
