US President Donald Trump on Thursday said that he would nominate a top economic adviser to the US Federal Reserve’s board of governors for four months, temporarily filling a vacancy while continuing his search for a long-term appointment.
Trump said he has named Stephen Miran, chair of the White House’s Council of Economic Advisers, to fill a seat vacated by Fed Governor Adriana Kugler, a Biden appointee who was stepping down yesterday. Miran, if approved by the US Senate, would serve until Jan. 31 next year.
The appointment is Trump’s first opportunity to exert more control over the Fed, one of the few remaining independent federal agencies. Trump has relentlessly criticized Fed Chairman Jerome Powell for keeping short-term interest rates unchanged, calling him a stubborn moron last week on social media.
Photo: Bloomberg
Miran has been a major defender of Trump’s income tax cuts and tariff hikes, arguing that the combination would generate enough economic growth to reduce budget deficits. He has also played down the risk of Trump’s tariffs generating higher inflation, a major source of concern for Powell.
The choice of Miran might heighten concerns about political influence over the Fed, which has traditionally been insulated from day-to-day politics. Fed independence is generally seen as key to ensuring that it can take difficult steps to combat inflation, such as raising interest rates, that politicians might be unwilling to take.
Fed governors vote on all the central bank’s interest-rate decisions, as well as its financial regulatory policies.
Miran’s nomination, if approved, would add a near-certain vote in support of lower interest rates. Kugler had echoed Powell’s view that the Fed should keep rates unchanged and further evaluate the impact of tariffs on the economy before making any moves.
Trump has said he would appoint Fed officials who would cut interest rates, which he says would reduce the borrowing costs of the federal government’s huge US$36 trillion debt pile. Trump also wants lower rates to boost moribund home sales, which have been held back partly by higher mortgage costs. Yet the Fed does not directly set long-term interest rates for things such as home and car purchases.
At its most recent meeting last week, Fed officials kept their key rate unchanged at 4.3 percent, where it has stood after three rate cuts late last year, but two Fed governors — Christopher Waller and Michelle Bowman — dissented from that decision. Both were appointed by Trump in his first term.
Still, even with Miran on the board, 12 Fed officials vote on interest rate policy and many remain concerned that Trump’s sweeping tariffs could push inflation higher.
Miran could be renominated to a longer term at the Fed once his initial appointment is concluded, or replaced by another nominee.
Powell’s term as chair ends in May next year, yet he could remain on the board of governors until January 2028, even after he steps down as chair. That would deny, or at least delay, an opportunity for Trump to appoint an additional policymaker to the Fed’s board.
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