Senators grill Trump's Fed nominee over political independence
Trump has undertaken a monthslong pressure campaign urging lower interest rates.
Stephen Miran, a nominee to serve on the board of the Federal Reserve, on Thursday vowed to safeguard central bank independence but said that he does not plan to resign from his position as a top economic advisor to President Donald Trump if confirmed for the Fed role.
The remarks came as senators of both major parties affirmed the importance of the political independence of the Fed during an hourslong confirmation hearing before the Senate committee on housing, banking and urban affairs.
Democratic senators voiced skepticism about Miran's vow to uphold the independence of the Fed, while Republican members applauded Miran's commitment on the issue and appeared poised to lend support to his nomination.
Democrats pointed to Trump's monthslong pressure campaign urging the Fed to lower interest rates as well as Miran's advisory role within the White House.
Trump recently moved to fire board member Lisa Cook, who sued Trump over her attempted ouster, saying the decision violated her legal protections as an employee at the independent federal agency. Trump said he removed Cook over mortgage fraud allegations against her.
Sen. Elizabeth Warren, D-Mass., slammed Miran, saying his nomination shows that Trump is eager to "install his lackeys so we have a Fed that uses its policies to please the president but can't be trusted to keep inflation under control."
In an effort to test Miran's independence from the president, Warren asked Miran on multiple occasions whether Trump had lost the 2020 presidential election. In response, Miran said Joe Biden had been "certified by Congress as president of the United States," but Miran declined to say Trump had been defeated.
If confirmed, Miran said he plans to take an unpaid leave of absence from his role as a top economic advisor in the White House rather than resign. Miran reached the decision after "advice from counsel," since his term on the Fed board would last four months, Miran said.
Miran has been nominated for a vacancy created by the early retirement of Fed board member Adrianna Kugler. After Miran fulfills the remainder of Kugler's term, Trump could then nominate Miran for a full term, and Miran would resign after attaining that role, Miran said.
The plans to remain a White House employee drew sharp criticism from Democratic senators. "Your independence has already been compromised. You'll be technically an employee of the President of the United States while a member of the Federal Reserve board. That's ridiculous," said Senator Jack Reed, D-RI.
Republicans on the committee applauded Miran's commitment to the independence of the Fed.
Sen. Tim Scott, R-S.C., said Miran's expertise would "strengthen the Fed at this critical moment."
"You've been clear with me, consistent with me and honest with me," Scott said.
Sen. Mike Rounds, R-S.D., praised Miran as "very qualified for this position."
When Rounds asked Miran whether "it's fair for the president to lobby the Fed," Miran said he welcomes input from others as a means of exposing himself to different viewpoints.
"The president is entitled to a view on monetary policy, as is anyone interested in the subject. And I welcome everybody sharing their views," Miran said.
Miran has previously voiced strident criticism of the Fed. Last year, Miran co-authored a report calling for a "fundamental overhaul" of the central bank, saying the Fed's structure has "facilitated groupthink that has led to significant monetary-policy errors."
If confirmed, Miran would mark the third Trump appointee on the seven-member Fed board. If Trump prevails in removing Cook and installs a replacement, his appointees would make up a majority of the Fed board, whose members help set the nation's interest rates and oversee other central bank responsibilities, such as regulation of the financial system.
The clash over the Fed comes after Trump railed for months against the central bank and its Chair Jerome Powell for declining to heed his call for lower interest rates. Five meetings and eight months have elapsed since the Fed last adjusted interest rates.
Last month, Powell said the Fed would "proceed carefully" but he hinted at the possibility of an interest rate cut, appearing to indicate greater concern for flagging employment growth than rising prices.
The policy shift may align the Fed with Trump's desire for lower interest rates, though the central bank is expected to opt for a modest quarter-point reduction rather than the larger cut Trump has sought. The Fed will issue a decision on the level of interest rates later this month.
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