It was not an excellent day for Sen. Elizabeth Warren (D-MA). First, she was rocked by Health and Human Services Secretary Robert F. Kennedy Jr. Then, the progressive lawmaker exposed her hypocrisy at a confirmation hearing involving Stephen Miran, President Donald Trump’s pick to join the Federal Reserve Board temporarily. While Warren shrieked in the upper chamber about central bank independence, she forgot to talk about her own list of demands to Fed Chair Jerome Powell.
Last month, Fed Governor Adriana Kugler abruptly resigned from the Eccles Building, effectively vacating a seat at the powerful establishment. Days later, President Trump unveiled her potential successor: Stephen Miran, current head of the White House’s Council of Economic Advisers.
Sen. Warren, the top Democrat on the committee, led the charge against Miran, claiming he will be a voice for President Trump and take an axe to Fed independence by cutting interest rates.
“Dr. Miran, you have made clear that you will do or say whatever Donald Trump wants you to do or say,” she said. “That may work in a political position, but it takes an axe to Fed independence and will make life far more expensive for Americans.”
Her Democratic colleagues presented similar arguments, vowing to vote against his confirmation. However, Warren’s remarks were far more interesting as she ostensibly forgot about all the times that she implored Powell and Co. to lower the benchmark federal funds rate heading into the 2024 presidential election.
In July 2024, days before a meeting when the rate-setting Federal Open Market Committee (FOMC) kept policy unchanged, Warren co-authored a letter demanding a 75-basis-point cut. “Given the Fed’s confidence in inflation moving towards its target of 2 percent and data indicating slower job growth, now is the time to swiftly move forward with rate cuts,” the authors wrote.
Months earlier, she co-authored another letter telling the central bank chief to reduce rates to address the affordable housing crisis. Heck, the former presidential candidate went so far as to describe Powell as “a dangerous man whose actions make our banking system less safe.”
Yeesh. She sounds like a particular individual currently sitting behind the Resolute Desk. And yet, during President Trump’s first nine months back in the Oval Office, Warren has repeatedly told the press that terminating Powell and lowering rates will crash the financial markets.
Neither Miran nor Republican senators alluded to Warren’s history of rate-cut demands. However, the top economic adviser in the White House noted that everyone has an opinion about the Fed, including the sitting president. Indeed, he is correct, as even former President Joe Biden stated several times that Powell needs to stop hiking interest rates. Did Warren howl at the moon?
At the same time, Sen. John Kennedy (R-LA) also made a compelling point to Miran. “There’s nothing wrong with politicians in Washington offering their opinions,” Kennedy said. “You can’t stop them. But we need a monetary plan that was put together by something other than vodka and darts, and that’s what we have the Federal Reserve for.”
With Republicans controlling the committee and holding a majority in the Senate, Miran’s confirmation is, as they say when a baseball player hits a home run out of the ballpark, a no-doubter. His time will be brief, serving until January 31, 2026. Miran will then either walk away and return to the White House or be re-nominated to pitch a tent at the Fed Board of Governors for 14 years. Despite Miran’s commitment to being an independent voice at an institution that has become increasingly political over the years, any realistic individual would know that he will likely advocate for cutting interest rates and advancing the Trumponomics 2.0 economic agenda.
From Arthur Burns to Alan Greenspan, the Fed has been and will always be a political institution.