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Sep 5, 2025  |  
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Tobias Burns


NextImg:Senators spar over Trump’s grip on Fed at testy confirmation hearing

The question of Federal Reserve independence took center stage Thursday at the confirmation hearing of Stephen Miran, chair of the White House Council of Economic Advisers, whom President Trump nominated for a seat on the Fed board of governors.

Both Democrats and Republicans on the Senate Banking Committee wanted to know if Miran would be able to make decisions independent of the preferences of a sitting president — an urgent question following Trump’s unprecedented pressure campaign.

Trump has been telling the central bank to cut interest rates since he took office. He’s berated Chair Jerome Powell, ordered the firing of Fed board member Lisa Cook and said he’s actively seeking a majority on the interest rate-setting committee that will do what he wants.

While central banks have long faced political pressures, Trump’s attacks have flouted the Fed’s traditional independence, raising concerns about inflation and the demotion of the monetary authority to a political tool.

Democrats were quick to portray Miran as a Trump loyalist who would do the president’s bidding.

Sen. Elizabeth Warren (D-Mass.) asked him if he believed Trump lost the 2020 election, if he agreed with Trump’s assessment that recent jobs data from the Labor Department were “faked” and if tariffs were causing price increases. 

Miran largely sidestepped the questions, saying Congress certified former President Biden as the winner of the last election, the Labor Department has had issues with survey response rates and tariffs were not causing inflation, despite the many economists who have argued they are.

“Every vote he takes will be tainted with the suspicion that he isn’t an honest broker but instead is Donald Trump’s puppet,” Warren said.

Republicans also asked Miran if he would act independently as a Fed governor, which Miran repeatedly said he would do.

“If I’m confirmed to this role, I will act independently as the Federal Reserve always does,” Miran told Banking Committee Chair Tim Scott (R-S.C.).

Republicans pointed to examples of what they saw as politicization of the Fed under the Biden administration, including work on factoring in climate-related risk into economic models and diversity initiatives.

Miran said if he’s confirmed to the Fed board role, he’s been advised by counsel not to resign from his current role as chair of the White House Council of Economic Advisers, but to take an unpaid leave of absence from the position.

Trump nominated Miran to the remainder of the term vacated by former Fed board member Adriana Kugler, which is set to lapse in less than five months. Miran said that because his Fed stint would be so short, counsel said he did not need to resign his White House position.

This would leave him dually appointed to the ostensibly independent Fed with the ability to return to his old post in the White House.

Several Democratic senators pressed Miran on this arrangement and accused him of breaking his standards for Fed appointees.

Last year, Miran wrote a paper arguing to “close the revolving door” between the executive branch and the Fed.

“To further insulate board members from the day-to-day political process, they should be prohibited from serving in the executive branch for four years following the end of their term,” Miran wrote in a paper for the conservative Manhattan Institute.

During the hearing, Miran distanced himself from his positions in the paper, which he said could be “implemented in a piecemeal fashion.”

“I think that considerations like that need to be taken in context of an overall package of reforms and not looked at in isolation,” he said Thursday.

Democrats were not satisfied with his answers.

“I just don’t understand how your nomination doesn’t break the rule or the goal that you set out yourself,” Sen. Tina Smith (D-Minn.) said.

Much of what Miran has spelled out in recent policy papers has been put into practice by the Trump administration, setting new international norms and breaking from decades of economic precedent.

Trump’s wide-ranging tariffs, the devaluation of the dollar relative to other currencies, and pressure on U.S. allies to pay for more of their own defense budgets have all been recommendations from Miran. To varying degrees, they were seen by policy experts as unlikely before they became reality.

Miran has also proposed big changes for the Federal Reserve System, including nationalizing reserve banks and changing the voting structure of the open market committee. Experts are wondering now if new paradigms are under consideration for the Fed.

“Article Two [of the Federal Reserve Act] gives, within the statute, an enormous amount of responsibility to reorganize the system and potentially redraw the twelve [regional bank] districts,” Mark Spindel, founder of Potomac River Capital, said during an event hosted by JPMorgan Chase on Thursday, adding that some of that authority is provided “without even Congressional approval.”

Former Fed economist Claudia Sahm told The Hill she thought it would be bad if Miran, who argued for greater executive control over the Fed, used his position as a governor to pursue major reforms while also guiding monetary policy.

“He can hold a view that a Fed governor should be at will, but what would be inappropriate is for him to use a role as a Fed governor to make that happen,” she said. “There’s a difference between [the question of] who should be in control of monetary policy and who is in control of monetary policy.”

Miran insisted Thursday he would keep a tight focus on the Fed’s core responsibilities while being an independent voice on the board.

“The president nominated me because I have policy views that I suppose that he liked,” Miran said.

“If I’m confirmed to this role, I will act independently as the Federal Reserve always does. … That said, I’m always happy to hear views from every source possible.”

Governance structure aside, investors and economists have expressed concern about a blurring of monetary and fiscal policy as the Fed potentially comes under greater executive control. That could show up as a bond market revolt with spiking longer-term yields.

“We’ve seen an uptick in traditional algorithmic ways to measure term premia,” Spindel said.

“The risk is getting control of the balance sheet … going back to a … version where the Fed, even though it had divorced itself from the president, kind of leans back into its marriage with Congress, for better or worse.”

Despite the risks, bringing monetary and fiscal policy closer together could be part of the administration’s overall objective as tariffs are set to make up an increasing share of national revenues.

“That certainly seems like what the president is angling for when trying to get control of the [Fed] board, to use the central bank as part of a coordinated policy that involves tariffs as a revenue generator,” Graham Steele, assistant Treasury secretary for financial institutions during the Biden administration, told The Hill. “That’s the risk of having people who are too close to the White House here. That’s part of what their project is.”