When President Donald Trump announced that he nominated Council of Economic Advisers Chairman Stephen Miran to fill a vacant Federal Reserve Board seat, it seemed like a strange choice. Those of us who saw Miran’s disastrous handling of April’s tariff “Liberation Day” wondered if this was the White House‘s way of quietly offloading him from the Trump administration.

If only we were so lucky.

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Instead, Miran has made clear that he is the Trump administration’s weapon to wrest political control of the traditionally independent Fed while advancing his private war on the dominance of the U.S. dollar.

Senate Republicans raced to confirm Miran in time for September’s Federal Open Market Committee meeting without actually making Miran resign as CEA chairman. This means Miran will remain a member of the executive branch throughout the duration of the unexpired Fed term he’s filling, which expires next January. Miran is the first dual member of the Fed board and the executive branch since 1936, when the Banking Act went into effect, specifically to liberate the Fed from a power grab by former President Franklin D. Roosevelt.

Miran’s first act as a member of the central bank was to prove that he would serve Trump’s wishes. This was reflected somewhat in his lone vote to slash the federal funds rate by 50 basis points as opposed to the 25-bps cut passed by the rest of his peers. However, it was reflected even more so in his ludicrous projections of what he believes the Fed should do next.

Once a quarter, the Fed publishes a summary of economic projections that show how it estimates its monetary policy and macroeconomic factors to move in the short and long term. The median consensus of the central bankers was that core PCE inflation for 2025 would be 3.1% and that they would pass three 25-bps rate cuts by the end of the year.

Based on the “dot plot,” which shows the individual projections of each member, Miran believes the Fed would optimally pass six rate cuts, or a total of 150-bps, by the end of 2025. This would bring the federal funds rate below the inflation rate.

As evidenced by the consensus of the rest of the Fed, nobody was seriously challenging the notion that it was time to relax the federal funds rate. And as Tiana’s Take has discussed ad nauseam, the persistent downward revisions to government employment data mean that the Bureau of Labor Statistics indeed needs new leadership in the form of EJ Antoni to provide more precise data in the preliminary job reports.

However, insisting that an economy with a softening, but still stable enough, labor market and rising inflation needs real negative interest rates is not a serious suggestion from Miran. Rather, it’s an appeal of fealty to Trump, an act of self-flagellation of the Fed’s independence, and a declaration of war on the dollar’s status as the world’s reserve currency.

During his Senate confirmation hearing, Miran, who has reiterated his goal to deprive the United States of the “burden” of the greenback’s reserve status, oddly did not swear to uphold the Fed’s dual mandate of balancing price stability to full employment. Instead, he added moderating long-term interest rates as a third and equally important goal, an oddity considering that, unlike price stability and full employment, which are two forces that are often opposed to each other, moderating long-term interest rates is simply a product of investor confidence in the Fed’s balance of the dual mandate.

On its face, recklessly slashing the federal funds rate by 150-bps would escalate long-term interest rates. However, senior research strategist Michael Brown of foreign currency brokerage Pepperstone sketched out his theory after Miran’s weird triple mandate comment roiled bond trading desks across the globe.

“If said [federal funds rate] cuts cause inflation expectations to unanchor, especially at a time of runaway federal spending, and spiraling budget deficits, then those cuts would likely result in a dramatic steepening of the curve, and much higher long-end yields,” Brown wrote. “If this scenario were to come to pass, the Fed’s ‘solution’ would probably be three-fold … end balance sheet runoff; secondly, restart quantitative easing, with a bias toward longer duration securities; thirdly, going ‘full BoJ,'” in reference to the Bank of Japan’s dismal experiment of yield curve control.

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The Fed currently does not control interest rates because it cannot control them. The federal funds rate may manipulate the short end of the curve, but the last time the Fed slashed the federal funds rate by 100 bps, both the 10-year U.S. Treasury and the 30-year fixed mortgage rose 100 bps. Again, on the heels of September’s rate, short-term Treasury yields sank, but the 10-year yield soared back to its highest point in nearly a fortnight.

Miran has already uttered the unthinkable about dollar dominance and done the unthinkable by serving as an executive branch loyalist on the Fed board. Why wouldn’t Miran try to break monetary policy as his next step in his war on the public’s faith in the Treasury?