President Trump’s pick to fill a key seat at the Federal Reserve defended the need for independence at the central bank, as Democrats accused Mr. Trump of working to reshape and politicize the institution.
The Senate Banking Committee is considering Stephen Miran, chairman of the Council of Economic Advisers, to join the Fed’s Board of Governors while Mr. Trump loudly cajoles the bank’s open market committee to slash rates.
Mr. Miran testified Thursday that he would soberly execute the bank’s core missions.
“In my view, the most important job of the central bank is to prevent depressions and hyperinflations. Independence of monetary policy is a critical element for its success,” Mr. Miran said in opening remarks.
Committee Chairman Sen. Tim Scott, South Carolina Republican, said Mr. Miran’s expertise will “strengthen the Fed at this critical moment.”
If confirmed, Mr. Miran would fill a board vacancy by Fed Governor Adriana Kugler, a Biden appointment.
Simultaneously, Mr. Trump is calling on Fed Governor Lisa Cook, a Biden appointee, to resign from the board over allegations of mortgage fraud.
If Ms. Cook were to resign and be replaced, it would give the White House a Trump-appointed majority on the Fed board while it urges the central bank to lower interest rates.
Ms. Cook has sued to keep her job, saying the fraud allegations are a pretext to shape the Fed to Mr. Trump’s liking.
The situation is sparking a fierce debate about the Fed’s independence and ability to set monetary policy based on data, not political whims.
The committee’s ranking Democrat, Sen. Elizabeth Warren of Massachusetts, said Mr. Trump has waged a “monthslong campaign to seize control of the Federal Reserve.”
She said Mr. Trump failed to deliver costs on day one, as promised, and wants to scapegoat the Fed instead of changing his policies.
“We are now on day 227, and costs are not down. Donald Trump has failed to deliver on his promises,” Ms. Warren said.
She said political pressure on the Fed could result in artificially low rates and a situation in which prices and unemployment both rise — something that occurred in places like Argentina and Turkey when leaders interfered with central banks.
The Fed has been reluctant to cut interest rates because it fears inflation from Mr. Trump’s tariff policies.
The White House recently finalized its full tariff rates on imports from other countries, and the costs of those levies could be passed along to consumers. Mr. Trump said his tariffs haven’t resulted in widespread price increases and that high rates are holding back borrowers, especially those who want to buy a home.
The Fed is also worried about a slowdown in hiring, putting pressure on it to reduce rates.
The Fed’s Open Market Committee is expected to cut interest rates by at least 25 basis points, or 0.25%, when it meets later this month. Mr. Trump says it should have acted sooner.
Mr. Miran said the open market committee is “an independent group with a monumental task.”
“And I intend to preserve that independence and serve the American people to the best of my ability,” Mr. Miran said.
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.