Trump advisor temporarily appointed as Federal Reserve governor questioned, nominee Miran: No one asked me to commit to supporting interest rate cuts

On September 4th, Thursday, Eastern Time, during the hearing regarding the confirmation of his Federal Reserve Board nomination, U.S. President Trump's economic advisor Stephen Miran emphasized to lawmakers the importance of the Federal Reserve's independence, denying that his nomination came with any conditions supporting interest rate cuts.

Comments pointed out that the hearing revealed concerns among members of the Senate Banking Committee about whether Miran would be willing to uphold the Fed's long-standing independence. One of the most notable focal points of the hearing was Miran's plan to temporarily step down as Trump's senior economic advisor during his tenure as a board member, with some lawmakers labeling this arrangement as "absurd."

There were also comments suggesting that whether Milan becomes a board member is entirely a partisan struggle. He consistently expressed support for the Fed's independence during the hearing but avoided questions about his past positions. He had previously proposed granting the president more power to dismiss Federal Reserve officials and opposed setting up a "revolving door" between political and regulatory positions.

The media believes that Miran's ability to become a board member hinges on whether he wins the support of Republican lawmaker Thom Tillis during a meeting on Wednesday. Unless Tillis and other Republican lawmakers oppose him, Miran is still expected to have his nomination confirmed before the Federal Reserve's interest rate decision meeting on the 16th to 17th of this month.

The Independence of the Federal Reserve is "Crucial" Acknowledges Nomination by Trump is Due to Policy Views

During the hearing regarding the confirmation of his board nomination, Miran stated that no one asked him to commit to voting in favor of interest rate cuts as a board member. When asked if anyone in the Trump administration had requested him to commit to cutting rates, Miran replied, "No."

When asked if it was fair for Trump to lobby the Federal Reserve, Miran stated that expressing differing opinions is important. He is "happy to listen" to anyone's viewpoints. Like others, Trump, as president, has the right to express opinions on interest rates, and he is happy to hear those opinions.

In a prepared statement for the hearing, Miran attempted to alleviate concerns that he might undermine the long-standing independence of the Fed's decision-making from the White House. The statement read:

"In my view, the most important responsibility of the central bank is to prevent economic depression and severe inflation. The independence of monetary policy is a key factor in its success."

During the Q&A session of the hearing, the first question Miran faced was about independence. Senate Banking Committee Chairman Tim Scott stated that the Federal Reserve needs to maintain its independence and asked Miran for his thoughts on this. Miran responded that the Fed's independence is "crucial" for the U.S. economy. He said:

"I completely agree that the independence of the central bank is crucial."

Miran stated that Trump chose him to serve on the Fed Board because he appreciates his policy views. While acknowledging that Trump nominated him based on his policy judgments, Miran said that if confirmed, he would act independently and make all decisions regarding interest rates based on economic data and his personal analysis.

When asked by the strongly critical lawmaker Scott about the Basel III agreement and capital requirements, Miran said, "I share some common concerns with you," and added that there is a need for a "comprehensive" review of the costs and benefits of regulation After mentioning the independence of the Federal Reserve, Miran also stated that the Fed's past focus on issues such as climate change is a sign of politicization. The Fed's regulatory actions surrounding climate change are highly politically motivated.

Miran criticized the Federal Reserve for incorporating climate issues into its agenda and stated that he would "strongly resist" any actions by the Fed that exceed the core responsibilities granted to it by Congress.

During the Tenure as a Governor, He Will Temporarily Take Leave as a White House Economic Advisor

Public information shows that Miran served as an economic advisor during both terms of Trump, making him one of Trump's "core team members."

According to CCTV News, Miran was nominated by Trump last December to be the chairman of the White House Council of Economic Advisers (CEA). Trump stated at the time that Miran had served as a senior economic policy advisor at the U.S. Department of the Treasury during his first presidential term and holds a Ph.D. in economics from Harvard University, and would work with other members of Trump's economic team to revitalize the U.S. economy.

At a hearing this Thursday, a senator asked Miran, who currently serves as CEA chairman, whether he would resign from his position as a senior economic advisor at the White House if he were to take office as a Federal Reserve governor.

Miran cited legal advice stating that he would only be on unpaid leave from the White House temporarily, as his term as a nominated governor would end in January next year. Miran also mentioned that during his tenure as a Federal Reserve governor, he would step down from the CEA, and he did not know what would happen after taking office, but if nominated for a longer-term position as a Federal Reserve governor, he "absolutely" would resign from the CEA.

"If I am nominated and confirmed for a term longer than a few months, I will absolutely resign."

In response, Democratic Senator Jack Reed stated that this arrangement has already undermined the independence of the Federal Reserve. He said, "Strictly speaking, you are an employee of the President of the United States, but you are also an independent member of the Federal Reserve Board. This is absurd."

Refused to Answer Whether the President Should Dismiss Federal Reserve Governors Due to Policy Differences

When Reed asked whether he would adhere to the suggestion he made in a paper last year—that anyone leaving the Federal Reserve Board should not hold a position in the executive branch for four years—Miran did not make such a commitment.

Another senator, Tina Smith, questioned Miran's complaints about the frequent rotation between political and regulatory positions. Smith said, "I don't know how you can be an exception. How can we expect you to be impartial and neutral?"

Commentary suggests that Reed's questioning raised new concerns about whether Trump's economic advisor can serve as a Federal Reserve governor while on unpaid leave.

In subsequent questioning, Miran refused to answer whether the president should dismiss Federal Reserve governors based on policy differences.

Miran stated that in the document he co-authored last year regarding Federal Reserve reform, selecting specific recommendations was "very inappropriate." The proposal he drafted is a "comprehensive plan" that outlines the "checks and balances" among Congress, the executive, and the judiciary.

Later, when asked by other senators about the proposal to allow the president to dismiss Federal Reserve officials, Miran avoided the question, stating that it is part of the aforementioned power balance proposal Some lawmakers also mentioned that Miran's proposal includes granting the president the power to dismiss Federal Reserve governors. Miran stated that the proposal would also strengthen the powers of regional Federal Reserves and give them a majority voice in interest rate setting. He said, "I suggest implementing a system of checks and balances."

Miran clearly stated that the Federal Reserve needs to be independent of political operations. "In recent years, the president has made a series of excellent calls on monetary policy, but I believe that the central bank's ability to free itself from the influence of political cycles is key to its long-term success in achieving excellent economic outcomes."

BLS "Complacency" Does Not Prevent Gradual "Deterioration" of Employment Data Quality

Democratic Senator Elizabeth Warren accused the nomination of Miran as an attempt by Trump to take over the Federal Reserve during the hearing. In response to Warren's questioning, Miran refused to explicitly state that Trump lost the 2020 presidential election, saying that former President Biden's victory was "certified by Congress" at that time.

Miran also did not refute Trump's claim that the head of the Bureau of Labor Statistics (BLS), responsible for releasing monthly employment data, fabricated data for 2024 to benefit then-President Biden.

When asked by Warren whether the BLS fabricated employment data last year to manipulate the November election, Miran stated that the BLS data has "gradually deteriorated over time."

Warren then asked whether the employment data had been manipulated. Miran did not directly answer whether the BLS data was falsified, but said he believed the BLS was somewhat complacent. The BLS staff "complacently allowed" the data to be released without correcting the quality issues.

In subsequent questions from other lawmakers, Miran avoided the question of whether the BLS had political bias and emphasized the need for a thorough reform of the data and its methods. He said:

"I want to state that the BLS leadership has taken no measures to prevent the deterioration of data quality."

Miran believes that the quality of the data is affected by the declining response rate of surveys and the BLS's failure to correct the data.

On August 1, the BLS released the July non-farm payroll report, which was a "bombshell": the non-farm payroll increased by only 73,000 in July, far below economists' expectations of 110,000, and the total number of new jobs added in the previous two months was revised down by 258,000. Wall Street Journal noted that after the employment report was released, Trump announced the same day that he instructed the immediate dismissal of BLS Director Erika McEntarfer.

At that time, Trump stated that McEntarfer was an official appointed by former President Biden, and the important data she was responsible for publishing must be fair and accurate, "and cannot be used for political manipulation."

Analysts believe that the BLS claims its work is "independent" and "non-partisan," and this neutrality is crucial for public and market trust in the data. Trump's accusations against McEntarfer of politicizing the employment report, without providing any evidence, raised concerns about the integrity of the data

Tariffs Have Not Led to Significant Overall Price Increases; Prices May Fluctuate in the Short Term

At a hearing on Thursday, when asked about inflation by Senator Warren, Miran stated that tariffs have not yet impacted inflation. Warren cited several examples of inflation, to which Miran responded that tariffs have not caused a noticeable increase in overall price levels.

Warren summarized that Miran has clearly indicated, "You do what Trump wants you to do and say what he wants you to say."

Miran then pointed out that focusing solely on monetary policy is a mistake—fiscal policy also needs to be discussed. "When thinking about the trends in inflation and employment, it is wrong to focus only on monetary policy. I believe a complete set of economic policies, including economic policy and other factors, will affect these outcomes."

Some lawmakers mentioned that small businesses have been complaining that rising tariffs are harming their operations. Miran said there would be fluctuations in the short term, but he has not seen concrete evidence of large-scale unemployment or small business closures.

Regarding how tariffs affect the economy, Miran maintained his view that new trade policies will bring benefits in the long run. He said, "From an economic perspective, any policy can be understood as a tax."

Miran attempted to downplay the impact of Trump's tariffs potentially increasing consumer costs, but he acknowledged that prices may fluctuate immediately after the implementation of tariffs. "In the short term, I have always believed that fluctuations may occur."

Predicts Bond Market Will Not Resist Rate Cuts

Senator Kennedy stated that the Federal Reserve's monetary policy committee (FOMC) can lower short-term interest rates at will, but that does not mean long-term rates will decrease. Miran agreed with this and also noted that Congress's actions are important. Miran said the Federal Reserve does not control the long end of the yield curve.

Miran told Kennedy that he is not Trump's puppet. Kennedy said, "We will ask you to keep your promises, Director, future Directors, you need to be realistic about them (the data)."

A lawmaker asked if a politicized Federal Reserve cuts rates, whether the Fed could overcome resistance from the bond market. Miran stated that he expects the bond market will not resist the rate cuts.

Miran said, "I predict the bond market will not say that." He added, "It is impossible to respond to a hypothesis without a broader economic context."

A lawmaker asked if Miran had ever lied on a mortgage loan application, to which Miran denied.

A lawmaker accused the Trump administration of "political persecution" against Federal Reserve Governor Lisa Cook, who has been accused of mortgage loan fraud, questioning whether Cook has received due process and the presumption of innocence she deserves