Washington (AFP) – A US Senate committee on Wednesday advanced the nomination of President Donald Trump’s choice to join the Federal Reserve, amid mounting concerns over the central bank’s longstanding political independence. Stephen Miran, who chairs the White House Council of Economic Advisers (CEA), passed the Senate Banking Committee’s vote by 13-11, with Democratic lawmakers opposing the advancement. Among their top concerns were his stated plans to take a leave of absence from the CEA — rather than resigning — if he were confirmed to the Fed’s board of governors.
Nonetheless, Wednesday’s vote clears the path for Miran’s full Senate confirmation, meaning that he could be in place on the central bank’s rate-setting Federal Open Market Committee (FOMC) by its next meeting on September 16-17. Trump has been ramping up pressure on the Fed to slash interest rates, an effort which has sparked worries surrounding its independence from politics. Around two weeks ago, Trump separately moved to fire Fed Governor Lisa Cook, the first Black woman to serve on its board, over allegations of mortgage fraud. A federal judge has temporarily blocked Cook’s ouster while her legal challenge against Trump plays out, meaning she is still expected to remain in place for next week’s rate meeting. The president’s legal team on Wednesday appealed this ruling, in a lawsuit that could have broader implications for the bank.
– ‘Loyalty test’ – Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee, warned that Miran’s nomination “sets up an obvious Trump loyalty test.” She argued that Miran’s votes on rate decisions could determine if he is able to return to his White House job after his time at the central bank. If confirmed, Miran fills a short-term Fed vacancy for slightly over four months until January 2026. Due to the short stint, Miran told the committee last week that he only planned to take a leave of absence from the CEA if he were confirmed. But upon further questioning by lawmakers, he said that he would step down if nominated and confirmed for a longer Fed term.
Warren also expressed fears that Miran has not committed to resigning from the Fed at the end of his abbreviated term if confirmed. The seven members of the Fed’s powerful board of governors are among the 12 voting members of the central bank’s rate-setting FOMC. Since its last cut in December, the Fed has held rates steady this year as officials monitor the effects of Trump’s tariffs on inflation. Analysts widely expect the Fed to cut rates next week, however, given that the tariffs appear to be having a limited impact on inflation for now while the jobs market is weakening.
© 2024 AFP
