President Trump's nominee to fill an open seat on the Federal Reserve board faced tough questions from Senate Democrats Thursday about whether he would take direction from the president in setting interest rates — but with broad support from Senate Republicans Stephen Miran appeared poised to win confirmation.
Miran currently serves as chairman of the president's Council of Economic Advisers. His nomination for the important Fed post has crystalized concerns about Trump's efforts to exert more control over the central bank, threatening decades of Fed independence.
"We cannot ignore the elephant in the room and that is that President Trump has launched an all-out assault on the independence of the Federal Reserve," said Sen. Elizabeth Warren, D-Mass., the top Democrat on the Senate Banking Committee. "The committee should be putting our efforts towards stopping Trump's reckless takeover of the Fed, not holding a business-as-usual confirmation hearing to help grease the skids for Donald Trump to grab more power."
Miran insisted he would not simply do the president's bidding at the central bank.
"If I'm confirmed to this role, I will act independently as the Federal Reserve always does, based on my own personal analysis of economic data, my own personal analysis of the effects of economic policies," Miran said.
The nominee acknowledged, however, that he plans to keep one foot in the White House while at the Fed, taking an unpaid leave from his job as an administration economist.
Trump has tapped Miran to serve out the remainder of Fed governor Adriana Kugler's term, which expires early next year. Kugler stepped down in August to return to a teaching post at Georgetown University.
Trump seeks more control of Fed's board
Trump has also tried to create an additional vacancy on the Fed's seven-member governing board by firing Lisa Cook, over allegations that Cook had made false statements on a mortgage application. Cook, who has denied mortgage fraud, is challenging her dismissal in court.
By law, the Fed is designed to be insulated from political pressure so policymakers can make sometimes unpopular decisions to promote long-term economic stability.
Warren tried to test Miran on his independence, asking whether he agreed, for example, that Trump had lost the 2020 election. Miran hedged, saying only that Joe Biden had been certified as the winner.
Sen. John Kennedy, R-La., also quizzed Miran about his ability to operate at arm's length from the White House.
"Are you Donald Trump's puppet?" Kennedy asked. He seemed satisfied when Miran assured him that he was independently minded.
"We're going to hold you to that," Kennedy said. "You need to call 'em like you see 'em."
With that warning, Kennedy signaled his approval of the nominee, referring to Miran as a "future governor" of the Fed.
Trump has been unusually outspoken in challenging the central bank's independence. He has repeatedly demanded lower interest rates and threatened to fire Fed Chairman Jerome Powell. If he succeeds in replacing both Kugler and Cook, the president will have appointed a majority of the Fed's governing board.
The White House hopes to have Miran seated as a Fed governor before the next policy meeting in mid-September. The central bank is widely expected to cut its benchmark interest rate by a quarter percentage point, in an effort to prop up the softening job market.
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