Independence of monetary policy is a critical element for the Federal Reserve’s success, economist Stephen Miran said today during his nomination hearing for an open seat on the Fed board.
Miran is currently chair of the U.S. Council of Economic Advisers. President Trump nominated Miran to fill a board seat previously held by former Fed Governor Adriana Kugler, who stepped down last month. If confirmed, Miran will serve out the remainder of Kugler’s term, which ends early next year.
Miran’s nomination comes as Trump has sought more authority over Fed policy. The president recently announced that he would remove Governor Lisa Cook from the Fed board, but Cook is challenging that decision in federal court. Trump has also suggested he may seek to remove Fed Chairman Jerome Powell. In his prepared remarks before the Senate Banking Committee, Miran said that he supported the central bank’s independence in setting monetary policy.
“The Federal 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,” Miran said.
Both Republican and Democratic committee members questioned Miran on Fed independence, although Democrats were skeptical about Miran’s commitment to the principle. Among other things, they cited Miran’s decision to take an unpaid temporary leave from the economic advisory council rather than step down, noting that he will remain an administration employee during his tenure on the Fed board.
Committee Chairman Tim Scott (R-S.C.) said the Fed’s independence was “paramount” for the U.S. economy, but he questioned policy actions taken by the central bank during the Biden administration, particularly a proposal to implement the Basel III endgame capital requirements. Miran said he shared some of Scott’s concerns about Basel III and other regulatory proposals.
“I do believe there needs to be a fulsome process at the Fed for thinking about not only the benefits of regulations but the costs as well, and thinking about the consequences of those regulations for the provision of credit into the economy,” Miran said.
The committee also heard testimony today from four other nominees: Ben Hobbs and Ronnie Kurtz to be assistant secretaries of the Department of Housing and Urban Development, and Christopher Pilkerton and Jonathan Burke to be assistant secretaries of the Treasury Department.
