Federal advocate Stephen Miran championing tariff barriers
In a move that could signal a potential shift in monetary policy, U.S. President Donald Trump has nominated Stephen Miran, the current chairman of the Council of Economic Advisers (CEA), to fill a vacant seat on the Federal Reserve's board. This nomination, if confirmed, could mark a significant development in the ongoing debate over the succession of Fed Chair Jerome Powell, whose second term ends in May 2026.
Miran, a renowned economist, has been vocal about his views on monetary policy. He has harshly criticized the Fed's record over the past few years, particularly the Fed's bond purchases during the COVID-19 pandemic, arguing that they suppressed yields and fueled inflation through low interest rates.
Christopher Waller, another potential candidate for the top Fed job, is seen as a candidate who values Fed independence, supports rate cuts in the face of labor market weakening, and holds that tariffs should not influence monetary policy decisions. Waller, who has served in various academic posts and as executive vice president and director of research at the St. Louis Fed, has argued that tariffs do not boost inflation, a stance that supports his call for lower rates despite the presence of tariffs.
Miran and Dan Katz, now chief of staff at the Treasury Department, have previously published a 24-page plan for Fed reform, accusing the central bank of encroaching on political areas outside its purview and attributing its political mistakes to "groupthink." The duo has proposed separating monetary policy from bank regulation and supervision at the Fed, with the supervisory role transferred to another agency.
Meanwhile, Adriana Kugler, a member of the Fed's board, has announced her resignation and will return to academia as an economics professor at Georgetown University. Trump described Kugler's early departure as a "pleasant surprise."
The "Mar-a-Lago Agreement," written by Miran, serves as a script for Trump's trade policy agenda. The agreement views tariffs as an effective means to force trading partners to appreciate their currencies and build a sustainable U.S. trade deficit. However, Miran denies inflationary consequences of increased tariffs on U.S. trading partners, expecting any inflation from tariffs to be a one-off price shift and not a lasting trend.
Fed Chair Jerome Powell, on the other hand, believes that while the tariffs' impact on inflation is likely to be temporary, Fed decision-makers must also consider other scenarios, including the possibility that inflationary effects could persist. Trump has long pushed for interest rate cuts and has repeatedly criticized Powell, even publicly discussing his removal, which would not be legally justified due to a dispute over monetary policy.
In an interview with Bloomberg Television, Miran stated there are no macroeconomically significant signs of price pressure from Trump's increased tariffs on U.S. trading partners. Miran praised Waller for not getting caught up in the tariff madness and providing an independent voice. Waller opposed the Fed's decision to keep rates unchanged last month, preferring a quarter-point cut.
As the nomination process unfolds, the potential appointment of Miran or Waller could bring significant changes to the Fed's monetary policy, particularly in the areas of interest rates, inflation, and trade tariffs. The future direction of these policies will be closely watched by economists and the general public alike.
Stephen Miran's nomination to the Federal Reserve's board, if confirmed, could lead to shifts in monetary policy, affecting various sectors such as business, finance, politics, and general-news. His vocal criticism of the Fed's bond purchases and his plan for Fed reform, which advocates separating monetary policy from bank regulation, suggest potential changes in these areas.
The ongoing debate over the succession of Fed Chair Jerome Powell, who believes that while tariffs' impact on inflation is likely temporary, the Fed should consider other scenarios, adds another layer of complexity to these anticipated changes.
