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Donald Trump’s nominee to join the Federal Reserve said the president was “entitled” to take a view on monetary policy even as he vowed to uphold the independence of the US central bank.
Stephen Miran told the Senate banking committee on Thursday that he viewed Fed independence as “paramount” as he sought to assuage lawmakers’ fears that his actions in the role would be based on Trump’s instructions.
But he added “the president is entitled to a view on appropriate monetary policy, as is everyone else interested in the subject”.
The subject of Fed independence was at the heart of Thursday’s hearing, which comes in the middle of Trump’s multipronged attack on the US central bank.
The president has repeatedly criticised chair Jay Powell for refusing to lower interest rates, which he says should be “at least” three points below their current level of 4.25 per cent to 4.5 per cent.
Last week he took the unprecedented step of moving to fire Fed governor Lisa Cook over allegations of mortgage fraud. She has denied the allegations through her lawyers and is contesting the dismissal.
Trump nominated Miran, a central architect of his economic agenda, after Adriana Kugler abruptly stepped down from the central bank’s board of governors at the start of August.
Miran, who serves as chair of the White House Council of Economic Advisers, said he would not resign from his current role if confirmed as a Fed governor, which Democrats said would leave him beholden to the Trump administration.
“I have been advised by counsel that the legal approach is to take an unpaid leave of absence from the Council of Economic Advisors, cease my activities, and if council advises me otherwise, I will follow the law and follow council’s advice,” he said.
Miran would hold the Fed position for four months, seeing out the remainder of Kugler’s term. He said if he was nominated for a longer stint after that, he would “absolutely resign” from the CEA.
Elizabeth Warren, the top Democrat on the panel, said every move Miran made at the Fed would be “tainted” with the “suspicion” that he would be “Donald Trump’s puppet”.
“He has made clear that his loyalty is not to the American people, not to the numbers, not to independence, but to saying whatever it is Donald Trump wants him to say,” she said.
By the end of the hearing, Miran had avoided any glaring mis-steps that would derail his nomination to the board, appearing to have provided sufficient reassurance to the Republicans on the committee that he was committed to central bank independence.
Miran also told lawmakers he did not foresee an adverse bond market reaction to any potential loss of Fed independence and that he did not think Trump’s tariffs were stoking inflation, taking issue with the central argument put forward by Fed members against cutting interest rates.
“I do believe that there’s no evidence that tariffs had any inflationary effect in the sense of moving the price level,” he said.
Miran also said the Fed had become “politicised” in recent years and vowed to take a stand against the central bank wading into issues such as climate change that he said were beyond its brief.
“If I am confirmed, I will forcefully push back on the Fed straying from its core mandates that were signed by the Congress.”