Update 892 – SBC OK’s Miran for Fed;
Court Allows Cook to Remain on Board
President Trump’s effort to stack the board of the Federal Reserve with friendly voices advanced today as Stephen Miran, Chair of the White House Council of Economic Advisors, was confirmed by the Senate Banking Committee to a seat on the Federal Reserve Board in a party-line vote this morning. The full Senate could vote on Miran’s confirmation before the Fed’s interest-rate-setting committee meets next week, allowing him to participate.
But Trump’s effort to secure a working majority on the Board hit a snag this week, as a federal judge temporarily blocked his attempt to remove Fed Governor Lisa Cook in a ruling issued last night. Governor Cook can continue to serve on the board as her case advances and vote on monetary policy next week. Congress must recognize Miran’s nomination as an attempt to ensure monetary policy is decided by political loyalists rather than independent officials and push back on the Trump administration’s dangerous attacks on Fed independence.
Best,
Dana
Senate Banking Confirms Miran as Fed Governor
The Senate Committee on Banking, Housing, and Urban Affairs confirmed Chair of the White House Council of Economic Advisors Stephen Miran to be a member of the Board of Governors of the Federal Reserve System earlier today in a 13-11 party-line vote, with every Democrat present opposing. President Trump nominated Miran to fill the remaining roughly five months of the unexpired term previously held by former Fed Governor Adriana Kugler, whose resignation took effect on August 8. Miran’s confirmation could move to the Senate floor as soon as this week.
Republicans are seeking to confirm Miran before the Fed’s interest rate-setting committee, the Federal Open Market Committee (FOMC), meets next week. The FOMC is composed of twelve members – the seven members of the Fed’s Board of Governors; the president of the Federal Reserve Bank of New York; and four of the remaining eleven Reserve Bank presidents, who serve one-year terms on a rotating basis.
President Trump has called for the FOMC to cut interest rates by an unprecedented 250 basis points despite inflation ticking up steadily in recent months. The FOMC has held the federal funds rate steady at the 4.25 to 4.5 percent range throughout this year. At the FOMC’s last meeting in July, two Trump-appointed Fed governors – Vice Chair of Supervision Michelle Bowman and Governor Christopher Waller – dissented, supporting a rate cut instead of another pause. Kugler’s resignation gave Trump the opportunity to add another member to the FOMC who will support his preferred monetary policy path. As Senate Banking Committee Ranking Member Elizabeth Warren (D-MA) noted during Miran’s confirmation hearing last week, President Trump “wants to install his lackey so that we will have a Fed that uses its power to please the president, but that can’t be trusted to keep inflation under control.”
A Closer Look at Miran’s Economic Positions
Miran currently serves as Chair of the White House Council of Economic Advisors, where he directly serves the President as an advisor on economic policy. Miran has said he will not resign from his role on the Council of Economic Advisors but would take an unpaid leave of absence instead, allowing him to return to the White House after his term as Fed governor ends in January.
Miran claims that he will act independently if confirmed, but President Trump could choose to block Miran from returning to his position at the Council of Economic Advisors. How can Miran serve independently while President Trump constantly holds his position over his head?
Even Miran understands that independence under such circumstances is impossible. A 2024 report co-authored by Miran said, “Short-circuiting the revolving door between the Fed and the executive branch is critical to reducing the incentives for officials to act in the short-term political interests of the president.” The report goes further, proposing “To further insulate board members from the day-to-day political process, they should be prohibited from serving in the executive branch for four years following the end of their term.” Miran clearly has no intention of abiding by his own proposed rule.
The report also proposes significant structural reform to the Fed, resulting in a less independent and far more political institution. These include:
- Making board members and Reserve Bank leaders subject to at-will removal by the president.
- Shortening all board members’ and Reserve Bank leaders’ terms to a single term of eight years.
Miran’s analysis of the economy is also contentious. He claims, “There has been no detectable increase in the aggregate price level as a result of tariffs.” In reality, the Fed’s preferred measure of inflation has risen from 2.2 percent in April to 2.6 percent in July as the Trump administration’s tariffs have begun to settle into the economy.
As a member of the Fed’s board, Miran will also help shape federal banking regulation as the Trump administration pushes through its risky deregulatory agenda. When asked about regulators’ Basel III Endgame and supplementary leverage ratio reform proposals, Miran said that he shared some concerns of Senate Banking Committee Chair Tim Scott (R-SC) about resulting limitations on credit provision.
Cook Seat and Trump’s Attempt to Seize the Fed
As Warren also noted during Miran’s confirmation hearing, “President Trump has conducted a long campaign to seize control of the Federal Reserve.” Trump is seeking to secure a majority on the Fed’s Board of Governors to gain influence over these traditionally politically insulated monetary policy decisions.
Trump’s effort has included repeated threats to fire Fed Chair Jerome Powell and his ongoing attempt to remove Governor Lisa Cook. No President has ever removed a Fed governor. Trump cannot legally fire any member of the board for refusing to lower interest rates. The President can only legally remove a member of the Fed’s board “for cause,” according to Section 10 of the Federal Reserve Act. “Cause” usually refers to serious misconduct or malfeasance in the officeholders’ performance of their role.
Trump has threatened to fire Fed Chair Powell before his term as chair ends next May and apparently sought to manufacture grounds for a “for cause” firing related to the Fed’s ongoing building renovations ahead of the Fed’s last interest rate decision in July. When Powell’s term as chair ends, Trump will have the opportunity to nominate a replacement from the board’s members to chair the board for a four-year term.
Late last month, Trump attempted to remove Lisa Cook from the Fed’s Board of Governors effective immediately, following allegations of mortgage fraud leveled by his political ally, Federal Housing Finance Agency Director Bill Pulte. Pulte filed a criminal referral against Cook with the Department of Justice. Cook took office as a member of the Fed’s Board in May 2022 to fill an unexpired term ending January 2024. She was later reappointed to the board to serve a full fourteen-year term, ending in January 2038. Governor Cook has yet to be charged with or convicted of a crime and has refused to step down.
Last night, a federal judge ruled that Trump’s effort to remove Governor Cook is likely illegal and that Cook must be immediately reinstated. This will allow Cook to participate in next week’s FOMC meeting.
Preview of September FOMC Meeting
Inflation is rising, the labor market is cooling, and growth is moderating under the weight of the Trump administration’s trade and immigration policies, putting the Fed’s dual mandate of stable prices and maximum employment in tension.
New data released yesterday revealed that the labor market has been softening by more than previously estimated. Job gains over the period March 2024 to 2025 were revised significantly down – monthly job gains in 2024 averaged 106,000 per month, down from the previously estimated 168,000 per month, and monthly job gains in 2025 averaged 44,000 per month, down from the previously estimated 75,000 per month. The significant moderation in job gains over the past nearly year and a half will likely incline FOMC officials to cut rates by 25 basis points at their meeting on Tuesday and Wednesday.
President Trump’s campaign to seize control of the Fed is part of his broader effort to eliminate longstanding pockets of independence within the federal government and intimidate any official who puts duty to the American people over the President’s political will — an authoritarian step to concentrate power in the executive and stifle dissent.
Trump’s attempts to undermine the independence of the Fed threaten global confidence in the institution and the American economy. During future periods of stress, the world will look to the Fed to help provide stability and see a weakened institution under the thumb of the President. It could be detrimental for the Fed to prioritize the president’s short-term political interest above broader economic stability. Every member of the Senate should appreciate the risk and oppose Miran’s confirmation as it moves to the floor.