Miran vows to uphold Fed independence but says Trump ‘entitled’ to a view on policy
Stephen Miran, Donald Trump’s nominee to join the Federal Reserve, has vowed to uphold central bank independence even as he said the president is “entitled” to take a view on monetary policy.
Miran told the Senate banking committee on Thursday that the Fed’s rate-setting committee was “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”.
But Miran said “the president is entitled to a view on appropriate monetary policy, as is everyone else interested in the subject”.
Miran, chair of Trump’s Council of Economic Advisers, also declined to weigh in on whether he agreed with the president that the Bureau of Labor Statistics had manipulated US economic data. Instead, Miran said, the agency’s data had “deteriorated steadily over time”.
By the end of the hearing, Miran had managed to avoid any glaring mis-steps that would derail his nomination to the Fed’s board, appearing to have provided sufficient reassurance to the Republicans on the committee that he was committed to Fed independence.
In responses to questions from senators, Miran told lawmakers that he did not foresee an adverse bond market reaction to any potential loss of Fed independence and that there was ‘no evidence’ Trump’s tariffs were stoking inflation. He also said that he had not been asked by White House to commit to rate cut, should he be confirmed.
The Senate hearing comes at a time when Trump has launched a sweeping attack on US economic institutions.
Trump fired the BLS chief about a month ago, claiming the agency had rigged labour market data to hurt his administration. He has also sharply criticised Fed chair Jay Powell, insisting the central bank should slash interest rates.
The president stepped up his assault of the Fed late last month when he moved to fire central bank governor Lisa Cook. She has sued the Trump administration, asking a judge to block the sacking.
Trump nominated Miran, a key architect of Trump’s economic agenda, after Adriana Kugler abruptly stepped down from the central bank’s board of governors at the start of August.
Markets muted during Miran’s Fed hearing
Markets were little moved during and shortly after Stephen Miran’s Senate confirmation hearing to the Federal Reserve’s board.
The yield on the interest rate-sensitive two-year Treasury was fractionally lower at 3.59 per cent around noon in New York.
Markets are still betting heavily on a rate cut from the Fed at its September’s meeting. Investors have received further confirmation of a possible cut over the past two days, with weak labour data raising concerns that tomorrow’s official non-farm payrolls number will show anaemic job growth.
On Thursday morning, ADP’s payroll numbers showed 54,000 jobs were added in August, below the 68,000 expected by economists polled by Bloomberg. The ISM Services index then came in higher than consensus, but showed signs of a weakening labour market.
Job openings and labour turnover data released on Wednesday also came in below expectations.
Fed policy needs to not be ‘vodka and darts’, senator Kennedy says
Republican senator John Kennedy said monetary policy needed to be based on something other than “vodka and darts” as he called on Stephen Miran to ignore the opinions of politicians.
“There’s nothing wrong with politicians in Washington offering opinions,” said the senator from Louisiana. “But we need a monetary plan that was put together [based on] something other than vodka and darts. And that’s what we have with the Federal Reserve.”