Stephen Miran may join the Fed before the next vote on interest rates

Last month, President Donald Trump nominated Stephen Miran to fill a vacant seat on the Federal Reserve’s Board of Governors. And much like other Trump administration picks that require Senate confirmation, Miran’s selection has drawn skepticism from Democratic lawmakers.

Miran met last week with members of the Senate banking committee, and a full floor vote to confirm him could happen this week. Trump and other officials are keen to install Miran ahead of next week’s Federal Open Market Committee vote on the Fed funds rate as the president continues his battle with Fed Chair Jerome Powell.

Miran would replace Adriana Kugler on the Fed board and become one of 12 people who set interest rate policies. Kugler resigned at the start of August, and her replacement will finish out her term that expires in January 2026.

Miran’s nomination sparks Democratic pushback

As the chair of the White House Council of Economic Advisers, Miran has close ties to the president. He published a paper last year that called for the aggressive use of tariffs to reshape the global economy. A recent report from The New York Times mentioned a separate paper that Miran co-authored, which criticized the central bank “and concluded that its institutional setup made it prone to policy errors and that it was unaccountable to the very people it was supposed to serve.”

His nomination has sparked pushback from Democrats, including Sens. Elizabeth Warren (Mass.) and Jack Reed (R.I.), who questioned Miran’s independence. He has publicly stated his plan to take an unpaid leave of absence from the White House, rather than resign, to work with the Fed.

“Even if the Republicans on this Committee force through his confirmation, Dr. Miran’s tenure will be tainted. No one — not the American public, not investors here at home, not the worldwide financial markets — will trust him as an independent voice,” Warren said in prepared remarks during last week’s confirmation hearing. “Every claim he makes and every vote he takes will be tainted with the suspicion that he isn’t an honest broker, but that he is Donald Trump’s puppet.”

“This arrangement would not serve the best interest of the American people,” a letter from Senate Democrats to Miran read. “It is ludicrous to contend that you could exercise independent judgment regarding monetary policy and financial regulation.”

Conservative support for the nomination

Conversely, the America First Policy Institute — a conservative think tank — issued a statement of support for Miran, saying that his departure from Biden-era monetary policy would be welcomed.

“The Federal Reserve under the Biden Administration has become increasingly more political by choosing to further a radically political ESG (environmental, social, governance) agenda instead of addressing the hidden inflationary tax on the American people, which is part of the Fed’s original mandate,” the statement read. “Stephen Miran, President Trump’s nominee for governor of the Federal Reserve, will put Americans first and restore the Fed’s core mission without political bias.”

Miran defended his positions during the hearing, saying that the Fed requires “democratic oversight.”

“I’m very independently minded, as shown by my willingness to stray from consensus and have out-of-consensus views, and I believe that I will continue to be as independent in my thinking process, if confirmed,” he said.

The Fed’s battle against inflation

At the tail end of 2024, Fed policymakers implemented a series of three consecutive rate cuts that reduced the federal funds rate by a total of 100 basis points. Those moves came after a lengthy period of rate hikes in 2022 and 2023 as the Fed attempted to combat 40-year high inflation.

While mortgage rates are not directly controlled by the Fed, the rate hikes have resulted in long-term lending costs rising significantly from their historic low points in 2020 and 2021. Even with some recent downward movement, the average 30-year conforming loan rate this week is 6.64%, according to HousingWire‘s Mortgage Rates Center.

With annual inflation normalizing and dropping below 3% at the end of last year, Fed officials projected two more rate cuts in 2025. But these have yet to materialize as Powell and others have taken a “wait-and-see” stance to analyze the impacts of Trump’s global tariff regime.

In the wake of the August employment report — which saw the country add only 22,000 jobs — market observers widely expect a rate cut next week. As of Monday, the CME Group’s FedWatch tool showed that 88% of interest rate traders believe rates will be lowered by 25 basis points. The remaining 12% think it will be a 50-bps cut.

Along with Miran’s potential confirmation, Trump could gain another supporter on the Fed board if he’s allowed to proceed with the firing of Lisa Cook. After allegations of mortgage fraud surfaced against Cook, the president attempted to remove her, but Cook sued and is retaining her seat for now.

The Department of Justice announced it would investigate the matter. The Fed has said it will abide by any decisions made by the courts.