Washington (AFP) – Donald Trump’s pick to join the Federal Reserve’s board of governors pledged Thursday to uphold US central bank independence if confirmed, as the institution faces growing political pressure from the president to slash interest rates.
“The Federal Open Market Committee is an independent group with a monumental task, and I intend to preserve that independence,” Stephen Miran, who chairs the White House Council of Economic Advisors, told senators at his confirmation hearing. Miran added in opening remarks to the Senate Banking Committee that the most important job of the central bank is to prevent depressions and hyperinflation. “Independence of monetary policy is a critical element for its success,” he said, adding that his views and decisions will be driven by his analysis of the macroeconomy.
But Senator Elizabeth Warren, the top Democrat on the committee, charged Thursday that Trump has launched an “all-out assault” on the independence of the Fed. Trump nominated Miran to the Fed’s board to finish out the term of Adriana Kugler, an appointee of former president Joe Biden who announced her resignation recently.
The personnel shift came, however, as the Fed faced intensifying calls from the US president to cut interest rates significantly. Trump has repeatedly lashed out at Fed Chair Jerome Powell for not cutting rates sooner, calling him a “numbskull” and “moron.” Trump has also moved to fire another Fed governor, Lisa Cook, who has since embarked on a legal battle to remain in her position. Cook, like Kugler, was nominated by Biden to the Fed’s board and took office in 2022.
In seeking to remove Cook, the first Black woman to serve on the Fed’s board, Trump cited allegations of mortgage fraud. She has not been charged with a crime, and the alleged incidents occurred before she took office as a Fed governor.
On Thursday, Warren noted that Miran was moving from a political role to a non-political one, posing questions that challenged him to prove his independence from Trump’s positions on various issues. Since its last rate cut in December, the Fed has held interest rates at a range between 4.25 percent and 4.50 percent this year. Powell has opened the door, however, to lowering levels at the bank’s next policy meeting later this month.
The seven members of the Fed’s powerful board of governors sit on the central bank’s Federal Open Market Committee, which votes on interest rate decisions.
© 2024 AFP
