Senate Republicans voted on Monday to confirm a senior Trump official to the Federal Reserve’s board of governors as the White House raced to strengthen the US president’s control over the central bank ahead of its latest meeting.
Hours before Fed policymakers convene for their September decision on interest rates, the Senate voted 48 to 27 to confirm Stephen Miran – already chair of Donald Trump’s council of economic advisers – as a governor.
The vote concluded just as a US appeals court declined the Trump administration’s request to fire Lisa Cook, a governor appointed by Joe Biden, before the two-day policy meeting begins on Tuesday. The ruling from the US court of appeals for the District of Columbia Circuit means that Cook may remain in her position during the policy meeting where the Fed is expected to cut interest rates.
Miran’s appointment marks the first time in the history of the modern Federal Reserve, which stretches back almost a century, that a sitting member of the executive branch would also work at the highest levels of the central bank.
Trump has made no secret of his plans to influence the Fed, calling into question the future of its longstanding independence from political oversight by publicly describing plans to swiftly build “a majority” on its board.
He has repeatedly broken with precedent – presidents typically allow the Fed to operate with interference – to demand interest rate cuts, and attack senior Fed officials, including its chair Jerome Powell, when they repeatedly defied these calls.
While Powell has signaled the Fed is gearing up to resume rate cuts, Trump has already made clear he is unlikely to be satisfied by its cautious approach. Concerning economic signs, including data indicating that the labor market has stalled while inflation picked up, have reinforced expectations that many policymakers will want to tread carefully.
The administration has played down these official reports – and fired one of the officials responding for overseeing them. Trump’s proposed replacement is an ardent supporter of his agenda, who has been accused of misrepresenting and exaggerating statistics.
While Miran described the Fed’s independence as “critical” during a confirmation hearing earlier this month, and pledged to preserve it as governor, his decision to only take unpaid leave from his current job at the White House, rather than resign, raised questions over his ability to operate independently.
The administration has also been pushing to remove Cook for the Fed’s board as soon as possible, despite her legal action over Trump’s bid to dismiss her. The president has cited unconfirmed allegations of mortgage fraud. US district judge Jia Cobb also ruled on 9 September that Trump’s unfounded claims of mortgage fraud were not enough to terminate Cook under existing law. Congress created provisions to shield the Fed from political interference including that the president could only fire a governor “for cause”. The law does not define what would qualify as cause for termination.
Cook has denied wrongdoing, and argued Trump has no authority to fire her. Her term is not due to expire until 2038. A respected economist, with stints at Harvard University and Stanford University, she is the first Black woman to sit on the Fed’s board of governors. In August, Cook sued the Fed and Trump alleging the president chose to fire her for her stance on monetary policy.
Early on Monday, Trump reiterated his call for lower rates. Powell “MUST CUT INTEREST RATES, NOW, AND BIGGER THAN HE HAD IN MIND”, the US president wrote on his Truth Social platform, claiming: “HOUSING WILL SOAR!!!”
The latest Fed decision will be announced on Wednesday.