Fed nominee Miran tells Senate panel he’s ‘not at all’ Trump’s puppet

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By Ann Saphir and Bo Erickson

(Reuters) -Stephen Miran, President Donald Trump’s pick to fill an open seat at the Federal Reserve, on Thursday parried dozens of questions from lawmakers about whether he will make interest-rate decisions independently of presidential pressure, with Republicans seeking to use the exchanges to affirm Miran’s promise of political neutrality and Democrats expressing their skepticism.   

The Senate Banking Committee hearing on Miran’s nomination comes as Trump steps up efforts, including an unprecedented attempt to remove a sitting Fed governor, to exert control over the central bank. The Fed’s ability to manage inflation effectively is widely seen as requiring freedom from political influence over interest-rate decisions.

Fed policymakers are expected to cut rates by a quarter percentage point when they next meet, on September 16-17. That’s far less than the several percentage points Trump says he wants, and Republicans have signaled they will use their majority in Congress to try to get Miran confirmed in time to participate. Miran would have one vote of 12 on rate setting at the Fed.

“I think the president has had a series of excellent calls on monetary policy,” Miran said at the two-hour-and-20 minute hearing in which he repeatedly promised to preserve the Fed’s independence and make decisions based on his own analysis and what’s best for the economy’s long-term stewardship. “That said, I’m always happy to hear views from every source possible…to challenge my own views and interrogate them,” he said.

Senator Elizabeth Warren of Massachusetts, the top Democrat on the Senate Banking Committee, was not reassured, saying Miran’s joining the Fed would “take an axe” to the central bank’s independence and pressing her point with questions to Miran over whether he believed Trump lost the 2020 presidential election and if he agreed with the president that recent jobs numbers showing a drop in monthly job gains were rigged.

Miran repeated his view that he was concerned with “data quality” at the Bureau of Labor Statistics, and on Trump’s 2020 loss said only, “Joe Biden was certified by Congress as the President of the United States.”

Other Democratic Senators were equally pointed as they grilled Miran, who would occupy a seat unexpectedly vacated last month by Fed Governor Adriana Kugler, serving a term that ends January 31.

Miran made it clear he planned to take an unpaid leave of absence from his current job as chair of the president’s Council of Economic Advisors and would resign only if he was renominated to a longer Fed term. He later told reporters he has not spoken with anyone at the White House about that possibility.  

“For you to suggest that the president would somehow welcome you back with open arms at the Council of Economic Advisors should you vote in a way that is opposed by the president of the United States is just not credible,” Democratic Senator Chris Van Hollen of Maryland said, citing Trump social media posts threatening to fire Fed Chair Jerome Powell for not cutting interest rates and urging the Fed Board to overrule him.

Miran said he viewed such posts as an “exhortation” for Fed policymakers to “vote their own views.”

Powell and the majority of Fed policymakers have held rates steady all year out of concern that Trump’s high tariffs could reignite inflation. Miran told Senators he believes tariffs are not inflationary, and expects Trump’s border-tightening efforts, which reduce what he said has been excess demand for housing from immigrants, to be “deflationary.” 

“Has anyone in the administration asked you to commit, formally or informally to vote to lower interest rates?” asked New Jersey Democratic Senator Andy Kim. “No,” Miran said.

NOT A PUPPET

Republicans for their part signaled their general support for Miran. 

Senator John Kennedy, a Louisiana Republican, asked Miran to respond to Warren’s charges that he would be manipulated by the president. “Are you a Donald Trump puppet?” Kennedy asked.

“Not at all,” Miran responded.

“We are going to hold you to that,” Kennedy said.

Others raised criticism frequently leveled at the Fed by Republicans during the Biden administration.

“I find it particularly rich that the Federal Reserve’s independence is suddenly a big issue from a party that’s long sought to systematically inject its ideology in the work of the central bank,” said Senator Bill Hagerty, a Tennessee Republican.

Democrats do not have the numbers to stop or even slow the current nomination process, the next step for which would be a vote by the Republican-dominated banking committee to send Miran’s nomination for approval by the full U.S. Senate.

Two Trump appointees from the president’s first term – Fed Vice Chair for Supervision Michelle Bowman and Fed Governor Christopher Waller – dissented against the Fed’s July decision to hold rates steady, preferring a rate cut. Both are said to be under consideration as nominees to succeed Powell as Fed chair when his term is up in May. 

(Reporting by Ann Saphir and Bo Erickson; Editing by Andrea Ricci)