Fed's Milan: Plans to maintain FOMC independence if board nomination is confirmed

Fed's Milan: Plans to maintain FOMC independence if board nomination is confirmed

The Federal Reserve Board nominee, Stephen Miran, is set to face a confirmation hearing next week, scheduled for September 4 at 10 a.m. Eastern Time. Despite Democrats' inability to block the nomination, a rigorous questioning process is expected, focusing on Miran's economic policies and the Trump administration's actions regarding the Federal Reserve [1].

Miran, previously appointed by President Trump to fill the unexpired term of Federal Reserve Governor Adriana Kugler, is expected to face scrutiny over Trump's attempts to influence the Fed's independence. This includes dismissing Governor Lisa Cook and pressuring the Fed to lower interest rates [2]. Miran has advocated for aggressive interest rate cuts and reforms to expand presidential influence over the Federal Reserve [1].

The Senate Banking Committee's announcement of the hearing comes as the market anticipates an 87% probability of the Fed cutting interest rates by 25 basis points in September. If confirmed, Miran may support such cuts, although the short-term impact could be constrained by the Fed's decision-making culture [1].

Milan's nomination underscores the ongoing assault by the Trump administration on the Federal Reserve's independence. Economists warn that political interference could damage the Fed's global credibility and trigger international spillover effects [1]. Despite the market's relatively calm reaction, the potential for increased long-term Treasury yields due to political risk is a concern [1].

The confirmation process is likely to proceed swiftly, with Senate Majority Leader John Thune advancing votes in line with White House priorities. Trump can afford to lose up to three Republican votes, and even his most controversial nominees generally pass through [1]. However, the Senate's ability to prolong the vote in the full Senate for several days means that procedural failures or unexpected opposition could delay the process [1].

Regardless of the outcome, the Federal Reserve's independence remains a critical factor in maintaining a stable and credible monetary policy. The Fed's ability to set interest rates independently is essential for long-term economic stability, and any perceived political interference could have significant economic implications [3].

References:
[1] https://news.futunn.com/en/post/61365223/the-trump-administration-is-pushing-to-get-on-the-table
[2] https://www.forbes.com/sites/simonmoore/2025/09/03/trump-attempts-to-remove-fed-governor-cook/
[3] https://www.aol.com/world-leader-issues-warning-trump-182449488.html