Donald Trump has intensified his campaign to exert greater political control over the Federal Reserve, calling for drastic rate cuts and pushing to remove a governor appointed by Joe Biden. The president's efforts have raised concerns about the central bank's independence, as he continues to install allies in key positions.
On Tuesday, Stephen Miran, chair of the US Council of Economic Advisers, joined the Fed's board of governors just hours before its latest meeting. Miran had previously co-authored an article arguing for a ban on the 'revolving door' between the White House and the Fed to reduce short-term political influence. During his confirmation hearing, he pledged to preserve the Fed's independence but took unpaid leave from his White House role.
At the meeting, the Fed cut interest rates by 25 basis points, the first reduction in almost three years. Miran was the sole dissenter, voting for a 50-basis-point cut, aligning with Trump's demands for faster and deeper cuts. Fed Chair Jerome Powell noted that there was 'not widespread support at all' for such a move and expressed confidence that rate discussions remain unaffected by politics.
Trump has publicly stated that the Fed should be independent but 'listen to smart people, like me'. His administration is also seeking to remove Lisa Cook, a Fed governor appointed by Biden. With Powell's term expiring next year, Trump will have the opportunity to select a new chair, further testing the Fed's independence.
