Stephen Miran, a key economic adviser to former President Donald Trump, has formally resigned from his position at the White House to maintain his role as a governor at the Federal Reserve. This move fulfills a commitment Miran made to the Senate, as his temporary assignment at the central bank has extended beyond its initial timeframe.
Background on Miran's Dual Roles
Miran had been serving as chair of the White House's Council of Economic Advisers (CEA) while simultaneously holding a position on the Federal Reserve's board of governors. He was placed on unpaid leave from the CEA after Trump appointed him last year to fill an unexpected vacancy at the Fed, with a term originally set to expire on 31 January. This unusual arrangement sparked criticism from Democratic senators, who argued it could compromise the Fed's independence by creating a presidential puppet within its policymaking ranks.
Legal Advice and Senate Promise
In his resignation letter dated Tuesday, Miran explained that he had received legal counsel indicating no need to quit his CEA post initially, as the Fed role was expected to last only a few months. However, he stated, "I promised the Senate that if I should stay on the board past January, I would formally depart the council." Miran emphasised the importance of honouring his word while continuing his duties at the Federal Reserve, to which he was appointed by the president and confirmed by the Senate.
Political Context and Fed Leadership
This development occurs amidst significant political manoeuvring around the Federal Reserve's leadership. Trump recently announced plans to nominate former Fed governor Kevin Warsh as the next chair to succeed Jerome Powell, whose term ends in May. Although this would fill the board seat currently occupied by Miran, existing legislation permits him to serve until a successor is confirmed by the Senate, a process that may face delays.
Investigations and Tensions
The resignation unfolds against a backdrop of heightened scrutiny and tension between the Trump administration and the Federal Reserve. Powell disclosed in January that the Department of Justice has launched a criminal investigation into statements he made to the Senate regarding Fed building renovations. Powell has characterised this probe as part of a broader administration effort to exert control over the central bank.
Additionally, the justice department opened an investigation last year into Fed governor Lisa Cook over alleged misstatements on her mortgage application. Cook denies any wrongdoing and is currently engaged in legal action to block Trump's attempt to dismiss her, with the case now before the supreme court.
Reactions and Implications
The White House has not immediately commented on whether Pierre Yared, the current acting chair of the CEA, will be appointed to the top position permanently. Miran's resignation was initially reported by Barron's, highlighting its significance in financial and political circles.
Since joining the Federal Reserve last September, Miran has consistently advocated for substantially lower interest rates at every meeting. Trump has openly expressed his desire for the Fed to reduce rates, even making support for easier monetary policy a criterion for selecting a new Fed chief.
A majority of the Senate banking committee, including all Democratic members and one Republican, have condemned the justice department's investigation of Powell as political intimidation. They have also indicated opposition to advancing Warsh's nomination, suggesting potential hurdles in the confirmation process.
This situation underscores ongoing debates about the independence of the Federal Reserve from political influence, a cornerstone of modern economic policy. Miran's departure from the White House role, while continuing at the Fed, represents a delicate balancing act between administrative loyalty and institutional integrity.
