Trump’s Fed Strategy Falters: Powell Stays, Miran Resigns from White House
The recent political maneuvers surrounding the U.S. Federal Reserve spotlight significant shifts in the relationship between President Trump and the central bank. As Trump’s ambitions for a more compliant Fed appear to falter, Federal Reserve Chairman Jerome Powell may remain in his position longer than anticipated, while Stephen Miran, a key Trump ally at the Fed, resigns from his role.
Powell’s Future at the Fed
Trump’s strategy aimed at reshaping the Federal Reserve has faced major setbacks. Initially, he targeted Powell with criticisms, seeking to influence interest rates to benefit his administration’s standing. Following his election, Trump shifted his stance, calling for lower rates.
Despite Trump’s efforts, Powell’s term as Fed chair is set to end in May. Nonetheless, the likelihood of his replacement has grown uncertain. The Trump administration had proposed Kevin Warsh, a former Fed governor, as Powell’s potential successor.
Challenges Ahead for Warsh’s Nomination
Warsh’s nomination now faces hurdles. The Senate Banking Committee has paused proceedings until ongoing criminal investigations initiated by the Trump administration against Fed members are resolved. These investigations impact both Powell and Fed Governor Lisa Cook.
- Powell is under investigation for testimonies related to Fed renovations.
- Cook faces allegations regarding her mortgage terms before joining the Fed, which she denies.
Democrats in the Senate have expressed concerns over Trump’s attempts to exert influence on the Federal Reserve. They argue that these tactics undermine the independence essential for the Fed. UBS chief economist Paul Donovan recently noted that these developments suggest Powell may continue as chair longer than expected.
Miran’s Departure from the Fed
In a related shift, Stephen Miran, who supported Trump’s economic agenda, has resigned from his position on the Fed. Miran previously served as the chairman of the Council of Economic Advisers. His resignation signifies a separation between the White House and the Federal Reserve, which operates under a mandate of political independence.
As tensions rise, White House spokesman Kush Desai remarked that Miran’s departure aligns with a commitment made last year, recognizing his contributions to the Trump administration’s economic strategies.
Conclusion
The evolving dynamics between Trump, the Federal Reserve, and its leadership reveal a complex narrative. With Powell’s future uncertain and Miran’s exit marking a clear shift, the Federal Reserve’s independence remains a focal point in the ongoing political discourse.
