President Trump’s choice to fill a seat at the Federal Reserve said Thursday he would act based on economic data and not political whims as debate rages over White House efforts to reshape the Fed to its liking.
Stephen Miran, chairman of the Council of Economic Advisers, worked to assure skeptical senators that he could transition from his White House role, directly under Mr. Trump, to a governor’s position at the Fed, even though he plans to take a leave of absence from his administration role instead of resigning from it entirely.
“The president nominated me because I have policy views, I suppose, that he liked,” Mr. Miran told the Senate Banking Committee. “If I’m confirmed to this role, I will act independently, as the Federal Reserve always does, based on my own personal analysis of economic data.”
The committee is considering Mr. Miran while Mr. Trump loudly cajoles the bank’s Open Market Committee to slash rates.
Simultaneously, Mr. Trump is calling on Fed Board member Lisa Cook, a Biden appointee, to resign from the board over allegations of mortgage fraud. If Ms. Cook were to resign and be replaced, it would give the White House a Trump-appointed majority on the Fed Board while it urges the central bank to lower interest rates.
As Democrats accused Mr. Trump of tapping loyalists to erode Fed independence, Mr. Miran testified he would execute the bank’s main mission.
SEE ALSO: DOJ investigating Fed’s Cook over mortgage fraud
“In my view, the most important job of the central bank is to prevent depressions and hyperinflations. Independence of monetary policy is a critical element for its success,” Mr. Miran said in opening remarks.
Mr. Miran testified that no one has forced him to commit to lowering or raising interest rates, and he pledged to focus on “core missions” at the Fed instead of issues such as climate change.
Committee Chairman Sen. Tim Scott, South Carolina Republican, said Mr. Miran’s expertise will “strengthen the Fed at this critical moment,” while the ranking Democrat, Sen. Elizabeth Warren of Massachusetts, put Mr. Miran’s political independence to the test.
She asked Mr. Miran, point-blank, if Mr. Trump lost the 2020 election.
“Joe Biden was certified by Congress as the president of the United States,” Mr. Miran said.
“Did Donald Trump lose that election? Can you say the words Donald Trump lost that election? Are you independent enough to say that?” Ms. Warren said.
“The Congress certified Joe Biden,” Mr. Miran said again.
“Woo, that was one,” Ms. Warren said, cutting him off and moving on. “Let’s try another.”
Ms. Warren asked Mr. Miran if the Labor Department faked job numbers to help Democratic presidential nominee Kamala Harris last year, to which Mr. Miran said job reporting had “deteriorated” lately.
Given the GOP majority in the Senate, Mr. Miran is likely to be confirmed unless some Republicans dissent. He would fill a board vacancy by Fed Board member Adriana Kugler, a Biden appointment.
Mr. Miran would complete Ms. Kugel’s term through January. Because of the short term, he’s using the unusual arrangement of taking his leave of absence from the White House instead of resigning entirely.
Mr. Miran told skeptical Democrats that he was advised to do that because he doesn’t know what will happen after his short term.
Sen. Andy Kim, New Jersey Democrat, questioned that decision, saying Mr. Miran could override the White House and choose his career path.
Ms. Cook, meanwhile, has sued to keep her job, saying the fraud allegations are a pretext to shape the Fed to Mr. Trump’s liking.
Ms. Cook hasn’t fully explained why she listed both a Michigan home and a Georgia property as her primary residence in 2021.
Her lawyer Abbe Lowell said in court filings that she didn’t seek to commit fraud and that Washington knew about any “inconsistencies” in her filings long before Mr. Trump won a second term and attacked the Fed, including Chair Jerome H. Powell.
“If those are facial contradictions, as the Government and President claim, they certainly existed in the materials that Governor Cook provided as part of her Presidential vetting and Senate Confirmation process,” Mr. Lowell told a federal court considering the lawsuit.
The Justice Department opened a formal criminal inquiry into Ms. Cook and started to issue subpoenas, The Wall Street Journal reported Thursday.
The situation is sparking a debate about the Fed’s independence and ability to set monetary policy based on data, not political desires.
Ms. Warren said Mr. Trump has waged a “monthslong campaign to seize control of the Federal Reserve.”
She said Mr. Trump failed to deliver lower costs on Day 1, as promised, and wants to scapegoat the Fed instead of changing his policies.
“We are now on Day 227, and costs are not down. Donald Trump has failed to deliver on his promises,” Ms. Warren said.
She said political pressure on the Fed could result in artificially low rates and a situation in which prices and unemployment both rise — something that occurred in places like Argentina and Turkey when leaders interfered with central banks.
The Fed has been reluctant to cut interest rates because it fears inflation from Mr. Trump’s tariff policies.
The White House recently finalized its full tariff rates on imports from other countries, and the costs of those levies could be passed along to consumers. Mr. Trump said his tariffs haven’t resulted in widespread price increases and that high rates are holding back borrowers, especially those who want to buy a home.
The Fed is also worried about a slowdown in hiring, putting pressure on it to reduce rates.
The Fed’s Open Market Committee is expected to cut interest rates by at least 25 basis points, or 0.25%, when it meets later this month. Mr. Trump says it should have acted sooner.
Mr. Miran said the Open Market Committee is “an independent group with a monumental task.”
“And I intend to preserve that independence and serve the American people to the best of my ability,” Mr. Miran said.
In a notable exchange, Sen. Bernie Moreno asked Mr. Miran if he ever lied on a mortgage application.
“Thank you, senator, I have never done that,” Mr. Miran said.
“You’re already ahead of the game then,” said Mr. Moreno, Ohio Republican. “That’s good news.”
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
Please read our comment policy before commenting.