August 8, 2025

Hold onto your hats, finance fans! US President Donald Trump shook the world of money and markets on Thursday. He announced his choice to fill a key seat at the Federal Reserve board for four months. The lucky nominee? Stephen Miran, the head of the White House's Council of Economic Advisers. This seat opened up when governor Adriana Kugler, handpicked by Joe Biden, stepped down. If the Senate gives a thumbs up, Miran will serve until January 31, 2026. This is Trump's first big chance to grab more reins over the mighty Fed, known for staying independent from politics. Why so important? Because Jerome Powell, the Fed Chair, has been stubborn — keeping interest rates steady. Trump even called him "a stubborn MORON" on social media last week! Stephen Miran isn’t just any adviser. He’s stood firmly behind Trump’s tax cuts and tariff hikes, saying these will grow the economy and even shrink budget deficits. Plus, he downplays worries that tariffs might push inflation up – a big headache for Powell. But here’s the spicy bit: Miran joining the Fed might make critics nervous about political control creeping into the usually neutral Fed. Traditionally, the Fed needs to stay independent to make tough calls like raising interest rates to fight inflation — moves politicians often avoid. Fed governors are the VIPs who vote on interest rate changes and important financial rules. Miran’s presence would likely add a strong voice for keeping rates low. On the other hand, Kugler agreed with Powell’s plan to hold rates steady and watch tariffs’ effects carefully. Trump wants Fed officials who will slash rates to bring down borrowing costs on the US’s massive $36 trillion debt and help revive sluggish home sales. But remember, the Fed’s decisions don’t directly control long-term rates for buying homes or cars. Recently, the Fed kept the key rate at 4.3%, unchanged after cuts last year. Two governors appointed by Trump, Christopher Waller and Michelle Bowman, disagreed with this move — showing some sparks of internal drama. Even with Miran on board, the Fed’s 12 voting officials worry that Trump’s sweeping tariffs could push inflation up soon. After his four-month term ends, Miran might be reappointed for longer or replaced by another nominee. Powell’s term as chair ends in May 2026, but he could stay a governor until January 2028. That could block Trump from packing the board with his picks quickly. So Trump might wait till then, or appoint Powell’s next chair early to fill Kugler’s spot. Strong candidates for chair include former Fed governor Kevin Warsh and Trump’s adviser Kevin Hassett. Waller might also step up. Economist Marco Casiraghi from Evercore ISI says Miran’s pick could be good news for Waller, since Trump didn’t nominate someone ready to take over as chair yet. After a recent jobs report, Miran slammed Powell for not cutting rates, saying Trump was right about inflation before and will be again. He told MSNBC, "What we are seeing now in real time is a repetition once again of this pattern where the president will end up having been proven right." Miran is no stranger to bold ideas. Last November, he suggested lowering the dollar’s value to boost US exports, reduce imports, and cut the trade deficit — a win for Trump’s policies. He also suggested a "Mar-a-Lago Accord" with trade partners, like the 1980s Plaza Accord, to manage currency values. In March 2024, Miran proposed big changes to how the Fed is run, wanting to make it easier for presidents to fire board members. He called the current system a "groupthink" machine causing serious mistakes. So buckle up! With Miran’s name in the game, the Federal Reserve’s path could get a whole lot noisier — and more political — in the months to come.

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Tags: Donald trump, Federal reserve, Stephen miran, Interest rates, Jerome powell, Us economy,