Washington
—
In MAGA world, Stephen Miran, the White House economist President Donald Trump nominated last week to the Federal Reserve’s top ranks, is a force to be reckoned with.
Miran has been a key voice in support of Trump’s sweeping economic agenda, with the president praising him as “distinguished” and “unmatched.”
But what it takes to get nominated to the Fed is different from what it takes to succeed at the central bank.
Miran was nominated in place of Adriana Kugler, who resigned from the Fed with six months left in her term. That means Miran would serve on the Fed’s Board of Governors only until January 31, should he be confirmed by the Senate. His unconventional views of the economy will be on full display during his confirmation hearing before the Senate Banking Committee — the same views that would put him out of step with the rest of the board.
Unlike most mainstream economists, including those at the Fed, Miran believes that Trump’s widespread tariffs on US trading partners won’t stoke inflation — a view that suggests the Fed should have already cut interest rates this year, as Trump has loudly demanded for months.
He’s doubled down on that position as recently as Tuesday.
“There’s just still continues to be no evidence whatsoever of any tariff-induced inflation,” Miran told CNBC. “I think lots of folks who are expecting that, who are predicting doom and gloom, it just hasn’t panned out, and it continues to not pan out for them.”
Miran also co-authored a paper last year that argued against the Fed’s independence, though he’s struck a different tone in recent comments. It’s unclear if he’ll be as unequivocal about honoring the Fed’s independence as Chair Jerome Powell and other Fed members typically are.
“The Fed is a consensus-driven body, so someone has to be persuasive in making sure everyone is on the same page,” said Ed Mills, Washington policy analyst at investment firm Raymond James. “But Miran is aligned with the president’s views, not Jerome Powell’s.”
Miran aligns closely with Trump’s unorthodox vision for the US economy, centered on an overhaul in trade policy. He’s one of its architects, after all.
In a November 2024 paper, Miran argued that a steep decline in the US dollar’s value and a tariff-centric approach could reshape the global economy in favor of the United States.
Since the beginning of the year, the Trump administration has haphazardly rewritten US trade policy, with sweeping levies as high as 50% that went into effect just last week. Fed officials have warned those import levies could push up inflation, but Miran continues to say the doubters are all wrong.
Consumer prices in July rose 2.7% from a year earlier, according to the latest Consumer Price Index data, released on Tuesday — a continuation of relatively tame inflation readings so far this year. Economists polled by data firm FactSet expected to see an annual gain of 2.8% in July.
With signs that the labor market is sputtering, the Fed could be on track to cut interest rates as soon as next month anyway. But if central bankers have to stop cutting because inflation rises, Miran’s long-held view that any impact of tariffs on inflation is fleeting would be out of line with the board again. And he could find himself getting the cold shoulder.
“The latest data have revealed some more weakness in the economy, but there are still quite a few Fed governors who are worried about inflation,” said Daniel Altman, an economist and writer of the High Yield Economics newsletter.
And in his Manhattan Institute paper last year, Miran called the Fed’s independence an outdated idea and argued Fed officials should be subject to at-will dismissal from the president — more in line with Trump’s views that presidents should get a say on interest rates than with Powell’s view of a politics-free Fed. But he softened that stance on Tuesday.
“I’ve always been clear that independence of the Fed is of paramount importance,” he said in his CNBC interview.
No current Fed official holds tariffs with the same high regard as Miran.
They have all said Trump’s tariffs could push up inflation to some extent. Even the two Trump appointees who dissented with the Fed’s decision last month to hold rates steady — Fed Governor Christopher Waller and Fed Vice Chair for Supervision Michelle Bowman — have argued that tariffs could have at least a limited effect on prices.
“Tariffs are one-off increases in the price level and do not cause inflation beyond a temporary increase,” Waller said in a statement explaining why he dissented at the July policy meeting.
Miran, however, goes much further.
In an interview with CNBC last month, Miran said it is “rare” for tariffs to boost inflation, comparing such instances to “pandemics or meteors or whatever.”
If Miran becomes a Fed governor, he’ll have the chance to lay out his economic views, including on tariffs, and recommend to his colleagues what the Fed should decide on interest rates.
The Fed’s rate-setting committee consists of 12 voting members, each of whom have only one vote. That means being able to build a consensus — usually the responsibility of the chair — is crucial if Miran wants to bend the Fed to Trump’s will.
Still, Miran in some ways remains a conventional Fed candidate.
“We don’t know exactly how Miran is going to vote, but he’s still a traditional nomination. He’s the head of the Council of Economic Advisers after all,” Mills said.
