Senate Panel Advances Trump’s Fed Pick. Miran Is on Track for September Meeting.

“The labor market is in a pretty good place,” Stephen Miran said in an Aug. 28 interview. (Daniel Heuer/Bloomberg)

The Senate Banking Committee voted along party lines Wednesday to advance President Donald Trump’s nominee for a temporary seat on the Federal Reserve’s board.

The nominee, White House economist Stephen Miran, is expected to sail through to full confirmation in time for the Fed meeting next week.

A weakening labor market is expected to prompt the Fed to cut its benchmark interest rate with or without Miran. Still, his confirmation would give the president a new lever of influence over an independent economic agency he has long sought to dominate. The consequences of that decision are likely to play out in the market for long-term interest rates, where critics worry the president’s often-expressed desire for lower rates may end up keeping them elevated instead.

Miran’s fast-track process reflects the intensity of Trump’s desire to bring down rates. He was nominated to fill a seat vacated by former Fed governor Adriana Kugler, appointed by former President Joseph Biden in 2023. She announced her intent to resign on Aug. 1, just 46 days ahead of the start of the rate-setting Federal Open Market Committee’s next meeting, starting on Sept. 16.

The average nomination for a position below cabinet level has taken 112 days, according to the Center for Presidential Transition, a nonpartisan organization that provides advice to presidential candidates.

Miran’s nomination, advanced on a 13-11 vote, still needs to be approved by the full Senate. That vote hasn’t been scheduled, but is expected to happen soon.

“There’s no reason why the GOP leadership would delay it. And so my expectation is they’ll push him through before the meeting,” said Carl Tobias, Williams chair in law at the University of Richmond.

The full Senate vote “might even come this week,” he said.

All 53 Republican Senators voted in March to confirm Miran for his current job as chair of the Council of Economic Advisers.

Miran said in a Senate hearing last week that he intends to return to that job once his tenure on the Fed concludes. The term he is filling expires Jan. 31, though Fed governors can continue to serve until their replacements are confirmed.

Miran’s plan to take a leave of absence from the White House, rather than resign, has prompted sharp criticism from Democrats. His tenure will be “tainted with the suspicion that he isn’t an honest broker,” said Sen. Elizabeth Warren (D., Mass.).

But Democrats lack the votes to block his nomination. Senate Republicans have escalated a separate fight over some administration nominees and are unlikely to tolerate significant delays to giving Trump what he wants from the Fed.

The stock market hasn’t reacted recently to Trump’s attempts to rein in the Fed, but the bond market shows some signs of jitters.

The Fed has the most control over short-term interest rates. Those have fallen recently as traders anticipate up to three Fed rate cuts this year. Longer maturities, such as the 10-year Treasury note, have also fallen—but less. This steepening of the yield curve suggests that markets are concerned about the possibility of inflation getting out of hand if Fed officials bow to political pressure not to raise interest rates.

Prominent hedge fund manager and Republican donor Ken Griffin laid out those concerns in a Wall Street Journal opinion essay on Sunday. “Lower inflation should naturally produce lower interest rates. But statements and actions that undermine the independence of the Fed risk stoking both higher inflation and higher long-term rates,” Griffin wrote with Anil K. Kashyap of the Chicago Booth Business School.

The White House didn’t respond to a request for comment. Miran has said he would follow his own judgment in making rate-setting decisions.

To be sure, Treasury yields are far from crisis levels. The yield on the 10-year note traded below 4.1% Tuesday, its fourth-lowest level of the year, and well below its 52-week peak of 4.8% set in mid-January.

Miran’s vote is just one of a dozen on the Fed, and even if confirmed speedily, he may be involved in as few as four rate-setting votes before his term ends. The president will get to choose a nominee to succeed Miran, but he may need to use that opening to ensure he can put in place a replacement for Chair Jerome Powell. His position as chair expires in May, but he may continue to serve on the board through 2028.

But Miran’s confirmation will still be consequential. He is a forceful advocate of Trump’s policy ideas, as he articulated recently in an interview with Barron’s. His tenure on the Fed will begin a process of change at the central bank that is likely to take many traditionalist economists outside of their comfort zones.

As Miran’s confirmation will show, the momentum behind that change is growing, fast.

Write to Matt Peterson at matt.peterson@dowjones.com