The MAGA Takeover of the Fed Begins Now

Trump nominated Stephen Miran, chairman of the Council of Economic Advisers, for a short-term seat on the Fed’s board of governors. (Photography by Aaron Schwartz / Sipa / Bloomberg)

President Donald Trump has been itching to remake the Federal Reserve almost since the moment his nominee for Fed Chair, Jerome Powell, was confirmed in 2018. On Thursday, Trump finally got his chance to start the overhaul.

The nomination of economist Stephen Miran for a short-term seat on the Fed’s board of governors gives Trump the opportunity to install a loyal voice at the Fed without having to wait for the chair to open up.

In Miran, currently chair of the White House Council of Economic Advisers, Trump has chosen a sharp critic of the Fed who is all but certain to help advance the president’s agenda. Trump is likely to see immediate results in the form of vocal dissent to Powell’s decisions.

Trump gained the unexpected opportunity to reshape the Fed when Governor Adriana Kugler announced on Aug. 1 she would resign ahead of schedule. Miran, if confirmed by the Senate, could serve through the end of January, when Kugler’s term would have ended. Powell’s term as chair expires in May.

Miran contributed guest commentary to Barron’s in 2022-2024 while he was a senior strategist at the hedge fund Hudson Bay Capital and a fellow at the Manhattan Institute, a conservative think tank. He was a senior adviser to the Treasury in Trump’s first term.

Miran declined to comment when reached by text message and referred questions to the White House. The White House didn’t immediately respond to emailed questions.

Miran has argued for years that the Fed damaged its own credibility, particularly during the 2022 inflation episode. That bout of inflation, after the Fed gave itself flexibility with its inflation target, left the central bank on “thin ice,” he wrote. And if the Fed mishandles its mandate, “it risks Congress reopening the Federal Reserve Act or a future president removing board members for cause.”

In 2023, after higher interest rates contributed to the sudden failure of Silicon Valley Bank, Miran again criticized the Fed. “It has conditioned markets to anticipate it will ease aggressively in response to any downward shocks to the economy, even with high inflation,” he wrote. The Fed has a role supervising banks in addition to its job setting monetary policy.

And as the debate about Fed independence began to unfold during the presidential campaign, Miran argued the “ship has sailed.” The idea that the Fed is walled off from the government is belied by the reality that personnel frequently moved from one institution to the other, he wrote. That included both Powell and his predecessor Janet Yellen, who each had positions at the Treasury as well as the Fed.

It will soon be Miran’s turn to make the jump. He was confirmed to his current White House job by the Senate in a party-line vote just five months ago. Little has changed that would make Republican senators rebel against him. At the White House, he has championed Trump’s view of the economy, publishing an analysis that argued imported goods were falling in price despite tariffs, among other papers.

His tenure at the Fed is likely to be limited. He may only have a few opportunities to vote on rate policy before his tenure expires. The Fed is already likely to cut rates in September, given the cooling economy, so one more dovish vote among the 12 overall voters may not substantially change the trajectory of rate policy.

And yet adding a MAGA perspective on the rate-setting Federal Open Market Committee will be consequential. July’s rate decision to hold short-term rates steady prompted two dissents from Trump-appointed governors who want to bring rates down now. Miran will add to that chorus, hastening the end of a decadeslong period when the Fed aimed to speak with one voice.

Trump’s prior nominees to the Fed came from an earlier era. Those who have joined Trump’s second term were chosen in large part because of their wholehearted commitment to the MAGA cause, tariffs and all. The months Miran has spent sparring with the press over the Trump economy will have hardened him for the fights that are to come on the FOMC.

When a new chair is finally elevated after Powell’s term expires in May 2026, Fed watchers are likely to dub it the beginning of a new era. Miran may well be off the Fed by then, but in reality it will be his short tenure that marks the shift to something new. It is already underway.

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