WASHINGTON: The US Senate narrowly confirmed President Donald Trump’s nominee Stephen Miran to the Federal Reserve board just hours before the central bank’s crucial policy meeting.
This confirmation occurred alongside a federal appeals court ruling that allows Fed Governor Lisa Cook to retain her position while challenging her attempted removal by the Trump administration.
Both developments create a politically charged atmosphere for the Federal Open Market Committee’s two-day meeting starting Tuesday.
The Republican-majority Senate voted 48-47 to approve Miran, who chairs the White House Council of Economic Advisers, enabling him to join both the Fed’s board of governors and the interest rate-setting committee.
Miran fills the vacancy left by former governor Adriana Kugler’s early resignation and will serve the remaining four months of her term.
Democratic lawmakers expressed significant concerns about Miran maintaining his White House role through a leave of absence rather than resigning completely.
The confirmation comes as Trump intensifies pressure on the Fed to implement substantial interest rate cuts this year, frequently citing low inflation figures.
Separately, the appeals court’s 2-1 decision noted Cook’s strong likelihood of success in her argument that she received improper notice before Trump’s removal attempt.
Judge Gregory Katsas dissented, emphasizing the importance of ensuring Fed governors maintain market confidence and competence.
The central bank is widely expected to lower its benchmark rate by 25 basis points to between 4.0% and 4.25% during Wednesday’s announcement.
Trump reiterated his demand for aggressive rate cuts on his Truth Social platform, directly addressing Fed Chair Jerome Powell.
Investors will closely analyze Powell’s post-meeting remarks for signals about future rate reduction pace and magnitude.
These developments raise concerns about maintaining the Federal Reserve’s traditional independence from political pressure.
The outcomes of both Miran’s appointment and Cook’s legal battle could have lasting implications for the central bank’s structure and operations.
Market participants await Wednesday’s decision amid ongoing economic uncertainty and a weakening labor market. – AFP
