First Since 1989! White House Advisor to Serve as Fed Governor — Is the Fed’s Independence Still Intact?

TradingKey - On Monday evening, the U.S. Senate confirmed President Trump’s senior economic advisor, Stephen Miran, as a Federal Reserve Governor, by a narrow vote of 48 to 47. The timing — just hours before the start of the Fed’s two-day rate-setting meeting — has been widely seen as a direct move by the White House to influence monetary policy.

Miran’s appointment is highly controversial. He did not resign from his role as Chair of the White House Council of Economic Advisers, but instead joined the Fed while on an unpaid leave of absence, with his term set to expire in January 2026.

This makes him the first official since 1935 to simultaneously hold a senior position in the executive branch and a seat on the Federal Reserve Board — breaking a long-standing norm of institutional separation and sparking widespread concern over whether he can act independently.

Although Miran pledged during his confirmation hearing to make decisions based on data and institutional integrity, his past statements reveal clear leanings. He has sharply criticized the Fed for maintaining caution on rate cuts amid inflationary pressures, and publicly supported President Trump’s push for aggressive easing, arguing that the president’s “policy instincts” are superior to Chair Jerome Powell’s approach.

Market analysts believe that while Miran may not sway the outcome of this meeting, his economic projections could shape market expectations for future easing. There is also speculation he might cast a dissenting vote, potentially paving the way for more aggressive rate cuts.

The appointment has drawn bipartisan criticism from veteran policymakers.

Eric Rosengren, former President of the Boston Fed, said Miran’s dual role severely undermines public trust in the Fed’s independence.

Harvard economist Greg Mankiw compared the situation to “the Attorney General temporarily serving as a Supreme Court Justice,” highlighting the fundamental misalignment of roles.