Trump’s pick for Federal Reserve plans to keep his White House job while on Fed

Federal Reserve nominee Stephen Miran, a senior White House economic adviser, told Senate lawmakers Thursday that he does not plan to resign from the Trump administration if confirmed to the Federal Reserve’s board of governors – an unusual arrangement likely to raise concerns about the central bank’s independence.

Testifying in the Senate on Thursday, Miran said he plans to take an unpaid leave instead of stepping down from the White House because he would only be filling a short-term slot on the seven-member Fed board. He said repeatedly he was citing the advice of an attorney.

If confirmed, he would be the first modern-day Federal Reserve Board member to maintain such close ties to the White House. Although he would be filling a term that officially expires at the end of January, he could remain on the Fed board until a successor is confirmed by the Senate.

The arrangement is almost certain to open up Miran to criticism that it would be difficult for him to function independently of the administration while serving at the central bank, which is set up to be insulated from the White House.

Sen. Andy Kim (D-New Jersey) said the arrangement was problematic because Miran could continue to act in a way that is in the political interests of the president because he plans to return full time to the Council of Economic Advisers, which he has chaired since March, sometime next year.

“Why do you even want this job at the Fed for four months if you’re just hedging your bets and just continuing to hold your position at the White House?” Kim asked at the hearing.

Miran told lawmakers that he could remain independent. He appeared on track for confirmation after no Republican lawmakers signaled they would vote against him.

“My opinions and decisions will be based on my analysis of the macroeconomy and what’s best for its long-term stewardship,” he said in prepared remarks. “The Federal Open Market Committee is an independent group with a monumental task, and I intend to preserve that independence and serve the American people to the best of my ability,” he said, referring to the Fed committee that sets short-term interest rates.

Dual roles would be an unusual twist for Miran, who has criticized the revolving door between the central bank and the executive branch. In a paper last year, Miran said Fed board members should be insulated from the day-to-day political process. He added they should be prohibited from serving in the executive branch for four years following the end of their Fed term.

It’s not unusual for top officials to serve multiple jobs in the Trump administration. For instance, Marco Rubio is serving as both secretary of state and the acting head of the National Security Council. Russell Vought, who heads the White House budget office, is also acting director at the Consumer Financial Protection Bureau.

But that’s not the case at the Fed, and administration officials haven’t simultaneously served on the Fed board in about 90 years. While the treasury secretary had previously served as the chairman of the Fed board, and the comptroller of the currency – a top banking regulator – long ago served as a member of the board, those practices ceased after 1936, according to the website Federal Reserve History.

Miran would fill a vacancy created by last month’s departure of Adriana Kugler, who left suddenly.

Trump has made clear he wants a central bank more responsive to his political agenda, pressing for steep rate cuts to ease the cost of financing swelling deficits and exploring nominees seen as loyal to him.

Last week, Trump sought to fire another Fed governor, Lisa Cook, over allegations she committed mortgage fraud. She says the firing was unlawful and is seeking to remain on the Fed board while she litigates.

Trump also told reporters last week he would soon hold a majority on the Fed’s seven-member board – a shift that could give him greater control over interest-rate policy as well as the power to replace the 12 regional Fed bank presidents, who also help set policy.