Stephen Miran, a key economic adviser to former President Donald Trump, has officially stepped down from his role at the White House to maintain his position as a governor at the Federal Reserve. This move fulfills a commitment he made to the Senate, ensuring his continued influence at the central bank amid ongoing political tensions.
Resignation from Council of Economic Advisers
Miran submitted his resignation letter on Tuesday, as reviewed by Reuters, marking the end of his tenure as chair of the White House's Council of Economic Advisers (CEA). He had been on unpaid leave from this post since Trump appointed him last year to fill an unexpected vacancy on the Fed's board of governors, a term that was set to expire on 31 January.
In his resignation, Miran stated, "I promised the Senate that if I should stay on the board past January, I would formally depart the council. I believe it is important to stay true to my word while I continue to perform the job at the Federal Reserve to which you and the Senate appointed me." This decision follows legal advice he received that initially suggested no resignation was necessary, as the Fed role was expected to last only a few months.
Political Backdrop and Senate Scrutiny
The arrangement had drawn criticism from Democratic senators, who argued that it could turn the Fed's newest policymaker into a presidential puppet, undermining the central bank's independence. Miran's move to resign addresses these concerns, though it comes amid broader investigations and political manoeuvring within the Trump administration.
On Friday, Trump announced plans to nominate former Fed governor Kevin Warsh as the next chair of the central bank, succeeding Jerome Powell. While this nomination would fill the board seat currently held by Miran, federal law allows him to serve until a successor is confirmed by the Senate, a process that could face delays due to political opposition.
Investigations and Fed Independence
The resignation occurs against a backdrop of heightened scrutiny over the Fed's autonomy. In January, Powell disclosed that the Department of Justice had launched a criminal investigation into statements he made to the Senate regarding Fed building renovations. Powell has characterised this investigation as part of a broader administration effort to exert control over the Fed.
Additionally, the Department of Justice opened an investigation last year into Fed governor Lisa Cook for alleged misstatements on her mortgage application. Cook denies any wrongdoing and is currently suing to block Trump's attempt to dismiss her, with the case now before the Supreme Court.
Senate Opposition and Future Implications
A majority of the Senate banking committee, including all Democratic members and one Republican, have condemned the justice department's investigation of Powell as political intimidation. They have expressed opposition to moving forward with Warsh's nomination, signalling potential hurdles in the confirmation process.
Miran has been a vocal advocate for sharply lower interest rates at every Fed meeting since joining the central bank last September, aligning with Trump's public desire for reduced rates. Trump has made support for easier monetary policy a key criterion for selecting a new Fed chief, further highlighting the political pressures on the institution.
The White House has not yet commented on whether Pierre Yared, the current acting chair of the CEA, will be appointed to the top post permanently. Miran's resignation was first reported by Barron's, underscoring the ongoing media attention on this significant shift in economic leadership.
