Federal Reserve Under Scrutiny
The future of the most powerful central bank in the world and the direction of the US economy are in balance. President Donald Trump’s endeavor to revise the Federal Reserve could receive a considerable thrust at a hearing on Thursday.
Hearing for Stephen Miran’s Appointment
At 10 a.m., the Senate banking committee will hold a hearing to check the appointment of Stephen Miran, one of Trump’s top management consultants, in order to fill a free seat in the Fed Governor Council. This is a crucial step in Trump’s efforts to rebuild the Fed and possibly undermine its long-term independence from politics.
Trump’s Attacks on the Fed
The FED has been undergoing the Trump government’s unprecedented attacks since the beginning of the year, since the central bankers have not taken into account the President’s claims after the interest rates. Fed officials have stood pat since December because they wanted to see how the US economy first reacts to Trump’s extensive guidelines, even though they are preparing for an installment section in two weeks.
Concerns Over Miran’s Independence
Miran, a doctoral student trained by Harvard, has questioned the independence of the Fed in the recent past. Last year Miran co-authored a report that described the independence of the FED as outdated "Shibboleth", and he called for shorter conditions for the FED governors to give the president more authority to influence the agency.
Miran’s Unconventional Perspective
His unconventional perspective will probably come into view during his hearing. The Democrats – and some Republicans – are expected to press Miran especially on his view of the independence of the Fed. The democratic Senator Elizabeth Warren, the ranking member of the banking committee, said that "every claim he and every voice is affected with the suspicion that he is not an honest broker, but he is Donald Trump’s doll."
Potential for Miran to Become Fed Chairman
If Miran were confirmed as a Fed governor, he would no longer play a role in the design of the government’s financial and trade policy. However, there is a chance that Miran will not only be a Fed governor, but also potentially become the Fed chairman. According to the Fed rules, the chairman can only be selected under the current FED governors.
Lisa Cook’s Status in Question
Last week Cook filed a lawsuit in which Trump relieved her and claimed that the president had violated her proper procedural rights according to the constitution and the Federal Law. The Federal Government said that the dismissal was justified because the president found that there was sufficient cause, citing unproven allegations for mortgage fraud. Cook asked the court that she can stay in her job while the legal dispute progresses.
Upcoming Fed Meeting
The court’s decision as to whether Cook will keep her job while the case takes place with high operations is crucial. A Fed Political Session on September 16 to 17 is expected to lower interest rates for the first time since December. The outcome of these events will have significant implications for the future of the Federal Reserve and the US economy.
