Senate OKs WH Economist for Fed Board  09/16 06:11

   

   WASHINGTON (AP) -- The Senate has approved one of President Donald Trump's 
top economic advisers for a seat on the Federal Reserve's governing board, 
giving the White House greater influence over the central bank just two days 
before it is expected to vote in favor of reducing its key interest rate.

   The vote to confirm Stephen Miran was largely along party lines, 48-47. He 
was approved by the Senate Banking Committee last week with all Republicans 
voting in favor and all Democrats opposed.

   Miran's nomination has sparked concerns about the Fed's longtime 
independence from day-to-day politics after he said during a committee hearing 
earlier this month that he would keep his job as chair of the White House's 
Council of Economic Advisers, though would take unpaid leave. Senate Democrats 
have said such an approach is incompatible with an independent Fed.

   Senate Democratic Leader Chuck Schumer said ahead of the vote that Miran 
"has no independence" and would be "nothing more than Donald Trump's mouthpiece 
at the Fed."

   The vote was along party lines, with Alaska Sen. Lisa Murkowski the only 
Republican to vote against Miran.

   Miran is completing an unexpired term that ends in January, after Adriana 
Kugler unexpectedly stepped down from the board Aug. 1. He said if he is 
appointed to a longer term he would resign from his White House job. Previous 
presidents have appointed advisers to the Fed, including former chair Ben 
Bernanke, who served in president George W. Bush's administration. But Bernanke 
and others left their White House jobs when joining the board.

   Miran said during his Sept. 4 hearing that, if confirmed, "I will act 
independently, as the Federal Reserve always does, based on my own personal 
analysis of economic data."

   Last year, Miran criticized what he called the "revolving door" of officials 
between the White House and the Fed, in a paper he co-wrote with Daniel Katz 
for the conservative Manhattan Institute. Katz is now chief of staff at the 
Treasury Department.

   Miran's approval arrives as Trump's efforts to shape the Fed have been dealt 
a setback elsewhere. He has sought to fire Fed governor Lisa Cook, who was 
appointed by former President Joe Biden to a term that ends in 2038. Cook sued 
to block the firing and won a first round in federal court, after a judge ruled 
the Trump administration did not have proper cause to remove her.

   The administration appealed the ruling, but an appeals court rejected that 
request late Monday.

   Members of the Fed's board vote on all its interest rate decisions, and also 
oversee the nation's financial system.

   The jockeying around the Fed is occurring as the economy is entering an 
uncertain and difficult period. Inflation remains stubbornly above the central 
bank's 2% target, though it hasn't risen as much as many economists feared when 
Trump first imposed sweeping tariffs on nearly all imports. The Fed typically 
would raise borrowing costs, or at least keep them elevated, to combat 
worsening inflation.

   At the same time, hiring has weakened considerably and the unemployment rate 
rose last month to a still-low 4.3%. The central bank often takes the opposite 
approach when unemployment rises, cutting rates to spur more borrowing, 
spending and growth.

   Economists forecast the Fed will reduce its key rate after its two-day 
meeting ends Wednesday, to about 4.1% from 4.3%. Trump has demanded much deeper 
cuts.