Judul : Federal Reserve split 4-3 as Trump allies join board
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Federal Reserve split 4-3 as Trump allies join board
Stephen Miran, White House National Economic Advisor and a close aide to U.S. President Donald Trump, joined the Federal Reserve Board, which oversees U.S. monetary policy including benchmark interest rates, on the 16th. Fed Governor Lisa Cook, who has faced pressure from Trump to resign and is embroiled in a legal battle, won an appeal at a federal appeals court the previous day, allowing her to remain on the board for the time being. The two individuals, whose stances on interest rates and political orientations are diametrically opposed, will now work within the same organization.
Currently, the seven Fed governors are split 4-3 between “anti-Trump” and “pro-Trump” factions. Critics argue that the Fed, which is supposed to maintain high political independence in setting interest rates, is increasingly perceived as a political institution due to Trump’s active intervention in personnel decisions, potentially undermining the central bank’s credibility.
The Fed announced on the morning of the same day that Miran had taken the oath and begun his term as a new governor, just hours before the two-day Federal Open Market Committee (FOMC) meeting starting on the 16th. Miran was nominated by Trump to replace Adriana Kugler, who abruptly announced her resignation last month with about five months remaining in her term. The U.S. Senate approved Miran’s nomination on the 15th by a vote of 48-47.
Miran is often referred to as a “Trump maniac.” Though from Wall Street, he was not a successful financier. After his company collapsed in early 2020, he joined the Treasury as an economic advisor in April of that year through personal connections. He returned to Wall Street after Trump’s first term but reportedly longed for Trump’s re-election. After Trump’s victory in the November 2024 election, Miran was appointed as economic advisor and made a dramatic comeback. His post-election “Miran Report,” which argued that the U.S. should threaten punitive tariffs to resolve trade and fiscal deficits before inducing a weak dollar, is seen as laying the groundwork for Trump’s tariff war.
Despite being raised by Democratic parents, Miran is one of Trump’s strongest supporters. He even frames and displays a Truth Social post announcing his appointment in his office. Miran did not resign from his role as White House economic advisor upon becoming a Fed governor, signaling his intent to actively reflect Trump’s demands for aggressive rate cuts.
In contrast, Governor Lisa Cook, who has opposed rate cuts, faces pressure from the Trump administration over allegations of falsifying mortgage loan documents. However, she continues to resist through legal battles. As a result, the Fed remains in a tense standoff, though Trump has publicly stated, “I will soon secure a majority on the Fed Board.” According to the *New York Times*, if pro-Trump appointees gain a majority, they could sway U.S. monetary policy.
The FOMC includes the seven Fed governors and five rotating regional Federal Reserve Bank presidents out of 12, totaling 12 voting members who decide on rate changes by majority vote. Notably, the board approves appointments and reappointments of regional bank presidents, whose five-year terms are subject to board approval.
Concerns are growing that the Fed’s transformation into a political arena could erode trust in international financial markets. If the Fed sets rates based on domestic politics rather than its dual mandates of “price stability” and “maximum employment,” global economies could face simultaneous turbulence. The *Washington Post* described the situation as “political turmoil engulfing the Fed.”
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