On Wednesday local time, the hearing script for Federal Reserve Board nominee Stephen Miran was released. The Senate Banking Committee will hold a confirmation hearing for Miran on Thursday morning local time.
The Federal Reserve Board candidate nominated by President Trump vowed to uphold the independence of the central bank and its &#34;dual mandate&#34;—price stability and maximum employment. In his opening statement submitted in advance to the Senate Banking Committee, Miran stated, &#34;In my view, the most important responsibility of the central bank is to prevent a great depression and runaway inflation. The independence of monetary policy is a key element of its success.&#34;
Miran, who is the chairman of the President's Council of Economic Advisers and a close advisor to Trump, will fill the vacancy left by the unexpected departure of Federal Reserve Board member Adriana Kugler, with a term ending on January 31, 2026. The Federal Reserve will hold its next interest rate decision meeting on September 17.
Miran's appointment comes amid speculation that Trump may nominate a &#34;shadow chairman,&#34; whose main task would be to act as a check within the Federal Reserve Board. Trump has indicated that the nominee for Kugler's seat will be temporary and not a permanent replacement for Jerome Powell.
Trump has been pushing for significant reductions in borrowing costs. Miran has previously criticized the Federal Reserve, particularly its aggressive stimulus policies during the COVID crisis. He said:
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If I am confirmed, I will faithfully fulfill my role in accordance with the responsibilities granted by Congress. My views and decisions will be based on my analysis of the macroeconomy and the best considerations for long-term economic governance. The Federal Open Market Committee (FOMC) is an independent body with a daunting task, and I intend to uphold its independence and serve the American people to the best of my ability.
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Miran also raised some oversight questions regarding the Federal Reserve's functions beyond its dual mandate, including the central bank's balance sheet:
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The Federal Reserve oversees the world's most important financial institutions. It sets different funding prices for borrowers, including other central banks. The ultimate composition of the Federal Reserve's balance sheet remains an open question.
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<h2>Full Text of Miran's Hearing Script</h2>
Below is the original text of Stephen Miran's hearing script:
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Thank you for your kind introduction, Chairman Scott. Senator Warren, esteemed members of the committee; it is a great honor to appear before you today. Although I did not expect to be back so soon after my last appearance in February. I am honored to receive the President's nomination and to be reviewed by this esteemed committee.
As the 32nd Chairman of the President's Council of Economic Advisers (CEA), I have advised the President and his administration on fiscal and regulatory policies aimed at achieving full employment and price stability. These goals are explicitly stated in the Employment Act of 1946 and resonate with the mission outlined in the Federal Reserve Act. The responsibilities of the CEA and the Federal Reserve in advancing the progress of the U.S. economy were further articulated in the Full Employment and Balanced Growth Act of 1978. Both institutions share common goals but differ in their means
I have been researching and writing about monetary policy and macroeconomics for twenty years, starting with my studies for a Ph.D. in economics at Harvard University. I am grateful to have been guided by my former CEA Martin Feldstein. For most of my career, I have been active in public markets, particularly in interest rate and monetary markets. I have witnessed firsthand the significant impact of monetary policy and market structure on the pricing and availability of credit.
The cost of borrowing is not just a Wall Street phenomenon. Buying a car or a home is a significant milestone in the pursuit of the &#34;American Dream.&#34; Affordability and interest rates influence people's decisions about whether to have children or start a business. The flow of credit and liquidity is at the core of the U.S. banking system and extends to global capital markets. The Federal Reserve's role in maintaining this system is crucial.
In my view, the most important job of a central bank is to prevent a Great Depression and runaway inflation. The independence of monetary policy is a key factor in its success. Given the central bank's significant role in the economy, it is not surprising that there has been external commentary on its decisions for decades. If I am confirmed, I will faithfully fulfill my role in accordance with the responsibilities granted to me by Congress. My views and decisions will be based on my analysis of the macroeconomy and the best considerations for long-term economic governance. The Federal Open Market Committee (FOMC) is an independent body tasked with a challenging mission, and I intend to uphold its independence and serve the American people to the best of my ability.
But the Federal Reserve's functions go far beyond that. Managing the liquidity of the financial system is a complex task that requires regular fine-tuning. The Federal Reserve oversees the most important financial institutions globally. It sets different funding prices for borrowers and lenders, including other central banks. The ultimate composition of the Federal Reserve's balance sheet remains an open question.
Effective monetary policy is crucial for the smooth functioning of the economy, the maintenance of a strong U.S. capital market, and the growth of national prosperity. Congress wisely tasked the Federal Reserve with pursuing price stability, maximum employment, and moderate long-term interest rates. If I am confirmed, I will strive for this mission with transparency and honesty, aiming to maintain a stable and healthy economy that benefits all Americans.
Thank you all, and I look forward to answering your questions
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Federal Reserve Board nominee Miran: The main responsibilities of the Federal Reserve are to prevent economic recession and inflation, and plans to maintain the independence of the FOMC