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Stephen Miran was supposed to step down from the Federal Reserve at the end of this week.
That’s not going to happen.
As Trump nears a decision on a central bank nominee who’d arrive as his chosen successor to Fed Chair Jerome Powell, whomever he picks still has no path to confirmation. Retiring Sen. Thom Tillis, R-N.C., pledged earlier this month to prevent the Senate Banking Committee from advancing any of Trump’s nominees until the Justice Department scraps its criminal investigation into Powell.
But the administration has instead signaled that the Powell probe should “take its course,” as Treasury Secretary Scott Bessent put it earlier this month. The stalemate leaves Miran marooned at the central bank, since the law allows Fed governors to stay on as long as it takes for a successor to be “appointed and qualified.”
“In reality, the only way I move on any Fed position is for this to be adjudicated — because otherwise, you’re really giving weight to the idea that the Fed is no longer independent,” Tillis told Semafor Tuesday night.
“Which is exactly why I took a pretty definitive stand early when I heard the news” about the Powell investigation, Tillis added.
He said he has not heard from the White House about lifting his hold: “I think my position is pretty clear, and I’m here because the DOJ put us here.”
Senators last year confirmed Miran, a Harvard-trained economist, to finish out a term that ends Saturday. But the absence of a Senate-confirmed replacement means the dovish Trump adviser is now at the central bank “for the indefinite future,” said Peter Conti-Brown, associate professor of financial regulation at The Wharton School of the University of Pennsylvania.
In the meantime, the longtime advocate for lower interest rates is expected to dissent on Wednesday when the Fed likely elects to hold monetary policy steady. This week’s meeting is officials’ first since the DOJ opened its investigation into Powell and the Supreme Court heard arguments on Trump’s attempt to fire central bank governor Lisa Cook.
“We’ll see more of the same [from Miran], which is: calls for much deeper rate cuts than the rest of the FOMC is willing to give,” Karen Petrou, managing partner of Federal Financial Analytics, told Semafor. “A lot of advocating and influencing closed-door procedures — but so far very little on actual decisions.”
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Miran, who’s currently on a leave of absence from the White House, said during his confirmation process that he’d resign only if the president nominated him for a longer term. The decision drew criticism from Democrats, who panned it as a potential infringement on central bank independence given Trump’s ongoing campaign to bend the Fed to his will.
“Donald Trump is doing everything he can to turn the Fed into a collection of sock puppets,” Senate Banking Committee ranking member Elizabeth Warren, D-Mass., told Semafor Tuesday night. “That’s not good for our economy and not good for our country.”
It was clear even last year that Miran would likely stay at the Fed past January, Petrou said: “This administration clearly doesn’t move fast to name key appointees, and reasonably, whoever they appointed would be extraordinarily controversial, so it did not seem like it would be a rapid process.”
Still, Trump continues to tease an imminent announcement of a longer-term pick for Miran’s seat. He told Reuters Jan. 14 that he’ll “be announcing something over the next couple of weeks.”
But the White House is showing no qualms about leaving Miran in place: “Until an announcement is made by President Trump, any reporting about the Federal Reserve chairman nominations process is pointless speculation,” White House spokesperson Kush Desai told Semafor.
In fact, Bessent told Fox Business earlier this month that Saturday “was a self-imposed deadline” to tap a nominee.
The administration may be purposefully hanging back so it can “package” the nominee’s confirmations as both governor and chair, Petrou said. Three of Trump’s four reported Fed finalists — former central bank Governor Kevin Warsh, National Economic Council Director Kevin Hassett, and BlackRock executive Rick Rieder — would need to win Senate confirmation for both roles.
Powell, whose term as chair ends in May, will be able to decide whether to stay on until 2028 as a governor. Though he’s revealed little about his plans, his response to the DOJ investigation fueled speculation that he may be loath to provide Trump with another opening to fill.
Eleanor’s view
It’s hard to see where the White House goes from here. Tillis is as dug in as he was when news of the investigation first broke. And administration officials seem equally committed to seeing it through.
Miran getting to hang around in the meantime is undoubtedly a win for Trump, who wants to see more of what he’s pushing.
But it also isn’t getting him very far. One friendly governor now is a far cry from a like-minded chair later, one who would inevitably hold far more (though still limited) sway over his fellow policymakers.
Room for Disagreement
Yet there’s also an avalanche of more urgent issues competing for officials’ attention, like federal agents’ killing of a US citizen on Saturday.
Two of three Senate Banking Committee Democrats Semafor spoke with Tuesday said they’d recently given little thought to the Fed.
“I’m sure I’ll have something smart to say tomorrow,” one quipped.
Notable
- Prediction markets show Rieder in the lead for Fed chair, Reuters reports.