Synopsis
The Federal Reserve’s meeting is overshadowed by political turmoil as a new Trump appointee joins while the administration seeks to oust another governor. Despite expected rate cuts, the focus remains on Trump’s influence over monetary policy and the implications for the Fed’s independence. The job market’s shakiness and inflation concerns also weigh heavily on policymakers.
AP Stephen Miran The US Federal Reserve began a two-day meeting on Tuesday with a new governor on leave from the Trump administration joining the deliberations and a second policymaker at the table still facing efforts by President Donald Trump to oust her. The unusual circumstances, both historic in their own right, have changed what would have been a meeting about risks to the job market into a benchmark of Trump’s efforts to gain influence over monetary policy.
Trump said on Tuesday he had signed documents allowing Stephen Miran, who is on leave as head of the White House’s Council of Economic Advisers, to join the U.S. central bank’s Board of Governors. Miran was sworn into his Fed position later on Tuesday morning and the policy meeting began at 10:30 a.m. EDT (1430 GMT). A White House spokesman also said the administration would ask the U.S. Supreme Court to allow the president’s effort to fire Fed Governor Lisa Cook “for cause” to proceed.
A federal appeals court on Monday blocked Cook’s firing, paving the way for the Biden appointee to participate fully in the policy meeting this week. The Fed is widely expected to cut its benchmark overnight interest rate by a quarter of a percentage point to the 4.00%-4.25% range. The timeline of any Supreme Court appeal and decision is unclear. The Fed will release a policy statement and updated quarterly economic projections at 2 p.m. EDT on Wednesday. Fed Chair Jerome Powell will hold a press conference half an hour later.
Miran’s economic and rate projections could show whether he backs the ultra-low interest rates and sunny economic outlook Trump has insisted on – with a forecast that lies outside that of his colleagues – or whether his views meld more indistinguishably with the others. Trump on Tuesday said he agreed the Fed needs to be independent. Through much of this year he has berated Powell for not lowering the central bank’s policy rate, which he feels should be slashed to around 1% to make government borrowing cheaper and buoy the housing market, and pushed him to resign. In a 2-1 ruling on Monday, a federal appeals court in Washington said Cook could remain in her job while litigation over Trump’s effort to fire her proceeds, a decision that absent a last-minute intervention by the Supreme Court means she will participate fully at the meeting this week.
White House spokesperson Kush Desai said the administration would appeal, but gave no other details.
“The President lawfully removed Lisa Cook for cause. The administration will appeal this decision an
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