In a move that has sent ripples through financial circles and the halls of Congress alike, President Donald Trump announced on August 7, 2025, his intention to nominate Stephen Miran, the current Chairman of the Council of Economic Advisers, to fill a sudden vacancy on the Federal Reserve’s Board of Governors. The announcement comes as Adriana Kugler, who occupied the seat, departs the Fed on August 8 to return to her academic post at Georgetown University, according to Reuters and Bloomberg News.
Miran’s nomination is notable not just for his credentials—he holds a PhD in economics and has served in previous administrations—but for the radical ideas he brings to the table. As reported by Reuters, Miran has been a vocal critic of the Federal Reserve’s entrenched independence, advocating instead for a system that would give the White House far more direct control over the central bank. In a 2024 report he co-authored for the Manhattan Institute, Miran argued for an overhaul that would shorten the terms of Fed governors to eight years (from the current fourteen) and, more controversially, allow the president to fire board members at will.
Such proposals would represent a seismic shift in the governance of America’s central bank. Miran’s blueprint also calls for transferring significant monetary policy authority to the 12 regional Federal Reserve banks. Under his plan, these regional leaders—who would be overseen by state governors—would all have a vote on monetary policy, potentially outvoting the Washington-based Board of Governors. The aim, Miran contends, is to inject greater accountability into a system he views as suffering from “groupthink,” regulatory overreach, and a lack of consequences for poor decisions.
“Accountability has been absent... Poor policy decisions do not necessarily result in consequences for Fed leadership,” Miran wrote with co-author Dan Katz, currently chief of staff to Treasury Secretary Scott Bessent, in the Manhattan Institute report. He cited episodes such as the recent outbreak of inflation, the failure of Silicon Valley Bank, and the Fed’s post-2008 asset purchase programs as evidence of the need for change. Miran criticized the latter—bond-buying meant to hold down long-term interest rates—as having “distorted the allocation of credit.”
These ideas, while bold, are not without their critics. The current system, established in the 1930s, was designed specifically to insulate the Fed from political pressures and to prevent the White House from directly influencing interest rate decisions. Some key Republicans, as Reuters notes, have already spoken up in defense of the Fed’s independence in the face of President Trump’s repeated calls for rate cuts and his public criticism of current Fed Chair Jerome Powell.
Trump’s motivations are clear. With inflation having cooled but economic growth showing signs of slowing, the administration has been pressuring Powell to lower interest rates more aggressively. Trump is also openly considering replacements for Powell when the latter’s term as chair expires in May 2026. According to Bloomberg News, Fed board member Christopher Waller has emerged as a frontrunner for the top job, having impressed members of Trump’s team despite not yet meeting the president in person. Waller, who supported a rate cut at the Fed’s July 2025 meeting, argues that tariffs are unlikely to spark significant inflation and that a softening labor market requires monetary stimulus.
For now, Miran’s initial term on the Fed board would run only until the end of January 2026—a stopgap appointment while Trump considers whom to nominate for the full 14-year seat. Yet if confirmed by the Senate, Miran would become the Trump administration’s most direct line into the Fed, and his presence could take on greater significance if other board members—particularly those appointed during the Biden era—were to resign, giving Trump more opportunities to reshape the institution.
Miran’s critics warn that his reforms, if enacted, would erode the central bank’s independence and inject overt partisanship into monetary policy. Ellen Meade, a former top Fed adviser now at Duke University, told Reuters, “They want a mouthpiece. They want to stir things up. And that is concerning.” She added that filling four seats on the board with Trump appointees would be “skiing further down that slope” of losing the Fed’s independence.
Even so, most of Miran’s proposed changes would require an act of Congress—a tall order, given the likely resistance from lawmakers wary of politicizing the central bank. As Reuters points out, the Senate must still confirm Miran’s appointment, and his ideas may prove a hard sell on Capitol Hill, where many are already uneasy about Trump’s attacks on the Fed.
Miran himself seems to acknowledge the inescapable role of politics in central banking. “Political motivations will always exist,” he wrote in his report. “The key is to provide mechanisms to block them from unduly affecting policy.” Yet his solution—making the Fed more directly accountable to the president and to state governments—would mark a dramatic departure from decades of precedent.
The financial markets have taken notice. Long-term Treasury yields and the interest rate on inflation-protected bonds edged up slightly in the hours after Miran’s nomination was announced, reflecting investor concerns about the prospect of a politically captive central bank and its ability to keep inflation in check. Nevertheless, expectations for a quarter-point rate cut at the Fed’s September and December meetings remained largely unchanged, suggesting that traders are still weighing the likelihood of Miran’s confirmation and the implementation of his ideas.
Within the Fed, some of Miran’s criticisms are already being addressed. As Reuters reports, the central bank is preparing to revise its inflation management framework—adopted in 2020 and criticized by Miran for its “hubris”—in light of the recent inflation surge. Fed Governor Christopher Waller, a possible next chair, has also worked with Powell to curb staffing and rein in Reserve Bank presidents who stray into political commentary. But these internal reforms fall well short of the sweeping changes Miran envisions, such as stripping the Fed of its autonomous budget authority and subjecting it to congressional appropriations.
For now, Miran would be just a single voice on a seven-member board and, for monetary policy decisions, one vote on the 12-member Federal Open Market Committee. But his nomination signals a clear intent by the Trump administration to challenge the status quo at the nation’s most powerful economic institution. Whether Miran’s vision for “monetary federalism” will gain traction—or trigger a political backlash—remains to be seen.
As the Senate prepares to consider his nomination, all eyes are on Washington to see whether the long-standing wall between the White House and the Federal Reserve is about to be breached.