Stephen Miran Federal Reserve confirmation hearing: Live coverage

Sen. Cynthia Lummis, R-Wyo., asked White House Council of Economic Advisers chair and President Trump's nominee to serve on the Federal Reserve Board agreed with her assessment that bank supervision is the exclusive purview of the President during Miran's confirmation hearing Thursday.

"There's no basis in the law for bank supervision to be completely independent, just the way it is for monetary policy," Lummis said. "Do you agree with that, that those are different functions?"

"Yes, I do agree that they are different functions," Miran replied. 

Lummis went on to describe what she characterized as partisan efforts by the Fed under President Joe Biden, including alleged "debanking" efforts targeting political conservatives, asking Miran whether the Fed has been independent in its recent judgements.

"Do you think the Federal Reserve Board and reserve banks have been independent from politics in the last several years?" Lummis asked. 

"I don't believe that it was a set of non-partisan, non-political objective technocrats that decided … that the Federal Reserve should be a solution to face climate change," Miran answered. "I don't believe that operation choke point was a non-political act, either. And so if confirmed [to] Federal Reserve, I intend to fully respect independence, respect the monetary policy, as you say. On regulatory work, there's a lot of work to be done, and I applaud the work this committee has done on Operation choke points and other matters that you mentioned."

"Can you help us as a member of the reserve to set up a system that clearly demarks the independence on monetary policy, but recognizes that the President — through his regulatory supervision and oversight of the executive branch — does have a role in bank supervision?" Lummis asked. 

"If confirmed, it is absolutely an issue that I would greatly welcome working with you and your team on," Miran responded.

Republicans suggested that Stephen Miran's nomination to the Fed Board would restore the central bank's independence rather than erode it. 

Sen. Bill Hagerty, R-Tenn., a leading Republican on the Senate Banking Committee whose office has penned much of the banking legislation that's come out of the committee this year, said that Democrats have "long sought to systematically inject it ideology of the central bank."

He cited positions on diversity in the Fed's employment mandate and climate change, which could have major impacts for the financial sector, especially the insurance market, as examples. 

"The Fed itself has undermined its credibility by caving to progressive pressures," Hagerty said. 

It's an interesting tactic that suggests Republicans will vote for Miran's nomination, but that they still see Fed independence as an important topic. In framing Biden's Fed as not independent, they can make the case that Miran's confirmation would not respresent a radical change to the board's independence. 

The picture, though, gets muddier from there. Neither climate change nor diversity initiatives were held by the Fed's monetary policy arm, and the Trump team has claimed that the administration should have more control over the Fed's other duties, such as bank regulation. And Miran himself talked about how he would account for things like Trump's border policy when considering monetary policy decisions. 

Miran also refused to answer questions about whether the president should be able to fire a board member simply because he disagrees with them on an interest rate decision. 

"We've got to take politics out of this," Hagerty said. "You've been very clear you want to get the Fed to get out of the political arena."

Stephen Miran sidestepped several questions regarding a policy he previously advocated for that would bar people like him from serving on the Federal Reserve board. 

Miran has previously written that policy should short circuit the "revolving door" between the Fed and the executive branch, a path that he himself would follow if confirmed. Miran is currently serving as chair of the White House Council of Economic Advisers. 

"Given the nature of your current role and your express concern in mind, I just don't understand how your nomination doesn't break the rule you set out yourself," said Sen. Tima Smith, D-Minn.

"When you have taken on a role of advocating, it's very hard to step away from that and I don"t know how you could be an exception to that," she added later. 

Miran did not address Smith's concerns. Instead, he focused on bigger-picture Fed reform, which he said should include things like more aggressively using the Fed's powers across the board. 

"It's a mistake to focus solely on monetary policy, when thinking about the path of inflation, and employment and I think that the full suite of economic policies … affect those outcomes," Miran said.

Stephen Miran, President Donald Trump's pick to fill a short-term seat recently vacated by Adriana Kugler, said he wouldn't officially leave his current post as chair of Trump's economic council. 

Miran said that he would take unpaid leave as chair of the Council of Economic Advisers, a powerful committee that crafts much of the White House's economic, tariff and financial policy.

"I have received advice from counsel that what is required is an unpaid leave of office," Miran said in response to a question from Sen. Jack Reed, D-R.I. "The term being nominated is a little more than 4 months. As long as that is the advice of counsel, I will follow the law." 

Miran's nomination already comes amid big questions about the independence of the Fed, and on how and whether Miran would operate as a close ally of Trump. His position on the CEA is an additional wrinkle in his nomination, which will likely sail through the Senate with Republican support. 

"You're going to be an employee of the president of the United States on leave… that is absolutely ridiculous," Reed said. 

Miran later said that he would "absolutely resign" if he was nominated for a longer term.