'It's Pretty Obvious': Tina Smith Denounces Trump's Efforts To Install 'Loyalists On The Fed Board'

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During a Senate Banking Committee hearing, Sen. Tina Smith (D-MN) questioned Stephen Miran, President Donald Trump's nominee to serve of the Federal Reserve Board of Governors, about his independence and the Trump Admin's attacks on the Federal Reserve.

Transcript

00:00Mr. Mayor, and welcome to the committee. Thank you to the chair and ranking member.

00:04I just have a couple of straightforward questions for you, which will hopefully be easy to answer.

00:10So you currently work in the White House as an economic advisor to the president, correct?

00:16Thank you, Senator. That is correct. I do currently work as the chairman of the Council of Economic Advisers in the White House.

00:22Right. And so in this role, you've had a hands-on role in implementing the president's political and policy agenda.

00:29Would that be fair to say?

00:30That is not correct, Senator. The Council of Economic Advisers is an advisory organization.

00:35I have no statutory implementation powers whatsoever.

00:37Well, you've been described as the architect of the Trump tariffs and a vocal proponent of the one big beautiful bill.

00:43So it seems to me that you've been part of the administration's policy and political agenda.

00:50Senator Kim referenced just a bit ago about the paper that you co-authored that argued that short-circuiting,

00:56the revolving door between the Fed and the executive branch is critical to reducing the incentives for officials to act

01:03in the short-term political interests of the president.

01:06You wrote this, and I actually agree with it.

01:09So, I mean, here's my concern.

01:11Given the nature of your current role and your expressed concern in mind for insulating the Fed board members

01:19from the day-to-day political process, I just don't understand how your nomination doesn't break the rule

01:26or the goal that you've set out yourself.

01:29I mean, you previously said that no one can go from being a high, you know, political operative

01:36to being politically neutral.

01:38And, I mean, I agree with you.

01:40When you have taken on a role of advocating, it's very hard to step away from that.

01:46And I don't know how you could be an exception to that.

01:50Last September, you criticized the Fed's decision to cut rates as the biggest policy mistake in 2021.

01:58But now, I mean, where do you stand on that?

02:01Is, you know, that President Trump is in office.

02:04You've done a complete 180.

02:06I don't understand what your position is on this now.

02:09And how can we expect you to be unbiased and neutral?

02:11Thank you for the question, Senator.

02:15As I was saying to Senator Kennedy a few moments ago, I think it's a mistake to focus solely

02:19on monetary policy when thinking about the path of inflation and employment.

02:22And I think that the full suite of policies, economic and otherwise, affects those outcomes.

02:28And what the Fed ought to do is to be forward-looking in its expectations of where inflation

02:33and employment are going, because those are the mandates that Congress assigned to it.

02:38But my understanding of how economics works is that a wide variety of policies that have

02:43been implemented since January are actually quite disinflationary.

02:46And let me give you one example, which is the border policy, which you might not think

02:51of an economic policy.

02:52But the truth is that if you increase the number of occupants of housing by millions in

02:57a relatively short period of time without a dramatic expansion of the number of houses,

03:01it's going to put upward pressure on rents.

03:03So I'm sorry to interrupt you, but I know I just have a little bit of time left.

03:08And I'm not disagreeing with the fact that the Fed has a broad portfolio and that it is

03:15a complex thing.

03:16But what I'm concerned about is because of the role that you've had in the Trump administration,

03:20and now as the president tries to move you to the Fed, that we, and we are all so concerned

03:27about the open question about the independence of the Fed because of the things that President

03:32Trump has said.

03:33I mean, so, I mean, I think we can be pretty clear about what's happening here.

03:39This nomination, your nomination, is getting rushed through because the president is frustrated

03:44with the Fed for not cutting rates.

03:47And he sees he wants loyalists on the Fed board.

03:50I mean, that's just pretty obvious, I think, to what's going on here.

03:54So I just think it's important that we not lose sight of this.

03:57We not lose sight of what's happening and also not lose sight of why the president wants

04:01to see rate cuts go down.

04:04Because the economy is in a struggle right now because of the trade war, because of everything

04:10else that he is doing, and this flailing that is happening, I think, is the result of it.

04:16So my view here, Mr. Chair and ranking member, is that it is extremely important for this

04:23committee to take a stand against politicizing the Fed, that that is the best thing for the

04:28long-term health of our economy, and that this is not the right step to take if that is our goal.

04:36Thank you, Mr. Chair.

04:38Thank you, Senator.

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