The Fed and Trump have been at odds over how to fix the economy. But he’s done playing around.
Now Trump has an ace up his sleeve to make the Federal Reserve bend the knee.
Trump’s Fed Pick Positions for Pivotal Rate Decision
Stephen Miran, the economist appointed by President Donald Trump this fall to the Federal Reserve Board, is emerging as a potential swing vote in the central bank’s upcoming monetary policy meeting next month. Sworn in on September 16, after a narrow Senate confirmation, Miran brings a perspective aligned with the Trump administration’s push for faster interest rate reductions to boost economic growth and ease pressures on American families and businesses.
Having dissented in the last two meetings—advocating for a more aggressive half-percentage-point cut over the quarter-point reductions—he could now tip the scales in a divided committee, reflecting the administration’s proactive stance on monetary easing.
In a Friday interview on Bloomberg TV, Miran emphasized his commitment to economic stability over personal preferences. “I would absolutely vote for a 25-basis point cut if my vote were the marginal vote,” he said.
“There’s no there’s no question about that. To do otherwise would be to cause real harm to the economy for purposes of vanity, and that’s not who I am.” This willingness to support a moderate cut underscores a pragmatic approach, prioritizing progress toward lower rates—a goal long championed by Trump to counter lingering inflation without derailing recovery efforts.
Uncertainty Lingers Ahead of December Meeting
With just weeks until the Federal Open Market Committee (FOMC) convenes, markets remain jittery over whether the Fed will deliver a third consecutive rate cut or hit pause amid inflation worries. Investors, via the CME Group’s FedWatch tool, currently price in a 72% chance of a December cut, up from under 40% just days ago, highlighting the volatility tied to incoming data and policymaker signals.
The Trump administration’s influence through nominees like Miran has injected fresh momentum into these debates, aiming to steer the Fed toward policies that support robust job growth and affordability—key pillars of Trump’s economic agenda. Yet, the path isn’t clear-cut, complicated by a recent government shutdown that delayed critical reports, including the October jobs data and consumer price index.
Mixed Signals from Fed Leadership and Data
Fed Chair Jerome Powell, speaking at the October FOMC meeting shortly before the shutdown, cautioned against assuming a December cut is inevitable.
“A further reduction in the policy rate at the December meeting is not a foregone conclusion,” Powell said, noting “strongly differing views” among the 19 participants and no firm decision on next steps. Vice Chair Phillip Jefferson echoed a cautious tone, describing the current stance as “somewhat restrictive” but urging a “slow” approach toward neutrality.
In contrast, New York Fed President John Williams hinted at near-term easing in comments the same day as Miran’s interview. “I view monetary policy as being modestly restrictive, although somewhat less so than before our recent actions,” Williams said. “Therefore, I still see room for a further adjustment in the near term.”
Similarly, Governor Christopher Waller, a potential Powell successor, voiced support for a cut this week, focusing on labor market softening rather than inflation risks. “I am not worried about inflation accelerating or inflation expectations rising significantly,” Waller said.
“My focus is on the labor market, and after months of weakening, it is unlikely that the September jobs report later this week or any other data in the next few weeks would change my view that another cut is in order.”
The Fed’s dual mandate—taming inflation while maximizing employment—hangs in the balance, with recent data adding to the fog. Thursday’s belated September jobs report showed 119,000 positions added and unemployment edging to 4.4%, alongside downward revisions signaling a softer labor picture than earlier thought.
Missing October metrics due to the shutdown only heighten the stakes, but Trump’s strategic appointments like Miran position the board to potentially accelerate relief, aligning with administration goals to deliver tangible wins for workers and the economy.
