Pro-Trump Fed Governor Stephen Miran
"Fed independence is a means, not an end"
Emphasizes that tariffs burden foreign companies
Fed Governor Stephen Miran, who is considered a pro-Trump figure within the U.S. Federal Reserve (Fed), recently said in effect that dollar weakness does not have a meaningful impact on monetary policy decisions, according to reports by Reuters and the Wall Street Journal (WSJ).
Speaking at a discussion held on the 9th (local time) at Boston University’s Questrom School of Business, Miran said, “To really be a first-order driver of U.S. consumer prices, you would need a really large move in the dollar,” adding, “In conclusion, dollar weakness is largely uncorrelated with consumer prices.”
In other words, unless there is an exceptional situation in which the dollar plunges, it does not become a problematic factor. The dollar index (DXY), which measures the value of the dollar against the currencies of six major trading partners, has fallen 7.7% over the past year.
Miran also said that central bank independence helps lead to better policy, but stressed that independence is a means, not an end in itself. Public criticism has flared recently that the U.S. administration violated the Fed’s independence by launching investigations into Fed Chair Jerome Powell and Governor Lisa Cook.
“What we want is monetary policy that is aligned with the business cycle,” he said, “and not monetary policy that is aligned with some other calendar, like the political calendar.” He added that in times of crisis there is broad-based cooperation between the Fed and the Treasury Department.
“There is no such thing as absolute, 100% pure independence,” he said. “Even so, it is really important that decisions to tighten when economic conditions call for tightening, and to ease when they call for easing, are made in line with the business cycle.”
In addition, Miran indicated that, in his view, the burden from the Trump administration’s tariff policies has fallen more heavily on foreign countries and overseas companies than on U.S. consumers. “The shock from tariff increases has been far more muted than initially feared,” he said, adding, “In practical terms, foreign companies are the ones bearing that burden.”
He also reiterated his earlier argument that tariff revenues will help reduce the U.S. government’s fiscal deficit. “Tariff revenues will make a meaningful contribution to shrinking the fiscal deficit,” he said.
Miran, regarded as a pro-Trump official, saw his term as governor officially end late last month, but he can continue working at the Fed until President Donald Trump nominates a successor and the Senate confirms that nominee.
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