Senate OKs president's pick for Fed board

WASHINGTON — The US Senate on Monday narrowly cleared President Donald Trump's choice for a key role at the Federal Reserve, as the clock ticks down to the central bank's next policy meeting.

The decision came just as a US federal appeals court also ruled on Monday night that Fed Governor Lisa Cook can remain in her position while challenging her ouster from the bank — after Trump sought to fire her.

Both developments set the stage for the two-day gathering of the bank's rate-setting Federal Open Market Committee, due to begin early on Tuesday.

All eyes will be on the outcome of this gathering amid concerns over political pressure faced by the independent central bank.

Late on Monday, the Republican-majority Senate voted 48-47 to confirm Stephen Miran, who chairs the White House Council of Economic Advisers, or CEA, allowing him to join the Fed's board of governors and the committee, which sets interest rates steering the world's biggest economy.

The committee's 12 voting members include seven members of the Fed's board of governors.

With the latest ruling from the US Court of Appeals for the District of Columbia Circuit, Cook is also due to participate in the gathering.

Miran's swift confirmation and Cook's lawsuit come as Trump intensified pressure on the central bank to slash interest rates this year, often citing benign inflation figures in doing so.

Strong concerns

But critics worry the president's moves threaten the Fed's separation from politics.

Miran fills a vacancy on the Fed's board after another governor, Adriana Kugler, resigned before her term expired. He is expected to serve out the remainder of her term, lasting just over four months.

But Democratic lawmakers have raised strong concerns over his White House ties.

Their main worries include Miran's plan to take leave of absence from the CEA rather than resign, a decision he attributed to his short tenure.

Miran has, however, indicated willingness to step down if confirmed for a longer stint at the Fed.

He holds a PhD in economics from Harvard University and served as a senior adviser in the Treasury Department during Trump's first presidency.

He later joined the Manhattan Institute, a conservative think tank, where he wrote commentaries on issues including calls for Fed reform.

For now, the central bank is widely expected to lower its benchmark lending rate by 25 basis points on Wednesday, to a range between 4.0 percent and 4.25 percent — as policymakers try to shore up the economy amid a weakening labor market.

Trump on Monday reiterated his call for a rate cut, writing on his Truth Social platform that Fed Chair Jerome Powell "must cut interest rates, now, and bigger than he had in mind".

For now, Powell and other Fed policymakers have signaled the Fed is more concerned about weaker hiring, a key reason investors expect the central bank to reduce its benchmark interest rate by a quarter point on Wednesday to about 4.1 percent.

Still, stubbornly high inflation may force them to proceed slowly and limit how many reductions they make. The central bank will also release its quarterly economic projections on Wednesday, and economists project they will show that policymakers expect one or two additional cuts this year, plus several more next year.

Agencies - Xinhua