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Donald Trump has once again reached into his past team, selecting economist Stephen Miran, who served in his first administration, to head the Council of Economic Advisers. This appointment is notable as Miran isn’t just a critic of Federal Reserve Chair Jay Powell but has also accused the Biden administration of economic manipulation, claiming they’ve taken over responsibilities traditionally held by the central bank.
In a statement released on Sunday, Trump expressed confidence in Miran, saying, “Steve will collaborate with my Economic Team to bring about a Great Economic Boom that benefits all Americans.” Previously, Miran served as a senior adviser on economic policy during Trump’s first stint in office. Currently working as a senior strategist at Hudson Bay Capital Management, Miran expressed his excitement, stating on X, “I’m honored to help put the President’s policy agenda into action to foster a thriving, inflation-free economy that benefits everyone in America!”
The White House Council of Economic Advisers, comprising three members, plays a crucial role in advising the president on economic issues. Trump has hinted at taking a hardline stance on trade with other countries. Among his proposed actions are imposing significant tariffs, such as 25% on goods from Mexico and Canada, and 10% on Chinese imports right from day one.
On the campaign trail, Trump promised to levy a 20% tariff on all U.S. imports and a hefty 60% on Chinese products, suggesting a possible shift toward more protectionist policies that could impact the global economy differently than during his first term. He’s also committed to renewing the tax cuts enacted during his initial term in the White House.
Earlier this year, Miran co-authored a paper accusing the Biden Treasury Department of economic manipulation during election season. The paper argued that the government’s reliance on short-term debt was akin to “stealth quantitative easing,” which jeopardizes the Fed’s efforts to control inflation. In collaboration with economist Nouriel Roubini, Miran wrote, “By tweaking its debt maturity profile, the Treasury is managing financial conditions dynamically and, by extension, the economy, overstepping the Federal Reserve’s primary roles.”
In one of their discussions, they coined the term “activist Treasury issuance,” or ATI, saying it shifts the interest-rate risks borne by investors, much like the Fed’s quantitative easing initiatives.
In a piece for FT Alphaville, Miran explored the risks of a two-tier bond market, noting that such a scenario “could undermine Treasuries’ status as risk-free collateral, a cornerstone of the global financial system,” likening it to the turmoil faced by default-prone emerging economies.
Miran hasn’t hesitated to criticize Powell, particularly for advocating increased fiscal and monetary stimulus shortly before the 2020 Presidential election to support pandemic recovery efforts. On X, Miran commented, “Powell’s call to ‘go big’ on fiscal stimulus in October 2020, just before the election, was politically and economically misguided, favoring Democrats’ $3 trillion over Republicans’ $500 billion offer. We all saw the outcome.”
Miran’s appointment hinges on confirmation by the US Senate. In a related move, Trump recently appointed Kevin Hassett to chair the National Economic Council.
