On Monday, the Senate confirmed Stephen Milan, the chairman of the White House Economic Advisors Council, to the Federal Reserve Committee. This confirmation provides President Donald Trump with significant influence in the central bank, especially at a pivotal time for monetary policy.
The vote, which ended in a narrow 48-47, primarily followed party lines. Notably, Sen. Lisa Markowski (R., Alaska) sided with Democrats in opposition. Recently, Republicans have streamlined Senate procedures to expedite the consideration of candidates, ensuring Milan’s position is set before the Fed’s crucial two-day meeting starting Tuesday.
Democrats seemed to oppose Milan not necessarily due to his qualifications, but more as a response to his White House role. While Milan stressed his dedication to the Fed’s statutory mission, critics focused on his connections to the administration. This confirmation process eventually turned into a partisan conflict where qualifications took a backseat to political motives.
Beyond Consensus
Milan has been a significant force behind the administration’s economic policies, defending the president’s global tariff strategies and promoting a positive outlook on economic growth. His assessments regarding the benefits of a comprehensive tax reform known as the “big beautiful bill” are considered instrumental in its passage. Recently, the Congressional Budget Office indicated that this law would stimulate faster growth over the next three years.
Supporters believe Milan’s presence at the Fed could mitigate what they view as long-standing groupthink among central bank policymakers.
During his confirmation hearing, Milan expressed his intention to uphold the Fed’s dual responsibilities, emphasizing the importance of long-term economic health. He assured lawmakers, “I will faithfully perform my role according to the duties assigned by Congress.”
Concerns about Independence
Some senators, including Murkowski, suggested that Milan should resign from his White House position instead of taking a leave of absence, arguing this might create issues with divided loyalty. Others disregarded these worries, asserting that the Fed’s effectiveness relies on open dialogue and the inclusion of officials with diverse experiences.
Milan has not shied away from critiquing the Fed’s policies. He criticized the central bank for failing to foresee inflation following pandemic stimulus measures and contended that tariffs didn’t cause the widespread price pressures many economists expected. Prior to returning to government, he worked as a senior strategist at Hudson Bay Capital Management and served in the Treasury during Trump’s first term.
In 2024, Milan authored a paper known as the Mar-a-lago Accord, which urged policymakers to consider more proactive management of the dollar to enhance America’s competitiveness globally. He proposed that rather than viewing exchange rates as volatile, they should be utilized as tools to boost exports, rebalance trade, and encourage domestic production. Proponents saw his proposal as a refreshing take on longstanding debates over currency strategy, akin to the 1985 Plaza Accord, yet adapted for today’s economic landscape.
Short-Term Appointments…Perhaps
Milan fills the vacant position left by Adriana Coogler. Although his term extends until January, he can continue working until a replacement is chosen. Trump will also have the chance to appoint a new Fed chair when Jerome Powell’s term concludes in May.
For now, Milan’s confirmation ensures that after recent interest rate cuts by Trump following a period of stabilization this year, officials are deliberating their next steps. His presence is expected to foster more intense discussions within the executive board and test how open central banks are to perspectives beyond their traditional consensus.
