On Tuesday, President Trump’s top economists transitioned to the Federal Reserve as the central bank commenced an important meeting regarding interest rates.
Stephen Milan was officially sworn in as a member of the Federal Reserve Committee, a development announced shortly after the Senate voted along party lines for his nomination.
While serving the remaining four-month term at the Fed, Milan will take an unpaid leave from the White House, where he currently leads the Economic Advisors Council (CEA).
The Federal Reserve Committee is made up of seven “governors,” each serving a term of 14 years. If a governor departs before their term concludes, the next appointee can fulfill the remaining term.
On the same day he joined the Fed, Milan participated in the much-anticipated Federal Open Market Committee (FOMC) meeting.
The FOMC consists of rotating members from the Federal Reserve Committee, along with the president of the New York Federal Reserve and the heads of Regional Reserve Banks.
Interest rate cuts are expected to be announced by the Fed at the conclusion of its meeting on Wednesday.
Trump has exerted unusual pressure on the Fed to reduce interest rates, and he aims to replace Fed Chairman Jerome Powell with someone he perceives to be more aligned with his views.
Moreover, there are indications that Milan may be positioned for a permanent role on the Fed committee, particularly if he manages to oust Fed Governor Lisa Cook.
Senate Democrats have criticized Trump for undermining the Fed’s independence, suggesting that Milan might be overly loyal to the president to fulfill his duties at the central bank.
Milan’s swift confirmation is seen as a win for Trump, although it’s uncertain how it will influence the outcome of the FOMC meeting. In a significant address last month, Powell expressed concerns regarding a slowdown in U.S. job growth, hinting that interest rate cuts could be forthcoming.
Since then, the U.S. has experienced a decline in employment growth, coupled with a continued rise in unemployment rates.
