Donald Trump has nominated Stephen Miran to fill a soon-to-be vacant seat on the Federal Reserve’s board of governors.
Miran, chair of the White House’s Council of Economic Advisers, will take the seat vacated by Adriana Kugler, who is leaving the central bank on Friday, months before her term was set to end in January. The president said in a Truth Social post on Thursday that Miran would serve through to the end of January as the administration continues its search for a “permanent replacement” to fill the seat. The seat would give Miran a vote on the rate-setting Federal Open Market Committee, where he is seen as likely to support Trump’s calls for aggressive interest rate cuts. It is expected that Trump will eventually use the seat to nominate a replacement for Jay Powell, whose term as Fed chair ends in May 2026, but who could serve as a governor until the end of January 2028. Miran will need to be confirmed by the Senate for the role. The Senate approved his appointment to the CEA by 53 votes to 46. The hashtag#Fed declined to comment. Source: FT
As expected, the fed leaves rates unchanged despite some of the positive developments observed on the inflations side (see below Inflation surprise index versus Fed Funds rate).
We note that this decision was met with opposition from Governors Michelle Bowman and Chris Waller, both of whom have advocated for the Fed to start easing. This is the first time since 1993 that multiple governors cast no votes on rate decision. Source: zerohedge
LIQUIDITY ALERT >>> The Treasury released their borrowing estimates.
$1.6T in net new debt issuance over the next two quarters. About $500B of it is the TGA refill. Source: Lyn Alden
‼️ Pretty BIG week ahead in terms of central bank rate decisions
➡️ The Fed and the Bank of Canada are both expected to hold rates steady on Wednesday at 4.50% and 2.75%, respectively. ➡️The Bank of Japan is also anticipated to hold its rate unchanged at 0.5% on Thursday. Source: Bloomberg, Global Markets Investor
The US has the highest central bank rate of any developed market.
Here’s a detailed look at current global policy rates: Source: bespokeinvest
BREAKING >>> Trump spars with Powell over renovation costs during Fed visit, but says not ‘necessary’ to fire chairman
Trump: It looks like it’s about $3.1 billion Powell: I’m not aware of that. Trump: It just came out Powell: You just added in a third building Trump: It’s a building that’s being built Powell: It was built five years ago. Source: @SpencerHakimian
The US president will spend about an hour at the central bank, as he looks to pressure its chair Jay Powell to cut interest rates more aggressively.
Source: FT
Goldman:
"Market participants seem to agree that the risk to Fed independence is rising, as 5-year 5-year forward inflation swaps have recently decoupled higher from their prior close relationship with the 2-year note yield." Source: Nick Timiraos
