Trump's Fed appointment has some truly confusing policy ideas

Copyright © HT Digital Streams Limit all rights reserved. Trump’s Fed appointment Stephen Miran has policy ideas who read Parplex economists and investors Rahul Jacob 5 min read 24 Sept 2025, 12:30 pm Ist Stephen Miran’s view of the positive impact of Trump’s disruptive policy can be called Champagne Anarchism. (Reuters) Summary of a failed fund manager to a controversial governor, Stephen Miran shakes the basis of US economic policy. His increase under Trump, who advocates aggressive rate cuts and radical policy shifts, raises questions about market stability and the future of global finance. Through one of the strangest twists in economic history, Stephen Miran, chief economic adviser of US President Donald Trump and the newly appointed member of the Federal Reserve Governors, saw that his career had been raised in almost mythical way since the failure of the investment firm he founded in 2022. of US money management), according to the Wall Street Journal. Amberwave turned into a hedge fund but did not get a traction and closed in the end of 2023. A year later, Trump’s victory in the US election barely laid down a rebirth for Miran. In addition to being one of the most zealous of all the president’s JA men, he is a vocal proponent of the drastic to combat immigration, weaken the dollar and ask our allies to bear a larger part of the defense costs on strategic alliances. Trump’s victory paved the way for him to take a much greater role as chairman of the American Council of Economic Advisors. Last week, the 42-year-old economist, just appointed in the Fed by a slim Senate margin, with every democratic senator voting against his appointment, brought the lonely votes out of the Fed’s monetary policy decision. He wanted a cut of 50 basis points to the Fed’s federal fund goal, twice as large as delivered. On Monday, Miran doubled and argued that the US economy needed aggressive cuts, reaching the policy rate about 2.5%. Miran argued that the Trump administration’s policy would lead to net zero immigration and help keep a lid on rental prices. “Since about 100 million Americans rent, net zero immigration (a percentage point) would imply lower rental inflation per year,” he said. He added that “insufficiently responsible for the strong downward pressure at the neutral rate due to changes in border and fiscal policies, resulting in some people apparently being less restrictive than it actually is.” He also pointed to tax reductions, regulatory changes and a projected slowdown in population growth as major positive that would increase investment and productivity, enabling lower interest rates. According to the estimate of the congress budget office, this week, he argued that tariff income could lower the budget deficit by more than $ 380 billion a year, which will support the case for lower rates. It’s been almost half a century since George HW Bush created the term “voodoo economics” to harm Ronald Reagan’s similar wide eye optimism and illogical policy mix. Bush lost the bid for the nomination of the Republican Party, but eight years of Reaganomics left the US with higher shortages than ever before. Similarly, Miran’s view of the positive impact of Trump’s disruptive policy can be called Champagne Anarchism. His speech on September 22, for example, overlooked the impact of chaotic policy announcements of the White House over the head of the confidence and investment plans. The H 1-B confusion is only the latest example. It seems that Miran has stopped Japan, which spent two decades of economic malaise and deflation, as an example for the US to follow: “It was just a few years ago that there was a widespread discussion about whether most developed economies would be, due to falling fertility figures, it is still a force.” There could be a valid case for the US to lower interest rates faster, partly because the effects of Trump’s policy significantly delayed the economy. Miran is right that exporters have reduced prices for US retailers, and the impact of tariffs on inflation may be lower than other Fed -governors expected. It is also true that many US trading partners, especially in East Asia, had significantly undervalued currencies against the US dollar for years. Their central banks contributed to its increase by collecting reserves in dollars. The question is what to do about this. Threaten to force trade partners and allies to keep many long -term US government bonds, as set out in Miran’s 2024 paper, against adverse returns, and repeating the case for a weaker dollar does not help confidence. The currency is down more than 10% this year, the worst performance in more than two decades. Whether the administration has the right to fire governors on the Fed’s board to replace them with those who can take his view is now before the Supreme Court. Still, the stock market ended at an almost highlight last week. But as Financial Times columnist Katie Martin notes, while international fund managers buy shares for us, they entrench their currency risk by selling US dollars, and it contributes to pressure on the currency. Meanwhile, as more dollar investors turn away, scale investment in gold new highlights, which is in great inflows via gold enterprises as far as Thailand and leads to a too strong Thai Baht. Martin quoted the Dutch asset management firm Robeco, who in his recent five-year prospects says that there is one-in-three chance that the global financial order will expose. There is an even greater probability that Miran and the foreign policy he promotes can make investment managers’ returns even more mediocre than those at the firm he founded together before it was forced to close. Ironically, the unsuccessful ETF that Miran was running has invested in companies that are considered good for the US and its supply chains. The author is a former Financial Times outdoor correspondent. Catch all the business news, market news, news reports and latest news updates on Live Mint. Download the Mint News app to get daily market updates. More Topics #federale Reserve #Donald Trump #US Economy Read Next Story