Mickey Levy is certain about one thing when it comes to Stephen Marin becoming a member of the Federal Reserve’s Board of Governors, widely expected after President Trump appointed him to this recently vacated position. As much as the President may want to see his first official pick get a policy-making role at the Fed quickly confirmed, Mickey says Marin will likely face some significant hurdles when it comes to getting approved by Congress.
For starters, Mickey notes that Miran wrote the treatise that became the blueprint for the President’s tariff policies.
“Steve basically wrote this report that's like the blueprint for President Trump's tariffs, imposing very high tariffs, managing the dollar. Pretty, radical changes that are totally outside of the consensus <of> mainstream economists, “ he says. “There are going to be some tough, tough questions to ask from both sides of the political aisle. Republicans as well as Democrats, you know, disagree, with Trump's tariffs.”
And then there’s the study that Marin co-authored last year entitled “Reform the Federal Reserve’s Governance to Deliver Better Monetary Outcomes.”
”And it includes what a lot of people would perceive to be fairly radical changes in the governance of the Federal Reserve,” Mickey says. Among these changes he lists are such steps as shortening the length of Fed governors’ term, allowing every Federal Reserve regional bank president to vote at every meeting, and allowing the President to fire at will any Fed governor.
“As a governor, you know, he would he would have a much bigger platform… for promoting this and advocating it,” Mickey says. Which also means it will be within the Senate Banking Committee’s mandate “to ask tough questions about how Miran would recommend changing the governance of the Fed, in addition to… his other, beliefs… with regard to monetary policy and its conduct.”
Before you dive in and hear what Mickey has to say, let me remind you that he has decades covering the Federal Reserve on Wall Street, at positions in Washington D.C., as a Visiting Fellow at the Hoover Institution, and as a longstanding member of the SOMC, the Shadow Open Market Committee.
And let me provide you some basic information about Stephen Marin, who currently serves as the Chair of the Council of Economic Advisors, and the background of his nomination.
He has been nominated by the President for the open (6-month) slot on the Federal Reserve Board created by the departure of Fed Governor Arriana Kugler.
Miran, a Trump loyalist, from the first Trump Administration, is a Harvard PhD. He has mostly worked in financial markets rather than in academics. He wrote a treatise on trade and how tariffs and other fixes were needs to make the US competitive to solve what has emerged as global impediments to US firms having economic success by operating on American soil. This treatise brought him to the attention of the President. His paper “A Users Guide to Restructuring the Global Trading System,” formed the basis for what has been called the Mar-a-Lago Accord.
Miran has been a factor in the Trump Administration 00:02:43:15
Steve basically wrote this report that's like the blueprint for President Trump's tariffs imposing, very high tariffs, managing the dollar. Pretty, radical changes that are totally outside of the consensus. Mainstream economists. There are going to be some tough, tough questions to ask from both sides of the political aisle. Republicans as well as Democrats, you know, disagree, with Trump's, tariffs policy. <Miran was> the head of the Council of Economic Advisers, and he basically the chief economist for the, the Administration, being a governor of the Federal Reserve is a different role. And the Senate Banking Committee, legitimately has a lot of questions to ask. Not just about tariff policies that are being put in place, but what, Miran would advocate as a governor of the Federal Reserve.
More influence for Miran? 00:04:49:04
So I think a lot of people may be unaware that Miran is the coauthor of the study that has come out entitled, Reform the Federal Reserve's governance to deliver better monetary, outcomes. And, it includes what a lot of people would perceive to be, fairly radical changes in the governance of the Federal Reserve. As a governor, you know, he would he would have, a much bigger platform for, for promoting this and advocating it. And, of course, that would depend on who becomes chair, but it would certainly that certainly should, come within the Senate Banking Committee mandate to ask tough questions about how Miran would recommend changing the governance of the Fed, in addition to, how he would, what his other, beliefs are with regard to monetary policy and its conduct
A backtrack On Fed Independence? 00:07:21:22
And this is, you know, independent of where Steve, what he believes the Fed should do with the funds rate next… And so, this these are much, much bigger issues. And, of course, the broader context is the Fed and the US Treasury, its independence and is it a little bit too insular? And now this could really, stir the pot and, on a lot of different dimensions.
Miran is in his own orbit 00:08:18:15
His views don't always match up with everybody else's. Is he going to make much difference? At least at first? Well, let's consider Kathleen, let's consider the current context. Inflation is a touch above the Fed's, mandate, 2% on the price index. The unemployment rate is low, but edging up a touch. We have in the last meeting, the Fed voted to keep rates at its current range (4 ¾ to 5 ½). But there were two dissents. Marin presumably would be a third dissenter, and that's just on monetary policy and that and of course, that's front and center, which is different than then. His proposal to overhaul the governance of the Federal Reserve <travels with him>. So he does stand out as a fairly controversial appointee.
Miran: a rate cutter and…just a start? 00:09:28:02
Because in his view of tariffs and global trade and what the U.S. needs now, that he doesn't think they're inflationary and he not only approves, he seems to encourage their use. Yes. He would definitely vote to lower rates. Wow. That's a just as simple as that. He would favor… he would favor lower rates. And then and then once again, you know, within the next six months, President Trump is going to, nominate, a chair who you know, may come out of the same kind of cloth as, as Miran.
Miran: Agent of change 00:10:34:11
in Marin's report, you know, shortening the length of the Fed governor’s term, and allowing every Federal Reserve Bank bank president to vote at, at every meeting, enhances, you know, the powers of the Federal Reserve Bank presidents. And then there are other big changes that would, enhance the role of the it would allow the president to fire at will any Federal Reserve Bank governor. It would change the structure of the, the Federal Reserve, the vice chair of the Fed for bank supervision would report directly to the president of the United States. It makes a lot of very large changes. And once again, Kathleen, depending on who becomes the next Fed Chair, if Miran is renominated to, after his <short> term runs out at the end of January 2026, if President Trump renominated him, that could really lead to some significant changes in the Federal Reserve. So that should be front and center when the Senate Banking Committee starts its, confirmation hearings.
Candidates and characteristics 00:12:58:08
Some of the names of candidates are very, very well known, like Jim Bullard, who, you know, has had an extraordinarily fine track record as president, the Federal Reserve Bank of Saint Louis and really understands monetary policy. Others, are less known. I think it's really hard to say. Which direction we're going to go in, but what we need to consider is the possibility of the new Fed chair being unconventional relative to the, the types of, of chairs we've had recently in terms of, prioritization of the Fed's dual mandate and in terms of openness to wholesale reform of the Federal Reserve System.
Data matter, but the Fed is headed for a rate cut 00:14:35:20
…<if there are> Lots of payroll jobs, then it's going to be a lot harder to cut rates. But, in general, do you get the sense that this is going to be sticky at least for a while? It can be a lot of people we know. Well, bank presidents, governors are still going to be there. I think the tendency right now is for the next said move is going to be to cut rates. That shouldn't be the overriding issue here because, you know, right now the inflation adjusted fed funds rate is high. The economy is softening.
Trump has created a welter of uncertainties 00:15:21:03
In part in response to the uncertainties that President Trump has created in tariffs and in immigration policy. The broader question is truly, the independence of the fed. And, you know, clearly, President Trump does not respect the independence of the fed and wants to control it in ways that he sees fit, that is inconsistent with the Fed and what it stands for in its charter.
Lots of issues on the table 00:16:06:15
And these are the issues on the table. And that's why the appointment of, or the nomination of, Steve Marin and the eventual appointment and confirmation of the new Fed chair are so important at this juncture.
Dr. Mickey D. Levy
Research Focusing On How Monetary and Fiscal Policies Influence Economic and Financial Behavior
Mickey Levy is a macroeconomist who uniquely analyzes economic and financial market performance and how they are affected by monetary and fiscal policies.Mickey Levy is a macroeconomist who uniquely analyzes economic and financial market performance and how they are affected by monetary and fiscal policies. Dr. Levy started his career conducting research at the Congressional Budget Office and American Enterprise Institute, and for many years was Chief Economist at Bank of America, followed by Berenberg Capital Markets. He is a long-standing member of the Shadow Open Market Committee and is also a Visiting Scholar at the Hoover Institution at Stanford University.
Dr. Levy is a leading expert on the Federal Reserve’s monetary policy, with a deep understanding of fiscal policy and how they interact. He has researched and spoken extensively on financial market behavior, and has a strong track record in forecasting. Dr. Levy’s early research was on the Fed’s debt monetization and different aspects of the government’s public finances. He has written hundreds of articles and papers for leading economic journals on U.S. and global economic conditions, and has been an active voice on how financial markets are influenced by monetary policy. He has testified frequently before the U.S. Congress on monetary and fiscal policies, banking and credit conditions, regulations, and global trade, and is a frequent contributor to the Wall Street Journal, Bloomberg, and other media.
He is a member of the Council on Foreign Relations and the Economic Club of New York, and has previously served on the Panel of Economic Advisors to the Federal Reserve of New York, as well as the Advisory Panel of the Office of Financial Research.
Dr. Levy holds a Ph.D. in Economics from University of Maryland, a Master’s in Public Policy from U.C. Berkeley, and a B.A. in Economics from U.C. Santa Barbara.
https://mickeydlevy.com/
