During a Thursday Senate Banking Committee nomination hearing, Senator Reverend Warnock attacked the President’s attempts to fill the Federal Reserve with “yes men” by illegally firing Federal Reserve Board Governor Lisa Cook
During the hearing, Senator Warnock highlighted the Federal Reserve Governor nominees’ lack of commitment to the Federal Reserve’s independence, which risks millions of retirement accounts and the health of the U.S. economy
Senator Reverend Warnock during the hearing: “America’s economy is the envy of the world. I think the independence of the Fed is an important part of that, and based on the statements that I have seen so far, I’m convinced that you’re not going to exercise that kind of independence”
Watch Senator Reverend Warnock at Thursday’s hearing HERE
Washington, D.C. – Today, U.S. Senator Reverend Raphael Warnock (D-GA), a member of the Senate Banking Committee, defended the importance of an independent Federal Reserve while questioning Dr. Stephen Miran, President Trump’s Chair of the Council of Economic Advisors and nominee to serve on the independent Federal Reserve Board. During the hearing, Senator Warnock continued to voice his support of Lisa Cook, a renowned Georgia economist and the first Black woman on the Federal Reserve board. Recently, President Trump attempted to illegally fire Cook to fill the Federal Reserve with “yes men,” which would endanger not only millions of retirement accounts but the health of the entire American economy.
“Lisa Cook is a first-rate economist and a Georgian that we’re all very proud of,” said Senator Warnock.
The hearing was held for the nominations of Dr. Stephen Miran to be a Governor for the Federal Reserve Board, as well as Ben Hobbs and Ronnie Kurtz, to be Assistant Secretaries for the Department of Housing and Urban Development (HUD), and Christopher Pilkerton and Jonathan Burke, to be Assistant Secretaries Department of the Treasury (USDT).
Senator Warnock also used the hearing to highlight Dr. Miran’s failure to commit to the Federal Reserve’s independence.
“America’s economy is the envy of the world. I think the independence of the Fed is an important part of that, and based on the statements that I have seen so far, I’m convinced that you’re not going to exercise that kind of independence,” said Senator Warnock. “I think you’re conflicted in this role, that you would be a mouthpiece and a proxy vote on the Fed board for President Trump, if you were confirmed, and I find that deeply alarming and concerning, as I think about the retirement accounts of people of Georgia, as well as the strength of our overall economy.”
Watch the Senator’s full remarks and line of questioning HERE.
See below transcript of the key exchange between Senator Warnock and Dr. Stephen Miran:
Senator Reverend Warnock (SRW): “On Monday, August 25, President Trump escalated his continuing assault on the independence of the Federal Reserve by attempting to illegally fire Fed Governor Lisa Cook. Lisa Cook is a first-rate economist and a Georgian that we’re all very proud of.”
“No president has ever attempted to fire a Fed Governor before. This stems from unsubstantiated allegations that Governor Cook has denied. Everyone understands what’s happening here. The President’s tariffs are damaging the economy. We can all see that. The economy is struggling, as he’s created a 10% tax on virtually everything, making Americans poorer and poorer, all to give a tax cut to billionaires, and now he’s insisting that the Fed cut interest rates to try and mask the fact that his economic policies are failing miserably. Families deserve a fed that will work for them, not for the President. And Lisa Cook is simply being scapegoated for Trump’s failed economic policies.”
“Dr Myron, the Fed’s job is to maximize employment and keep prices stable. That’s it. Not to soothe the President’s ego, not to inflate his poll numbers, not to carry out his political agenda. A strong central bank serves families, investors and the entire world by just relying on economic data and focusing on employment and prices. There’s a reason why our economy, even when it struggles, is the envy of the world. There’s a reason why people invest in America, and I think that the independence of the Fed has a lot to do with that. You seem to believe the opposite.”
“For example, in this Manhattan Institute paper published last year that I would like to enter into the record. You proposed reforming the Federal Reserve by explicitly tying Fed board membership to the result of elections, giving the President control over the Fed and allowing the President to have complete authority to fire Fed governors. Congress would need to implement these reforms, is that correct?
Dr. Stephen Miran (SM): “Thank you, Senator, that is not correct. I did not recommend giving the President control over the Fed, because what I recommended doing was a package of checks and balances, and one of the other checks and balances included in that package was strengthening the system of reserve of regional Reserve Banks and ensuring that they voted every meeting which would then get majority of the Board of Governors.”
(SRW): “I’ve read your paper, and I disagree with your characterization of the argument. Do you think our economy would be better off with President Trump setting interest rates unilaterally?”
(SM): “Thank you, Senator. I don’t believe that’s a situation which is currently happening.”
(SRW): “But my question is, do you think our economy would be better off if he were able to set interest rates unilaterally? Yes or No?”
(SM): “I think the President has had a series of excellent calls in monetary policy over the recent so you think yours however, I do think that independence of the central bank from political cycle is key to its long-term success in delivering superior economics.”
(SRW): “So, if a Fed Governor disagrees with the President over interest rates, should the President be able to fire them based solely on that policy disagreement?
(SM): “I’m afraid that I have no legal training, particularly not in constitutional employment law, so that question is not one that I am capable of answering.”
(SRW): “Do you think the President should be able to fire someone based solely on a policy disagreement. You’ve been nominated to serve on the Fed?”
(SM): “Again, I have no means with which to evaluate that claim, lacking any…”
(SRW): “Do you think it’s appropriate for the President to threaten to fire them as he’s threatened to fire Chair Powell?”
(SM): “Again, it’s, it’s not my prerogative to have views on such and such a question.”
(SRW): “Well, I think you have opined on such questions. Here’s the problem with your answer. Trust in institutions takes years. It takes decades to build, and this political assault on the Fed’s independence threatens market stability, reducing investment in our country, costing jobs, and jeopardizing the retirement accounts of millions of Americans.”
“Dr Myron, in your view, what happens when businesses and consumers and investors lose faith in the Fed’s ability to act independently from politics, whether it’s from the left or the right?”
(SM): “Thank you, Senator. Should financial markets and households and firms come to view the Fed as not independent, it presumably will have a material effect on bond yields and inflation expectations. That would be adverse for economic outcomes.”
(SRW): “I think that there’s a reason, again, that America’s economy is the envy of the world. I think the independence of the Fed is an important part of that, and based on the statements that I have seen so far, I’m convinced that you’re not going to exercise that kind of independence. I think you’re conflicted in this role, that you would be a mouthpiece and a proxy vote on the Fed board for President Trump, if you were confirmed, and I find that deeply alarming and concerning, as I think about the retirement accounts of people of Georgia, as well as the strength of our overall economy.”
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