Christopher Rugaber and Josh Boak, Associated Press
WASHINGTON (AP) — President Donald Trump on Thursday nominated the top economic adviser to the Federal Reserve for four months, saying he will temporarily fill the vacant seats while continuing a search for long-term appointments.
Trump said he named White House Economic Advisors Council Chairman Stephen Milan to fill the seats that were vacant by Biden’s appointee Gov. Adriana Kugler, who resigned Friday. Milan will serve until January 31, 2026, if approved by the Senate.
The appointment is Trump’s first opportunity to take more control over the Fed, one of the few remaining independent federal agencies. Trump is criticizing current chairman Jerome Powell for calling him a “stubborn idiot” on social media last week.
Milan is a leading advocate for Trump’s income tax cuts and tariff hikes, claiming that the combination will generate enough economic growth to reduce the budget deficit. He also reduced the risk that Trump’s tariffs would create higher inflation. This is a major source of concern for Powell.
Milan’s choice could raise concerns about the political impact of the Fed, which has traditionally been isolated from daily politics. Fed independence is generally seen as key to enabling difficult measures to combat inflation, such as raising interest rates politicians may not be willing to take.
The Federal Reserve Governor votes for all central bank interest decisions and its financial regulatory policies.
Milan’s nomination, if approved, will add an almost certain vote to support low interest rates. Coogler reiterated Powell’s view that the Fed should not change fees before making any moves, and thought it would need to further assess the impact of tariffs on the economy.
Trump said he would appoint a Fed official to cut interest rates, but that would cut the borrowing costs of the federal government’s vast $36 trillion debt pile. Trump also hopes that lower rates will increase moribund’s home sales. However, the Fed does not directly set long-term interest rates for home and car purchases.
At last week’s latest meeting, Fed officials had not changed their key rate to 4.3%, which was standing after three interest rate cuts late last year. But two Fed governors — Christopher Waller and Michelle Bowman — opposed the decision. Both were appointed by Trump in his first term.
Still, even with Miran on the board, 12 Fed officials vote for interest rate policies, with many worried that Trump’s sweeping tariffs could boost inflation in the coming months.
Milan could be replicated for a long time with the Fed or replaced by another candidate once his initial appointment is over.
Powell’s term as a chair ends in May 2026. However, even after he stepped down as a chair, Powell was able to remain on the Governor’s Committee until January 2028. It would deny or at least delay Trump’s opportunity to appoint additional policymakers to the Fed’s board.
As a result, one option for Trump is to appoint Powell’s final replacement as chairman to replace Kugler once the remaining four months of her term are complete. Key candidates for that position include Kevin Wahsh, a former Fed governor from 2006 to 2011, frequent critics of Powell’s chairman, and Kevin Hassett, Trump’s top economic adviser.
Another option for the White House next May is to choose Waller, who is already on the board, and replace Powell, and have been widely mentioned as a candidate.
Marco Kasilagi, a senior economist at investment bank Evercore ISI, said Milan’s choice could be a positive sign for Waller.
After the July employment report was released last Friday, Milan criticized the Fed chairman for not cutting benchmark interest rates, saying Trump was proven right about inflation during his first term and would do so again. The president has pressured Powell to cut short-term interest rates under the belief that his tariffs would not promote higher inflationary pressures.
“What we’re seeing in real time now is a repetition of this pattern where the president has ultimately proven right,” Milan told MSNBC. “And the Fed will eventually catch up with the president’s view if it’s late, perhaps too late.”
Last year, Milan expressed support for several unconventional economic views in its commentary on the Fed and international economics.
Last November he proposed measures to reduce the value of the dollar to promote exports, reduce imports and reduce the US trade deficit, a top priority for Trump. He also suggested that tariffs would encourage US trading partners such as the European Union and Japan to accept cheaper dollars as part of the Mar-a-lago Accord, an echo of the Plaza Agreement that reduced the value of the dollar in the 1980s.
As a conservative Manhattan Institute Fellow, in March 2024, Milan proposed an overhaul of the Fed’s governance, including the president to facilitate board members.
“The Fed’s current governance has encouraged group thinking that has led to significant monetary policy errors,” Milan wrote in a paper with Dan Katz, the top official at the Treasury Department.
Original issue: August 7, 2025, 4:16pm EDT
