Trump's former economic advisor Stephen Miran steps down from Fed board, supports Kevin Warsh as new chair

• Miran championed removal of 'reputational risk' banking guidelines he claimed were used to impose political preferences on issues like firearms and fossil fuels onto bank customers
• Working with Vice Chairwoman Michelle Bowman, Miran helped slash regulatory requirements that freed over $100 billion in capital, allowing banks to extend more credit without penalties for holding safe assets like U.S. Treasuries
• Kevin Warsh, 56, was confirmed by the Senate as the next Federal Reserve chair, replacing Jerome Powell whose term expires Friday

Summary

Key Development: Federal Reserve Governor Stephen Miran submitted his resignation Thursday, effective upon or shortly before Kevin Warsh is sworn in as the new Fed Chairman. Miran, who began his Fed term in September 2025 after serving as President Trump's Council of Economic Advisors (CEA) chair, filled the seat vacated by Governor Adriana Kugler on January 31.

Major Accomplishments Highlighted:

• Successfully removed "reputational risk" guidelines that Miran claimed allowed regulators to impose political preferences on banks regarding firearms and other matters
• Collaborated with Vice Chairwoman Michelle Bowman to reduce "accumulated excess capital," freeing over $100 billion in bank capital
• This deregulation reduced leverage constraints, enabling banks to extend more credit without penalties for holding safe assets like U.S. Treasuries

Economic Policy Stance: Miran warned the Fed risks combating "fake rather than real inflation" by failing to account for economic measurement biases. He argued that reduced immigration and supply-side deregulation are "powerfully disinflationary" forces, and that current inflation metrics are skewed by biases in portfolio management fees and AI-driven software. Misreading these signals could unnecessarily increase unemployment, he cautioned.

Leadership Transition: Kevin Warsh, 56, was confirmed by the Senate Wednesday as the next Fed Chairman, replacing Jerome Powell whose term expires Friday. Miran expressed support for Warsh continuing efforts to limit the Fed's scope to its "narrow mandate" while shrinking the central bank's balance sheet and reducing its financial system footprint.

Market Implications: The transition signals a potential shift toward more conservative monetary policy and regulatory approach, with emphasis on deregulation and tighter Fed mandate focus.