Milan passes Senate Banking Committee; will Trump take control of the Fed?

Deng Tong, Golden Finance

On September 10, 2025, the U.S. Senate Banking Committee approved Stephen Milan, Trump's nominee for Federal Reserve Board of Governors, by a vote of 13 to 11. This result could allow Milan to take his seat before the Fed's two-day meeting on September 16-17.

Who is Milan? Will the Federal Reserve become Trump's controlling institution? What has Milan said about cryptocurrency?

I. Milan

1. Milan's Biography

Stephen Ira Milan is an American economist who has served as Chairman of the Council of Economic Advisors since 2025.

Milan graduated from Boston University with a bachelor's degree in economics and philosophy. He graduated from Harvard University in 2010 with a doctorate in economics.

After graduating from Harvard, he worked as an analyst at Lily Pond Capital Management before joining Fidelity Investments and Sovarnum Capital. In 2015, Milan became Sovarnum's Head of Macroeconomic Strategy. In April 2020, Milan served as a senior advisor for economic strategy at the U.S. Treasury Department. After Biden's inauguration in January 2021, Milan returned to the private sector and co-founded Amberwave Partners. In February 2024, he joined Hudson Bay Capital Management as a senior strategist. In December 2024, Trump nominated Milan as a candidate for chairman of the Council of Economic Advisors. In March 2025, he was confirmed by the U.S. Senate. After Federal Reserve Board Governor Kugler announced his resignation in August, Trump nominated Milan to replace Kugler. 2. Trump's "Tariff Architect" In February 2024, Bessant began supporting Trump's 2024 presidential campaign. Bessant approached Milan for his support. That same year, Milan donated $1,000 to Never Surrender, a pro-Trump political action committee, and another $1,000 to Trump 47, a joint fundraising committee. On December 22, Trump nominated Millan as his nominee for chairman of the Council of Economic Advisers. In January 2025, Bloomberg News reported that Millan was one of several Trump advisers exploring the use of the International Emergency Economic Powers Act to gradually increase tariffs. On February 27, he appeared before the Senate Committee on Banking, Housing, and Urban Affairs. Millan reiterated his support for raising tariffs to encourage investment. On March 6, the Committee on Banking, Housing, and Urban Affairs approved his nomination by a party-line vote of 13 to 11. On March 12, Millan was confirmed by the Senate. As chairman of the Council of Economic Advisers, Milan crafted Trump's tariff policy; the Financial Times called him the "architect" of Trump's tariffs. Milan's actions contradicted optimistic forecasts and early data. 3. Federal Reserve Board Career Begins On August 7, 2025, Trump nominated Milan to succeed Kugler on the Federal Reserve Board. Milan will serve the remainder of Kugler's term, which ends in January 2026. Trump has hinted that he will seek a "permanent replacement" for Powell. Milan's appointment gives Trump more time to consider Powell's successor. JPMorgan analysts say that if Milan's nomination is confirmed, the yield curve could steepen. According to the New York Times, although Milan's term will end in a few months, he will be able to influence discussions about interest rates and Powell's successor. On September 4th, Milan appeared before the Senate Committee on Banking, Housing, and Urban Affairs. Milan intends to continue serving as Chairman of the Council of Economic Advisors while serving on the Federal Reserve Board, but will take an unpaid leave of absence. II. Will the Federal Reserve become an institution controlled by Trump? 1. Milan's appointment could lead to the Fed's capitulation to Trump. CNN believes Milan's appointment will be a milestone in Trump's attempts to bend the Fed to his personal will. Milan has publicly stated his plans to remain involved with the White House during his tenure at the Fed. He is not resigning from his positions as Presidential Economic Policy Advisor and Chairman of the Council of Economic Advisors, but rather intends to take an unpaid leave of absence. This will allow him to return to government service after his term at the Fed concludes.

White House spokesman Kush Desai said in a statement: "Based on legal advice, if confirmed, Milan would be able to take an unpaid leave from his position on the Council of Economic Advisers."

The arrangement has raised concerns that Milan may be beholden to Trump and unwilling to support policy measures that, while good for the economy, would be politically problematic for him.Some former White House officials, legal experts, economists and Democratic lawmakers warned that confirming Milan under these circumstances could set a dangerous precedent and undermine the Federal Reserve's long-standing independence. 2. Many Concerns About Milan's Performance of Office: Glenn Hubbard, former Chairman of the Council of Economic Advisers during the George W. Bush administration, stated, "This move is clearly inappropriate, and raises serious concerns about his ability to perform his duties independently." Katherine Judge, a renowned law professor at Columbia University who specializes in financial markets and regulation, noted that the Federal Reserve's founding act does not directly stipulate whether someone like Milan can maintain a White House position while serving at the central bank. Congress did not contemplate such an arrangement when it drafted the Federal Reserve System's charter in 1935 and established numerous constraints. "These carefully designed mechanisms clearly indicate that Congress intended the Federal Reserve to have substantial independence," she said. Any attempt to undermine the Fed's independence could pose "significant risks" to the economy. Lisa Gilbert, co-chair of the watchdog group Public Citizen, stated that Milan's continued ties to the White House "completely contradict" Congress's original intent in establishing the Federal Reserve. This situation is particularly problematic at a time when Trump is trying to pressure the Federal Reserve into cutting interest rates. "The Trump administration has been relentlessly pressuring the Fed, and given our known attempts to influence this independent institution, this dual role is inherently problematic," said Senator Mark Warner of Virginia. "Trump's attempt to install political supporters at the Fed will create further instability for consumers. I strongly oppose the nomination of Stephen Milan and urge my colleagues to reject this latest effort to politicize the Fed." Senator Elizabeth Warren (D-Mass.), the ranking member of the Senate Banking Committee, said before the vote: "This nomination is a clear test of Dr. Milan's loyalty to President Trump, with every vote determining his return to the White House. That's not independence, it's servitude. If he is confirmed to the board under these circumstances, his credibility with the markets, businesses, and the public will be zero." 3. Trump's Desire for Control Trump has made no secret of his desire for a more compliant central bank that would meet his demands for rate cuts. For months, the Fed has held interest rates steady to control inflation. The president even boasted that he was on the verge of securing a majority on the powerful Federal Reserve Board, and that Milan could be the next to join. If Trump successfully removes fellow governor Tim Cook over mortgage fraud charges, he will have another chance to appoint a member to the Fed Board. Furthermore, the president will also appoint a new Fed Chair after Jerome H. Powell's term ends next May. Since the start of his second term, Trump has significantly disrupted the status quo of US economic policy by imposing historic tariffs and exerting intense pressure on the Federal Reserve. His impact on the Fed and, ultimately, the US economy, will become clearer in the coming months and weeks. On August 29th, a lower court ruled that most of the tariffs imposed under the president's emergency powers were illegal. Now, Trump hopes the conservative-majority US Supreme Court will overturn that ruling. According to the U.S. Department of Labor, construction and manufacturing jobs fell for the full year, down 10,000 and 31,000 jobs, respectively, compared to three months earlier. A business survey by the Institute for Supply Management (ISM) showed that manufacturers and service providers remain frustrated by Trump's volatile trade war and are struggling to plan ahead.

III. Milan's remarks on cryptocurrency

In December 2024, Milan stated on the "Forward Guidance" blog program that the United States should focus on policies that support innovation: "I believe financial deregulation will be a strong component of this. I believe cryptocurrency may play an important role in innovation and in leading a new round of economic prosperity under the Trump administration."

In November 2023, Milan responded to Zhao Changpeng's resignation, "I have always been amazed at how much 'innovation' in recent decades has been achieved by circumventing regulation. Uber, cryptocurrency, Airbnb..."

Many people in the cryptocurrency field welcomed Milan and believed that this was a positive development for the cryptocurrency industry.

Under Milan's leadership, the Federal Reserve may adopt policies to promote cryptocurrency innovation and its integration with traditional finance, accelerating the integration of cryptocurrency into mainstream finance. Milan’s views, combined with the fact that cryptocurrencies have traditionally performed well in low-interest rate and high-liquidity environments, could be a significant catalyst for assets like Bitcoin and Ethereum.