The American Financial Services Association is hoping the latest round of bluster on Capitol Hill quells soon, so the Federal Reserve can stay focused on its purpose of setting interest rates.

AFSA shared its views in a blog post last week on the same day the Senate Banking Committee hosted a hearing to question Stephen Miran, who is President Trump’s nomination to the board of governors of the Federal Reserve.

“With conflicting economic data, from strong quarterly corporate financial reports in several important U.S. business sectors to jobs and inflation data that at times defies expectations, the role of the Federal Reserve remains in focus,” AFSA wrote. “This is one reason the confirmation hearing in the U.S. Senate for current chair of the White House Council of Economic Advisers Stephen Miran’s nomination to the Federal Reserve Board of Governors is crucial. Consumers, businesses and markets appreciate certainty when it comes to both public policy and the economy.

“That said, the Fed’s role in setting monetary policy can sometimes seem detached from day to day economic and financial decisions most American consumers make,” AFSA continued. “However, in as much as some Fed decisions do affect the price of funds that AFSA Member Companies make available as credit to consumers, as well as the interest rates that affect the cost of larger consumer goods, such as vehicles, the role and accountability of the Federal Reserve Board is coming into clearer focus for many Americans.

As you might imagine when politics comes into play, the views of the Senate Banking Committee chair and the ranking member are opposite.

When opening the hearing, Sen. Tim Scott, the chair and a South Carolina Republican said, “Dr. Stephen Miran, nominated to serve as a governor on the Federal Reserve Board, is well known on this committee.

“As chair of the Council of Economic Advisers, he has already helped guide the Trump administration toward policies that have boosted domestic production, reduced trade deficits, and increased revenues for the Treasury Department,” Scott continued. “His expertise will strengthen the Fed at this critical moment.”

Later during the hearing, Sen. Elizabeth Warren, the ranking member and a Massachusetts Democrat, questioned why Miran should be a part of the Fed at all.

“Illegally removing a Fed Governor is a key step in Trump’s scheme to destroy the independence of the Fed and turn it into his own personal toy. He wants to install his lackeys so that we’ll have a Fed that uses its power to please the President, but that can’t be trusted to keep inflation under control,” Warren said.

“If Donald Trump seizes control, Fed decisions won’t be driven by data. Instead, the Fed will follow Donald Trump’s political whims. When the Fed loses its credibility, businesses and consumers stop trusting it to control inflation and start acting like inflation is here to stay — that raises prices across the board for American families in the long-run,” Warren continued.

“This is not hypothetical. We’ve seen it before — in other countries, and right here in the United States,” she went on to say. “It happened in the 1970s when President Nixon bullied the Fed into keeping rates too low for too long — and led to years of stagflation, where both interest rates and unemployment and inflation stayed high.

“Deep down, even my Republican colleagues know that a Presidential takeover of the Fed is a recipe for disaster,” Warren added.

Before arriving at the White House, Miran was a senior strategist at Hudson Bay Capital Management and senior fellow at the Manhattan Institute for Policy Research.

And in President Trump’s first term, Miran was senior advisor for economic policy at the U.S. Department of the Treasury in 2020 and 2021, when he assisted with fiscal support to the economy during the pandemic recession, including the Paycheck Protection Program and other economic support programs.

“I have been studying and writing about monetary policy and macroeconomics for two decades, beginning with my doctoral research in economics at Harvard. I am thankful to have been advised by my CEA predecessor, Marty Feldstein. For the majority of my career, I was active in public markets, particularly interest rates and currencies. I learned firsthand the substantial sway that monetary policy and market structure hold over the price and availability of credit,” Miran told the Senators.

“Borrowing costs are not just a Wall Street phenomenon. Purchasing a car or home are major milestones in pursuit of the American Dream. Affordability and interest rates affect decisions to have children or start a business. The flow of credit and liquidity is central to America’s banking system, and by extension, global capital markets. The Fed’s role safeguarding these is of paramount importance,” he continued.

“In my view, the most important job of the central bank is to prevent Depressions and hyperinflations. Independence of monetary policy is a critical element for its success. Given the central bank’s outsized role in the economy, it’s no surprise that outsiders have opined on its decisions for decades. However, if confirmed, I plan to dutifully carry out my role pursuant to the mandates assigned by Congress,” Miran went on to say.

“My opinions and decisions will be based on my analysis of the macroeconomy and what’s best for its long-term stewardship. The Federal Open Market Committee is an independent group with a monumental task, and I intend to preserve that independence and serve the American people to the best of my ability,” he added.