SENATE COMMITTEE ON BANKING, HOUSING, & URBAN AFFAIRS
Nomination Hearing
For questions on the note below, please contact the Delta Strategy Group team.
On September 4, the Senate Committee on Banking, Housing, and Urban Affairs held a hearing to consider the nominations of:
- Dr. Stephen Miran, to be a Member, Board of Governors of the Federal Reserve System
- Christopher Pilkerton, to be Assistant Secretary for Investment Security, Department of Treasury
- Jonathan Burke, to be Assistant Secretary for Terrorist Financing, Department of Treasury
Below is a summary of the hearing prepared by Delta Strategy Group, which includes several high-level takeaways, followed by summaries of opening statements and discussion.
Key Takeaways
- Senators across the aisle, led by Chairman Scott (R-SC) and Ranking Member Warren (D-MA), reiterated the need for the Federal Reserve (Fed) to remain independent and steer away from political influences and back toward data-driven monetary policy.
- Miran reaffirmed the necessary independence of the Fed in monetary policy and his commitment to the Fed pursuing price stability, maximum employment, and moderate long-term interest rates without political interference. He stated that his opinions and decisions would be based on his macroeconomic analysis and emphasized his willingness to hear a wide variety of views to evaluate his positions.
- Chairman Scott raised questions about priorities in ensuring a holistic approach to the capital framework, citing necessary reform of the Supplementary Leverage Ratio (SLR) and Basel III, with Miran responding about his shared concerns around Basel III. He stated that there needs to be a fulsome process for considering the benefits of regulations, alongside examining the costs and consequences of regulations for credit provision.
- Senator Lummis (R-WY) asked whether monetary policy and bank supervision are distinct functions, and whether bank supervision and payment regulations are regulatory functions subject to Presidential direction rather than entitled to the same level of independence as monetary policy, with Miran agreeing they are different functions. Senator Lummis called for Miran to help establish a system that clearly demarcates the independence of monetary policy while recognizing the President’s role in bank supervision.
- Democrats warned against politicizing the Fed as they cited inflationary factors, such as tariffs, that are increasing economic pressure and heightening the risk of stagflation. Ranking Member Warren and Senator Gallego (D-AZ) cited how President Nixon’s pressure on the Fed to drop interest rates was a factor in subsequent stagflation in the 1970s.
- Ranking Member Warren and Senator Warner (D-VA) raised allegations of the administration undermining the integrity of the Bureau of Labor Statistics’ (BLS) data. Miran raised how the data from BLS has deteriorated in quality and reliability. He cited two reasons as declining response rates over time, alongside an inability or refusal to correct for those declining response rates, as he criticized BLS’s failure to take corrective action and for complacently allowing the deterioration.
- Senator Cortez Masto (D-NV) asked whether Miran still believes that the economic burden of U.S.-imposed tariffs is borne by the country whose exports are tariffed. Miran responded that he believes that in the long run, while maintaining that there could be volatility in the short run. When asked if he believes tariffs are taxes, he stated that, economically speaking, any policy can be modeled as a tax.
- Senator Ricketts (R-NE) discussed how, under the Agricultural Foreign Investment Disclosure Act (AFIDA), foreign entities are required to disclose the transactions of American agricultural land to the USDA, which is then shared with the Committee on Foreign Investment in the United States (CFIUS). He emphasized that the AFIDA Improvement Act would strengthen reporting requirements and improve data sharing and coordination between USDA and CFIUS so that national security risks tied to foreign land purchases are flagged immediately.
- Senator Rounds (R-SD) cited the need for passing the Promoting Agriculture Safeguards and Security (PASS) Act to protect U.S. military installations from foreign observation. Senator Britt (R-AL) questioned Pilkerton on how to address increasing Chinese land ownership, particularly farmland, in close proximity to sensitive military sites as a matter of national security.
SUMMARY
Opening Statements and Testimony
Chairman Tim Scott (R-SC)
As Chair of the CEA, Miran has already helped guide the Trump administration toward policies that have boosted domestic production, reduced trade deficits, and increased revenues for Treasury. His expertise will strengthen the Fed at this critical moment. Pilkerton would lead CFIUS and Treasury’s outbound investment screening efforts with the legal and financial experience needed to keep America secure from hostile foreign influence and to ensure U.S. investment does not aid our adversaries in key sectors. Burke has a proven track record both in government and in the private sector. From his early days at Treasury to his work implementing rigorous anti-financial crime controls in the private sector, he understands the stakes of his mission in protecting the American economy from those who would do it harm.
Ranking Member Elizabeth Warren (D-MA)
President Trump has conducted a months-long campaign to seize control of the Fed and failed to deliver on his promises to cut costs. Instead of taking responsibility for his failing economic agenda or changing his tariff policies, Trump wants to make the Fed his scapegoat. When the Fed loses its credibility and is not driven by data, but political whims, businesses and consumers stop trusting it to control inflation and start acting like inflation is here to stay. Even Republicans know that a presidential takeover of the Fed is a recipe for disaster. During Dr. Miran’s tenure as Chairman of the CEA, his primary achievement has been the willingness to make increasingly absurd economic claims on behalf of every single reckless move. He helped design Trump’s chaotic tariff policies that are driving up costs for families and played cheerleader for the One Big Beautiful Bill. Even if Republicans force through his confirmation, Miran’s tenure will be tainted with suspicion. If we allow the Fed to become a political football, we will pay a long-term price.
Dr. Stephen Miran, to be a Member, Board of Governors of the Federal Reserve System
As CEA Chairman, I have advised the President and his administration on fiscal and regulatory policies designed to achieve full employment and stable prices. Both the CEA and the Fed work to advance America’s economic prosperity as a shared and common goals, but with different means. From my career and activity 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. 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. 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. If confirmed, I plan to dutifully carry out my role pursuant to the mandates assigned by Congress. My opinions and decisions will be based on my analysis of the macroeconomy and what is best for its long-term stewardship. The Federal Open Market Committee (FOMC) is an independent group with a monumental task, and I intend to preserve that independence and serve it to the best of my ability. Managing financial system liquidity is a complex exercise requiring regular fine-tuning. The ultimate composition of the Fed’s balance sheet is an open-ended question. Effective monetary policy is critical to the well-functioning of the economy and the preservation of the U.S.’s robust capital markets. If confirmed, I will transparently and honestly work toward the pursuit of price stability, maximum employment, and moderate long-term interest rates.
Christopher Pilkerton, to be Assistant Secretary, Department of Treasury
The role of Assistant Secretary for Investment Security is critical to both the national security and economic growth of the U.S. As President Trump and Secretary Bessent have made clear, the U.S. is open for business, but we must be vigilant to ensure that that business does not jeopardize our safety or unwittingly advance any malicious interests of adversaries. Economic growth is a priority, and international investment will play a significant role by creating jobs, strengthening manufacturing, and advancing technologies that will propel the U.S. forward. Vigilance around how foreign investment is introduced to the U.S. is critical, as our adversaries will continue to be relentless in efforts to undermine our assets, technological competencies, and private data. There can be no compromise of the U.S.’s talent and treasure. If confirmed, I will be resolute in this charge and commit to working closely with this Committee.
Jonathan Burke, to be Assistant Secretary, Department of Treasury
Terrorist Financing at Treasury has played a key role in combating the biggest threats to our national security and to the integrity of our financial system. Financial measures, including sanctions, are important tools in the U.S. arsenal to respond to geopolitical challenges and counter threats to the U.S.’s safety and economy. Thanks to Treasury’s work, the ability of both the domestic and international financial systems and of partner governments to combat these threats has grown stronger. Treasury plays a critical role in setting policy and strategy to directly combat illicit finance, protect the integrity of the financial system, and support U.S. foreign policy objectives. I have supported our policy efforts to strengthen regulatory frameworks for anti-money laundering (AML) and counter-terrorist financing (CFT). However, policy is only half of the story. Since leaving Treasury, I have been on the front lines of financial warfare in managing the implementation of sanctions in the private sector. I observed rapid geopolitical shifts, the proliferation of digital finance, and constantly evolving financial crime risks. Finance is now inseparable from technology, and innovation has given rise to complex financial supply chains where criminals and sanctioned parties can hide their identities, obscure business purposes, send funds instantaneously, and quickly adapt. Treasury must match this pace of innovation and change in its fight against financial crime in several ways: identify new vulnerabilities in the financial ecosystem before they are exploited; promote a risk-based regulatory regime that is aligned with 21st century risks, is effective, and supports global competitiveness for American businesses; a clear objective of sanctions and other financial measures coupled with clear messaging to industry on expectations for implementation and compliance; encourage and incentivize the private sector’s innovative capabilities through constructive engagement without fear of technical non-compliance. We should leverage the financial services industry’s dedication to and expertise in combatting financial crime. These will be the keys to preserving the success of Treasury’s past efforts and continuing its mission into a future of financial innovation and safe economic growth. If confirmed, I will strive to bring to Treasury practical insights and a clear vision to support and protect the U.S. and the integrity of our financial system.
DISCUSSION
Chairman Scott (R-SC): Can you confirm that your answers prior to this hearing still reflect your views now, specifically in your role as a Fed Governor and not as CEA Chairman, given the importance of the Fed remaining completely clear in its independence? Miran: I could not be more in agreement that the independence of the Fed is of paramount importance for the economy, financial markets, and the long-run stewardship of the country. All of those are areas where I am in complete accord. The President nominated me because I have policy views that he supports. If confirmed, I will act independently, as the Fed always does, and based on my own personal analysis of economic data and assessment of the effects of economic policies on the economy. I will act based on my judgment of the best possible economic policy. It is important to me to ensure that I truly believe in my judgement and challenge my own views and interrogate them. Hearing a variety of perspectives is always helpful in that regard.
Chairman Scott (R-SC): What are your immediate priorities at the Fed to ensure the capital framework is looked at holistically, so financial institutions are not forced to keep capital on the sidelines and limit access to credit for Americans? Miran: I agree and share some of your concerns around Basel III and some regulations entailed in that process. There needs to be a fulsome process for thinking about not only the benefits of regulations, but the costs and consequences of those regulations for the provision of credit into the economy. It is time for a fulsome examination of the regulatory process to think about where we want it to be going forward. I am very happy to work on that if confirmed.
Ranking Member Warren (D-MA): Do you agree with President Trump that BLS published fake numbers to manipulate the outcome of the 2024 presidential election? Miran: The BLS data on various measures deteriorated steadily in quality over time. It did not take corrective action to improve the quality and was complacently allowing the deterioration.
Ranking Member Warren (D-MA): Do you think the numbers are lying that costs are up? Miran: You are conflating relative price increases with inflation, with an increase in aggregate price level. There has been no detectable increase in the aggregate price level as a result of tariffs.
Senator Rounds (R-SD): Do you see a difference between the role that you play as CEA Chairman and Advisor to the President versus being an independent member of Fed? Miran: There is a night and day difference in being CEA Chairman as part of a political administration. The Fed is an independent agency whose independence is critical to the well-functioning of the economy and financial markets. The responsibilities of the jobs are very different. If confirmed, I will behave in an independent manner and act based on my own independent analysis of the economic data, inflation, employment, and effects of economic policy.
Senator Rounds (R-SD): Is it fair for the President to lobby the Fed in a direction that he believes can move the economy in a direction that improves Americans’ lives? Miran: It is very important in economics to hear a wide variety of views and interrogate your own position. I will always be happy to hear the opinions on monetary policy of everyone with an opinion, so that I can help evaluate whether my position is the correct position.
Senator Rounds (R-SD): Would it not be reasonable to assume that you share a very similar point of view with the President? Miran: The CEA is tasked by Congress with advising the President on appropriate fiscal and regulatory policy to achieve full employment and stable prices, and prosperity of the American economy. The President selects people based on his evaluation of their qualifications and their policies. I assume that he nominated me to the CEA because he likes my policy views.
Senator Reed (D-RI): If confirmed, will you resign from the CEA? Miran: I have received advice from Counsel that what is required is an unpaid leave of absence from the CEA. Considering the term I am being nominated for is a little bit more than 4 months, that is what I will be taking. As long as that is the advice of Counsel, I will follow the law.
Senator Reed (D-RI): Do you still commit to your statement that a Board member should refrain from involvement with any executive branch for four years after leaving office, even though you are going to be technically an employee of the President, but an independent member of the Fed? Miran: I am committed to the independence of the Fed. I have in the past proposed a suite of reforms to improve Fed governance. That suite was a package deal, with a system of checks and balances designed to diffuse political power and isolate the Fed from political interference. It would be inappropriate to take one check per balance away from the entire suite.
Senator Reed (D-RI): If the courts grant President Trump the authority to fire a Fed Governor for any reason at any time, will you commit to advising the President publicly to refrain from exercising this authority consistent with your recommendations in 2024? Miran: That proposal was a package deal and a suite of checks and balances. It is highly inappropriate to take one check or balance outside of the context of the overall package.
Senator Kennedy (R-LA): If Congress is profligate in its spending to the tune of seven percent every year on the deficit, does that also have an impact on inflation and economic growth? Miran: Fiscal policy is extremely important. People often make the mistake of solely looking to monetary policy when fiscal policy is a huge driver.
Senator Kennedy (R-LA): The Fed can lower short-term rates through FOMC all it wants, but that does not necessarily mean long-term rates for ten years and above will go down, does it? Miran: Not necessarily.
Senator Kennedy (R-LA): If the bond market thinks inflation is on the horizon, is it accurate that long-term rates are going to keep going up or at least stay steady? Miran: Yes, the Fed does not control the long end of the yield. What Congress does matters.
Senator Kim (D-NJ): Why did Counsel advise you not to resign from the CEA if you have every right to resign? Do you want to return to the CEA after your Fed term as a way to hedge your bets? Miran: I do not know what will happen. The term for which I have been nominated is 4.5 months. If I am nominated and confirmed for a longer term, I would absolutely resign.
Senator Kim (D-NJ): Do you still agree that short-circuiting the revolving door between the Fed and the executive branch is critical to reducing the incentives for officials to act in the short-term political interest of the President? Miran: Considerations like that need to be taken in the context of an overall package of reforms and not looked at in isolation.
Senator Kim (D-NJ): Did you previously state that excessive control by elected political actors interferes with good policy and results in bad economic outcomes? Miran: I believe that political interference in monetary policy and in making decisions can erode the outcomes, and that it is important for the Fed to be insulated from the political cycle.
Senator Kim (D-NJ): Would it be appropriate for a new President to come in and replace the entire Board with entirely new appointments at the beginning of each Presidency, as proposed in your list of reforms? Miran: The reform proposal was a package deal with a series of checks and balances. That was one check, but offset by other balances and other checks that would diffuse power throughout the Fed system. Included in that package was strengthening the system of regional Reserve Banks and ensuring that they vote at every meeting, which would then give them the majority over the Board, and why we refer to it as a form of monetary federalism.
Senator Kim (D-NJ): Has anyone in the administration asked you to commit formally or informally to vote to lower interest rates? Miran: No.
Senator Ricketts (R-NE): Do you agree that the increase in Communist China’s ownership of American farmland, from 13,720 acres in 2010 to 277,000 acres in 2023, poses a threat to our national security, especially when some of that land is located near sensitive military installations? Pilkerton: I share your concern. The Chinese penetration in agriculture, agricultural land, real estate, and critical technologies is something that we all should be very concerned about from a national security perspective. If I am confirmed to lead CFIUS, I look forward to working with Congress and Secretary Rollins.
Senator Ricketts (R-NE): What enforcement gaps or vulnerabilities in the CFIUS process pose the greatest risk or threat, and are there other aspects of the CFIUS process we can improve on? Pilkerton: CFIUS’s focus is national security, and my priorities would be just that, including focusing on critical technologies, artificial intelligence, quantum computing, and other areas where America is and will continue to lead. Another priority is the non-notification of covered transactions, which are transactions that should be reported but are not reported. We should find out how we can use CFIUS’s different tools and authorities, with a focus on compliance and enforcement. There is front front-end review of transactions that come through CFIUS, but many times there are mitigation agreements and ongoing compliance, and we must stay vigilant and ensure people are abiding by the agreements. CFIUS and national security are a bipartisan matter, so having that feedback loop with the executive branch and Congress is going to be very critical.
Senator Smith (D-MN): As CEA Chairman, would it be fair to say that you have had a hands-on role in implementing the President’s political and policy agenda? Miran: That is not correct. The CEA is an advisory organization, and I have no statutory implementation powers whatsoever.
Senator Smith (D-MN): What is your position now on your comments last September about how the Fed’s decision to cut rates in 2021 was the biggest policy mistake? How can we expect you to be unbiased and neutral? Miran: It is a mistake to focus solely on monetary policy when thinking about the path of inflation and employment. The full suite of economic policies affects those outcomes. What the Fed ought to do is to be forward-looking in its expectations of where inflation and employment are going, because those are the mandates that Congress assigned to it. A wide variety of policies that have been implemented since January are actually quite disinflationary.
Senator Britt (R-AL): Can you speak to the seriousness of enforcing sanctions and how critical that is in the context of President Trump’s maximum pressure campaign? How can we better utilize secondary sanctions? Burke: I share your concern about the need for sanctions to be effective. It is a multifaceted approach and imposing new sanctions on new targets is complemented by extensive diplomatic engagement with partners and allies as well as the private sector to identify risks associated with exposure to Iran to take action to curtail such activity. Secondary sanctions are intended to change the behavior of continued bad actors.
Senator Britt (R-AL): Will you commit to working with Congress to ensure that we can move the needle on preventing the CCP from buying up U.S. agriculture and farmland, particularly near sensitive military sites, through properly reviewing foreign land purchases within the CFIUS process? Pilkerton: Yes. Secretary Rollins has said food security is national security, and I completely agree with that.
Senator Cortez Masto (D-NV): Do you still believe the economic burden of tariffs imposed by the U.S. is borne by the country whose exports are tariffed? Miran: In the long run, I 100 percent believe that. In the short run, I have always maintained that there could be volatility.
Senator Cortez Masto (D-NV): Do you believe tariffs are taxes? Miran: Economically speaking, any policy can be modeled as a tax.
Senator Cortez Masto (D-NV): Were you incorrect that manufacturing and construction would surge as a result of the President’s tariff and tax policies? Miran: People were concerned that Congress would allow the biggest tax hike in history to throw the economy into recession, and there would be substantial disincentives for investing in the U.S. Fortunately, Congress did not allow that to happen. The uncertainty around the tax situation has been resolved and replaced with enormous incentives for investing in America.
Senator Moreno (R-OH): Do you think policies, like climate or pandemic spending, are things the Fed should be weighing in on? Do you think it was wise to claim that inflation was transitory? Miran: It is not something the Fed should be weighing in on. I do not believe it was wise for the Fed to advocate for one fiscal program over another.
Senator Warner (D-VA): How are you going to make things better at BLS when we have had senior professionals leave due to the threat of political interference? Are you making the accusation that the BLS data is being politically influenced? Miran: The data from BLS has deteriorated in quality and reliability. There are two issues at play. One is declining response rates over time, and two is an inability or refusal to do something to correct for declining response rates. It needs an overhaul and a fresh pair of eyes as BLS leadership did nothing to arrest the deterioration in data quality.
Senator Hagerty (R-TN): How will your CEA analysis, where you found that President Trump’s tariffs would not have a substantial impact on inflation, influence your perspective on monetary policy? Miran: There is no evidence that tariffs have had any inflationary effect in the sense of moving the aggregate price level. The CEA just put out an update to a previous study where we looked at the import components of every single good, and we identified that imported goods have actually been getting cheaper relative to domestically produced goods, which is the opposite of what would be expected if tariffs were inflationary. There is no sense in which U.S. goods inflation has diverged from goods inflation internationally, which again is something you would expect to see if tariffs were inflationary, because the U.S. is implementing significant tariffs, but other countries are not. Moving forward, I expect my view of inflation to be informed by the broad suite of economic policies and not just monetary policy. This is a subject that has received insufficient attention in the past.
Senator Gallego (D-AZ): What happened to the economy and to the independence of the Fed under President Nixon and Fed Chairman Burns? Was there public scrutiny? Would you say that what occurred in terms of the pressuring of the Fed by President Nixon to drop interest rates probably caused stagflation? Miran: There was public scrutiny and news stories about fractious relationships between the Fed and President Nixon. Stagflation was an outcome during that period, but I would not say the pressure caused it. The inflation of the 1970s was caused primarily by two errors of the Fed plus unfortunate supply shocks from energy markets and geopolitics in the Middle East. The errors the Fed made in that period were a conflation of nominal and real interest rates. By failing to raise nominal interest rates by more than inflation went up, they actually kept real interest rates relatively steady.
Senator Gallego (D-AZ): What everyone understands was direct pressure on the Fed to drop interest rates that were not matching the economic situation had zero contribution to the stagflation that plagued the U.S. for almost 10 years? Miran: No, I do not believe the consensus you portrayed exists.
Senator Lummis (R-WY): What steps would you take at CFIUS to ensure we know when a Chinese-owned business is operating near a critical site, such as a land-based nuclear missile site like Warren Air Force Base, given it took over two years and a public tip to identify a Chinese-owned digital asset mining operation in Cheyenne? Pilkerton: That example is incredibly concerning and speaks to focusing on companies that were not notified of where there would be a covered transaction. We cannot protect against what we do not know about. I would look forward to working through all authorities within CFIUS as it currently stands, as well as with the various communities who would be able to provide intelligence information and law enforcement to work on these issues.
Senator Lummis (R-WY): Do you agree that monetary policy and bank supervision are different functions, and that unlike monetary policy, bank supervision and payment regulations are regulatory functions subject to the direction of the president and not entitled to the same kind of independence? Miran: Yes, I do agree that they are different functions.
Senator Lummis (R-WY): Do you think the Fed Board and Reserve Banks have been independent from politics in recent years, given concerns about Operation Chokepoint 2.0 and the Fed’s supervisory role in debanking? Miran: I do not believe that it was a set of nonpartisan, non-political, objective technocrats who decided that the Fed should be an institution that fights climate change. I do not believe that Operation Chokepoint was a non-political act either. I intend to fully respect independence with respect to monetary policy. On regulatory work, there is a lot of work to be done.
Senator Lummis (R-WY): Can you help us, as a member of the Fed, set up a system that clearly demarks the independence of monetary policy but recognizes that the President, through regulatory supervision and executive branch oversight, does have a role in bank supervision? Miran: If confirmed, it is absolutely an issue that I would welcome working with you on.
Senator Warnock (D-GA): Do you think our economy would be better off with President Trump setting interest rates unilaterally? Miran: I do not believe that is a situation currently happening. The President has had a series of excellent calls on monetary policy over recent years. However, I do think that independence of the central bank from the political cycle is key to its long-term success in delivering superior economic outcomes.