Fed structure may be in flux, not just rates

WHATEVER happens at September’s Federal Reserve meeting will pale in comparison to a wholesale rethinking of the US central bank’s design, a possibility stirred by Donald Trump’s latest appointment.

The president nominated White House adviser Stephen Miran to temporarily fill Adriana Kugler’s vacant Fed board seat, reheating a debate about whether the Fed structure, its independence and even its central role in the monetary economy should now become live questions.

That may sound like a giant leap in a discussion that has so far centred largely on how quickly the Fed should lower interest rates, and numerous big hurdles certainly limit the potential for massive institutional change. For one thing, Miran, who has written about re-ordering the Fed voting system and appointment process and binding the central bank more closely to government thinking, still has to be confirmed by the Senate.