LIVE MARKETS-Stephen Miran could be the dark horse pick for Fed chair

Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

STEPHEN MIRAN COULD BE THE DARK HORSE PICK FOR FED CHAIR

Barclays' public policy senior research analyst Michael McLean is making the case, in his latest research note, that Stephen Miran, Chair of the Council of Economic Advisers and President Donald Trump's nominee to replace former Federal Reserve Governor Adriana Kugler, could be the next U.S. central bank chair.

Kugler resigned effective August 8, but her term does not expire until January 31, 2026.

Miran is not considered a contender by betting markets. Fed Governor Christopher Waller is still the favorite to become the new Fed chief, with a 36% probability, according to Polymarket.

McLean believes Miran, if confirmed by the Senate, could stay indefinitely after the term's expiration, noting that "members of the Fed board shall continue to serve until their successors are appointed and have qualified." He cites the case in 2012, when Fed Governor Elizabeth Duke served 19 months past the end of her term before she resigned.

The Barclays analyst further points out that Trump could have left the Kugler seat vacant and taken his time to consider who to nominate. He adds that Miran is unlikely to be the pivotal vote on the FOMC, and Barclays economists have also raised doubts about whether he will have enough influence to affect the upcoming funds rate path.

McLean thinks that Trump is giving Miran a trial run for the Fed Chair job. He notes that the road to the Fed chair "is a well-trodden path," citing Chairs Alan Greenspan, Ben Bernanke, and Janet Yellen, who were CEA heads before becoming the Fed's top official.

"He clearly has the trust of President Trump and a record as a strong supporter and advocate for the president and his policies," McLean writes.

In addition, Miran, he says, will have "a bully pulpit" that other candidates, beside Waller, will not have, to speak about monetary policy and participate in FOMC votes. He sees Miran as a "vocal dissenter", calling for larger and/or more rate cuts than other Trump-appointed governors.

As Fed chair, Miran might be more comfortable dissenting from FOMC consensus, citing his previous comments on this issue.

Miran has said: "The idea that everyone is in agreement all of the time makes no sense. I think if you look at a system like the Bank of England, where the governor is not only once in a while, but, with some frequency, in the minority, is a much healthier intellectual environment, I think, to try and arrive at good policy."

(Gertrude Chavez-Dreyfuss)

*****

EARLIER ON LIVE MARKETS:

BofA CLIENTS SNAP UP SINGLE STOCKS CLICK HERE

WHY NOISY ECONOMIC DATA COULD COST THE ECONOMY CLICK HERE
US STOCKS RALLY, BUT STRUGGLE TO HOLD THE HIGH GROUND CLICK HERE

U.S. STOCK FUTURES RALLY AFTER ROUGHLY IN-LINE CPI DATA CLICK HERE

RUSSIAN GAS TAPS TO EUROPE UNLIKELY TO FLOW ANYTIME SOON CLICK HERE

THE FED: IT'S COMPLICATED! CLICK HERE

TARIFF U-TURN STEADIES GOLD, UBS KEEPS $3,500 VIEW CLICK HERE

STOXX NUDGES UP, BUT STUCK IN RANGE CLICK HERE

BEFORE THE BELL: EUROPEAN FUTURES EDGE UP CLICK HERE

TRUCE EXTENDED, ECONOMIC DATA NEXT CLICK HERE