Trump announced this afternoon that Stephen Miran will take the Fed seat vacated by Adriana Kugler.
We've talked a lot about Miran's paper on restructuring global trade. He's Trump's Chairman of the Council of Economic Advisors, and he wrote the blueprint for the tariff strategy.
And most recently, we've talked about his view on the role of the exporting country's currency in absorbing the tariff blow.
In short, exporters devalue, their goods stay competitive, U.S. consumers avoid price hikes — and the pain hits the foreign economies via loss of global purchasing power and real wealth.
That's the "burden sharing" that is core to Miran's strategy to realign global trade.
So, clearly this view is that tariffs are not inflationary.
With Miran, Trump has not just replaced a monetary policy hawk (in Kugler) with a dove (in Miran), but the architect of the tariff policies will now be inside the Fed.
This is a step toward aligning the Fed with the Trump trade and industrial policy.
For markets, it should be a green light for assets that benefit from the U.S. policy position of strength (relative to trading partners): commodities (on tighter supply and global currency pressures), small caps (protected by tariffs), gold (as global currencies devalue) and industrials (on reshoring).
