Trump ally Myron, a Fed governor, resigns White House post…pushing for rate cuts until Warsh arrives? [Fed Watch]

Official resignation as Chair of the White House Council of Economic Advisers (CEA)

'For Warsh to become Fed chair, he must first become a Fed governor'

Likely to take over Myron’s seat as Fed governor

Myron may press ahead with rate cuts until Warsh arrives

Stephen Myron, a close ally of U.S. President Donald Trump and a governor at the U.S. central bank (the Fed), formally resigned on the 3rd (local time) from his post as chair of the White House Council of Economic Advisers (CEA). While framed as a decision tied to the end of his term, the move is being read as the result of an interplay between Fed staffing conventions and the personnel picture surrounding Kevin Warsh, the Fed chair-in-waiting.

Myron joined the Trump administration as CEA chair in January 2025, but went on leave from the CEA role after joining the Fed’s Board of Governors in September that year. He was nominated as a Fed governor to fill the remainder of the term after Adriana Kugler, a Fed governor appointed by the Biden administration, abruptly resigned last August.

Kugler’s term ended on January 31 this year, but U.S. central bank law provides for a so-called “holdover” arrangement under which a sitting governor may remain in office after a term expires until a successor is nominated by the president and confirmed by the Senate. Under that practice, Myron was also in a position to continue serving as a Fed governor even after the end of his term.

This setup directly intersects with Kevin Warsh, a former Fed governor tapped as the next Fed chair. President Trump has said he intends to nominate Warsh as the next Fed chair, but incumbent Chair Jerome Powell’s term runs through May 2026. For Warsh to become chair, he would first need to return to the Board as a Fed governor—which requires a vacancy on the Board.

In a recent CNBC interview, Myron said, “My seat is the only vacancy Warsh can come into.” The remark suggests that Myron could have played a “bridge” role—holding the seat beyond his term and stepping aside in line with the timing of Warsh’s nomination and confirmation.

Political calculations about the balance of power on the Board also appear to have influenced the decision over Myron’s future. At present, the Board is dominated by officials appointed under the Biden administration, and its monetary-policy leanings tilt toward a relatively cautious or hawkish stance.

If Myron were to step down as a Fed governor immediately upon the end of his term and Warsh’s nomination and confirmation were delayed, it would create a “policy vacuum” in which Trump-aligned officials would be unable to exercise voting rights during the interim. That would mean losing a vote that could represent the Trump camp’s position on key issues such as rate decisions.

Myron is thus seen as having sought to use the “holdover” practice—staying in the seat until a successor formally takes office—to preserve a vote reflecting the Trump administration’s economic philosophy until Warsh joins the Board.

In fact, throughout his time at the Fed he consistently advocated aggressive rate cuts, repeatedly casting dissenting votes against the majority. He dissented at all four Federal Open Market Committee (FOMC) meetings he attended, and argued that three 0.25%p cuts should have been 0.5%p cuts. At the January meeting as well, he opposed the decision to hold the policy rate at 3.5–3.75%, calling for a cut.

However, another issue arises in that scenario. During his confirmation as a Fed governor, Myron told the Senate he would “return to the White House CEA when my term ends.” If he remained longer as a Fed governor while awaiting a successor, the period in which he would keep a senior White House title while serving as a Fed policymaker would be extended—raising potential conflict-of-interest concerns tied to the independence of monetary policy.

In the end, Myron chose to carry out his prior pledge: “If I end up needing to stay at the Fed longer, I would rather resign the White House post.” White House spokesperson Kush Desai said, “In line with the promise he made to the Senate during the Fed confirmation process, Myron submitted his CEA resignation,” adding, “Up until he went on leave, he was a core asset supporting the president’s economic policy.”

New York = Correspondent Park Shin-young nyusos@hankyung.com