The battle over the Fed's future moves to the Senate

The battle over the future of the Federal Reserve played out in August between the White House and the central bank's leaders, and in the courts. Now, it's the U.S. Senate's turn.Why it matters: Thursday's confirmation hearing for Stephen Miran, President Trump's nominee to a vacant Fed governor slot, is the first formal opportunity for lawmakers to weigh in on a momentous series of developments in America's monetary system.Miran has advocated changes that would put the Fed more squarely under the president's control.His confirmation process is taking place with breakneck speed as Republicans try to install him before a Fed policy meeting in less than two weeks.It also comes as the president tries to fire Fed governor Lisa Cook for mortgage irregularities, the legality of which is pending in federal court. The Wall Street Journal reported Thursday that the Justice Department has launched a criminal case against her, issuing subpoenas and convening grand juries, citing sources familiar.The big picture: While the central bank independence clash is often framed as a battle between Trump and the Fed, it is, in a more profound sense, about the relative power of the president and Congress.The Federal Reserve Act, passed by Congress more than a century ago, established a system of lengthy, staggered terms for Fed governors and specified that they can only be fired for cause.Driving the news: Republican senators — including those who have spoken of the importance of central bank independence in the past — endorsed Miran for the governor slot, which expires at the end of January.Democrats were in lockstep opposed to Miran's confirmation.Miran embraced the language of central bank independence, notwithstanding his previous writings arguing for clarifying that Fed board members "serve at the will of the U.S. president."What they're saying: "I couldn't be more in agreement that independence of the central bank is of paramount importance for the economy," Miran told Senate Banking Committee chair Tim Scott."If I'm confirmed to this role, I will act independently ... based on my own personal analysis of economic data," Miran said, and act on "my judgment of the best economic policy possible."The other side: "We cannot ignore the elephant in the room, and that is that President Trump has launched an all-out assault on the independence of the Federal Reserve," said top Democrat Elizabeth Warren.She challenged Miran on whether he agreed with Trump's assertions that jobs data was rigged to try to tilt the election against him. Miran ducked the question, emphasizing that the quality of economic data has been in long-term decline.Miran said he will take an unpaid leave of absence from the White House if confirmed to the Fed term that expires in January."That's ridiculous," said Sen. Jack Reed (D-R.I.), noting that it means he would remain an employee answering to the president while serving on the Fed Board.The intrigue: Some Republicans stressed the need for Fed independence as well."You need to call 'em like you see 'em," Sen. John Kennedy (R-La.) said, before asking for Miran's commitment to ignore "all the rhetoric from politicians.""We need a monetary plan that was put together by something other than vodka and darts, and that's what we had the Federal Reserve for," he added.Of note: Sen. Thom Tillis (R-N.C.), a Banking Committee member, told reporters Wednesday that he will not consider any potential candidate for Cook's governor term — which runs through 2038 — until her lawsuit challenging her firing is resolved.Between the lines: It looks like Miran's assurances about Fed independence will be enough to keep Republican senators onside for his confirmation. What happens next with Cook's role on the Fed, and the slot she occupies, is murkier.

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