China-US trade soars as exporters race to hit tariff truce window
BEIJING - A temporary trade truce between the world's two largest economies has sparked a knee-jerk bounce across China's ports and factory floors.
In the week beginning May 12, when the United States and China agreed to sharply reduce tariffs for 90 days, bookings on freighters headed from China to US shores more than doubled from the prior week to about 228,000 TEUs, or twenty-foot equivalent units, data from container-tracking platform Vizion and data provider Dun & Bradstreet shows.
Prices for space on ships across the Pacific into the US also rose, with spot rates from Shanghai to Los Angeles jumping about 16 per cent – the biggest increase for the route this year – to US$3,136 per forty-foot equivalent unit for the week ending May 15, according to the Drewry World Container Index. The global composite index also rose the most this year.
And the demand wasn't just by sea: The number of international air cargo flights rose almost 18 per cent, according to data released by China's Ministry of Transport.
The surge is likely a wave of front-loading as the trade truce opens a window to avoid steep US tariffs, said Jayendu Krishna, a director at Drewry Maritime Services. It's also an important buying season for the holidays – it takes about a month for items to arrive stateside and retailers are rapidly running through inventory they've had on hand awaiting some trade certainty.
'The current surge in bookings is likely to lead to supply chain disruptions for the next two to three months, unless there is another tariff shock from Mr Trump,' Mr Krishna said.
Bookings on ships are due to be filled by factories like supply-chain manager Chen Lei's, which makes various types of home appliance products from coffee machines and toasters to irons and humidifiers. The Guangdong-based manufacturer where Chen works counts Royal Philips and Walmart among clients, and has received a flurry of requests from the US to resume production on orders that were put on hold in April.
'Machines in the factories are working non-stop now,' said Mr Chen, '90 days is too short. Production, shipping - we can't wait a single minute.'
A.P. Moller-Maersk, a major container liner that's also one of the largest on the trans-Pacific route, added capacity again after seeing an increase in bookings when the truce was announced, a spokesman said.
Even with the boost in activity from earlier weeks, the overall level of shipments remains in-line with this time in 2024. That shows many retailers are either not ordering to the same extent, waiting for more certainty, or maybe have already stocked up earlier this year.
Liners were also bringing unused capacity already on these routes back online, with the share of voided sailings down to 13 per cent as of May 26, compared to 25 per cent a week before, data from HSBC and Flexport show.
A flurry of trade figures from across Asia this week show the chaos that Mr Trump's policies have wrought this year.
In South Korea, the value of exports fell 2.4 per cent in the first 20 days of May from the prior year, with outbound shipments to the US down about 15 per cent. Japanese exports rose only 2 per cent in April – the weakest growth in seven months, data out on May 21 showed. BLOOMBERG
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Token2049's conference in Singapore in 2024 drew over 20,000 participants. PHOTO: TOKEN2049 Increasingly, crypto bro culture – born of internet memes lampooning central banks and counter-cultural idealism about decentralised finance – is making inroads into the mainstream. It is now gaining converts among fresh graduates who might once have gunned for careers in traditional finance or big tech, despite its enduring relationship with scandal. Anti-establishment vibe The mixture of idealism and opportunism in crypto has spawned an industry culture with an 'anti-establishment' vibe unlike that of traditional tech and finance. Singaporean crypto enthusiast Imran Mohamad, 41, recalls once being gifted a thumb drive containing some bitcoins by an enthusiastic entrepreneur in 2010. Back then, it was a little-known technology mostly discussed in fringe internet forums and was valued in mere cents. 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After he soured on the industry after having to threaten some crypto clients with legal action over non-payment of fees, he later returned to the industry in 2022 to head marketing for Kyber Network, a crypto trading platform – until it was hacked for assets valued at over US$50 million. While Kyber eventually paid off its creditors, he notes they still lost out on the potential gains of their investments. Such experiences are not uncommon in crypto, with insiders sharing the heady mixture of 'fear of missing out' (Fomo), deeply held optimism and even an acceptance that malicious behaviour is the norm. Instead of introducing themselves on LinkedIn or proffering business cards, crypto workers usually prefer communicating over Telegram and X (formerly known as Twitter) or rubbing shoulders at events that blur the boundaries between work and play. Mr Aneirin Flynn (left, pictured at the start-up competition Meet The Drapers) opted not to go to university so he could get straight into working. PHOTO: FAILSAFE Young Singaporeans like Mr Aneirin Flynn, 31, are emblematic of the subculture's freewheeling approach. As chief executive and founder of a crypto cybersecurity start-up, he has hired an engineer who once hacked into his firm by finding a vulnerability in its code. Many in the sector operate under the veil of anonymity, and avoid putting out their real names and pictures online out of fear of being doxxed and hacked. 'He didn't want to tell us his real name or where he was from,' says Mr Flynn, who adds that he later found out the hacker was based in Egypt. After a few months of working together and building trust, the hacker turned out to be 'one of the good guys'. He adds: 'Today, he's a real pillar of our company. This big burly man with a huge beard and kids, who's the friendliest guy ever.' 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PHOTO: TOKEN2049 Part of the reason for the sector's counter-cultural energy – at the intersection of fringe internet communities, tech and finance – comes down to its origins. 'Crypto is by nature a rejection of financial institutions and central banks,' says Dr Andrew Bailey, a professor of philosophy at NUS and author of Resistance Money (2024), a book on Bitcoin. 'Someone who's attracted to that is likely to have suspicions about other kinds of institutions and norms as well.' The modern conception of cryptocurrency emerged in the wake of the 2008 financial crisis, when libertarians, anarchists and criminals sought decentralised alternatives to what they saw as a financial system that no longer served their needs. Different generations have found different entry points to crypto. 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PHOTO: TOKEN2049 One face of the shifting public attitudes towards cryptocurrency is Mr Jeremy Tan, 34, a businessman and crypto investor who contested the 2025 General Election as an independent candidate for Mountbatten SMC. Part of his platform included calling for the Government to adopt Bitcoin as a reserve currency. Mr Tan says the end of the 2008 financial crisis birthed a new 'eat the rich' and 'Occupy Wall Street' counter-culture that sparked his interest in Bitcoin – something he is drawn to because of his impoverished upbringing and his desire to find an asset that would not depreciate over time. 'Now, we are seeing the same type of movement,' says the Nanyang Technological University business graduate, opining that similar disgruntlement over the economy is fuelling interest in crypto among Singaporeans today. 'Our generation's 'Occupy Wall Street' will be of artificial intelligence and youth unemployment.' Such thinking is echoed by other enthusiasts and advocates who spoke to ST. Some complain of being unable to join the 'high-net-worth club' because of an 'unfair' financial system, and extol cryptocurrency's potential to level the playing field by creating a new scene without established experts. However, Web3's decentralising ethos does not mean crypto subculture can self-regulate or has a coherent ideology. Though the technology was initially envisioned as a 'superior' alternative to centralised finance, most crypto workers speaking to ST see growing interest from regulators and banks as a positive sign. Mr Tan weighs in on how he resolves this ideological tension.'The original ideology is that money is being debased, and we need to fight governments with 'resistance money'. 'I would say the original ideology is starting to meet its updated form, because stablecoins and Bitcoin enable one type of revolution to occur, which is to finally rely on technology and mathematics instead of poor fiscal planning.' Not unlike the Wolf of Wall Street An after-party for Token2049 Singapore 2024. PHOTO: TOKEN2049 This anti-establishment vibe is one that many in the field are eager to shed. Nearly all industry insiders ST spoke to sought to downplay the sector's links to high-rolling excesses and jet-setting, instead preferring to focus on the ways the sector has 'grown up' since 2017. Mr Joash Lee is a 22-year-old Columbia University student who invests in Web3 and AI start-ups through Iron Key Capital, a club where funds are pooled to invest in start-ups. He says while it is not uncommon to see crypto firms or conferences rent yachts and nightclubs for events, this is tame compared with the 'free money' era pre-2022, when slapping 'Web3' on a pitch deck meant that venture capital would line up to fund one's seed round. Others say the sector's 'youth' explains its predisposition towards such a lifestyle, or splurging on models and influencers to fill out one's entourage, and creating costumes and parties referencing obscure internet memes. Dr Loretta Chen (pictured at Token2049) believes the excesses that crypto is associated with are a sign of the sector's youth. PHOTO: SMOBLER 'When this whole notion of cryptocurrency was unleashed, it was the younger generation and digitally savvy that embraced it,' says Dr Loretta Chen, 48, founder and chief executive of local Web3 start-up Smobler. 'With this sudden flush of cash, when you're young, you will say, 'Wow, let's go throw a party', right?' Frequent comparisons were made with the excesses of 1980s Wall Street – as depicted in the 2013 movie The Wolf Of Wall Street – before regulation started to instil discipline. Ms Soh Wan Wei (right) with Hide the Pain Harold (a popular internet meme) at an ARC Community party in 2024. Members of ARC got to buy the Memeland token at an early stage. PHOTO: COURTESY OF SOH WAN WEI Another visible example of the sector's embrace of party culture is the private members' club ARC Community, known for its extravagant annual parties held by its Singaporean co-founders, which include singer JJ Lin and influencer Elroy Cheo. Members of this social club must own its non-fungible tokens (NFT), a type of digital asset, which are now being sold on online marketplace OpenSea starting at $4,000. Members received early access to purchase the Memecoin cryptocurrency created by internet culture website 9GAG, whose founder is also an ARC member. In 2024, they gathered for a meme-infused celebration featuring guests like Hide the Pain Harold, the coin's ambassador. The coin has since plummeted in value. In response to queries, ARC Community's head of brand Jaclyn Lee declined to discuss its parties or the lifestyles and networking habits of its members. 'We try not to go with these kinds of angles because it kind of furthers the impression that Web3 is not seen as very legitimate,' she says. This sensitivity to outside perception explains why the crypto world increasingly shuns talk of its parties and founders' high life, in favour of glossy magazine spreads about a founder's story and how he or she fell in love with the technology instead. Chasing waterfalls Members of the sector are eager to downplay its relationship with partying and jet-setting. PHOTO: TOKEN2049 The technology that underpins cryptocurrency remains in its early stages, which means that while some use cases exist, rampant speculation remains the norm, notes Dr Li Xiaofan, an assistant professor at NUS who researches cryptocurrency and cybersecurity. Dr Li recalls past examples of students being inspired to take on internships and a career in the crypto sector, only to emerge disillusioned. 'They thought they would be designing systems, or trying to improve it in certain areas, but in the end, they realised it's more like sales,' he says. 'Getting clients and money is much more important than developing the technology.' Lack of cryptocurrency regulations in many parts of the world means the magnetic pull of short-term gains – typically by exploiting gaps in investor information – can be impossible to resist. The ICO bubble of 2017 was the result of a flood of interest from members of the public, many of whom acted out of a fear of missing out on being an early investor in an Apple- or Google-like tech offering. But unlike initial public offerings (IPOs), the risk is not mitigated by financial reports and auditors, making investing in some crypto assets akin to operating in the thick fog of war. This involves scams and other activities where insiders profit at the expense of others left holding the bag, misrepresenting the extent to which a product actually involves blockchain technology, and building ecosystems to facilitate more crypto activities. 'People attracted to this industry do have certain qualities,' observes Dr Li. 'In my opinion, this may delay its development for the long-term good.' Experts say hype and speculation drive the crypto sector's focus on quick profits over long-term value. PHOTO: TOKEN2049 'The way to make money in crypto is to think of this as a waterfall of sh**,' Dr Bailey sums up a commonly held worldview in crypto bro circles. 'Either the sh** is falling on you, or you're higher up and safe from it and sh**ting on others instead.' This normalisation of malicious behaviour is echoed by many in the industry. For instance, one marketing professional argues that the 'extremely high failure rate' is not unlike that of tech start-ups. Another, when asked how he felt after the high-profile crashes of 2022, says 'it's normal to go through such things' and that it is outweighed by the joy of being in an emerging sector. The idea of a 'zero sum game', where profiting means somebody else must lose out, is common terminology. 'It is PvP (player versus player), not PvE (player versus environment),' Dr Bailey adds, referring to the video game labels for competitive instead of cooperative gameplay often used by crypto users. 'If you are taking something out, someone is putting that money in.' Yale-NUS College graduate Kaushik Swaminathan says after working in the sector since 2021, he has become wired to think in a more transactional way. PHOTO: COURTESY OF KAUSHIK SWAMINATHAN As Mr Swaminathan observes: 'People get upset at crypto when they lose money, and excited when they make money. Nobody really cares about the scandals, it's just that the downstream effect of the scandals is that they lose money. You need to have thick skin to survive in crypto, and those who have are mostly numb to the noise of the outside world.' Something he finds unsettling is how, after working in the sector since 2021, he has become wired to think in a 'more transactional' way. 'This is not something I love,' he says. 'Once you're in the crypto black hole, money becomes the currency or language of every interaction.' This means when someone approaches him at a conference with an idea, his default state of mind is if he is about to be taken advantage of. 'People use the phrase: 'I don't want to be your exit liquidity',' he says, explaining that it means 'I don't want to be the sucker that you're able to offload your things on'. 'Cultish' Ms Soh Wan Wei, 37, who has been investing and working in the crypto sector since 2017, takes a harsher view, saying she is not a fan of the 'I do what I want' culture that she sees as pervasive in the scene. Ms Soh Wan Wei (pictured speaking at a fintech event) says money warps the morality of those working in crypto. PHOTO: SIBOS 'You have people from Binance going to jail, and coming out, and people treat him like a god,' she says, referring to crypto exchange Binance's former chief executive Changpeng Zhao's four-month prison sentence for money laundering in 2024. 'If suddenly one's net worth goes up by 1,000 times, you will treat the guy as a god,' she adds. 'It's very cultish.' There is a sense that wealth equals morality, she adds. She recalls instances when crypto bros would flex by showing off pictures of themselves in castles and helicopters. Wanting to build rapport, she would 'just clap for him and say 'good for you, I'm so happy for you'.' Still, she concedes there is an addictive quality to the sector's volatility. Despite the threat of 'rug pulls' – where founders flee with investors' funds – and seeing the value of one's assets nosedive, the adrenaline high of a successful bet is alluring. 'The feeling is like buying Labubus.' These days, she prefers to stay away from crypto conferences. 'The barrier to entry is so low,' she adds. 'Just buy Bitcoin and get rich off it.' Such volatility also sharpens the subculture's ideological zeal as it weeds out those without sufficient grit or belief to hold on after a high-profile crash. A few weeks after joining Web3 software company Animoca Brands in 2022, Mr Brian Chan witnessed an industry rattled by the high-profile conflagration of the Luna cryptocurrency, followed by FTX's spiral, which signalled the start of the industry's bear market era. 'The volatility of crypto is a feature, not a bug, of the industry,' says Mr Chan. Splitting his time between Hong Kong and Singapore as Animoca Brands' deputy chief executive, he heads the development of a blockchain chess game Anichess, in collaboration with This volatility flushed out some 'non-believers' not only at Animoca but also across the sector, he observes. The company has a staff strength of 10 in Singapore. The uncertainty also guides how recruiting managers in the sector sift out applicants. 'When we hire, we do look at culture and values,' says Mr Chan. 'When I hire my specific teams, I care less about their CVs and their resumes, and I care more about what they have actually done in the space. That will give you some indication whether that person is in it for the long term. Whether he or she is a true believer or is solely in it for the upside.' This emphasis on non-traditional metrics is part of what makes the sector so appealing to young and hungry talent, especially when compared with traditional finance, where brand-name university qualifications reign supreme. Still, Mr Chan identifies something different about the newest wave of interest in the sector. While past cycles of growth were driven by the 'euphoria of pumping and dumping', 2025 is seeing more and more suits lending the scene new-found legitimacy. Is Singapore becoming a crypto capital? The OKX Singapore office at the Marina Bay Financial Centre. The company has over 900 employees in Singapore. PHOTO: OKX SINGAPORE While crypto bro culture is facing a resurgence globally, industry insiders are divided on whether Singapore is becoming a crypto capital as local regulations paint a complex picture. In June, the Monetary Authority of Singapore (MAS) tightened the rules, requiring crypto service providers serving customers outside of Singapore to be licensed. Previously, only those serving Singapore customers needed to be. Other restrictions also include a ban on crypto companies advertising their services in Singapore, as well as requiring providers to perform customer due diligence and report suspicious transactions. Experts speaking to ST say several issues hinder proper regulation of the sector. These include the lack of tools for auditors to ensure smart contracts (computer programs that run on blockchains) work properly and safely, the prevalence of cybercrime, the ease of anonymity and market manipulation, and the lack of responsible authorities in many cases. 'While the promise of blockchain and cryptocurrency is enormous, regulators need to address these complex challenges head-on,' says Dr Daniel Rabetti, an assistant professor at the NUS Business School. Asset tokenisation remains one promising use case of the technology, he adds. This refers to the ability to represent real-world assets as digital tokens, thereby democratising access to traditionally illiquid markets and creating a greater level of financial inclusion. Industry insiders say over the years, a shift towards institutionalisation has meant an exodus of those who prefer to operate in the greyer areas of the crypto world, as well as those who reject compliance and monitoring requirements. On Aug 1, the Singapore Police Force and MAS announced that local cryptocurrency trading platform Tokenize Xchange was under investigation. A director of its parent company was also charged with fraudulent trading. Prior to this, the company said it had ceased operations in Singapore and was relocating to Malaysia. Meanwhile, news agency Bloomberg reported in June that unlicensed exchanges such as Bitget and Bybit were planning to shift existing operations in Singapore to Dubai and Hong Kong. At the same time, the highly remote nature of the crypto sector means that many who work for unlicensed exchanges – which are not allowed to solicit Singapore customers – such as Binance continue to live and work out of Singapore. It is not just regulation that plays a role, as some argue that crypto's emphasis on decentralisation and breaking with norms appears to be incompatible with Singapore's emphasis on centralisation and stability. Privately, some say the sector's workers are more likely to embrace non-traditional ways of living that can be hard to live out in relatively conservative Singapore. One of the most headline-grabbing aspects of the FTX collapse was its leaders' co-living and polyamory, or having multiple partners. Indeed, the size and density of Singapore's crypto scene means nearly everyone knows everyone else, creating a vibe akin to a 'village' or 'middle school', rather than a growing hub, outside of conference season. This means gossip travels quickly and people can close ranks easily. Dr Loretta Chen (right) believes that Singapore's crypto regulations mean firms here can tout compliance as their competitive edge. PHOTO: SMOBLER However, enthusiasts like Dr Chen are optimistic about Singapore, arguing that the Republic is a natural hub for 'incredibly intelligent people' and high-net-worth individuals because of its reputation for safety and strong regulatory frameworks. She notes that whenever Mr Buterin visits the country, he does so without a security entourage and uses public transport, something that cannot be done in other crypto hubs. Being in Singapore also engenders a different kind of company set-up, says Dr Chen, who adds that Smobler stays away from the temptation of short-term profit of 'sh**coins and memecoins' and has diversified by going into AI and virtual reality. 'The technology lends itself to it, and many jump on that bandwagon, but we do not,' she adds, noting a long-term orientation is necessary for working closely with financial institutions and regulators. 'Regulation provides training wheels and guardrails,' says Mr Swaminathan. 'We can't be cowboys forever.' Enter the suits As regulators and financial institutions increasingly engage with crypto bros across the globe, it is giving the sector a growing veneer of legitimacy. This is channelling in more workers who might once have been destined for traditional finance or consulting careers. Crypto enthusiasts like Mr Tan note that as banks and family offices increasingly discuss crypto and hold related events, it has created a 'movement away from the original crypto bro Twitter culture'. Mr Hassan Ahmed (top right, with the Coinbase Singapore team) says the company is seeing an influx of interest from applicants. PHOTO: COINBASE Mr Hassan Ahmed, Singapore country director for Coinbase, one of the world's largest cryptocurrency exchanges, echoes this viewpoint. 'The regulatory uncertainty was not just weighing on companies and capital allocators, but also on job applicants,' he says, referring to the pre-2025 years. 'Perhaps I wouldn't want to make my career path in an industry that might be driven offshore.' Coinbase has a staff strength of about 100 in Singapore. Mr Ahmed notes it is now seeing a record number of applicants. Similarly, crypto exchange OKX Singapore's chief executive Gracie Lin, 43, says her 900-strong firm has seen a strong uptick in interest from applicants. There were three times the number of applications in the first half of 2025 than over the same period in 2024. Such interest is not only confined to 'Web3 natives', but also from experienced applicants from traditional tech and finance, as well as new graduates. 'It feels like the industry has entered a more confident, post-winter phase, and regulatory clarity in Singapore and other key markets has definitely contributed to that momentum,' she says. This change is also visible at Token2049. Mr Chua Ee Chien, Token2049's commercial director, says the conference is seeing a surge of interest from organisations outside the world of crypto. PHOTO: TOKEN2049 Mr Chua Ee Chien, 37, the conference's commercial director, says four years ago, all the speakers at the event were from the crypto sector. More recently, it has welcomed speakers from BlackRock and Goldman Sachs. Attendees say this can at times create a puzzling mish-mash of cultures. On one side, suited bankers and regulators hold roundtable discussions. On the other side, men in T-shirts and shorts rub shoulders with scantily clad women in costumes or jump into cold plunges. 'And I'm sitting here thinking this is the reason crypto doesn't have more adoption on the institutional level yet,' says Mr Flynn. 'But that paradox, it's fascinating. It's what draws people like me to the space.' One such person making a hard pivot from traditional finance to crypto is Mr Eddie Hui, 50, who relocated to Singapore in 2022 from France to join MetaComp after 23 years at French bank Societe Generale. MetaComp is a digital payment solution provider, with products including a cross-border payment infrastructure powered by stablecoins, typically cryptocurrencies pegged to an existing currency like the US dollar. 'Up until recently, if you mention digital assets, people wouldn't know what you're talking about,' he says. 'If you mention crypto, they'll say it's a scam. But with the Genius Act, it really brings a lot of legitimacy into the space.' The Genius Act is a US federal law aiming to create a comprehensive regulatory framework for stablecoins, which was signed into law by President Trump in July. Dr Emiliano Pagnotta, an associate professor of finance at Singapore Management University, says stablecoins have emerged as the dominant use of crypto. In 2024, on-chain stablecoin settlement volumes surpassed US$15 trillion, eclipsing both Visa and Mastercard. 'Yet, despite this growth, regulatory ambiguity has remained a barrier to broader adoption. That changed with the recent passage of the Genius Act in the US,' he says. Dr Pagnotta adds that Bitcoin has also become a household name, and is now only behind gold and the top six US firms in market cap (Nvidia, Microsoft, Apple, Amazon, Alphabet/Google and Meta). Since the launch of US spot Bitcoin exchange-traded products in 2024, integration with traditional finance has accelerated, drawing over US$54 billion in inflows. 'In 2025, a notable trend has emerged: corporations acquiring Bitcoin as a treasury reserve asset,' he says. 'Overall, this momentum is unlikely to fade, given persistent global concerns over fiat debasement, geopolitical instability and property rights erosion.' Meanwhile, Dr Christian Hofmann, an associate professor at the NUS faculty of law, says even central banks are now exploring the use of similar technologies. 'Of particular interest is the concept of wholesale Central Bank Digital Currency (CBDC) – a tokenised form of central bank money,' says Dr Hofmann. 'Especially in the context of cross-border transactions, such CBDCs could facilitate inter-jurisdictional payments and reduce dependence on existing private-sector intermediaries, notably the correspondent banking network.' Mr Eddie Hui, who made a hard pivot from banking to crypto, is emblematic of the growing institutionalisation of the sector. PHOTO: METACOMP For Mr Hui, a long-time banker, making the shift to crypto has not been without growing pains. For one thing, there is the constant need to educate and explain the product when dealing with traditional finance institutions. 'I never expected to be doubted in my field of work,' he says. 'You need to do a lot of education for people to understand what you're trying to do.' 'It's very different from the banking industry, where everyone who wants to work in the industry has studied finance at some point,' he says. 'When you work in crypto or digital finance, you cannot say, 'Please find me a candidate with over 10 years of experience.' There are a few of them, but it's more difficult to find.' Still, Mr Hui concedes that many of the firm's senior staff come from traditional finance backgrounds. 'All this experience and knowledge we acquired in traditional finance, what we're trying to do is apply it to the digital assets space as well.' For some of the insiders who spoke to ST, such institutionalisation marks a shift away from the sector's wilder and more informal subcultural origins – once premised on distrust towards centralised finance. 'The traditional prestige indicators that you normally look for in investment, banking or traditional tech roles – they're all coming into crypto,' says Mr Swaminathan. 'People care about your Ivy League education, your big tech resumes,' he says. 'They care about things that five to eight years ago, they certainly didn't. Now, it's frankly not all that different from if you were applying for a job at Google.'
Straits Times
a day ago
- Straits Times
Trump's US Fed pick wanted to upend its protection from politics
Dr Stephen Miran - nominated to the Board of Governors of the US Fed by President Trump - would like to radically overhaul the institution. WASHINGTON - Having railed against the 'revolving door' between the executive branch and the US Federal Reserve, Council of Economic Advisers chairman Stephen Miran may now be walking through it after President Donald Trump nominated him to the Board of Governors of an institution Dr Miran would like to radically overhaul. In a 2024 report co-authored by Dr Miran for the Manhattan Institute, the economist proposed harsh medicine for a series of ills he felt had infected the central bank, from 'groupthink' on monetary policy, to regulatory overreach, to poor accountability and a loss of focus on its core mission of fighting inflation. It was one of two big-think ideas Dr Miran floated in 2024, along with the so-called Mar-a-Lago accord for devaluing the dollar and restructuring US debt, a proposal that quickly fell into disfavour and was criticised as putting the dollar's global reserve status at risk. His views on the Fed might also be a hard sell. He has argued that the Fed's touted independence has left it unaccountable and ineffective and that it would be better served by a new system where presidents could fire the seven members of the Washington-based Board of Governors at will. To counter that presidential power, authority over monetary policy would shift to the 12 regional Federal Reserve banks, whose leaders would all vote on monetary policy and thus be able to outvote the Board, and whose oversight would come under the control of state governors. Instead of a system insulated from politics it would be a system fully infused with it, but in a form of 'monetary federalism' Dr Miran argues would increase accountability. Top stories Swipe. Select. Stay informed. 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Long-term Treasury yields and the interest rate on inflation-protected bonds rose slightly in the hours after Dr Miran's nomination was announced. Expectations of a quarter-point cut at the Fed's September and December meetings changed little. To Dr Miran, the current set-up at the Fed has merely excused what he regards as poor performance. 'Accountability has been absent... Poor policy decisions do not necessarily result in consequences for Fed leadership,' Dr Miran wrote with co-author Dan Katz, currently the chief of staff to Treasury Secretary Scott Bessent, citing episodes including the recent outbreak of inflation, the failure of Silicon Valley Bank, and the asset purchases first conducted more than a decade ago under former Fed chairman Ben Bernanke. A response to a deep global financial crisis and the fact that the economy was ailing despite interest rates cut to near zero, Dr Miran said the bond buying, meant to hold down long-term interest rates and now a staple tool among global central banks for certain crisis conditions, was wrong because it 'distorted the allocation of credit'. A single voice Mr Trump nominated Dr Miran on Aug 7 to fill a seat vacated unexpectedly by Ms Adriana Kugler, who leaves the Fed on Aug 8 to return to a teaching post at Georgetown University. The most fundamental changes Dr Miran proposed would take an act of Congress, and are considered unlikely. The current system, solidified in the 1930s, was meant to limit White House influence over interest rates, and some key Republicans have spoken up for that principle in the face of Mr Trump's attacks on current Fed chairman Jerome Powell. Even for internal budgeting or staffing reforms, Dr Miran for the moment would be just a single voice on a seven-member board and, for interest rate decisions, a single voice on a 12-vote policy committee that includes five voting members from among the Reserve Bank presidents. But with the potential to be appointed to a full 14-year term in 2026, or even be elevated to the chair, Dr Miran, if confirmed by the Senate, also becomes the most direct line into the Fed for the current Trump administration, which has been pressing for steep rate cuts and pressuring Mr Powell to resign before his term as the top policymaker ends in May. His views on presidential authority over the Fed could therefore take on new importance, particularly if others among the current board members, including three Biden-era appointees, resign and give Mr Trump more openings to fill. Mr Powell's seat would be a fourth, unless he opts to remain on the board until 2028 after his term as chair ends in May. If the aim is to acquire four seats on the board and put reforms into place 'it is skiing further down that slope' of the Fed losing its independence from the executive branch, said Professor Ellen Meade, a former top adviser to the Fed's board and now a research professor at Duke University. 'They want a mouthpiece. They want to stir things up. And that is concerning.' Dr Miran's report touches on issues familiar in conservative critiques of the central bank, and in some cases are being addressed already by the Fed itself. A new framework for managing inflation adopted in 2020, criticised by Dr Miran for its 'hubris,' quickly became passe when inflation rose during the pandemic and is likely to be discarded in an upcoming strategy revision. Fed governor Christopher Waller, also in the running as a possible next chairman, has been internally critical of Reserve Bank presidents straying into political and social commentary, and worked with Mr Powell on plans to curb staffing, which is due to fall 10 per cent. But all of that stops short of what Dr Miran envisions, including stripping the Fed of its autonomous budget authority and making that part of the congressional appropriations process. And while lamenting 'highly political personnel' moving freely between the White House and the Fed's Eccles Building in a journey he is now poised to take, Dr Miran wrote there was no point pretending there were no politics at the Fed. 'Political motivations will always exist,' he said. The key is 'to provide mechanisms to block them from unduly affecting policy.' REUTERS
