Key Takeaways
- President Donald Trump has nominated Stephen Miran, his top economic adviser, to a four-month term on the Federal Reserve Board, filling a vacant seat until January 31, 2026. This temporary appointment comes as Trump continues his search for a permanent replacement and has been critical of current Fed Chair Jerome Powell.
- Trump signed an executive order directing federal regulators to eliminate "reputational risk" standards for banks, aiming to curb service denials based on political or religious beliefs. The order seeks to combat alleged "debanking" practices, which the administration views as discriminatory.
- A separate executive order was signed to ease the inclusion of private assets, including private equity, real estate, and cryptocurrency, into 401(k) retirement plans. This move could open up a significant portion of the estimated $12.5 trillion held in defined-contribution accounts to a broader range of investments.
- US money-market fund assets have reached a new record of $7.15 trillion, according to the Investment Company Institute (ICI). This surge reflects continued strong inflows, with government funds and prime funds seeing notable increases.
President Donald Trump is moving swiftly to implement key financial policy changes, nominating a new Federal Reserve governor and issuing executive orders targeting banking regulations and retirement investment options. These actions underscore his administration's focus on economic policy and deregulation.
On the monetary policy front, Stephen Miran, currently the Chairman of the Council of Economic Advisers, has been nominated to serve on the Federal Reserve Board until January 31, 2026. This four-month term fills the seat vacated by Adriana Kugler. Miran, who holds a Ph.D. in Economics from Harvard University and served in Trump's first administration, is expected to bring his expertise to the central bank. The temporary nature of the appointment suggests the administration is continuing its search for a longer-term candidate, while also providing a foothold at the Fed amidst Trump's ongoing criticism of current Chair Jerome Powell's monetary policy decisions.
In a significant move impacting the banking sector, President Trump signed an executive order aimed at eliminating "reputational risk" standards that regulators use in their guidance and training materials. The White House asserts that these standards have enabled "politicized or unlawful debanking," leading financial institutions to deny services based on political or religious beliefs. The order directs federal banking regulators to review supervisory and complaint data for instances of such alleged discrimination and to take remedial actions, including fines or consent decrees. Industries like gun manufacturers and cryptocurrency companies, along with conservatives, have claimed to be targets of such practices.
Furthermore, President Trump signed an executive order designed to broaden investment opportunities within 401(k) retirement plans. The order seeks to ease the inclusion of alternative assets, such as private equity, real estate, and cryptocurrency, into these defined-contribution accounts. This initiative could unlock a substantial portion of the estimated $12.5 trillion held in these plans, offering American savers a wider array of investment choices. The Department of Labor will be directed to reassess guidance under the Employee Retirement Income Security Act (ERISA) of 1974, and coordinate with the Treasury Department and the Securities and Exchange Commission (SEC) to facilitate these changes.
Amidst these policy shifts, the Investment Company Institute (ICI) reported that US money-market fund assets have surged to a record $7.15 trillion. This record level reflects continued strong inflows into these funds, with government funds increasing by $45.67 billion and prime funds by $8.30 billion for the week ended March 5. The sustained growth in money market funds suggests ongoing investor preference for liquidity and potentially higher yields in a volatile market environment.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.