Whatever happens at September's Federal Reserve meeting will pale in comparison to a wholesale rethinking of the U.S. central bank's design, a possibility stirred by Donald Trump's latest appointment.

The president nominated White House advisor Stephen Miran to temporarily fill Adriana Kugler's vacant Fed board seat, reheating a debate about whether the Fed structure, its independence, and even its central role in the monetary economy should now become live questions.

That may sound like a giant leap in a discussion that has so far centered largely on how quickly the Fed should lower interest rates, and numerous big hurdles certainly limit the potential for massive institutional change.

For one, Miran, who has written about re-ordering the Fed voting system and appointment process and binding the central bank more closely to government thinking, still has to be confirmed by the Senate.

While that process may be expedited, because he was already confirmed as a White House official, he would ostensibly only hold the post until Kugler's term formally ends in January. He would also only get one vote under the current system, and Trump has yet to name his pick to replace Chair Jerome Powell next May.

But most Fed watchers think Miran is likely to be confirmed for the full board term eventually, even if he's not considered a candidate for the top job.

And his appointment, the eventual new Fed Chair, along with Chris Waller, the current favorite to replace Powell when his leadership term ends in May, and fellow Trump appointee Michelle Bowman, would then give Trump a board majority.

On monetary policy at least, the five rotating regional Fed presidents on the 12-person policymaking committee can still push back. That said, their views are likely in flux since last week's employment report, and markets expect interest rate cuts to resume next month regardless.

Source: Reuters