(Bloomberg) — It’s no secret that President Donald Trump wants to dismantle the global economic order. Less clear is what he’ll try to build in its place — and Wall Street has turned to Stephen Miran for clues.
The little-known economist will become a public figure starting Thursday, when he’s due at a Senate confirmation hearing for the job of leading Trump’s Council of Economic Advisers. Lawmakers and investors might finally learn how to pronounce his surname. They’ll definitely be eager to hear him expand on a November paper that’s shot to the top of financial-world reading lists.
The 41-page document has spawned an interpretive frenzy, drawing in the likes of JPMorgan Chase and Apollo Management — and it’s even helped drive market moves, despite the author’s insistence that he’s not laying out a policy roadmap. What Miran offers is more like a menu of measures to reboot world trade, in ways only Trump has the chutzpah to try. A “Mar-a-Lago Accord” — a multi-nation deal to weaken the dollar — is on it, along with tariff schedules tied to US military protection, and new types of Treasury bonds that foreign creditors could be pressured to buy.
Weeks into his second term, Trump is signaling change will be more far-reaching this time around. Tariffs on pretty much everyone — especially countries running big trade surpluses with the US — are in the pipeline. Longtime allies are on notice that their American security umbrella is about to get repriced. It’s left investors struggling to keep pace, and wondering what the world economy might look like when the dust settles.
Many are seeking guidance in Miran’s report — and the signs are they’re taking it more seriously than policymakers inside the administration are. The 41-year-old, then a senior strategist at hedge fund Hudson Bay Capital, published “A User’s Guide to Restructuring the Global Trading System” the week after Election Day.
“Why has the paper gotten so much attention? Just look at the title,” says Zachary Griffiths, head of macro strategy at Creditsights Inc. “Trump and his administration have come out swinging,” he says, and with a re-energized team of loyalists in place, “it only increases the probability of them enacting these policies.”
Which could be hugely disruptive, Griffiths says, because Miran’s work “lays out a substantial undertaking to shift the current order, from which the US benefits greatly.” And with the US currently running the biggest non-crisis budget deficits on record, “it’s a fragile time to approach such changes.”
In fact, for all the cult-like status that Miran (pronounced “my-run”) is acquiring among market-makers, it’s not clear what kind of influence he’ll have inside the White House. Miran did not respond to a request for comment.
The CEA exists to support the president’s agenda with advice based on “economic research and empirical evidence,” according to its website.
Miran had effectively started on that task before he’d even interviewed for the job. On page 1 of the paper that financiers are going gaga over, he spells out that the work is “not policy advocacy.” He acknowledges the potential for upheaval — “the broadest ramifications of any policies in decades” – and spends much of the report examining potential side-effects.
‘Sticks and Carrots’
Finance houses have been urging clients to take a close look anyway. Eurizon Capital dedicated a note, based on the paper, to predictions of a “Mar-a-Lago Accord.” Jim Bianco, founder of Chicago-based Bianco Research, corralled his clients to discuss rumors making the rounds of a sweeping global deal.
Miran himself notes major obstacles to any such undertaking, including global shifts since the Plaza Accord devalued the dollar four decades ago. A bigger share of currency reserves are now held by countries that aren’t close US allies, he writes, so “the mixes of sticks and carrots may be extremely challenging to get right.”
All of this points to the risk that markets take Miran’s paper more literally than its author perhaps intended. There’s already been an episode that looks like a misunderstanding on those lines.
In early February, traders started to wonder if Trump would revalue the country’s gold stockpiles. Treasury Secretary Scott Bessent, commenting on plans to create a sovereign wealth fund, said the US would seek to “monetize the asset side” of its balance sheet, without specifying how that would work. Some analysts assumed he was referring to an idea Miran had written about: revaluing gold reserves at today’s prices, rather than the currently used 1973 benchmark, and thus creating a $750 billion windfall for the Treasury that would reduce its need to sell bonds.
But Bessent downplayed the connection, saying “that’s not what I had in mind.” Gold pared gains after his comment.
Steven Mnuchin, Trump’s first-term Treasury chief, has also sought to dispel fears of imminent financial turmoil. He cited another proposal floated in Miran’s paper: ultra-long-term and low-interest Treasury bonds that would be sold to foreign central banks as a way of easing US debt costs.
“Asking people to take very low interest rate hundred-year bonds is not something that’s going to be appealing,” Mnuchin told Axios this week. “I don’t think that sets the right tone for the market.”
Of course, the Treasury and CEA roles are fundamentally different. In Bessent, Trump chose a finance chief with gravitas in the investor community, whose decades of experience signal he won’t take a wrecking ball to the existing order. There’s more latitude to float novel ideas at an advisory council.
‘Game of Chicken’
Bessent is one of the people who suggested Trump consider Miran for the job, according to a person familiar with the matter.
In early February 2024, as Bessent was gearing up to help Trump’s election campaign, he sought out Miran, the person said. It was a Miran paper for the Manhattan Institute – titled “Brittle Versus Robust Reindustrialization,” and focusing on how supply-side reforms and deregulation can buoy American industry — that drew Bessent’s attention, the person said. A Treasury spokesperson declined to comment.
There’s plenty of evidence that the two men are aligned in their thinking. Miran’s paper refers to graduated tariff hikes, a concept Bessent was pushing just before Trump’s inauguration. Both say the US should leverage the military protection it offers other countries to get the trade relations it wants.
With Trump’s tariffs set to ramp up as soon as next week, partners are weighing how to respond. Retaliation could undercut the benefits that America gets from using the policy tool, according to Miran. His paper calls for efforts to head off any tit-for-tat responses – drawing on US advantages that go to the heart of Trumponomics.
“Because the United States is a large source of consumer demand for the world with robust capital markets,” he writes, it’s “likelier to win a game of chicken.”
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