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Donald Trump has tapped Stephen Miran, an economist who served during the president-elect’s first term, to chair his Council of Economic Advisers and named billionaire investor Stephen Feinberg to a senior defence post.

Feinberg, who co-founded private equity group Cerberus Capital Management, has been nominated as deputy defence secretary, putting him in place to be the number two to Trump’s top Pentagon pick Pete Hegseth, who has been hit by allegations of sexual misconduct.

Trump praised Feinberg, whose company focuses on distressed assets, for being “an extremely successful businessman” who would “help Make the Pentagon Great Again”. The investor was chair of Trump’s Intelligence Advisory Board during his first term.

Defence is one of the core investment areas at Cerberus, which has $65bn in assets under management. In May the fund acquired a controlling interest in M1 Support Services, a US military aviation company. Last month it announced a $300mn investment in an Australian joint military-civil construction project.

Trump also named Elbridge Colby, a China hawk, to the Pentagon’s number-three position.

Miran was a senior adviser for economic policy at the Treasury department in the first Trump administration. With his nomination, the president-elect is seeking to elevate a critic of Federal Reserve chair Jay Powell who has also accused the Biden administration of manipulating the economy and “usurping” the central bank’s role.

“Steve will work with the rest of my Economic Team to deliver a Great Economic Boom that lifts up all Americans,” Trump said on Sunday.

Miran, who is currently a senior strategist at hedge fund Hudson Bay Capital Management, said he was honoured. “I look forward to working to help implement the President’s policy agenda to create a booming, noninflationary economy that brings prosperity to all Americans!” he posted on X.

The White House Council of Economic Advisers is a three-person group that advises the president on economic policy.

On the campaign trail, Trump had vowed to impose blanket levies of 20 per cent on all US imports, as well as tariffs of 60 per cent on those from China, suggesting his second-term policies could be more protectionist and disruptive to the global economy and markets than his first.

He has threatened US trading partners, saying he would, on the first day in office, impose 25 per cent tariffs on goods from Mexico and Canada and an extra 10 per cent levy on Chinese imports.

The president-elect has also pledged to renew tax cuts he enacted during his first spell in the White House.

Earlier this year, Miran co-wrote a paper accusing Biden’s Treasury department of manipulating the economy during the election, arguing the government’s dependence on short-term debt amounted to “stealth quantitative easing” and impeded the Fed’s ability to fight inflation.

“By adjusting the maturity profile of its debt issuance, Treasury is dynamically managing financial conditions and, through them, the economy, usurping core functions of the Federal Reserve”, he wrote with economist Nouriel Roubini.

“We dub this novel tool ‘activist Treasury issuance,’ or ATI. By manipulating the amount of interest-rate risk owned by investors, ATI works through the same channels as the Fed’s quantitative easing programs.”

Last year, Miran co-wrote a piece in FT Alphaville warning against having a two-tier bond market, saying it “would impair Treasuries’ ability to serve as risk-free collateral underpinning the global financial system” and bring to the US the chaos of a defaulting emerging economy.

Miran has also hit out at Powell for urging more aggressive fiscal and monetary stimulus in October 2020, about a month before that year’s election, to aid the economic recovery amid the Covid-19 pandemic.

“Powell was wrong politically and economically when he urged Congress to ‘go big’ on fiscal stimulus in October of 2020, on the eve of a Presidential election, suggesting that voters favour Democrats’ $3 trillion proposals over Republicans’ $500 billion”, Miran wrote on X in September. “We know what happened next.”

Miran must be confirmed by the US Senate.

Last month, Trump named Kevin Hassett as chair of the National Economic Council.

Additional reporting by George Russell in Hong Kong