(WASHINGTON) — President Donald Trump said Thursday that he intends to nominate two people to serve on the Federal Reserve’s Board of Governors, an institution he has repeatedly attacked for not cutting rates deeply enough.
Both were first named by Trump on Twitter in July but their nominations hadn’t been formally announced. Trump said he has picked Judy Shelton, an economic adviser to his campaign who recently served as the U.S. executive director for the European Bank of Reconstruction and Development, and Christopher Waller, the director of research at the Federal Reserve Bank of St. Louis.
Shelton’s long history of unorthodox economic commentary could make her nomination more controversial. Waller, who regularly attends the Fed’s rate-setting meetings in Washington, is a more conventional selection. Both will require confirmation by the Senate, a process that can take months.
Shelton and Waller would fill two vacancies on the Fed’s seven-member board. Board members vote on the Fed’s interest rate policies and also weigh in on financial regulation.
Trump has picked four of the five current members of the board, including his elevation of Jerome Powell to the position of Chair. That hasn’t stopped the president from harshly criticizing the Fed, calling its policymakers “boneheads” for not cutting rates quickly enough last year. The Fed reduced its benchmark short-term interest rate three times in 2019 to a range of 1.5% to 1.75%, a very low level historically.
Trump argues that the Fed should set rates even lower, at zero or even in negative territory, as central banks in Europe and Japan have done. Economists generally regard rates that low as evidence of an economy in trouble.
Shelton has a history of attacking the Fed’s policies and has urged that the United States return to the gold standard, under which the value of currencies like the dollar are fixed to a specific amount of gold. Most mainstream economists who study monetary policy reject the gold standard as antiquated.
Shelton criticized the Fed during Barack Obama’s presidency for keeping its benchmark rate pinned at zero for seven years, which she argued risked higher inflation and a sharp devaluation of the dollar, neither of which occurred. But like some of Trump’s previous Fed nominees,she now echoes Trump’s calls for lower interest rates.
Waller is also likely to support keeping interest rates low. He works for the president of the St. Louis Fed, James Bullard, who was one of the strongest supporters of rate cuts last year.
Waller “has been instrumental in helping shape Bullard’s view about the U.S. shifting into a low growth, low inflation and interest rate regime,” Kathy Bostjancic, an economist at Oxford Economics, said when Trump first floated Waller’s name in July.
