President Donald Trump said Tuesday that he intends to nominate Judy Shelton, a prominent supporter of returning to the gold standard, and St. Louis Federal Reserve economist Christopher Waller to the U.S. central bank’s board.
The nominations, which Trump tweeted out, come after two of the president’s earlier picks for the Fed board withdrew their nominations amid an onslaught of criticism from members of both parties. The selections also follow months of Trump pressuring the Fed and its chairman, Jerome Powell, to cut interest rates.
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Waller is director of research at the St. Louis Fed, 1 of 12 regional banks in the Fed system. St. Louis Fed President Jim Bullard, who has a vote on interest rate moves, was the only member of the Fed’s rate-setting committee to dissent against the central bank’s decision not to change rates in June; he preferred to cut them.
Shelton, who is close with White House economic adviser Larry Kudlow, served on Trump’s transition team and is currently U.S. executive director for the European Bank for Reconstruction and Development.
Shelton was a longtime critic of the Fed’s efforts to keep rates low in the wake of the 2008 financial crisis, telling The Wall Street Journal in 2016 that “ultralow interest rates” have “flooded wealthy investors and corporate borrowers with cheap money, while savers with ordinary bank accounts have been obliged to accept next-to-nothing returns.”
In an interview with the Journal last week, she sounded a different note, saying rates should be reduced.
“When you have an economy primed to grow because of reduced taxes, less regulation, dynamic energy and trade reforms, you want to ensure maximum access to capital,” she said. “Today we are seeing impressive gains in productivity, which more than justify the meaningful wage gains we are likewise seeing — a testimonial to the pro-growth agenda.”
Still, there is at least some sign that Shelton might clash with Trump’s vision. Shelton has repeatedly called for the Fed to return to its pre-crisis approach to setting monetary policy, something that would require the central bank to shrink the amount of assets it holds.
The Fed is currently shrinking its balance sheet, another policy that has drawn the wrath of the president.
Kudlow suggested in a 2016 tweet that Trump should put Shelton on the board, highlighting her support for a strong dollar. Multiple times in the past year, Trump has bemoaned the fact that the central bank’s policies have had the effect of strengthening the dollar, which makes imports cheaper and exports more expensive.