Tuesday, 19 Nov 2024

Trump to nominate Shelton, Waller to fill vacant Fed seats

WASHINGTON (Reuters) – President Donald Trump, a persistent critic of the Federal Reserve for keeping interest rates higher than he would like, on Thursday picked two economists for U.S. rate-setting roles who are seen as advocates for the looser policies Trump wants.

Christopher Waller, research director at the St. Louis Fed, is a specialist in monetary policy and works closely with bank president James Bullard to gauge the economic outlook and think through whether U.S. interest rates may need to be higher or lower to keep inflation steady and the labor market healthy.

Bullard was one of the U.S. central bank’s most vocal supporters of lower interest rates last year, and has said Waller shares his own views on policy. Before joining the Fed in 2009 Waller was an economics professor at the University of Notre Dame. A St. Louis Fed spokeswoman did not immediately respond to a request for comment.

Shelton is a far less conventional pick, with views that could draw scrutiny from Senators who must confirm any Fed nominees. A former Trump campaign advisor, she has advocated for a return to the gold standard, a move that Fed policymakers have said would limit the Fed’s flexibility to fight inflation and boost employment.

She railed against loose Fed policy when Barack Obama, a Democrat, was president, but since last summer when her name was first floated as a potential Fed pick she has echoed the president’s call for lower rates. She has also urged closer coordination between the Fed, the White House, and Congress.

The Fed closely guards its political independence as key to its ability to act in the best interest of the country’s economic health rather than at the behest of any one administration.

Shelton did not immediately respond to a request for comment.

This is not the first time Trump has tried to shape the world’s most powerful central bank more to his liking. If these two most recent picks are confirmed by the Senate, he will have installed six of the Fed’s seven governors. That includes Fed Chair Jerome Powell, whom Trump soured on soon after he put him in that post in 2018, when it became clear the Powell Fed would continue to raise rates despite Trump’s wishes to the contrary.

Fed policymakers include the Fed Board and the 12 presidents of the central bank’s regional outposts, picked not by the president but by their local boards of directors.

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