WASHINGTON (AP) – President Donald Trump said Thursday he plans to nominate two people for the Federal Reserve Board of Governors, an institution he has repeatedly attacked for failing to cut interest rates low enough.
Both were named for the first time by Trump on Twitter in July, but their nominations have not been officially announced. Trump said he selected Judy Shelton, an economic advisor for his campaign, who recently served as executive director of the European Bank for Reconstruction and Development in the United States, and Christopher Waller, research director at the Federal Reserve Bank of St. Louis.
Shelton's long history of unorthodox economic commentaries could make their nomination more controversial. Waller, who regularly attends Fed rate-setting meetings in Washington, is a more conventional choice. Both must be confirmed by the Senate, which 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 policy and also affect financial regulation.
Trump has selected four of the five current board members, including the appointment of Jerome Powell as chairman. That didn't stop the President from sharply criticizing the Fed and calling its decision-makers "boneheads" because they didn't cut rates quickly enough last year. The Fed cut its base rate three times in 2019 to 1.5% to 1.75%, which was historically a very low level.
Trump argues that the Fed should lower interest rates to zero or even negative, as central banks in Europe and Japan have done. Economists generally view such low rates as a sign of an economy in trouble.
Shelton has historically attacked the Fed's policies and urged the United States to return to the gold standard, which sets the value of currencies like the dollar to a certain amount of gold. Most established economists who deal with monetary policy reject the gold standard as outdated.
Shelton criticized the Fed during Barack Obama's presidency for leaving its key interest rate at zero for seven years. In their view, this threatened higher inflation and a sharp depreciation of the dollar. But like some of Trump's previous Fed candidates, it now agrees with Trump's calls for lower interest rates.
Waller is also likely to advocate keeping interest rates low. He works for St. Louis Fed President James Bullard, who was one of the strongest advocates of rate cuts last year.
Waller "was instrumental in Bullard's assessment of the US transition to a low-growth, low-inflation and low-interest regime," said Kathy Bostjancic, economist at Oxford Economics, when Trump first announced Waller's name in July.