President Trump said he would officially nominate Federal Reserve critic Judy Shelton and insider Christopher Waller to the central banking system’s board of governors.
Shelton, 66, has long supported backing the dollar with gold, a position that in 2011 she argued would make unlikely bedfellows of Tea Party conservatives and “the global elite.”
As envoy to the European Bank for Reconstruction and Development, Shelton has missed nearly half of the organization’s board meetings. By contrast, her predecessor missed four of 27. She has attacked the Fed for rate setting and its power over markets.
“If the success of capitalism depends on someone being smart enough to know what the rate should be on everything … we’re doomed. We might as well resurrect Gosplan,” she said, referring to the Soviet Union’s economic planning committee, in a Financial Times interview last year.
Trump has publicly called for the central bank to reduce rates, a position that Shelton, too, has backed. After a months-long pressure campaign yielded a September rate cut, Trump blasted Fed Chair Jerome Powell on Twitter. “Jay Powell and the Federal Reserve Fail Again,” Trump wrote less than half an hour after the central bank announced a quarter percentage point interest rate cut. “No ‘guts,’ no sense, no vision! A terrible communicator.”
Powell was handpicked by the president to replace Janet Yellen but has been a frequent target of his ire. The Fed cut its benchmark three times last year between July and October. Shelton, an informal adviser to the president, voiced last year that she does not think Powell is trying to appease him.
Waller, 61, has spent his career in academia and at the Federal Reserve Bank of St. Louis, where he is research director. Like other Fed officials, Waller advocates central bank independence, a stabilizing tenet to insulate monetary policy from politics — and from short-term congressional or White House pressures. Waller’s published work hints at positions he might hold on inflation targeting, financial regulation, and quantitative easing — where central banks look to drive economic growth through the purchase of bonds or assets.
The Senate must confirm Shelton and Waller. If both make it through, Trump will have appointed six of the seven sitting governors.
Two of the president’s earlier picks for Fed positions, Club for Growth founder Stephen Moore and pizza executive Herman Cain, were never formally nominated.
Federal Reserve Board members hold seven of 12 votes on the rate-setting Federal Open Market Committee, which sets monetary policy, and participate in banks and consumer credit regulatory decisions.
