WASHINGTON — President Trump on Thursday said he would formally nominate Judy Shelton and Christopher Waller to the Federal Reserve’s Board of Governors, about six months after Mr. Trump said he intended to add the two to the central bank.
Ms. Shelton, a critic of the Fed who has long supported backing the dollar with gold or some other anchor, has spent the intervening time tweeting her support of Mr. Trump’s administration and its policies. Mr. Waller, executive vice president and director of research at the Federal Reserve Bank of St. Louis, has kept out of the spotlight.
Ms. Shelton and Mr. Waller will now be vetted by the Senate Banking Committee and must be confirmed by the Senate. If that happens, the president will have nearly a full suite of his own picks at the Fed board — he will have nominated six of the seven sitting governors.
Mr. Trump’s former favorites for the open Fed jobs — the commentator Stephen Moore and the pizza mogul Herman Cain — faced lawmaker opposition and were never formally nominated. Mr. Trump’s earlier nominees, Marvin Goodfriend and Nellie Liang, both economists, failed to clear confirmation.
Fed Board members have substantial, but not absolute, power at the central bank. Of the 12 votes on the rate-setting Federal Open Market Committee, the board has seven. The other five voters come from the Fed’s 12 regional banks. The Federal Reserve Bank of New York has a permanent say, but the others rotate in and out of voting seats. The Washington-based board members also have a say on bank regulatory matters.
Mr. Trump’s two new picks are vastly different. Mr. Waller has spent his career in academia and within the Fed system, researching everything from Fed structure to its communication. Ms. Shelton was most recently the United States executive director at the European Bank for Reconstruction and Development, and she previously advised Mr. Trump during his presidential campaign and served on his transition team. She has also been an outside commentator who has regularly critiqued the Fed’s actions.
Mr. Trump has pushed the Fed to slash rates and routinely blasts the central bank and his handpicked chair, Jerome H. Powell, for holding back economic growth.
Mr. Trump has expressed jealousy over the European Central Bank’s negative interest rates. Officials and most economists say negative rates would be a bad idea in the United States, given its different economic and market structure and stronger economy. Just this week, he indicated that he wished he had picked Kevin Warsh, another one-time contender, as the Fed chair instead of Mr. Powell.
The president can nominate Fed officials and jawbone them, but he has little power over the central bank. Officials are free to pursue their goals of maximum employment and stable inflation as they choose, but must explain themselves to Congress.