Trump had on July 2 named both Shelton and Waller on Twitter as potential picks for the two remaining vacant seats on the seven-member Board of Governors but that announcement was not considered formal.
Board members vote on the Fed’s interest rate policies and weigh in on financial regulation.
Shelton is nominated “for the remainder of a 14-year term expiring January 31, 2024,” and Waller is nominated “for the remainder of a 14-year term expiring January 31, 2030,” the White House said. Both nominees must be approved by the Senate. The Senate has already confirmed four other Trump appointees to the board, including Chairman Jerome Powell.
Shelton served as an economic adviser to Trump’s 2016 presidential campaign and most recently served as the U.S executive director for the European Bank of Reconstruction and Development, a position confirmed by the Senate in 2018.
In 2019, after her potential nomination was floated, Shelton called for lower interest rates as well as more coordination between the Fed and other parts of the government.
Waller is the director of research at the Federal Reserve Bank of St. Louis, Missouri, where he works closely with bank president James Bullard. Bullard is one of the U.S. central bank’s supporters of lower interest rates. Prior to joining the Fed in 2009, Waller was an economics professor at the University of Notre Dame.
Congress originally tasked the Federal Reserve Bank with keeping inflation in check, and preventing economic bubbles and recessions. The Fed dictates the nation’s monetary policy through a number of financial tools, with one such key tool being the interest rate at which banks borrow money.
Trump has been critical of the Fed on numerous occasions for not taking a more aggressive interest rate-cutting stance. He has accused the Fed of stifling economic growth by being too slow to slash interest rates and has called the central bank the biggest problem for the nation’s economy.
Lower interest rates are intended to stimulate the economy by encouraging more borrowing and spending.
The Fed kept interest rates at historic lows throughout Barack Obama’s presidency but went on a spree of rate hikes after Trump took office. It raised rates eight times since Trump came into office, with the last hike triggering a stock market nosedive in December 2018. The central bank has held steady since then, and Trump continues to demand rate cuts.
The Fed reduced its benchmark short-term interest rate three times in 2019 to a range of 1.5 to 1.75 percent.
Trump’s prior two picks for the Fed vacancies—economist Stephen Moore and former presidential candidate Herman Cain—withdrew from the nomination process. Moore told The Epoch Times after withdrawing that Shelton was an ideal nominee.
“I think she’s just fantastic. She’d be better than me on the Fed, frankly. She’s an expert on monetary policy,” Moore said in May 2019.
Trump, Cain, Moore, and Shelton all believe that the United States would be better off if its monetary system was returned to the gold standard, a system where the value of the dollar would be backed by gold held by the government. Prior to his election, Trump praised the gold standard but said it would be difficult to return to.
Under the current system, the dollar is fiat money that has no intrinsic value and exists largely as data on the networks of private banks and the privately owned Federal Reserve.
Ivan Pentchoukov and Reuters contributed to this report.