WALLER CONFIRMED TO SERVE ON FEDERAL RESERVE BOARD
Trump pick narrowly OK’d by Senate after earlier rejections
The Senate on Thursday narrowly confirmed the nomination of Christopher Waller for the Federal Reserve’s Board of Governors, placing another of President Donald Trump’s picks on the Fed’s inf luential board after a string of high-profile rejections.
The vote in favor of Waller was 48-47. Waller, research director at the Federal Reserve Bank of St. Louis, taught economics for nearly 25 years before joining the St. Louis Fed in 2009. He has endured far less scrutiny than Judy Shelton, the controversial nominee he was paired with and who was voted down in the Senate last month.
Still, all Democratic senators voted against his nomination, making it an unusually close vote to confirm a Fed governor. Waller had won some Democratic votes when the Senate Banking Committee approved his nomination in July.
But Waller’s confirmation vote was also unusual in that it occurred during a lame-duck session of Congress. Senate Democrats would have preferred that President-elect Joe Biden fill the seat. And some worried that Waller would agree with the Fed’s recent moves to loosen regulations on large banks.
In contrast to Shelton, Waller is a conventional respected figure among economists. As an executive vice president of the St. Louis Fed, he has attended dozens of meetings of the Fed’s interest rate-setting policy committee, of which he will now become a voting member. His research has focused on how the Fed’s communications affect financial markets and on the benefits of an independent central bank. His term on the board will last through January 2030.
Waller, who holds a Ph.D. in economics from Washington State University, has taught at the University of Notre Dame, the University of Kentucky and Indiana University.
He is a top aide to James Bullard, the president of the the St. Louis Fed, who is a well-known “dove.” Doves are policymakers who generally favor lower interest rates to help boost job growth and who tend to worry less about the risk of inf lation. Those who concern themselves more with the threat of inf lation, by contrast, are referred to as “hawks.”
Carl Tannenbaum, chief economist at Chicago-based
Northern Trust, and a former Fed economist, suggested that Waller’s economic tilt won’t likely make much difference to the central bank’s policymaking “because the Fed is almost as dovish as they can be.”
In contrast to Waller’s conventional background, Shelton’s past support for the gold standard, which involves tying the dollar’s value to gold and is now mostly
discredited, generated vociferous opposition from Democrats and discomfort among some Republicans. She was voted out of the Senate Banking Committee on a party-line vote in July only for her nomination to languish until after the presidential election.
Shelton also came under fire for appearing to change her views on interest rates to suit the political circumstances. She opposed the Fed’s policy of pinning its benchmark interest rate at nearly zero when Barack Obama was president, only to support ultra-low rates after Trump’s election. Her nomination failed on a 47-50 vote
With Waller’s confirmation by the Senate, four of the Fed’s six governors have now been chosen by Trump. In addition, Jerome Powell was elevated to his chairmanship by Trump.
The only Democrat on the board of governors is Lael Brainard, who was considered a possible selection for Treasury secretary by Biden. That position went instead to former Fed Chair Janet Yellen. One seat on the Fed’s seven-member board remains vacant.
Trump’s two previous picks for the Fed’s board, Stephen Moore and Herman Cain, ran into so much opposition that they withdrew from consideration before their nominations came before the Senate.