Federal Reserve building. Photo: uschools via Getty Images

President Trump announced on Twitter Tuesday that he intended to nominate two people to the Federal Reserve Board of Governors: Christopher Waller of the Federal Reserve Bank of St. Louis, and Judy Shelton, an economist and a Fed critic.

Why it matters: Trump has been urging the Federal Reserve to lower interest rates, stoking widespread concern that he is seeking to politicize the Fed. Waller's boss has publicly favored a rate cut, while Shelton, who has repeatedly endorsed a return to the gold standard, recently told the Wall Street Journal that the Fed should cut rates.

What's happening: Trump's last three consecutive picks for the Fed board — Nellie Liang, Herman Cain and Stephen Moore — all withdrew from consideration. Cain and Moore did so following intense media scrutiny of their public records. Trump's attempt to fill seats on the Fed board have come amid his outspoken and unprecedented attacks against interest rate hikes by Chairman Jerome Powell.

The backstory:

  • Waller works for St. Louis Fed President James Bullard — who has been known to advocate for more dovish monetary policy and, more recently — a rate cut. The White House approached him last month about the Fed, a St. Louis Fed spokesperson told Axios. Waller met with Trump on Tuesday. Bullard disclosed last week that the Trump administration had approached him for a seat on the Fed governor’s board.
  • Bloomberg reported in May that Shelton was in the running for a potential nomination.

What’s next: Both Waller and Shelton will need to be confirmed by the Senate. Waller, a former economics professor who has been at the St. Louis Fed for 10 years, is considered a more traditional Fed pick, with a similar background to other Fed governors. He recently defended the St. Louis Fed’s opposition to interest rate hikes in an interview with Bloomberg, before news of a potential nomination came out.

  • Though Shelton was already confirmed by the Senate for a separate position, Fed watchers suspect she might face difficulty, given comments in recent weeks in which she shifted previous criticism of low rates to support for such a move — falling more in line with Trump’s expressed views.

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