President Trump nominated economist Nellie Liang to fill the final open seat at the Federal Reserve on Thursday evening after he returned from a trip to survey the damage from Hurricane Florence. Liang will need Senate confirmation to become a Fed governor, a process that could take months.
Liang is a senior fellow at the Brookings Institution and is no stranger to the Fed, having spent three decades there as a research economist and then director of the Fed’s Office of Financial Stability, which was created after the 2008-2009 financial crisis to help the central bank better monitor risks of another major crisis. She worked closely with the Obama administration on stabilizing the financial system and helped administer the first bank “stress tests” in 2009 to test whether large banks could handle another severe downturn.
Trump has had an unprecedented chance to reshape the nation’s central bank because there were so many openings on the Fed board when he took office. Liang is Trump’s sixth nominee to serve on the Fed board. The Fed is made up of seven governors based in Washington who are nominated by the president and 12 regional Fed bank presidents from around the country who are chosen by boards in each region.
The Senate so far has confirmed three of Trump’s Fed nominees: Chair Jerome H. Powell, Vice Chair Richard Clarida and Randal Quarles, who is vice chair for bank supervision. Two more nominees — Marvin Goodfriend and Michelle Bowman — have had hearings and are awaiting a Senate vote.
Trump has sparred openly with the Fed in recent months. Trump wants interest rates to remain low so companies and households will keep borrowing money and fueling an economic and stock market upswing. But Powell is committed to raising interest rates “gradually."
Last month, Trump said he was “not thrilled" so far with Powell. But for all his bluster about the Fed, Trump continues to nominate people to the Fed who are widely viewed as competent centrists on monetary policy who won’t be swayed by politics. Liang had a long career at the Fed and is expected to safeguard the Fed’s independence.
The Fed has faced criticism for being heavily white and male in recent years. Many were disappointed when Trump did not nominate Janet L. Yellen, the first female Fed chair, for another term. Among the Fed’s 15 current leaders, 12 are male, three are female and two are minorities. Liang would help diversify the board along with Mary Daly, who was just announced as the new head of the San Francisco Fed and will take office on Oct. 1.