After a series of unconventional picks for the Federal Reserve, President Donald Trump made a very conventional choice this week in Christopher Waller.
Waller, executive vice president and research director at the Federal Reserve Bank of St. Louis, is a respected scholar in monetary economics and a central bank insider. He’s a close adviser to St. Louis Fed President Jim Bullard, who himself deflected a White House inquiry about an opening on the Fed’s board of governors.
Former colleagues praise Waller for his collegial management style and for elevating the stature of his department. The rigorous quality of his research stands in contrast to other people Trump has considered for the Fed.
Judy Shelton, whom Trump plans to nominate for another opening on the board of governors, is an advocate of the gold standard, which puts her far outside the economics mainstream. Trump proposed two other gold-standard believers, businessman Herman Cain and commentator Stephen Moore, for Fed positions, but both withdrew after facing intense criticism.
William Gavin, a retired St. Louis Fed economist, says he knew of Waller’s research long before the two worked together. He says Waller was among a group of economists exploring the theoretical underpinnings of how money works in the economy.
“I really admire Chris,” Gavin said. “I think he’s a great choice, and I think he’ll be open-minded.”
Costas Azariadis, a Washington University economics professor and a research fellow at the St. Louis Fed, said Waller “is as knowledgeable about central banking as anybody I know. … Chris is made for this job.”
Waller, 60, is a lifelong Midwesterner. He was born in Nebraska City, Nebraska, and held faculty positions at Indiana, Kentucky and Notre Dame before joining the St. Louis Fed in 2009.
“What happened after he came was a huge improvement in the St. Louis Fed research department,” says Stephen Williamson, a former St. Louis Fed economist who’s now at the University of Western Ontario. “It was academic-quality research having to do with real-world problems and solving important things.”
“He’s my idea of a great manager,” said Dan Thornton, another former St. Louis Fed colleague. “I think he’d be an excellent choice.”
Waller’s published research provides hints of his thinking on policy issues. A 2018 paper found beneficial effects from the Fed’s quantitative easing, and a 2009 paper supported an alternative method of inflation targeting.
After Trump’s recent threats to fire Fed Chairman Jay Powell, Waller’s views on the Fed’s structure may also be important. In a 2011 article, he called central bank independence “the key tool to ensure a government will not misuse monetary policy for short-term political reasons.”
Waller frequently attended Fed policy meetings as an adviser to Bullard. Williamson says he would have been involved in research that led Bullard, beginning in 2016, to argue that the equilibrium level of interest rates was lower than most policymakers had thought.
Bullard cast a dissenting vote and argued for an interest-rate cut at the Fed’s most recent meeting. That may have caught the attention of Trump, who’s also been calling for lower rates.
In a statement, the St. Louis Fed said Waller was approached by the White House last month and met with the president Tuesday.
Waller certainly understands Bullard’s thinking and may vote in a similar way, but that doesn’t mean Trump can count on an automatic vote for easier policy.
“He’s got an independent mind,” Williamson said of Waller. “It’s not like he would be a carbon copy of Bullard.”