“Everything has become hyper-politicized, and the Fed is no exception,” said Mark Spindel, who with Ms. Binder wrote a book on politics at and around the Fed. “Filling those spots with Trump appointees just limits what Biden can do.”
The Fed’s Washington-based board members hold constant votes on monetary policy, while most of the 12 regional bank presidents rotate in and out of four voting seats. The Federal Reserve Bank of New York is the exception, holding a permanent vote. The board members, called governors, also vote on the regulations that govern the nation’s largest banks.
Interest-rate setting is usually not a partisan exercise, and policy preferences do not split cleanly along ideological lines. But bank oversight tends to be more political, with Republicans favoring lighter oversight and Democrats pushing for more stringent rules.
Despite the drama, Mr. Waller’s confirmation was received as good news by many in the central banking community.
He is a seasoned economist who has worked in academia and, most recently, as research director at the Federal Reserve Bank of St. Louis.
Mr. Waller’s research has covered topics including central bank independence — “the key tool to ensure a government will not misuse monetary policy” — and he has laid out a rationale for keeping borrowing costs cheap when prices are increasing slowly, as they have been in recent years. The Fed raises or lowers interest rates to slow or speed up the economy, hoping to keep inflation slow and stable while maximizing employment.
Before joining the Fed in 2009, Mr. Waller was a professor in the economics department at Notre Dame. He has a doctorate from Washington State University. It is not clear whether he will be installed at the Fed in time for the central bank’s Dec. 15-16 meeting.
“He’s been an excellent research director,” Robert S. Kaplan, the president of the Federal Reserve Bank of Dallas, said of Mr. Waller, calling him an “excellent economist” with a “keen mind.”