WASHINGTON, (Reuters Breakingviews) - Donald Trump is making the Federal Reserve great again. The U.S. president has chosen economist Nellie Liang to be a central bank governor, paving the way for all seven board seats to be filled for the first time in five years. Liang’s financial stability expertise rounds out Trump’s other conventional picks.

The U.S. central bank has had only three board members for much of this year. As result, they have juggled a lot of tasks. Lael Brainard heads up five Fed committees and is the only member of three panels, including one on consumer and community affairs. The vacancies also diminished the board’s voice on the interest rate-setting Federal Open Market Committee.

Liang, who, like two other nominees now needs Senate confirmation, would bring more than three decades of Fed experience to the job. She helped administer the first post-crisis bank stress tests in 2009 and in 2010 established the Fed’s financial stability division at the request of former central bank chief Ben Bernanke.

Her appointment would make the Fed one of the few institutions that Trump has stacked with technocrats. The mercurial president chose Fed governor Jerome Powell to lead the central bank and his vice chair is Richard Clarida, an economist and former Treasury Department official who joined the central bank on Monday.

That puts the Fed in a strong position to steer the economy through increasing trade tensions and emerging markets turbulence. The Trump administration this week announced another round of tariffs on about $200 billion of Chinese goods and Beijing responded with levies on $60 billion in U.S. goods.

Trump’s Fed picks are also firm believers in the institution’s independence. Trump has said several times that the Fed should not be raising interest rates while America is embroiled in trade disputes. Yet the central bank has raised rates twice this year and has signaled it will do so again at its FOMC meeting next week.

Despite Trump’s Fed comments, neither he nor the White House has shown an interest in blocking quality nominees as they have at other agencies. The diverse and impressive backgrounds of what may eventually be a fully-stacked board is an administrative achievement that will stand the central bank in good stead when crisis next strikes.

CONTEXT NEWS

- U.S. President Donald Trump will nominate former Federal Reserve economist Nellie Liang to the central bank’s board of governors, the White House said on Sept. 19. She needs to be confirmed by the U.S. Senate and her term would expire in 2024.

- Liang started at the Fed in 1986 and was asked by former central bank chairman Ben Bernanke to establish a financial stability division in 2010 in response to the financial crisis. She joined the Brookings Institution in 2017 and is also a visiting scholar at the International Monetary Fund’s Monetary and Capital Markets Department.

(Editing by Swaha Pattanaik and Amanda Gomez)

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