Fed Board members have substantial, but not absolute, power at the central bank. Of the 12 votes on the rate-setting Federal Open Market Committee, the board has seven. The other five voters come from the Fed’s 12 regional banks. The Federal Reserve Bank of New York has a permanent say, but the others rotate in and out of voting seats. The Washington-based board members also have a say on bank regulatory matters.

Mr. Trump’s two new picks are vastly different. Mr. Waller has spent his career in academia and within the Fed system, researching everything from Fed structure to its communication. Ms. Shelton was most recently the United States executive director at the European Bank for Reconstruction and Development, and she previously advised Mr. Trump during his presidential campaign and served on his transition team. She has also been an outside commentator who has regularly critiqued the Fed’s actions.

In the aftermath of the 2007 to 2009 recession, she criticized the Fed for keeping interest rates too low. More recently, she has voiced support for much lower rates, in line with Mr. Trump’s view.



Mr. Trump has pushed the Fed to slash rates and routinely blasts the central bank and his handpicked chair, Jerome H. Powell, for holding back economic growth.

Mr. Trump has expressed jealousy over the European Central Bank’s negative interest rates. Officials and most economists say negative rates would be a bad idea in the United States, given its different economic and market structure and stronger economy. Just this week, he indicated that he wished he had picked Kevin Warsh, another one-time contender, as the Fed chair instead of Mr. Powell.

The president can nominate Fed officials and jawbone them, but he has little power over the central bank. Officials are free to pursue their goals of maximum employment and stable inflation as they choose, but must explain themselves to Congress.