A political confrontation between President Trump and the Senate continues to simmer over the President's nominations for two vacant seats on the Federal Reserve Board. President Trump nominated Stephen Moorea and Herman Cain; the former, a conservative economic commentator, the latter, a former CEO who ran for the Republican presidential nomination in 2012. Senators and political commentators alike have criticized President Trump's picks as openly partisan, especially for a position that historically has been nonpartisan. While it is unlikely that Cain will be appointed by the Senate, there is still a chance for Moore's nomination to pass through. In 2015, Moore has called for both the U.S. Dollar to return to the gold standard; recently, he has rescinded that opinion and instead publicly claims he wants to lower interest rates to weaken the value of the dollar.
Should the Senate appoint Mr. Moore (and his policy proposals were enacted), there would likely be two effects, one short-term and one long-term. In the short term, it is possible that Mr. Trump and/or the Republican Party will be able to score a victory for their political base of lower-middle class workers in the Heartland of America. With a weak dollar (and a floating exchange rate), import-competing industries (like steel, chemicals, and manufacturing) will benefit greatly, as foreign goods will be more expensive, allowing the domestic industries to sell more comparatively and increase its revenues. As most of President Trump's base is tied to domestic industries, by weakening the dollar President Trump is able to invigorate his political base just before the 2020 election cycle. However, the long-term effects are less positive. By breaking the precedent of an apolitical Fed, President Trump may open the door for future administrations to nominate more political appointees. In doing so, it would likely be difficult for the Fed to maintain a consistent monetary policy, as each political appointee would try and use their influence to strengthen or weaken the dollar as their political party sees fit, often for electoral purposes. The constant political adjustments to the dollar and the bond rate would likely decrease investor confidence in the United States, as it increases volatility in a currency that is the world's reserve currency because of its notable stability. https://www.nytimes.com/reuters/2019/04/13/business/13reuters-usa-fed-senate.html