Senate panel approves Trump’s controversial Fed nominee
The Senate Banking Committee on Tuesday approved President Donald Trump’s choice of Judy Shelton for the Federal Reserve board on a party-line vote, overcoming widespread questions about her qualifications for the Fed.
Committee Chairman Sen. Mike Crapo, Republican of Idaho, said that Shelton had reassured him and other GOP senators that she recognizes the Federal Reserve’s independence from the rest of the government and also supports insuring bank deposits — widely accepted policies that she had previously questioned.
Crapo also noted Shelton’s comments during a February hearing that she does not support returning to the gold standard, in which the value of the dollar is tied to gold, even though she had advocated doing so in the past. Instead, Crapo said, Shelton regards the gold standard as a topic at least worthy of study.
“Many have tried to characterize her views on the gold standard … as outside the mainstream and disqualifying for this position,” Crapo said. “I strongly disagree with that characterization.”
The committee also voted to back the nomination of Christopher Waller, the research director at the St. Louis Federal Reserve Bank, to fill a final open seat on the Fed’s board of governors.
Shelton’s unorthodox views and questionable credentials have drawn widespread opposition among economists and many former Fed officials. She has previously voiced support for linking the U.S. dollar’s value to gold, has expressed skepticism about the Fed’s political independence, and has supported lower interest rates since Trump’s election after having criticized them under President Barack Obama.
Most mainstream economists regard any return to a gold standard as reckless, arguing that it would cause more and deeper recessions by limiting the Fed’s ability to cut interest rates to fight downturns. At a hearing in February, Shelton retreated from her previous stance and said she “would not advocate going back to a prior historical monetary arrangement.”