Saturday , April 4 2020

GOP lawmakers target Trump’s Fed nominee

Bloomberg

President Donald Trump’s pick for the Federal Reserve Board, Judy Shelton, came under fire from Republican lawmakers, signalling trouble ahead for her nomination.
Speaking to reporters after a Senate Banking Committee hearing on her appointment, Senators Richard Shelby from Alabama, Patrick Toomey from Pennsylvania and John Kennedy from Louisiana
all said they had not decided if they would vote for her confirmation.
A single Republican “no” vote on the committee is enough to block the Shelton nomination, assuming Democrats — who were pointed in their criticism of her at the hearing — are united in opposition.
“I think the Fed should be independent and we should have mainstream people on there,” Shelby, the committee’s longest-serving member, told reporters. “I don’t think she’s a mainstream economist. She’s different. Another voice.”
The former economic adviser to Trump’s presidential campaign is a controversial pick because of her past comments on the gold standard, the dollar, and whether the Fed’s congressional mandate to pursue maximum employment and stable prices is meaningful.
Shelton’s confirmation could place a Trump loyalist at the very heart of the central bank as she’s publicly supported the president’s policies. Trump has repeatedly attacked the Fed and its chairman, Jerome Powell, for not doing more to boost the economy. If the president is re-elected in November and Shelton joins the board, she could be Trump’s pick to succeed Powell as chair in 2022.
Speaking to reporters outside the hearing room, Toomey said Shelton’s answers didn’t eliminate his concerns about her, adding that he hasn’t made up his mind whether to support her nomination.
During his questioning of her, he voiced concern about what he saw as Shelton’s past suggestions that the Fed respond to other countries’ attempts to devalue their currencies by pursuing a similar path of its own.
“I just want to stress this is a dangerous path to go down,” Toomey said.
While saying that Shelton was academically qualified for the Fed job, Shelby said in the hearing he was troubled by some of her past writings and questioned her on whether she backs a return to the gold standard as a value of money.
“You never go back with money,” Shelton replied, adding that it can be beneficial to look at something that worked in past decades.
Trump’s other Fed nominee, economist Christopher Waller, faced few questions at the hearing. He is a Ph.D. economist and head of research at the St. Louis Fed.
‘Nutty Ideas’
Louisiana lawmaker Kennedy said he wasn’t bothered by apparent shifts in some of Shelton’s views.
“At the same time, and I’m not suggesting this is the case with either one of the nominees, nobody wants anybody on the Federal Reserve that has a fatal attraction to nutty ideas,” he told reporters.
Responding to questions about whether Shelton’s nomination was in jeopardy, White House spokesman Judd Deere said “the nominations of Judy Shelton and Christopher Waller are not being pulled. Both were in front of the Banking Committee today and the White House expects both to be confirmed by the Senate to the Federal Reserve.”
Fed Independence
Shelton answered multiple challenges on her allegiance during the hearing, saying: “I pledge to be independent in my decision making. Frankly, no one tells me what to do.”
She also came under fire from Democrats about her suitability for the role. Senator Sherrod Brown, an Ohio Democrat, pressed Shelton on her controversial views in his opening remarks at the hearing.
“Ms. Shelton has too many alarming ideas,” Brown said, adding that she’s also “flip flopped” on her views. “A vote for Ms. Shelton is a vote against Fed independence,” he said.
Panel chairman Mike Crapo, a Republican from Idaho, closed the meeting with some words of support for Shelton, telling her “you have been very solid in defending your writing and your positions.”
He later told reporters that a committee vote on the nominations was possible after Congress returns from next week’s recess, but he wasn’t sure.
“I’m going to see how it plays out.”

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