Trump’s Fed Nominee In Danger After 3rd GOP Senator Opposes

Outgoing President Donald Trump's conservative nominee for the Federal Reserve is in danger today after Sen. Lamar Alexander, R-Tenn., said he would not support Judy Shelton joining its board of governors.

The surprising announcement puts the controversial economist’s confirmation in doubt during the the final months of the Trump presidency.

Alexander, who sent his statement to The Washington Post, becomes the third Republican senator to oppose Shelton. Sens. Susan Collins, R-Maine, and Sen. Mitt Romney, R-Utah, both said over the summer that they would vote "No."

Shelton’s unorthodox views and questionable credentials had drawn broad opposition from economists and many former Fed officials. In a Wall Street Journal editorial in 2009, she wrote, “Let’s return to the gold standard.” And in another Journal column from 2019, she said the Fed should “pursue a more coordinated relationship with both Congress and the president,” which would undermine the central bank’s independence.

The Senate Banking Committee on approved Shelton in July 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 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 seven-member board of governors. Waller was approved 18 to 7, with all dissenting votes from Democrats.

Sen. Sherrod Brown from Ohio, the top Democrat on the committee, charged that Shelton had flip-flopped on many of her positions to align them with Trump. Shelton had, for example, criticized the Fed for holding short-term interest rates at nearly zero under President Barack Obama but now supports very low rates, as Trump has urged. Shelton has also long supported free trade and even called for a North American currency union but has since backpedaled on those views.

“She was an interest rate hawk and opposed tariffs on China, but now that President Trump doesn’t like those things, magically, neither does she,” Brown said.

The Associated Press contributed to this report

This report compiled by InsuranceNewsNet staff.