Fed nominees both recommended for confirmation by panel – but animus, controversy over one continues

(In the video, Senate Banking Committee Chairman Mike Crapo (R-Idaho) and Ranking Member Sherrod Brown (D-Ohio) make their respective cases for recommending for confirmation (or denying the recommendation) for Federal Reserve Board Nominee Judy Shelton during a hearing July 21 of the hearing. Shelton’s nomination was approved along strict party lines, 13-12.)

Nominees for two seats on the Federal Reserve Board were recommended for confirmation by a Senate panel Tuesday, but only after sharp and conflicting comments by the two leaders of the committee from both political parties.

The nomination of Judy Shelton as a central bank governor was recommended to the full Senate for confirmation on a 13-12, strictly party-line vote. (Another nominee, Christopher Waller, was recommended for approval on a vote of 18-7.)

Shelton’s nomination has become a lightning rod for both sides of the political aisle, with Republicans vowing to support the nominee of President Donald Trump, and Democrats vowing to defeat her based on past comments about reinstituting the gold standard, questioning the effectiveness of federal deposit insurance, and the Fed’s independence from political influence.

In his opening statement in support of Shelton, committee Chairman Mike Crapo (R-Idaho) said essentially that Shelton had either walked back or disavowed past comments that have raised Democrats’ ire. “I’m confident that her deep understanding of the Fed’s monetary policy toolkit, monetary history and commitment to maintaining Fed independence will serve the Fed well in its ongoing efforts to stabilize markets and toward its mission of price stability and full employment,” he said.

He noted that the previous nominees to the Fed board by Trump have demonstrated their own commitment to the Fed’s independence and its mission. “And I have no doubt that Dr. Shelton and Dr. Waller will do the same,” he said.

Democratic Ranking Member Sherrod Brown (D-Ohio) was less amendable to Shelton’s nomination. “Dr. Shelton doesn’t believe in an independent Fed; our economic crisis would be even worse if she were sitting on the board today,” Brown asserted. “She wants to bring back the gold standard and get rid of deposit insurance, in spite of what she says when questioned at the last minute by the chair of the committee. Our country’s tried that before – we know how it’s turned out. Just look to the Great Depression, and think how much worse the 2007-2008 financial crisis would have been when hundreds of banks failed.”

He also charged that Shelton has flipped-flopped on a number of positions (such as on monetary policy and tariffs) only to match the positions of Trump, alleging she did so just to win and keep Trump’s favor.

The nominations of both Shelton and Waller now move to the full Senate for consideration.

 

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