U.S. Senate panel set to advance Trump Fed nominee Shelton, backer of
gold standard
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[July 21, 2020]
(Reuters) - Judy Shelton, U.S.
President Donald Trump's controversial pick to serve on the Federal
Reserve's interest-rate-setting panel, is expected to win narrow backing
from the Senate Banking Committee Tuesday, allowing her nomination to
advance to consideration by the full Senate.
A vote is expected around 2 p.m. eastern.
A second nominee to the Fed Board, St. Louis Federal Reserve bank
research director Christopher Waller, is also expected to win the
panel's support.
Shelton, a conservative economist who has argued the nation would be
better off returning to the gold standard and as recently as 2017
criticized the Fed's power over money and financial markets as "quite
unhealthy," drew criticism from Democrats and even some Republicans
during a contentious hearing in February.
That was before the coronavirus pandemic sent the U.S. economy into a
tailspin, and the Fed responded by slashing interest rates to zero,
buying trillions of dollars of bonds, and rolling out an unprecedented
set of credit backstops that give the Fed a bigger footprint than ever
in U.S. financial markets.
An economic advisor to Trump during his 2016 campaign, Shelton would be
just one of 19 interest-rate-setters at the Fed, meaning her influence
at the central bank would be limited.
Still, critics worry that if Trump is reelected he could name her to
succeed Fed Chair Jerome Powell in 2022, giving the Trump ally sway over
U.S. monetary policy.
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Federal Reserve Board building on Constitution Avenue is pictured in
Washington, U.S., March 19, 2019. REUTERS/Leah Millis/File Photo
Powell had drawn Trump's anger for resisting rate cuts that the
president demanded.
Shelton's own views on interest rates have moved in lockstep with
Trump's. She lambasted easy money before Trump's presidency but
supported it after he took office. She has also expressed skepticism
over the Fed's need to set policy independently from the president
and Congress.
The power of the Fed chair has come into focus during the pandemic.
Powell has met frequently with Treasury Secretary Steven Mnuchin to
craft a credit rescue for the economy, and has urged lawmakers both
privately and publicly to do more to help out regular Americans hurt
by job loss.
Senate Democrats launched a #StopShelton campaign on Twitter, but
Republicans looked set to use their 13-12 majority on the panel to
move her nomination to the full Senate, where a handful of moderate
Republicans will hold the deciding votes on her confirmation.
(Reporting by Ann Saphir; Editing by David Gregorio)
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