Senate panel approves Trump’s Fed nominee

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WASHINGTON (AP) — The Senate Banking Committee on Tuesday approved President Donald Trump’s choice of Judy Shelton for the Federal Reserve board of governors 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.

A spokesman for Senate Majority Leader Mitch McConnell declined to comment on when the full Senate would take up the nominations of Shelton and Waller. The vote could take place any time this year, including after the November election.

Shelton’s approval by the Senate Banking Committee represents a turnaround from February, when several senators had expressed reservations about her after a hearing.

Republican Senator Pat Toomey of Pennsylvania said he would support Shelton after she had reassured him that she would not seek to lower the value of the dollar. 

As a member of the Fed’s powerful board of governors, Shelton would vote on the Fed’s rate decisions and on banking regulation. The governors also vote on whether to institute emergency measures, such as the Fed’s decision in March to start buying corporate bonds for the first time.

Shelton served as an economic adviser to Trump’s transition team and then as U.S. executive director for the European Bank for Reconstruction and Development, which helps former communist countries transition to market economies. She holds a Ph.D. in business administration from the University of Utah.

Waller drew much less attention at the same February hearing where Shelton appeared. Some of his research examines the benefits of the central bank’s independence from political interference.