'Very, very dangerous path': GOP senators skeptical of Fed nominee Shelton after hearing

Jim Saksa, CQ-Roll Call on

Published in Business News

WASHINGTON -- Facing opposition to her joining the Federal Reserve Board over questions about her political independence, among other issues, Judy Shelton refused to budge from some of her controversial positions at a confirmation hearing Thursday.

Her stance appeared to disappoint a few Republicans on the Senate Banking Committee, including Patrick J. Toomey of Pennsylvania, Richard C. Shelby of Alabama and John Kennedy of Louisiana. Each said they remained concerned after the hearing, but declined to say how they would vote.

With unanimous Democratic opposition a safe assumption, Shelton cannot afford to lose a single Republican on a panel split 13-12 in favor of the GOP. If she advances out of committee, just four Republican no votes could block her confirmation on the floor.

The committee heard from two nominees for the Fed board: Shelton, an economic adviser to President Donald Trump's 2016 campaign and the president's choice to represent the U.S. on the European Bank for Reconstruction and Development, and Christopher Waller, a high-ranking economist at the Federal Reserve Bank of St. Louis.

Shelton has espoused a range of views considered outside the mainstream of macroeconomics.

She has called federal deposit insurance a questionable government subsidy that distorted financial markets. Most economists credit it with restoring faith in the banking system following the Great Depression. She has advocated a return to a gold standard and floated the idea of the U.S. joining a multinational currency union, ala the euro.


On Thursday, she softened or repudiated some of those stances in response to senators' interrogation. She affirmed deposit insurance's importance, and when asked about the Fed's independence, said, "I pledge to be independent in my decision making and frankly no one tells me what to do."

But Shelton stressed the Fed's accountability. "Along with the political independence and operational autonomy granted to the Federal Reserve comes an obligation to be wholly accountable both to Congress and to the public," she said.

She said that she merely looked to the gold standard for historical guidance. "I would not advocate going back to a prior historical monetary arrangement," she said.

Pointing to Shelton's past advocacy for a global currency, ranking member Sherrod Brown, D-Ohio, took aim at persuading his Republican colleagues to join him in opposition. "That kind of globalist -- probably no better word than that -- that kind of globalist ideology doesn't belong anywhere near our fiscal and monetary policy," he said.


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