Senate Banking Panel Looks to Advance Trump's Fed Nominees
By Nick Timiraos
The Senate Banking Committee said Friday it would vote on the
nomination of two of President Trump's selections for the Federal
Reserve later this month.
The announcement suggests that Republicans, who have a one-vote
advantage on the panel, are prepared to advance the candidacy of
Judy Shelton, an economic adviser to Mr. Trump during the 2016
campaign whose heterodox policy views led to some resistance from
GOP senators at her Feb. 13 confirmation hearing.
If the committee approves of Ms. Shelton and a second nominee,
St. Louis Fed economist Christopher Waller, they would await a full
Senate vote before joining the central bank's board. The committee
vote is slated for July 21.
All 12 of the Democrats on the banking panel signed a letter to
the committee's chairman, Sen. Mike Crapo (R., Idaho), asking for a
new hearing, given how dramatically the coronavirus pandemic has
altered the economic outlook since Ms. Shelton's confirmation
hearing this winter.
The Fed's seven-member board has played an especially important
role responding to the coronavirus pandemic. The larger Federal
Open Market Committee, which includes the governors plus five
regional bank presidents, votes on interest rate decisions. But it
is the board that decides on the emergency-lending programs the Fed
has established to extend credit to companies, cities and states
since the coronavirus seized up financial markets in March.
Two Republicans on the panel had raised doubts after the
February hearing about Ms. Shelton's candidacy, but later said they
were prepared to support her nomination.
A third Republican remained undecided. "Nobody wants anybody on
the Federal Reserve that has a fatal attraction to nutty ideas,"
said Sen. John Kennedy of Louisiana after the hearing. "Now I'm not
saying that's the case here, but that was sort of the dialectic
Mr. Kennedy had pressed Ms. Shelton at the hearing to respond to
a hypothetical scenario in which the economy slowed sharply and the
unemployment rate jumped to 6.5%,from its reading at the time of
3.5%. Ms. Shelton was initially hesitant to provide specifics,
prompting Mr. Kennedy to press for a more prescriptive answer.
"First, I would make it clear that there are limits to monetary
policy," she said, adding that she would purchase government bonds
and other safe assets to stimulate growth "very reluctantly."
In their letter Friday, Democrats cited the exchange in asking
for another hearing. "We are now in an economic crisis worse than
the one Dr. Shelton was asked about at her confirmation hearing,"
they wrote. "Based on her answers at the hearing, we are deeply
concerned that the situation we are in today would have been worse
if Dr. Shelton were already sitting on the Board of Governors."
Write to Nick Timiraos at firstname.lastname@example.org
(END) Dow Jones Newswires
July 10, 2020 16:57 ET (20:57 GMT)
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