The US Senate is preparing to vote as early as next week to confirm Judy Shelton, Donald Trump’s nominee to the Federal Reserve board and a fierce critic of the US central bank.
John Cornyn, the Texas senator and second highest-ranking Republican in the upper chamber, told reporters about the vote on Thursday. Mitch McConnell also filed for cloture on Ms Shelton’s nomination, taking a first procedural step towards a final vote in the coming days.
Ms Shelton has long been considered a controversial choice for the Fed board, because of her staunch loyalty to Mr Trump, which has called into question her independence, as well as her sympathy for the gold standard. She also compared the Fed’s role in setting monetary policy to the Soviet Union’s economic planning.
If Ms Shelton is confirmed, it would allow Mr Trump to leave his imprint on the US central bank before he exits the White House in January.
Another Trump nomination to the central bank’s board, Christopher Waller, an economist at the St Louis Fed, is also pending. He has not encountered any significant opposition, unlike Ms Shelton.
The confirmation of Mr Trump’s two nominees would deny his successor, Joe Biden, an opportunity to quickly reshape the Fed board with his own appointments early on during his administration.
Ms Shelton’s nomination advanced slowly in recent months with several Republicans expressing reservations about her aptitude for the job. But just two of the 53 Senate Republicans, Mitt Romney of Utah and Susan Collins of Maine, expressed strong opposition, keeping alive the prospect that she would be confirmed.
On Thursday, Ms Shelton’s nomination received a further boost when Lisa Murkowski, the Alaska senator, said she would support her nomination.
Democrats have fiercely opposed Ms Shelton’s nomination, asking for another hearing to question her on her views. However, they lack the votes to block her confirmation during the lame-duck session of Congress before a new one is sworn in next year.
“Now more than ever, the Federal Reserve’s independence and stability is absolutely critical to our economic recovery,” Senate Democrats wrote to Mike Crapo, the Republican chair of the Senate banking committee, in July.
“Yet Dr Shelton does not believe that the Federal Reserve should be shielded from political whims, and she has advocated for failed Great Depression-era policies — like a return to the gold standard and the removal of deposit insurance — that would make our economy more volatile,” they said.
Elizabeth Warren, a Democratic senator from Massachusetts and former presidential candidate, slammed Republicans’ move to advance Ms Shelton’s nomination during the final days of the Trump administration.
“Judy Shelton lacks basic knowledge about our banking system — and she makes up for it by pushing fringe economic theories,” Ms Warren tweeted on Thursday. “Her appointment during a recession threatens our economy and the millions of families who are already struggling. The Senate must reject this nomination.”
As one of several Fed governors and members of the Federal Open Market Committee, Ms Shelton’s ability to sway central bank policy would be limited.
But she could nonetheless be a thorn in the side of Jay Powell, the Fed chair, as he tries to steer the economic response to the coronavirus pandemic, including a dovish monetary policy and decisions on the central bank’s emergency credit facilities and financial regulation.