WASHINGTON — The nomination of Judy Shelton, one of President Trump’s picks for the Federal Reserve, received a lift on Wednesday after a key Republican senator who had expressed skepticism about her qualifications said he would support her candidacy.
Senator Patrick J. Toomey, Republican of Pennsylvania, said in a statement that he would back Ms. Shelton. That leaves two Republicans on the Senate Banking Committee who have expressed doubts about Ms. Shelton — Senator Richard C. Shelby, Republican of Alabama, and Senator John Kennedy, Republican of Louisiana.
Mr. Shelby remains undecided, his office said. Mr. Kennedy is also undecided, according to a person with knowledge of his thinking.
Ms. Shelton’s path to the Fed board remains difficult. She would need a simple majority vote by the Banking Committee to move onto confirmation by the full Senate, meaning opposition by only one Republican on the panel could potentially dash her chances of moving forward. The committee has 13 Republicans and 12 Democrats, and it is unclear that any of the Democrats would support her bid.
But Mr. Toomey’s support is notable and comes after Ms. Shelton assuaged some of his concerns. Mr. Toomey had expressed serious worries about her nomination, describing as “dangerous” her previously stated view that the Fed should pay attention to foreign exchange rates in setting monetary policy.
“Since the hearing, I have corresponded and spoken further with Dr. Judy Shelton about her views on monetary policy,” he said in the statement. “She clarified to me that she will oppose using monetary policy for the purpose of devaluing the dollar.”
In her letter, Ms. Shelton said that “it would not be appropriate” for the Fed to react “directly” to the foreign exchange behavior of other countries.
In the past, Ms. Shelton has said that it is worth examining what effect central banks have on currency. Last year, she accused other central banks of “cheating, really, through currency devaluation.” Asked if the United States should follow suit, she said yes.
“We have the European Central Bank, Bank of Japan, People’s Bank of China, potentially the Bank of England, all of them devaluing against our currency,” Ms. Shelton said in August 2019 on CNBC. “It would be nice to be virtuous in a vacuum, but I don’t think we have that luxury.”
Ms. Shelton, 65, has also been a contentious pick in other ways. She has a history of supporting the gold standard, has questioned the need for the Fed and has changed her policy views significantly since Mr. Trump, for whom she served as an unofficial campaign adviser, took office.
Economists and former central bankers have also raised concerns about Ms. Shelton’s nomination. Her changing policy views — she used to support higher interest rates, but flipped to support lower rates around the time Mr. Trump took office — suggest that she could operate with an eye on the White House, they say.
She is nominated alongside Christopher J. Waller, the research director at the Federal Reserve Bank of St. Louis and a much less hot-button selection.
Source: Economy - nytimes.com
