US Senate advances controversial Trump nominee for Fed board

The Federal Reserve Board building in Washington, DC. PHOTO: AFP

WASHINGTON (AFP) - Republicans on a US Senate committee overrode opposition from Democratic lawmakers on Tuesday (July 21) and advanced the nomination of conservative economist Judy Shelton to the Federal Reserve board.

Shelton was an adviser to President Donald Trump during his 2016 election campaign and her criticism of the central bank attracted the ire of the Democratic minority in the Senate.

In a party-line vote, the Senate Banking Committee sent Shelton's nomination to the full chamber for confirmation.

"I am confident that her deep understanding of the Fed's monetary policy toolkit, monetary history and commitment to maintaining Fed independence will serve the Fed well in its ongoing efforts to stabilise markets, and toward its mission of price stability and full employment," Senator Mike Crapo, the committee chair, said.

The committee's top Democrat Senator Sherrod Brown strongly objected to Shelton's nomination, calling her "a threat to our economy, our democracy, our country," and saying "her ideas are far outside the mainstream."

Shelton has expressed support for returning to the gold standard, where the currency is tied to a fixed quantity of gold, believing that such a system would guarantee stability for exchange rates and prevent the United States' commercial partners from manipulating their currencies.

Last year, she published an editorial in the Wall Street Journal criticising the Fed's approach to combatting the global financial crisis in 2008, and has been an outspoken supporter of low interest rates.

Trump was as well, frequently criticising Fed Chair Jerome Powell by name for not lowering the bank's benchmark lending rate before the central bank cut it to 0-0.25 per cent as the coronavirus pandemic erupted in March.

Shelton's nomination came after Senate Republicans rejected two candidates Trump tapped for Fed board, conservative economic commentator Stephen Moore and former pizza executive Herman Cain.

The Senate committee also advanced the nomination of Christopher Waller, executive vice president and research director of the St Louis Federal Reserve, whom Trump had also nominated.

Waller was approved with some Democratic support.

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