Trump Fed nominee Shelton comes under sharp questioning
Trump has often blamed the Fed for a rising value of the dollar, which he argues have hurt exports. Shelton has often written about the need for a “sound” dollar
Federal Reserve board nominee Judy Shelton on Thursday faced sharp questioning from Senate Banking Committee members who challenged her independence from President Donald Trump and characterized her thinking about money and economics as far outside the mainstream.
As the hearing progressed at least one Republican committee expressed doubts about Shelton, with Pennsylvania Republican Sen. Patrick Toomey calling her views about using the Fed to manage the value of the dollar "a very very dangerous path to go down."
Trump has often blamed the Fed for a rising value of the dollar, which he argues have hurt exports. Shelton has often written about the need for a "sound" dollar.
Shelton, who has been sharply critical of the Federal Reserve in her writings and commentary, pledged broadly that she would be an independent thinker who would work well with existing Fed officials.
"I pledge to be independent in my decision making and frankly no one tells me what to do," Shelton said, deflecting questions about her past writings that, for example, characterized the Fed's setting of a short-term interest rate as similar to Soviet Union central planning.
But Senate Democrats said flatly they did not trust her.
"Shelton has flip-flopped on too many issues to be confirmed," said Ohio Democratic Sen. Sherrod Brown. "She is far outside the mainstream. She is outside the ideological spectrum."
A second nominee, Christopher Waller, a career economist who is currently the research director of the St. Louis Federal Reserve, faced few questions about his views.
The pair were nominated by Trump to fill vacant seats on the Federal Reserve's Board of Governors and in opening statements pledged to support the central bank's mission of full employment and price stability. They must be confirmed by the Senate.
Trump has blamed the Fed for holding back economic growth by not lowering rates far or fast enough, and his two picks are seen as part of an effort to shape monetary policy more to his liking.
Both Waller and Shelton released opening statements on Wednesday ahead of their hearings that offered few clues about their views on monetary policy beyond promising to promote policies that support financial stability and help the Fed meet its goals of full employment and price stability.
The two emphasized the Fed's accountability to Congress, which oversees the central bank.
But Waller leaned harder on the notion of Fed independence, noting he had studied the subject as an academic before joining the central bank. He also noted the time he had spent with members of the community discussing how Fed policy affects them, adding that the input he received "affected how I thought about policy and its consequences."
Shelton, a frequent critic of the Fed who since her nomination has expressed support for lower rates, did not repeat that view in her statement.
"I hope to contribute intellectual diversity as a Governor and would work collegially to promote sound money and sound finances," she said.
The phrase "sound money" is often associated with the gold standard or some other system tying the dollar to the value of goods.