Trump nominee Shelton blasted by Fed alums in open letter

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A group of former Federal Reserve officials and staffers, including former Vice Chairman Alan Blinder, published an open letter Thursday calling on the U.S. Senate to reject President Donald Trump’s nomination of Judy Shelton to the central bank’s Board of Governors.

“Ms. Shelton’s views are so extreme and ill-considered as to be an unnecessary distraction from the tasks at hand,” the letter said.

The letter was also signed by two former reserve bank presidents and three former division directors on the board’s staff. It has 38 current signatories, all of whom worked at the central bank at some point.

Judy Shelton
Judy Shelton

The Senate Banking Committee advanced Shelton’s nomination on a party-line vote in July, and she now awaits approval by the full Senate. No vote has been scheduled for her or fellow nominee Christopher Waller, research director at the St. Louis Fed.

Shelton didn’t immediately respond to an email seeking comment.

Two Republican senators, Mitt Romney of Utah and Susan Collins of Maine, have said they will vote against Shelton, and Lisa Murkowski of Alaska has said she was undecided, making Shelton’s fate uncertain. Her confirmation would be blocked if four Republicans vote against her and Democrats remain unified in their opposition.

Shelton, an informal adviser to Trump’s 2016 campaign, has drawn significant criticism for policy views well outside the mainstream — including a history of admiration for the gold standard — and for being a political loyalist who might bend to Trump’s will.

She appeared to abandon her advocacy for ultra-tight monetary policy when she emerged as a Fed candidate, publicly aligning herself with the president’s calls for lower interest rates.

The letter assailed her past advocacy for the gold standard, her one-time opposition to federal deposit insurance and past remarks calling into question the need for a central bank.

“Ms. Shelton has a decades-long record of writings and statements that call into question her fitness for a spot on the Fed’s Board of Governors,” the letter said. “Now, she appears to have jettisoned all of these positions to argue for subordination of the Fed’s policies to the White House — at least as long as the White House is occupied by a president who agrees with her political views.”

Other prominent signatories to the letter included Cathy Minehan, former president of the Boston Fed; Gary Stern, former president of the Minneapolis Fed; Edwin Truman, former director of the division of international finance; and William English, former director of the division of monetary affairs.

Bloomberg News
Monetary policy Federal Reserve FOMC Donald Trump
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