Some central bankers and top economists see Judy Shelton , a prominent Federal Reserve critic who has been nominated by President Trump for a seat on the Fed’s Board of Governors, as a potential threat to the central bank’s prized independence
Ms. Shelton, President Trump’s nominee to the Fed, has unconventional views. But it is a recent policy reversal that is stoking the most concern.has not materialized). “When you have an economy primed to grow because of reduced taxes, less regulation, dynamic energy and trade reforms, you want to ensure maximum access to capital,” she told The Wall Street Journal’s editorial page . She has also questioned the basis of the Fed’s independence from the White House, even as she acknowledged that central bankers believe that distance shores up their credibility. “I don’t see any reference to independence in the legislation that has defined the role of the Federal Reserve for the United States,” she said, in a question-and-answer session in Washington last year. Related legislation “demands that the Board of Governors of the Federal Reserve work hand-in-hand with Congress and the President to meet certain strategic economic goals for the United States.” Ms. Shelton would hardly be the first appointment to the seven-member Fed Board with a heavy partisan lean. President Ronald Reagan, who was not a fan of Fed independence, stacked the Fed with enough supporters to challenge then-Chair Paul Volcker. But current Fed officials robustly defend the central bank’s independence from politics, and Mr. Powell often says that interest rates are set with an eye toward the economy alone because the Fed avoids “mistakes of character.” History suggests, and some research shows , that politically-tied central bankers can favor policy that hurts the economy in the longer run. Ms. Shelton is expected to face pointed questioning at her confirmation hearing on Thursday before the Senate Banking Committee and must ultimately win confirmation from the full Senate. Bankers are skeptical of Ms. Shelton’s nomination. One senior financial services executive said that her questioning of the Fed’s independence, her skepticism of the need for deposit insurance, and her track record of advocating an anchored currency are areas that would draw lawmaker questions. Congress has been in the Fed’s corner during much of Mr. Powell’s tenure. When the chair testifies on Capitol Hill, as he did this week, he is assured that the Fed’s independence is valued. Senators have previously shot down possible Trump administration appointments to the Fed’s board that were viewed as partisan and problematic: conservative commentator Stephen Moore and former pizza executive Herman Cain were talked about for the job but never formally nominated after lawmakers expressed concern about their past statements and actions toward women. Lawmakers have approached Ms. Shelton’s nomination more cautiously. Senator Kevin Cramer, Republican of North Dakota, who had cooled on Mr. Cain, Mr. Waller and Ms. Shelton “well qualified.” Senator Mike Rounds, Republican of South Dakota, made a case for diverse views at the Fed while questioning Mr. Powell at a Senate Banking hearing on Wednesday. Past Fed nominees have scuppered their chances during their Senate testimonies. But Ms. Shelton has already passed Senate confirmation once, when Mr. Trump nominated her as the American envoy to the European Bank for Reconstruction and Development. She is a practiced public speaker. If Ms. Shelton is confirmed for the Fed but never elevated to the chairmanship, she will have more limited room to shake things up since individual governors hold just one vote on monetary policy, alongside their six fellow board members and five regional Fed presidents. But there are ways in which she could still exert influence. Narayana Kocherlakota, a former president of the Federal Reserve Bank of Minneapolis who was himself a contrarian at the Fed, noted that Mr. Waller and Ms. Shelton could form a coalition. While no governor has voted against a monetary policy decision since 2005, Mr. Waller “is his own person,” said Mr. Kocherlakota, who said he knows him from years of conferences. “The Chair would listen to a bloc of two governors, simply because he wouldn’t want two governors to dissent.” Governors have also historically used public remarks to shape broader policy discussions. Such activism can help to rein in groupthink — or it can be used to serve a political agenda. “If Dr. Shelton comes onto the board of governors and just represents a different point of view, there is no harm to it and possibly some good,” said Adam S. Posen, president of the Peterson Institute for International Economics. “If, however, this is an attempt to politicize the board’s discussion and possibly undermine the chair,” then “that would be a loss for the whole country.” Our 2020 Election Guide Read more: The New York Times
That’s a great thing....audit the Fed!! this is a trash article. if anyone in their right mind aside from liking or hating trump this is the best thing for every person in our country. why should we allow a few private bankers to dictate our economy and make money out of nothing and hold us in debt forever. wake up
EndTheFed Such a BS hit piece. Sounds like it was written by a 'Fabian' nut job. We really don't need a fed. Do you understand what Williams (NYFED) said here in the minutes....... Would he nominate an independent mind? Everything trump touches dies. 'Vet.' 😂. Right. Hint, the Fed is not a government unto its self... thy are not kings and queens
Does anyone actually think that the Fed is independent? Of course it is. Nothing is done by this admin to actually help. Stop claiming the Fed is independent and this is one thing that you surely can’t blame Trump for.
Oil briefly flashed a warning signal that shows traders are worrying about oversupply - Business InsiderBrent crude futures momentarily entered full contango, a signal that the market is worried about oversupply.
When an entire sentence is in parentheses, any final punctuation goes inside the parentheses, not outside them. jeannasmialek If the NYT is talking against her she must be Great. Shocker. Why else would Trump pick her? What independence ? Prominent? Potential? Unconventional? (waits for Carrying-Water-For-Trump-to-English translation) Oh, loud, definitive and unhinged, respectively
There is zero independence left in our current government. Zero. If Trump controls the Fed Res then we are surely headed to ruin across all boards....
Fed’s Powell talks to Congress about outlook for U.S. economy: live blogFed Chairman Jerome Powell will testify to Congress about the U.S. economic outlook
Stock market live updates: Dow turns negative, Trump blames Powell for fall, Boeing dropsLive updates of what's moving the market, including the latest on Under Armour, the coronavirus and the Fed.
Watch Fed Chair Jerome Powell speak to Congress liveLiveSquawk “Stop spending so much money. Thank you for your time” LiveSquawk Pretty sure I'd rather chew off my own fingernails. LiveSquawk listen to lies again
Cnbc @CNBCWATCH: Fed Chair Powell testifies on the state of monetary policy before Congress. Powell? Thats Maxine Waters! Get it right. A central bank has no place in our democracy! In other words 'repo on'.
Keith Urban, Blake Shelton, Tanya Tucker, more play rip-roaring benefit for country Hall of FameIf you've ever noticed Keith Urban on an awards show, it's probably been a shot of him in the audience…