Barring a surprise on Capitol Hill, the Federal Reserve’s Board of Governors is about to get its most controversial and contentious new member in decades.
The U.S. Senate is
Shelton, 66, a former informal adviser to Trump, was long known for her advocacy of a return to the gold standard, ultra-hawkish views on inflation and opposition to federal deposit insurance. She provoked
She has also
Former Fed officials and a group of prominent economists, including seven Nobel Prize winners, signed
Amid the outcry it was unclear whether Shelton had enough support among Republican senators to be confirmed. Democrats have said they will unanimously oppose her, meaning four Republican “no” votes could block her path.
With three GOP senators opposing Shelton and Florida Republican
Several Democrats missed Monday’s votes, and Vice President-Elect
Before it adjourns in December, the Senate might also approve the nomination of
If both are confirmed it would bring the Board of Governors to a full complement for the first time since 2013.
It would also mean that Trump had selected five of seven governors at the Fed and elevated a sixth,
Yet Trump never bent the Fed to his will. All of his previous successful picks could be described as mainstream, and during most of Trump’s term they resisted his calls to lower interest rates as much and as quickly as he wished, despite his frequent
Shelton is more unpredictable, especially with Trump leaving the scene. “I would welcome the chance to challenge the status quo at the Fed,” she told Bloomberg Businessweek in
But the power of an individual governor to influence monetary policy is limited, particularity if they are at odds with the leadership. In addition, though governor terms last for 14 years, Shelton has been nominated to fill a term that expires in 2024.
The biggest threat Shelton presented to Fed insiders and to financial markets -- the possibility that Trump might try to make her chair in 2022 when Powell’s term expires -- has evaporated with Trump’s failure to win a second term.
Waller, who has a doctorate in economics, is seen as a highly qualified insider, though one ready to challenge consensus views on the Federal Open Market Committee, the Fed’s rate-setting panel.
He helped develop the argument from St. Louis Fed President
Waller has been nominated for a term that expires in 2030.
(Updates with details of Grassley’s quarantine in second paragraph.)
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