Fed Nominee Shelton Faces Tough Questioning Before Senate Committee

WASHINGTON — Judy Shelton, President Trump’s nominee for the Federal Reserve, faced tough questioning from lawmakers over whether she would protect the Fed’s independence during a tense confirmation hearing before the Senate Banking Committee on Thursday.

Skepticism toward Ms. Shelton appeared to be bipartisan, with Democrats suggesting she might be politically tied to Mr. Trump and some Republicans questioning her monetary views.

Ms. Shelton, 65, has been a controversial pick for the job. She has a history of supporting the gold standard, has questioned the need for the Fed, and has changed her policy views significantly since Mr. Trump, for whom she served as an unofficial campaign adviser, came into office.

Senator Mike Crapo, the Idaho Republican who chairs the committee, sought to portray Ms. Shelton as a solid pick for diversity who would defend Fed independence despite her ties to Mr. Trump. Democrats quizzed her on whether she felt Mr. Trump’s frequent attacks on Fed Chair Jerome H. Powell are inappropriate.

“Frankly, no one tells me what to do,” Ms. Shelton said at one point. “I don’t think it’s the job of the Federal Reserve to accommodate political agendas” and “the Fed operates independently, as it should.”

But she indicated that she does not have a problem with Mr. Trump’s frequent criticisms of Mr. Powell. The president regularly blasts the Fed Chair on Twitter and in public remarks, faulting him for not doing more to boost the economy and pushing him to cut interest rates more aggressively.

“I do believe that every American, every member of Congress” and “our President” have the right to criticize the Fed, she said, adding later that “in some ways, it’s refreshing that it is out in the open.”

Ms. Shelton was asked repeatedly about her history of supporting a gold standard, a monetary approach that the United States abandoned half a century ago because it was deemed impractical. Mainstream economists generally say that returning to a gold-backed currency would be economically damaging, if it were even possible.

“You never go back, with money,” Ms. Shelton said during the hearing, suggesting she was surprised that people portrayed her as supporting a return to a traditional gold standard. At one point Ms. Shelton said that she “would not advocate going back to a prior historical monetary arrangement.”

Ms. Shelton started a 2009 Wall Street Journal editorial with the line: “Let’s go back to the gold standard.”

Republicans expressed some concerns about Ms. Shelton’s views.

Senator Patrick J. Toomey, a Republican from Pennsylvania, called Ms. Shelton’s view that the Fed should pay attention to foreign exchange rates “dangerous.”

“I remain concerned,” he told reporters outside of the hearing, saying that he has not yet made up his mind on Ms. Shelton’s nomination. He said he would be willing to oppose one of Mr. Trump’s nominees if he thinks the “nominee is unsuitable for the job.”

Ms. Shelton must first be confirmed by the Senate Banking Committee and then by the full Senate in order to win a seat on the Fed Board.

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