#Trump’s Federal Reserve nominee closer to approval after key Senate vote

A Senate committee on a 13-12 party-line vote has approved President Trump’s nominee to the Federal Reserve — a longtime Fed critic who favors a return to the gold standard.

Following her approval by the Senate Banking Committee, Judy Shelton will now face a vote by the full Senate, the final step before she joins a board she has lambasted in the past for having too much authority and political independence, a situation she called “quite unhealthy.”

Shelton, a conservative economist, was criticized by Democrats and even some Republicans during a contentious hearing in February.

But other Republicans on the Committee gave her praise.

“I am confident that her deep understanding of the Fed’s monetary policy toolkit, monetary history and commitment to maintaining Fed independence will serve the Fed well,” Banking Chair Mike Crapo (R-Idaho) said before Tuesday’s vote.

An economic advisor to Trump during his 2016 campaign, Shelton would be one of 19 interest-rate-setters at the Fed.

But critics worry that if Trump is reelected in November he could name her to succeed Fed Chair Jerome Powell in 2022, giving the Trump ally power over US monetary policy, Politico reported.

The president has a history of lashing out at Powell for declining his demands to lower interest rates.

“China, the European Union and others have been manipulating their currencies and interest rates lower, while the U.S. is raising rates while the dollars gets stronger and stronger with each passing day – taking away our big competitive edge. As usual, not a level playing field,” he tweeted in July 2018, well before the coronavirus pandemic slammed the US economy.

Shelton’s own views on interest rates have moved in lockstep with Trump’s. She has also expressed skepticism over the Fed’s need to set policy independently from the president and Congress.

The power of the Fed chair has come into focus during the worsening coronavirus pandemic.

Powell has met frequently with Treasury Secretary Steven Mnuchin to craft a credit rescue for the economy, and has urged lawmakers both privately and publicly to do more to help out regular Americans hurt by job loss.

Earlier, the committee approved fellow Trump nominee Christopher Waller by a 18-7 vote.

The US abandoned the gold standard, a system in which currency is backed by gold, in 1933 during the Depression when Congress enacted a resolution nullifying the right of creditors to demand payments in gold.

President Franklin Delano Roosevelt declared a nationwide bank moratorium in order to prevent a run on the banks by consumers lacking confidence in the economy, and also barred banks to pay out gold or to export it.

With Wires