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MNI POLICY:Senator Warren Says Fed Nominee Shelton Unqualified

By Evan Ryser
     WASHINGTON (MNI) - Senator Elizabeth Warren took aim at Judy Shelton, one
of President Donald Trump's nominees to the Fed, questioning her capacity to
fill the position and her economic expertise and judgement, according to a
six-page letter released Friday.
     Warren, a leading Democratic presidential candidate and current member of
the Republican-dominated Senate Banking Committee that has jurisdiction over Fed
nominations, accused Judy Shelton of having a history of "inaccurate and
radical" statements related to economic policy and the role of the Fed.
     Trump formally nominated Shelton and economist Christopher Waller this week
to fill the remaining two seats on the Fed's board of governors.
     Shelton is expected to face a contentious confirmation in the coming weeks.
Senate Banking Committee Chair Mike Crapo told a Bloomberg reporter that he
wants to move "as quickly as I can" on the two nominees.
     Warren, giving a deadline of Feb. 13, asked Shelton several questions to
clarify her views on federal deposit insurance, the Fed as a "Soviet" style
power, the origins of the 2008 financial crisis, her 2017 call for a "disruptive
voice on the Fed," and the gold standard.
     "You now support substantial cuts to the federal funds rate and have argued
for eliminating the Fed's practice of paying interest on excess bank reserves.
This drastic switch in your opinion to reflect President Trump's preferences
suggests that your judgments are informed by political opportunism rather than
sound economic analysis," Warren wrote.
     Trump has used the presidential bully pulpit and Twitter to criticize the
Fed for not delivering quick rate cuts into negative territory.
     Warren said Shelton's history of statements "strongly suggest that you lack
the capacity to exercise the care, consistency, and political independence
expected of members" of the Fed.
     On the presidential campaign trail in December Warren pledged to appoint
Federal Reserve Board members "who believe in full employment, who recognize
that inflation fears have been overblown for years, and who are willing to let
wages grow."
--MNI Washington Bureau; +1 202 371 2121; email:
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