MNI POLICY: White House Sends 2 Fed Nominees To Senate

By Evan Ryser

     WASHINGTON (MNI) - President Donald Trump is sending long-delayed Federal

Reserve Board of Governors nominations of Judy Shelton and Christopher Waller to

the Senate for confirmation, according to an announcement from the White House

on Thursday.

     Shelton, a former adviser to President Trump's 2016 presidential bid and

controversial economist who most recently served as the U.S. executive director

at the European Bank for Reconstruction and Development, and Waller, the

research director and executive vice president of the St. Louis Fed, were

originally named as potential nominees by Trump in early July in the form of a

tweet.

     Shelton has been nominated to a term expiring in Jan. 2024 and Waller to a

term expiring in Jan. 2030. 

     Shelton has previously questioned the Fed's dual mandate to maximize

employment and achieve low and stable prices. She has also publicly discussed

returning the U.S. to the gold standard, a move that many mainstream economists

and voting senators believe would damage the economy and handcuff the Fed in the

event of a recession or other crisis.

     After being nominated by the President, each potential Fed governor heads

to the Senate, where the Banking Committee schedules and holds a confirmation

hearing before going to the full Senate where a simple majority vote is need for

confirmation.

     Since the start of his presidency, Trump has moved to reshape the world's

most powerful central bank, already appointing four of the current five seats on

the Board, including Chair Jerome Powell, Vice Chair Richard Clarida, and

Governors Randal Quarles and Michelle Bowman.

     Trump's wide berth to reshape the central bank has so far seen a collection

of comparatively mainstream economists and centrist Republicans at the urging of

advisers such as Treasury Secretary Steven Mnuchin.

     Trump, however, has recently had a string of failed Fed nominees.

     Trump nominated Marvin Goodfriend in November 2017 but the conservative

economist's nomination failed to win support in the Senate among Democrats, and

when Republicans broke ranks with Trump the nomination was put on shaky ground.

It eventually lapsed without a full Senate vote.

     Nellie Liang, who worked at the Fed as a research economist and directed

the Office of Financial Stability, was nominated in September 2018. Liang

withdrew herself as a nominee in January 2019, after months passed without the

full Republican-led Senate granting her a hearing. 

     Trump has since considered more fringe figures, showing support for Stephen

Moore and, later, Herman Cain, a former pizza executive who dropped his bid for

the 2012 Republican presidential nomination amid sexual harassment allegations. 

     Both Cain and Moore later withdrew their names from the nomination process

after it became clear confirmation in the Senate was in doubt over their

backgrounds and qualifications.

--MNI Washington Bureau; +1 202 371 2121; email: evan.ryser@marketnews.com

[TOPICS: MMUFE$,M$U$$$]