Sen. Pat Toomey (R-PA) said he’ll support President Donald Trump’s nomination of Judy Shelton for the Federal Reserve Board.
That leaves two undecided Republican senators – Richard Shelby (R-AL) and John Kennedy (R-LA) – on the Senate Banking Committee who could nix the controversial nominee.
Whether Shelton gets a seat among the group of people who set U.S. monetary policy – influencing mortgage rates – depends on one Republican voting “no.”
Shelton has written dozens of books and articles over three decades advocating positions such as a return to the gold standard, a monetary policy abandoned by the U.S. almost five decades ago.
She was opposed to monetary easing in the years after the Great Recession, then reversed course and called for reductions when Trump began demanding the Fed cut rates to below zero last year.
After Trump nominated her in July, Shelton advocated for policy coordination between the Fed and the White House, which would break a decades-long tradition of Fed independence that economists credit with keeping inflation – and mortgage rates – near historic lows.
“It would be in keeping with its historical mandate if the Fed were to pursue a more coordinated relationship with both Congress and the president,” she wrote in a Wall Street Journal column on Sept. 16.
Toomey said during Shelton’s combative confirmation hearing two weeks ago that he was concerned about her past comments indicating she supports the Fed devaluing the dollar in response to devaluations of other currencies.
Toomey said in a statement Wednesday night Shelton addressed those concerns in a letter she sent to him.
“Since the hearing, I have corresponded and spoken further with Dr. Judy Shelton about her views on monetary policy,” Toomey said in the statement. “She clarified to me that she will oppose using monetary policy for the purpose of devaluing the dollar. It would have been imprudent and contrary to statutory authorization for the Federal Reserve to go down this path.”
“Given her assurances,” Toomey said. “I intend to support Dr. Shelton’s nomination.”
No one has voiced opposition to Trump’s other nominee to the Fed board, Christopher Waller, director of research at the Federal Reserve Bank of St. Louis. Waller doesn’t have a track record of controversial economic views.