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One of President Trump's picks to help lead the Federal Reserve got a bipartisan grilling on Capitol Hill today. Judy Shelton faced tough questions over her past support for the gold standard and her position on interest rates, which, as NPR's Scott Horsley reports, seems to shift with the political winds.
SCOTT HORSLEY, BYLINE: A decade ago, when the U.S. was trying to dig out of the Great Recession, the Fed responded by cutting interest rates and pumping money into the economy. That's central banking 101, but Judy Shelton was critical. Now Shelton supports cutting interest rates even though the economy's in good shape and unemployment is already near a 50-year low.
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CHRIS VAN HOLLEN: There does seem to be a pattern of total flip-flopping.
HORSLEY: Democratic Senator Chris Van Hollen complains Shelton's views on monetary policy seem to be guided less by economic conditions than by which political party controls the White House.
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VAN HOLLEN: The only pattern that I see here is a political one, not an economic one, and I think that's what concerns a lot of people.
HORSLEY: Shelton's recent calls for the Fed to lower interest rates echo those of President Trump, but she tried to reassure the Senate Banking Committee she won't just be a mouthpiece for the president if she's confirmed to the central bank's board of governors.
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JUDY SHELTON: I pledge to be independent in my decision-making, and frankly, no one tells me what to do.
HORSLEY: Trump has repeatedly tried to tell the current Fed chairman Jerome Powell what to do, though Powell insists he and his colleagues are guided by the economy, not the president's Twitter feed. Shelton says while it's important for the Fed to remain independent, there's nothing wrong with the president or anyone else expressing an opinion.
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SHELTON: What we've seen historically is some Fed chairmen have felt they were being pressured behind the scenes. In some ways, it's refreshing if that's out in the open.
HORSLEY: While the most pointed questions for Shelton came from Senate Democrats, some Republicans on the committee have their own issues with the nominee. Patrick Toomey complained Shelton seemed to push for the Fed to weaken the dollar to boost U.S. exports, a move he warned would just invite retaliation by other countries.
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PAT TOOMEY: I think that's a very, very dangerous path to go down. This beggar thy neighbor mutual currency devaluation is not in our interest.
HORSLEY: Shelton was also quizzed by Senator Richard Shelby about her past support for the gold standard, which the U.S. abandoned half a century ago. She says while the gold standard is a useful historical example, it's not appropriate for today's economy.
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SHELTON: You never go back with money. It keeps moving forward into the future.
HORSLEY: Both Toomey and Shelby said after the hearing they have concerns about Shelton's nomination, and a third Republican on the committee, John Kennedy, said he hasn't decided whether he'll support her. A single no vote from a Republican could torpedo the nomination, assuming the Democrats on the committee are united in their opposition.
A second Trump nominee, Christopher Waller, appears headed for easy confirmation. Waller has a more conventional background as director of research at the St. Louis Fed. Throughout the hearing, Shelton tried to appear conventional, disavowing many of her past statements and writings, but that apparent confirmation conversion just frustrated lawmakers like Catherine Cortez Masto.
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CATHERINE CORTEZ MASTO: So who are we getting? Who are we getting on the board - the woman who wrote extensively and should be proud of it or the woman who sits before us today and is countering everything that she has said in the past?
HORSLEY: You're getting the authentic Judy Shelton, the nominee answered, to which Democratic Senator Doug Jones replied, that's what bothers me. Scott Horsley, NPR News, Washington. Transcript provided by NPR, Copyright NPR.
