More than three dozen Fed alumni urge Senate to reject Judy Shelton

More than three dozen former Federal Reserve officials are urging senators to reject President Trump’s nomination of Judy Shelton to the central bank’s board of governors.

In an open letter published Thursday, 38 former officials of the Fed and its reserve banks asked senators to reject Shelton’s nomination to serve as one of the most influential U.S. economic policymakers.

“The Fed has serious work ahead of it. While we applaud the Board having a diversity of viewpoints represented at its table, Ms. Shelton’s views are so extreme and ill-considered as to be an unnecessary distraction from the tasks at hand,” the former Fed officials wrote.

The signatories include economists, attorneys and advisers that served the Fed’s board of governors in D.C. and several presidents and former senior officials of Federal Reserve banks. The highest ranking person to sign the letter is Alan Blinder, who served as vice chairman of the Fed board of governors from 1994 to 1996.

Trump nominated Shelton to the board of governors in January despite widespread opposition from economists and financial policy experts. If confirmed, Shelton would be one of up to seven votes on Fed regulatory decisions and up to 14 votes on monetary policy moves.

Shelton’s critics say her past support for the gold standard, inconsistent views on monetary policy, and questioning of the necessity of Fed independence disqualify her to join the central bank. Her fierce support for Trump’s economic agenda also makes her a likely candidate to replace Fed Chair Jerome Powell — whose term expires in 2022 — if the president is reelected.

“Ms. Shelton has a decades-long record of writings and statements that call into question her fitness for a spot on the Fed’s Board of Governors,” they wrote. “Now, she appears to have jettisoned all of these positions to argue for subordination of the Fed’s policies to the White House — at least as long as the White House is occupied by a president who agrees with her political views.”

Despite early concerns among Senate Republicans and a brutal confirmation hearing, Shelton won the approval of the Senate Banking Committee for a full Senate vote on her nomination. Her supporters argue that she will bring a fresh perspective to a central bank that has historically been derided for groupthink. 

Even so, Shelton still faces a narrow path to confirmation. Each member of the Senate Democratic Conference is expected to vote against her nomination and two GOP senators — Mitt Romney (Utah) and Susan Collins (Maine) — have announced their opposition. That means the opposition of two more Senate Republicans would effectively doom her nomination.