Soft-Spoken Shelton Stirs Alarm Over Views as She Nears Fed Seat

For a soft-spoken and unfailingly polite figure, Judy Shelton is inspiring no shortage of fear in Washington right now, at least in certain circles.

The libertarian think-tank veteran moved a step closer to joining the Federal Reserve’s Board of Governors when the Senate Banking Committee on Tuesday approved her nomination to that post by President Donald Trump. Unless four Republicans emerge to oppose her confirmation when it reaches the full Senate, she will soon have a seat, and a vote, on one of the world’s most powerful policy making bodies.

So what’s all the fuss?

In short, she’s viewed suspiciously by many in central banking circles for policy views that are well outside the mainstream -- including a history of admiration for the gold standard -- and for being a political loyalist who might bend to Trump’s will. Shelton appeared to abandon her long-time advocacy for ultra-tight monetary policy when she emerged as a Fed candidate, publicly aligning herself with the president’s calls for lower interest rates.

What’s at Stake

If confirmed as a governor, she’d have the power of her vote for a term that expires in 2024. But with a declared fealty to Trump’s economic agenda, she could be favored by the president to take the Fed’s top job when Chair Jerome Powell’s term expires in 2022, if Trump is re-elected in November.

That said, if a victorious Trump promotes her to chair, she’ll face another Senate confirmation process. Were she approved, she would still have to persuade her colleagues to back her on policy.