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US Senate banking committee to vote on Federal Reserve Board nominees


US Senate banking committee to vote on Federal Reserve Board nominees

US REUTERSBrendan McDermid
Photo: REUTERS/Brendan McDermid

The US Senate Committee on Banking, Housing and Urban Affairs will today vote on two of President Donald Trump’s nominees to the Federal Reserve Board, economists Judy Shelton and Christopher Waller.

The seven-member Federal Reserve Board (FRB) is part of the twelve-seat Federal Open Market Committee (FOMC). Five seats of the FOMC rotate between the governors of the country’s twelve Federal Reserve Banks. The FOMC and other Fed committees ultimately set monetary policy in the US.

Previous nominees have faced stiff Senate opposition or have failed in their nomination bids due to opposition from the commercial banking sector. As the chief researcher for the St. Louis Federal Reserve Bank, Waller is a traditional insider pick for the role and is not expected to face opposition from the Senate. Shelton however does face opposition, as she has expressed interest in negative interest rates and is an advocate of returning to the gold standard. These policies stand in stark contrast to over fifty years of US policy and the fiscal vision of current Fed Chairman Jerome Powell. If Trump wins re-election, there is a good chance Shelton is a “chair in waiting” to replace Powell in 2022 and will be able to influence looser US monetary policy for the duration of the 14-year term.

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