Fed Alumni Urge Senate Rejection of Fed Nominee Shelton
President Trump has nominated Judy Shelton to one of the vacancies on the Board of Governors of the Federal Reserve System. The nomination recently cleared the Senate Banking Committee and will soon reach the Senate floor. We urge the Senate to reject this nomination.
The undersigned all served on the staffs of either the Board of Governors or the Federal Reserve Banks. We have served in various capacities as economists, lawyers, bank supervisors, and in other professional capacities. We know and appreciate the unique position of the Federal Reserve in our nation’s economy and the need to preserve its nonpartisan approach to its many responsibilities.
The Federal Reserve is a vital part of our government and has been particularly important during our current crisis. The COVID-19 pandemic has required the suspension of much of the nation’s and the world’s economic activity. The Fed’s quick action to provide the markets with the necessary liquidity was crucial to restoring order to those markets and ensuring that the economic crisis that we are enduring did not become much, much worse. However, like the pandemic, the economic challenges persist.
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. She has advocated for a return to the gold standard; she has questioned the need for federal deposit insurance; she has even questioned the need for a central bank at all. 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.
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 late Chairman Paul Volcker was noted for advising new governors that “when you enter this building, you leave your politics at the door.” Sound advice that, from her record, Ms. Shelton is incapable of following.
We urge the Senate to reject her nomination.
[If you are an alum of the Federal Reserve System (Board or FRBanks) and would like to add your name to the letter, please complete this form.]