Republicans open to Trump’s new Fed picks

Republican senators whose opposition tanked President Donald Trump’s Federal Reserve picks earlier this year sounded optimistic Tuesday about the president’s replacement choices.

Trump last week announced his intention to nominate Judy Shelton, a member of the board of directors of the European Bank for Reconstruction and Development, and economist Christopher Waller, who is research director at the Federal Reserve Bank of St. Louis, for vacant seats on the Fed’s Board of Governors.

“I’m pleased that they are economists, because I think it’s important to have people with a background in economic study as opposed to people whose background is politics,” Utah Republican Sen. Mitt Romney told reporters. “We have an upgrade in the nominees and I’ll be looking at their record to see whether I can support them.”

Trump’s announcement comes as he continues to wage an unprecedented pressure campaign on the Fed — the world’s most powerful central bank — for interest rate cuts heading into his 2020 campaign.

“Strong jobs report, low inflation, and other countries around the world doing anything possible to take advantage of the United States, knowing that our Federal Reserve doesn’t have a clue!” Trump tweeted last week.

His earlier picks, former Republican presidential candidate Herman Cain and conservative economic commentator Stephen Moore, each withdrew from consideration earlier this year before being formally nominated. Moore was previously a CNN contributor.

Iowa Republican Sen. Joni Ernst told CNN she was still vetting the new nominees, but “as far as I’ve been able to read through their bios, they’re solid people.”

“I do want to find out a little bit more about Ms. Shelton’s policy because it seems to have shifted a little bit over the last several years,” she added, referring to Shelton’s reversal from her previous opposition to keeping interest rates low in the aftermath of the 2008 financial crisis.

Shelton, formerly an economic adviser for Trump’s presidential campaign, is more controversial than Waller. She has criticized Fed leadership and has long been a vocal advocate of returning to a gold standard.

“It’s up to the Senate to do advice and consent and I’m sure we’ll explore all those ideas,” Texas Republican Sen. John Cornyn told CNN of Shelton’s position on gold. “I know some of this can become controversial.”

Her views could make confirmation more difficult, Republican senators acknowledged.

North Dakota Republican Sen. Kevin Cramer, a key opponent to Cain’s nomination, said Shelton’s opinions are “fine,” but she “doesn’t have the same safe pedigree that Waller has.”

“Waller’s got a broad intellectual and research scope that I think speaks well of his credentials and his intellectual curiosity. In her case, she’s had a little more stronger opinions, but I think it’s fine,” Cramer told reporters. “One of the things I like about her skepticism in the first place about whether we even ought to be being so aggressive with monetary policy is that I think sometimes the best regulator is the one that’s skeptical of their own power. And I think that’s healthy.”

“You wouldn’t want the entire board to be made up of those people,” he added. “Diversity of thought is what makes for a good deliberative body and their independence does not require neutrality.”

Alabama Republican Sen. Richard Shelby, a member of the committee that evaluates Fed nominees, said that members have not yet had time to learn about Shelton and Waller, who have not yet been formally nominated.

“We need qualified people. That’s a very high, a high bar on the Fed,” he said.

Asked if the choices were better than Moore and Cain, Shelby replied: “The previous two were lacking in a lot of things.”