One section of Warren’s letter includes the heading “History of Inaccurate and Radical Statements Related to Economic Policy and the Role of the Fed." Warren wrote that Shelton’s past statements “strongly suggest that you lack the capacity to exercise the care, consistency, and political independence expected of members of the [Fed] Board of Governors.”
Shelton is a conservative scholar with a PhD in business administration who served as an adviser to Trump’s 2016 campaign. She is best known for predicting the collapse of the Soviet Union and advocating for the United States to return to something akin to the gold standard, a highly controversial position that many economists say would curtail the government’s ability to fight a recession.
Trump formally nominated Shelton and economist Christopher Waller this week to fill the remaining seats on the Fed’s board of governors. The past four people Trump signaled he wanted to nominate to the Fed’s board, a group that included businessman Herman Cain and conservative commentator Stephen Moore, failed to win much support, and their nominations floundered.
Senate Banking Committee Chairman Sen. Mike Crapo (R-Idaho) told a Bloomberg reporter this week that he wants to move “as quickly as I can” on the two Fed nominees. This could happen within a month, a rapid timeline considering how long the seats have been vacant.
The Fed’s board of governors has seven slots, though two are empty.
Warren gave Shelton a deadline of Feb. 13 to respond to the detailed questions. Shelton did not respond to a request for comment.
Shelton recently questioned the need for the Fed to be independent of the White House, going against a widely held view that apolitical central banks make the best decisions for the economy. She has also described the Fed as “very close to central planning" and questioned whether the United States still needs a central bank at all.
Shelton has also seemingly flip-flopped on a number of her views since she became a contender for Trump’s nomination, especially regarding how low interest rates should be.
Trump has repeatedly bashed the Fed for keeping interest rates too high. He has demanded that the Fed consider making the U.S. benchmark interest rate negative to match the European Union and Japan. The United States has never had a negative rate before and many experts say that should only be attempted in dire economic times.
Before the 2016 election, Shelton said negative interest rates “completely [undermine] the principles of free markets.” Lately, she has advocated for lower rates “as expeditiously as possible,” arguing that the central bank should not impede Trump’s pro-growth agenda and that the U.S. should not be at a disadvantage to other nations.
Shelton told The Washington Post in an interview this summer that she does not talk to the president and that she has a long track record of independent views. She said she has done many media interviews in recent months because “I believe you might as well know what I think, because I wouldn’t change.”
Trump’s top economic adviser Larry Kudlow has repeatedly expressed his confidence that Shelton will be approved by the Senate. The Fed’s next meeting to decide on interest rates is March 18. If confirmed, Shelton would be one of 12 members of the Fed’s committee that decides on rates.
The Fed left the U.S. benchmark interest rates unchanged this week at a level just shy of 1.75 percent. All members of the committee voted in favor of keeping the rate steady.