Shelton's Fed Board Nomination Stalled at Senate Threshold... Opposition Votes and COVID Complications

Procedural Vote Rejected on 17th... Impact of Disagreements Within Republican Party
Approval Unlikely Due to Tight Schedule..."Approval Window Narrows"

Judy Shelton Fed Board Nominee
[Photo by AP Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] The confirmation process for Judy Shelton, a nominee for the U.S. Federal Reserve (Fed) Board of Governors who is considered a 'code appointment' by U.S. President Donald Trump, has stalled at the Senate hurdle. Some Republican senators opposed her, and several senators were unable to participate in the vote due to self-quarantine from COVID-19, resulting in a failure to secure the necessary votes for confirmation.

According to Bloomberg and others on the 17th (local time), the U.S. Senate held a procedural vote to decide whether to proceed with the confirmation vote for Shelton. The result was 47 in favor and 50 against. Although the Republican Party holds the majority with 53 seats out of 100 in the Senate, they failed to gain the upper hand.

Republican Senators Mitt Romney and Susan Collins voted against Shelton as they had previously announced. Additionally, Senators Charles Grassley and Rick Scott suddenly entered self-quarantine due to possible COVID-19 exposure, causing them to miss the vote. This was an unexpected variable after Senate Republican Leader Mitch McConnell initiated the confirmation process last week.

If all Republican senators except those who announced opposition had voted in favor, the vote would have been tied 50-50, in which case Vice President Mike Pence, as Senate President, could have cast the deciding vote to approve the nomination. The Democratic Party even involved Senator Kamala Harris, who was elected Vice President, to participate in the vote to block Shelton's confirmation.

According to foreign media reports, Senate Majority Leader McConnell initially supported Shelton but changed his vote to oppose in order to retain the authority to restart the confirmation process under Senate rules. This is interpreted as leaving open the possibility of resuming the confirmation process once the quarantined senators return.

However, a variable is the soon-to-be-changed Arizona senator. Following a special election held earlier this month, Republican Senator Martha McSally will be replaced by Democrat Mark Kelly as early as the 30th of this month. This change would be unfavorable for Shelton's confirmation, so a quick re-vote is necessary, but scheduling is difficult due to the Thanksgiving holiday next week.

Shelton was nominated by President Trump and has been controversial since her nomination due to her past advocacy of the gold standard and criticism of the Fed's interest rate policies. Having served as the U.S. Executive Director of the European Bank for Reconstruction and Development (EBRD), she has been a lifelong advocate of the gold standard, a fixed exchange rate system linking currency to gold. She strongly criticized the Fed's low-interest-rate policies in the past but showed a supportive stance toward low rates after joining Trump's campaign, raising concerns about potential damage to the Fed's political independence.

The Fed Board consists of seven members, including Chair Jerome Powell, with two vacancies currently. Christopher Waller, an economic expert and former Vice President of the Federal Reserve Bank of St. Louis, who was nominated alongside Shelton, still awaits confirmation but has support from some Democratic senators, making his confirmation likely at this time.

White House Press Secretary Judd Deere stated, "We still believe Judy Shelton will be reconsidered and confirmed."