2-8-18 12:10 PM EST | Email Article
By David Harrison 

The U.S. Senate Banking Committee voted along party lines Thursday to advance the nomination of Marvin Goodfriend for a spot on the Federal Reserve's board of governors.

If the full Senate approves his nomination, Mr. Goodfriend would take one of the four vacant seats on the Fed's seven-member board.

Before the 13-12 vote, Sen. Sherrod Brown (D., Ohio) said he was troubled by Mr. Goodfriend's concern about rising inflation in the aftermath of the financial crisis. He also said he was concerned that Mr. Goodfriend had paid "lip service" to the Fed's independence.

"It ultimately rang hollow," Mr. Brown said.

The vote suggests Mr. Goodfriend's nomination could face a challenge in the full Senate, which Republicans control with 51 of 100 seats.

Democrats pressed Mr. Goodfriend during his confirmation hearing last month about the accuracy of his economic predictions. In particular, they criticized him for calling on the Fed to raise rates in the aftermath of the financial crisis, warning that inflation could rise dangerously high.

Inflation has undershot the Fed's 2% target for much of the past five years.

Mr. Goodfriend also has urged more congressional oversight of the Fed and said the central bank should adopt a mathematical target to set monetary policy.

At his confirmation hearing in January, Mr. Goodfriend said a policy rule would help enhance Fed transparency, but insisted he is committed to the central bank's independence. When asked whether he thought the Fed should have followed his advice to begin raising interest rates in 2012, he said, "No, I don't," but added that his remarks were being taken out of context.

President Donald Trump nominated Mr. Goodfriend in November. Two of the president's other Fed nominees, Chairman Jerome Powell and Randal Quarles, vice chairman for supervision, won Senate confirmation with bipartisan support.

The committee also advanced the nomination of Jelena McWilliams to lead the Federal Deposit Insurance Corp. Sen. Elizabeth Warren (D., Mass.) was the only recorded no vote. The committee also voted unanimously to advance the nomination of Thomas Workman to be a member of the Financial Stability Oversight Council.

Write to David Harrison at david.harrison@wsj.com

 

(END) Dow Jones Newswires

February 08, 2018 12:10 ET (17:10 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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