Trump Fed nominees Judy Shelton and Christopher Waller testifyng before the Senate in February. (Photo: Tom Williams/CQ-Roll Call via Getty Images)

The Senate Banking Committee voted on Tuesday to advance Trump's picks to fill the Federal Reserve board, Judy Shelton, and her much less controversial fellow nominee Christopher Waller, for confirmation by the full Senate.

Why it matters: Shelton's nomination is the most contentious in recent memory. Economists and policymakers worry about her record of fringe views and that granting the former Trump campaign adviser a spot on the Fed board would politicize the central bank.

Catch up quick: The Fed has two vacant seats on its 7-governor board. If Waller and Shelton are confirmed, all but one of them will have been nominated by Trump. Current members have more traditional backgrounds for the Fed board.

  • His prior picks to fill the 2 open slots — Nellie Liang, Stephen Moore and Herman Cain — never advanced this far in the nomination process. Marvin Goodfriend’s nomination lapsed before it got a full Senate vote.

Details: The vote to advance Shelton was along party lines. Waller was approved by an 18-7 margin, with some Democrats' support.

  • A few Republican committee members said publicly earlier this year they were wary of Shelton's views, but later said they would support her nomination.

The big picture: A Fed governor can serve a full term of 12 years and plays an important role in key monetary policy decisions.

  • The backdrop: The vote comes in the middle of an economic crisis caused by the pandemic, where the Fed has taken unprecedented action to support key funding markets and the economy.
  • It’s the members of the Fed board who decide on key emergency relief measures like the ones the Fed has announced.
  • Trump has chastised Fed chair Jerome Powell, appointed during his administration, throughout his term. In recent months, he’s praised the Fed for its response to the economic downturn.

What’s next: The full Senate will vote on whether to appoint Shelton and Waller to the Fed board.

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