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Judy Shelton testifies before the Senate Banking Comittee in February. Photo: Sarah Silbiger/Getty Images

Judy Shelton looks to be within striking distance of getting a seat on the Federal Reserve Board.

Why it matters: Her political background is unprecedented for a Fed candidate, and threatens the central bank's critical apolitical stance.

Our thought bubble, per Axios’ Felix Salmon: Of all the tools in the Fed’s arsenal, its independence from political influence is the most powerful and most important.

Driving the news: The former Trump campaign advisor is likely to cinch a position as one of the crucial decision-makers at one of the most powerful economic institutions in the world.

  • A full Senate vote on Shelton’s nomination is expected to happen as soon as next week.
  • Sen. Lisa Murkowski (R-Alaska) revealed she would support Shelton’s candidacy on Thursday — all but guaranteeing Shelton for now has the votes to be confirmed for the Fed governor post.

Where it stands: Shelton’s economic stance is unclear to Fed watchers, as she’s flip-flopped between unconventional views before her candidacy to post-election statements in line with President Trump.

  • "The hallmark of the Powell Fed is flexibly policymaking, but Shelton has taken that flexibility to a whole new level over the course of her career. It doesn't inspire confidence," Lou Crandall, a decadeslong Fed watcher and chief economist at Wrightson ICAP, tells Axios.

Case in point: Shelton long supported a return to the gold standard. But she said at a hearing earlier this year that she "would not advocate going back to a prior historical monetary arrangement."

  • She questioned the importance of the Fed's political independence in an op-ed last year. But at the onset of her congressional hearing, she nodded at the Fed’s "political independence and operational autonomy."
  • She criticized the Fed for cutting interest rates to near zero in the depths of the financial crisis. But then advocated for a steep rate cut last year — at the same time Trump was calling on Powell to slash rates.

The latest: Shelton‘s fate at the Fed went from possibly doomed when she was first nominated in January to a near lock.

  • Senators on both sides of the aisle were initially skeptical about Shelton. Senate Banking Committee Republicans voiced concern about her non-mainstream views and questioned her ability to uphold the Fed’s political independence, the Washington Post reported at the time.
  • But ultimately in July 2020, all the Republicans on the panel voted to advance Shelton to a full Senate vote.
  • Christopher Waller, a director of research at the St. Louis Fed and the far less controversial candidate nominated by Trump, picked up some Democratic votes. No word yet on a full Senate vote on Waller’s nomination.

The big picture: Earlier this year, concerns about Shelton's candidacy snowballed into fears that, given the right sequence of events, Trump could eventually appoint her to succeed Fed chair Jerome Powell. (That's not likely now since Joe Biden won the 2020 election.)

  • Her seat — which would expire in 2024 — may have little impact among the Fed’s 12-member (if you include Waller’s potential confirmation) voting panel.
  • "Anything she wanted to do outside of convention would be voted down," says Brandon Barford, a partner at research firm Beacon Policy Advisors and former Senate Banking Committee staffer.

The bottom line: Former Treasury official Tony Fratto tweeted, “It’s not just a question of what damage she could do (not much) it’s that it is a discredit to both the Senate AND the Fed. It screams, Nothing at all is serious. Not us. Not you. Not them.”

Go deeper

Trump stock market underperformed Obama's

Data: Yahoo Finance; Chart: Andrew Witherspoon/Axios

U.S. stock markets hit record highs during President Trump's time in office, but mostly underperformed his predecessor.

By the numbers: The stock market selloff that followed the outbreak of the coronavirus pandemic wiped out three and a half years' worth of market gains for Trump. As of March 23, 2020, the S&P 500 had lost 1.5% since Trump's first day in office.

Tina Reed, author of Vitals
2 hours ago - Health

Gottlieb: CDC hampered U.S. response to COVID

Illustration: Shoshana Gordon/Axios

The CDC moved too slowly at several points in the coronavirus pandemic, ultimately hindering the U.S. response, former FDA Commissioner Scott Gottlieb writes in a new book, Uncontrolled Spread.

The big picture: The book argues that American intelligence agencies should have a much bigger role in pandemic preparedness, even if that's sometimes at the expense of public health agencies like the CDC.

911's digital makeover

Illustration: Annelise Capossela/Axios

A next-generation 911 would allow the nation's 6,000 911 centers to accept texts, videos and photos.

The big picture: U.S. emergency communications have remained stubbornly analog, but Congress is about to take another run at dragging 911 into the digital age.