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Judy Shelton testifies before Congress in February. Photo: Tom Williams/CQ-Roll Call via Getty Images

President Trump's controversial Fed pick Judy Shelton appears to be blocked from joining the central bank's board, for now — a dramatic turn of events, marred by two senators who were expected to support her, but were in quarantine for COVID-related concerns.

Why it matters: Some Republicans broke ranks and opposed Shelton, who in the past has endorsed fringe economic policies and reversed her beliefs to be more in line with those of Trump. Vice President-elect Kamala Harris cast a crucial vote against Shelton on Tuesday, with the final tally coming out to 50-47.

Yes, but: Sen. Mitch McConnell changed his vote to "no" — a strategy that could revive Shelton's nomination down the line.

Details: Shelton's last hurdles to confirmation looked like a lock late last week when Sen. Mitch McConnell invoked cloture on her nomination. That is until Sen. Chuck Grassley (R-Iowa) said Tuesday that he was exposed to the coronavirus, forcing him to quarantine and miss the vote. Sen. Rick Scott was also absent as he quarantines.

  • On Monday, Sen. Lamar Alexander (R-Tenn.) came out against Shelton, but he was planning to be absent from the vote regardless.
  • Sens. Mitt Romney and Susan Collins voted against Shelton. Democrats unanimously opposed the nomination.

The big picture: All but one member of the Fed's seven-member board has been nominated by Trump.

  • Shelton is another setback for the president who's failed to fill the remaining two open slots on the Fed thanks to a string of unsuccessful candidates who have been unable to move forward — including the late Herman Cain and Stephen Moore.

What to watch: Still no word on a full Senate vote on Christopher Waller, director of research at the St. Louis Fed and the far less controversial candidate nominated by Trump.

Go deeper

Dion Rabouin, author of Markets
20 hours ago - Economy & Business

San Francisco Fed chief says Fed must do better on inequality

San Francisco Fed president Mary Daly. Photo: Nick Otto/Washington Post via Getty Images

While the Fed chair has downplayed and even denied the central bank's role in ratcheting up income inequality and the K-shaped recovery, other Fed members are taking responsibility and calling for change.

What happened: San Francisco Fed president Mary Daly took the subject head-on in a speech earlier this week, saying the Fed "will need to do more to ensure that the benefits of low interest rates and rising asset valuations can spread widely throughout the economy."

Dan Primack, author of Pro Rata
8 hours ago - Technology

TikTok gets more time (again)

Illustration: Aïda Amer/Axios

The White House is again giving TikTok's Chinese parent company more to satisfy national security concerns, rather than initiating legal action, a source familiar with the situation tells Axios.

The state of play: China's ByteDance had until Friday to resolve issues raised by the Committee on Foreign Investment in the U.S. (CFIUS), which is chaired by Treasury secretary Steve Mnuchin. This was the company's third deadline, with CFIUS having provided two earlier extensions.

Federal judge orders Trump administration to restore DACA

DACA recipients and their supporters rally outside the U.S. Supreme Court on June 18. Photo: Drew Angerer via Getty

A federal judge on Friday ordered the Trump administration to fully restore the Deferred Action for Childhood Arrivals program, giving undocumented immigrants who arrived in the U.S. as children a chance to petition for protection from deportation.

Why it matters: DACA was implemented under former President Obama, but President Trump has sought to undo the program since taking office. Friday’s ruling will require Department of Homeland Security officers to begin accepting applications starting Monday and guarantee that work permits are valid for two years.

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