Rand Paul Says He Will Oppose Marvin Goodfriend's Fed Nomination

Earlier Thursday, the Senate Banking Committee voted along party lines to advance Mr. Goodfriend’s nomination.

Mr. Goodfriend hasn’t attracted any Democratic support. If no Democrat or independent votes to confirm him, the GOP can lose no more than one of its votes in the Senate. Republicans have a 51-49 majority in the chamber, with 47 Democrats and two independents. The GOP’s thin majority has been even more delicate due to the medical absence of

Sen. John McCain

(R., Ariz.), who is being treated for brain cancer.

Last year, Vice President

Mike Pence

broke a 50-50 tie to secure confirmation for a handful of nominations where Republicans joined Democrats in opposition.

It is unusual for the Senate to reject a president’s Fed nominees, especially when the president’s party controls the Senate as it does now. In 2011,

Peter Diamond,

a Nobel Prize-winning economist at the Massachusetts Institute of Technology, withdrew his name from consideration to become a Fed governor after some Republicans on the Senate Banking Committee opposed his nomination.

President

Donald Trump

nominated Mr. Goodfriend in November. The White House’s other Fed nominees, Chairman

Jerome Powell

and

Randal Quarles,

vice chairman for supervision, won Senate confirmation with bipartisan support.

Mr. Paul said he was troubled by Mr. Goodfriend’s past support for tracking cash as it moves in and out of banks.

In academic papers, Mr. Goodfriend has supported pushing interest rates below zero during recessions and advocated charging a fee to take cash out of banks to make negative rates more effective. He has suggested inserting a magnetic strip on bank notes to track them as they enter circulation.

Mr. Paul’s father,

former Rep. Ron Paul,

was a vocal opponent of the idea. On Thursday, the younger Mr. Paul indicated he shared his father’s views on placing magnetic strips on bank notes.

“That doesn’t sound very exciting to me,” he said.

Before Thursday’s 13-12 committee vote to advance Mr. Goodfriend’s nomination,

Sen. Sherrod Brown

(D., Ohio) said he was troubled by the economist’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.

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 after the financial crisis, warning that inflation could rise dangerously high if it didn’t. Inflation has undershot the Fed’s 2% target for much of the past five years.

After the hearing, analysts said Mr. Goodfriend may have hurt his chances at confirmation not because of a poor forecasting record—many economists, including at the Fed, have made such errors in recent years—but because he didn’t provide an accounting for why his projections had proved off the mark.

Mr. Goodfriend has also urged more congressional oversight on the Fed and said the Fed 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.

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