- Central bank independence is widely seen as essential to a healthy economy and financial markets.
- But Judy Shelton, a likely nominee for a top position at the Federal Reserve, has repeatedly signaled a desire to challenge that.
- In a new Wall Street Journal op-ed, Shelton said the Fed should “pursue a more coordinated relationship with both Congress and the president.”
- Visit the Markets Insider homepage for more stories.
Central bank independence is widely seen as essential for a healthy economy and financial markets. But Judy Shelton, a likely nominee for a top position at the Federal Reserve, has repeatedly signaled a desire to challenge that.
In a new Wall Street Journal op-ed, Shelton said the Fed should “pursue a more coordinated relationship with both Congress and the president.” She argued those institutions could work together to achieve economic goals, including on trade.
“With no consistent free-trade principles governing global monetary policy, the Fed must take proactive steps to ensure that the U.S. can compete successfully,” Shelton wrote.
Such viewpoints are likely to curry favor with President Donald Trump, who announced in July that he intended to nominate Shelton. Trump has repeatedly pressured the Fed to drastically lower interest rates and to pursue other measures that could juice the economy.
“Jay Powell and the Federal Reserve Fail Again,” Trump wrote on Twitter after the Fed lowered interest rates by a quarter percentage point Wednesday. “No “guts,” no sense, no vision! A terrible communicator!”
In an interview with Business Insider in June, Shelton said it would be “superficial” to answer yes or no to whether the central bank was an independent institution. She pointed to administrative operations between the Fed and the Treasury Department, calling the agencies “fiscally incestuous.”
“That’s a hot-button issue,” she said. “It’s the kind where people will say, oh, she doesn’t believe in the independence of the Federal Reserve. So then, it will take a longer answer. Whereas I suppose, it’s easy to say no, it’s 100% independent, and they should never even talk to each other. That it should be more strict, and I don’t think they should be allowed to read newspapers. You could say that. But I don’t think that’s realistic.”
Shelton did not immediately respond to an email Wednesday afternoon. The White House did not offer comment on when Shelton could be formally nominated.