Bessent hires Judy Shelton as Treasury adviser
Shelton, whose Federal Reserve board nomination stalled under Trump, joins Treasury Secretary Bessent's team as an adviser.
Published
Treasury Secretary Bessent has hired Judy Shelton as an adviser. Shelton was nominated by President Trump to the Federal Reserve's board but her nomination did not advance.
Shelton has long argued for a rules-based monetary framework, including ideas tied to a gold-linked currency, and has been a vocal critic of the Fed's independence from the executive branch.
The hire comes as the Fed's own officials have been pushing back against calls for sharply lower rates. Fed Vice Chair Musalem has said strong demand for capital from AI investment and government borrowing is likely to keep interest rates higher than in the past, and separately said a timely return to 2% inflation is key, pointing to a growing hawkish tone among Fed officials. Fed governor Waller has said more rate hikes are needed, though not necessarily in consecutive meetings. Long-dated Treasury yields have stayed elevated since hitting a high on October 1.
Shelton's appointment places a longtime advocate of looser, rules-based monetary policy inside Bessent's orbit, adding a pressure point on a Fed that has spent recent weeks defending its inflation-first stance against Trump's repeated calls for lower rates. It does not change the near-term rate path Fed officials have signaled, but it fits a pattern from the administration of placing personnel sympathetic to looser policy around the edges of the Fed rather than through it. With long-dated yields already elevated on hike expectations and heavy issuance, the appointment adds to the political backdrop without altering the Fed's course so far.