Treasury's Bessent hires Trump's controversial former Fed board pick, Judy Shelton, as adviser

• Shelton's 2019 Fed nomination was rejected by bipartisan Senate opposition due to her views on Fed independence, support for the gold standard, and questioning whether the U.S. needs a central bank
• She will focus on evaluating financial conditions in China, though she is not known as a China expert; her background includes books on international monetary regimes and Soviet economics
• The counselor position does not require Senate confirmation, unlike the seven vacant Senate-confirmed Treasury positions following recent departures

Summary

Key Appointment:

Treasury Secretary Scott Bessent has hired Judy Shelton as a counselor to advise on currency policy, with particular focus on evaluating China's financial conditions. Shelton's appointment does not require Senate confirmation.

Background:

Shelton's 2019 nomination to the Federal Reserve Board was blocked by a bipartisan Senate coalition, including all Democrats and some Republicans. Her rejection stemmed from controversial views including support for the gold standard, questioning the need for a central bank, and concerns about Fed independence.

Professional Credentials:

• Former senior fellow at the Independent Institute and Hoover Institution at Stanford University
• Ph.D. in business administration from University of Utah
• Author of "Money Meltdown" (1988) and "The Coming Soviet Crash" (1989)
• Specializes in analyzing nations' monetary and financial conditions and their impact on exchange rates
• Not widely recognized as a China expert

Market Context:

The appointment occurs amid significant personnel turnover at Treasury. According to a Wall Street Journal report, seven Senate-confirmed officials departed the department through August, with only one position subsequently filled. Bessent also recently hired David Zervos, former Jeffries chief market strategist, as another counselor—a position that similarly bypasses Senate approval.

Implications:

Shelton's focus on China currency policy signals potential shifts in U.S.-China economic relations and Treasury's approach to monitoring Chinese financial conditions. Her unconventional monetary views may influence Treasury's currency policy stance, though the extent of her impact remains unclear given her advisory role.