Judy Shelton, U.S. executive director for the European Bank for Reconstruction and Development, speaks during an interview in Washington, D.C., U.S., on Wednesday, May 29, 2019.
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One of President Donald Trump’s possible picks for the open seats on the Federal Reserve board said in an interview that, if appointed, she would want to see interest rates all the way down to 0% in one to two years.
Judy Shelton said she “would lower rates as fast, as efficiently, as expeditiously as possible,” according to a report from The Washington Post on Wednesday.
Shelton, who served as an economic adviser for Trump during his 2016 campaign, told the Post that she had spoken with the White House about a role on the Fed’s board. Trump is currently looking to fill two vacant seats.
She would be fulfilling a call that Trump has made for over a year. The president has lambasted Chairman Jerome Powell multiple times for raising rates when Trump thought he should have cut. Despite Trump’s accusations that the Fed has “gone crazy” in its monetary policy decisions, Powell has repeatedly stated that the central bank’s decisions are not influenced by any political pressure.
Trump has also reportedly considered removing Powell as leader of the Fed, a move which is likely not legally possible. Cowen said in a note to investors earlier on Wednesday that Fed governor Lael Brainard is “the only governor that is clearly more dovish than Powell” if Trump were to try more ways to remove Powell.
“Elevating Brainard would be the only option as we don’t see any of the other governors as more inclined than Powell to cut interest rates,” Cowen said.
However, Cowen cautioned that – although Trump may still try to remove Powell – “we are with the consensus that the President is unlikely to try to demote Federal Reserve Chairman Jerome Powell given the uncertainty on whether such an action is legal.”
Read the full report by The Washington Post here.
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