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Trump’s Fed board choice calls for rate reduction

President Trump’s nominee for the Federal Reserve Board, Judy Shelton, is calling on the Fed to lower interest rates by 50 basis points as soon as next week.

“Even a 50-basis-point reduction would still keep the Fed funds rate well above zero,” Shelton told the Washington Post in an e-mail Monday. “I would have voted for a 50-basis-point cut at the June meeting.”

Shelton made the comments ahead of the Federal Open Market Committee’s meeting scheduled for July 30 through 31. Wall Street had been expecting a quarter-point reduction in rates ahead of Shelton’s comments.

The Fed, which would not cut rates without signs of a slowing economy, has said slowing global growth and trade policy uncertainty have weighed on the US economy.

“I do think global conditions and the clear monetary paths being signaled by other central banks are a factor in considering how much our own Federal Reserve might choose to lower on July 31,” Shelton said.

Trump has also been pushing for the Fed to lower borrowing costs for months, first tweeting barbs at Fed Chairman Jerome Powell for raising interest rates too aggressively in 2018, and then for not yet moving to lower them in 2019.

“The Fed raised & tightened far too much & too fast,” Trump said in a series of tweets Monday.

“It is far more costly for the Federal Reserve to cut deeper if the economy actually does, in the future, turn down! …they missed it (Big!). Don’t miss it again!” he said.



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