Who is Judy Shelton, Trump's newest Fed board pick?

On Tuesday evening, President Trump – who frequently assails the Federal Reserve for its interest rate policy – tapped conservative economist Judy Shelton to serve on the seven-member board of the U.S. central bank.

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Shelton, who serves as the U.S. executive director at the European Bank for Reconstruction and Development, was one of two candidates that Trump announced in a series of tweets, alongside Christopher Waller, a long-time official at the Federal Reserve Bank of St. Louis -- who’s viewed by experts as a more conventional pick.

It’s possible that Shelton's nomination – she still needs to be confirmed by the Senate – could raise some questions on Capitol Hill, given some of her more unorthodox economic beliefs (it’s worth noting, however, that Shelton previously secured Senate support for her role with the European Bank for Reconstruction and Development).

For instance, Shelton is an advocate of the gold standard. Essentially, she favors a monetary system in which the dollar is directly tied to the fixed supply of precious metals; the value of the currency is based on the agreed upon price for gold. No country currently uses this system (the U.S. stopped relying on it in 1933).

“In terms of gold being involved, some people may think of that as a throwback, but I see it as a sophisticated, forward-looking approach because gold is neutral and it’s universal,” Shelton, who served as an economic adviser to the Trump campaign, told Fortune in August 2016.

She went on to explain: “If this practice starts to spread to even more countries, you would start to see the semblance of a future stable exchange rate system with those exchange rates being determined by what market forces believe about the future value of those currencies.”

If she passes in the Senate, Shelton also seems likely to back a Trump-favored interest rate cut. In a recent interview with the Wall Street Journal, she agreed with Trump about whether the Fed should lower interest rates: “The answer is yes.”

The president recently renewed his criticism of the Fed -- and its Chairman Jerome Powell -- pressing policymakers to lower the benchmark federal funds rate. He’s repeatedly claimed the stock market would be “10,000 points higher” if interest rates hadn’t been raised during the Fed’s December meeting (the fourth time they were hiked in 2018).

Interestingly, while President Barack Obama was still in the Oval Office (and while Ben Bernanke headed the central bank), Shelton criticized the Fed for keeping interest rates so low.

"The Fed continues to pursue its zero-interest-rate policy in the name of supporting the recovery, even as the negative aspects of this approach are imposing significant economic costs," she wrote in an opinion piece for The Hill in 2015.

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