Trump Fed pick wants to revive the gold standard. Here's what that means

BY AIMEE PICCHI

JULY 3, 2019 / 1:29 PM / MONEYWATCH

As President Donald Trump named his picks to fill two influential seats on the Federal Reserve's Board of Governors, the price of gold surged. That may be because one of the them, Judy Shelton, is a believer in the return to the gold standard, a money policy abandoned by the U.S. in 1971.

Shelton is raising eyebrows among mainstream economists for her views, which include slashing the Fed's benchmark rate to zero and pegging the value of the dollar to gold prices. She's not the first Trump pick for the Fed to advocate a return to the gold standard, with his two previous failed Fed choices -- Stephen Moore and Herman Cain -- also advocating for a revival of the policy.

In picking Shelton, Mr. Trump is aiming to place a supporter on the Federal Reserve, which he's argued is slowing economic growth and depressing the stock market by keeping interest rates too high. The Fed currently is maintaining its benchmark rate in a range of 2.25% to 2.5%, but Shelton has said she wants to lower rates "as fast, as efficiently, as expeditiously as possible."

To be sure, Mr. Trump's second pick, economist Christopher Waller, holds more mainstream economic views. The research director at the Federal Reserve Bank of St. Louis, Waller has expressed support for the independence of the Federal Reserve and allowing inflation to run a bit higher, in order to help the economy recover from slowdowns.

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https://www.cbsnews.com/news/trumps-fed-pick-judy-shelton-gold-standard-explained/