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

The hiring of Judy Shelton as an adviser to the Treasury secretary is a significant development, particularly given her controversial economic ideas that led to her blocked nomination to the Federal Reserve. Shelton's views on monetary policy, including her support for a return to the gold standard, have been met with skepticism by many in the economic community. Her appointment may signal a shift in the Treasury's approach to economic policy, which could have implications for fund managers and investors.

As an adviser to the Treasury secretary, Shelton's influence may be felt in areas such as monetary policy, trade, and fiscal policy. Her views on these topics could shape the Treasury's approach to key issues, including interest rates, currency valuation, and trade agreements. Fund managers and investors will be watching closely to see how Shelton's appointment impacts the Treasury's policy decisions, particularly given her unconventional views on economic matters. The appointment may also spark debate among economists and policymakers about the direction of US economic policy.

The key thing to watch next will be how Shelton's appointment affects the Treasury's relationships with other economic policymakers, including the Federal Reserve. The Fed and the Treasury have historically worked closely together on economic policy, but Shelton's controversial views may create tension between the two institutions. Fund managers and investors will also be monitoring how Shelton's appointment impacts financial markets, including interest rates, currency markets, and stock prices. Any significant shifts in the Treasury's policy approach could have far-reaching implications for fund performance and investment strategies.

Originally reported by cnbc.com. FundNews adds analysis for finance & markets readers.