Federal Reserve Faces Scrutiny as Economist Judy Shelton Cites Vulnerability on "Several Fronts"

Washington D.C. – Economist and former Trump economic advisor Judy Shelton asserted that the Federal Reserve is "vulnerable" on multiple fronts and "has a lot to answer for," a statement made during a recent appearance on Fox Business Network's "Kudlow." Shelton, a long-standing critic of the U.S. central bank, highlighted ongoing concerns regarding its policies and independence.

Shelton's remarks align with the arguments presented in her latest book, "Good as Gold: How to Unleash the Power of Sound Money," published in October 2024. In it, she contends that the Federal Reserve's current inflationary policies disproportionately benefit financial elites while harming middle and lower-income Americans. She advocates for a return to sound money principles, proposing a new international monetary order that could involve gold-convertible Treasury bonds.

The Federal Reserve, in its July 2, 2025, Federal Open Market Committee (FOMC) statement, acknowledged that inflation remains elevated, reiterating its commitment to achieving its 2 percent objective. The central bank has maintained the federal funds rate target range at 5-1/4 to 5-1/2 percent, continuing its efforts to reduce its balance sheet. Despite these measures, Shelton suggests the Fed's approach to monetary policy requires significant reevaluation.

Shelton has consistently argued that central banking, in its current form, operates as a "central planning system" that distorts free market mechanisms. Her criticisms extend to the Fed's dual mandate of maximum employment and price stability, which she views as "nebulous." She posits that excessive financialization of the economy, rather than productive growth, is a consequence of the current monetary system.

During her contentious nomination process to the Federal Reserve Board of Governors in 2020, Shelton faced bipartisan scrutiny over her views, particularly her advocacy for a return to a gold standard. Her proposals, such as linking the dollar's value to gold to ensure stability and trustworthiness, are detailed in "Good as Gold." She emphasizes that such reforms require strong political leadership to overcome the inertia of the status quo.