The Federal Reserve should cut interest rates because of the European Central Bank’s recent signal that it intends to devalue the euro, Judy Shelton says
The Federal Reserve should cut interest rates because of the European Central Bank’s recent signal that it intends to devalue the euro, said Judy Shelton, President Donald Trump’s planned pick for a seat on the central bank’s board of governors.
Asked about her shift to a dovish position, in an interview on CNBC, Shelton said rate cuts were needed or else the U.S. economy, boosted by what she called the president’s pro-growth agenda, would be unfairly “punished” for its success. Instead, “Europe is headed for additional stimulus measures, which is code saying they are prepared to devalue the euro,” she said. A 5% devaluation of the euro is like a tariff on U.S. exports, she added.
Shelton said the strong June jobs report released earlier Friday was due to the Trump administration’s pro-growth agenda, which has created a better environment for businesses to be successful.The 10-year Treasury yield TMUBMUSD10Y, +0.00% pushed back above 2% after the June payrolls rise. Stocks SPX, -0.18% sank on the data.At the same time, Shelton noted that half of American households are invested in the stock market in some fashion.
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