An asset for the Fed calls for a sharp reduction in interest rates: report

WASHINGTON (Reuters) – An economist appointed by US President Donald Trump for a federal governorship has called for a sharp cut in interest rates at the central bank's policy meeting, reported Monday the Washington Post.

When asked if she was in favor of a 50 basis point cut in the Fed's target range for its benchmark interest rate, Judy Shelton said, "Yes." I would have voted for a 50 basis point cut at the June meeting, "the Washington Post reported, citing an email from Shelton.

Trump said earlier this month that Shelton, who had been economic advisor to Trump's 2016 presidential campaign, had chosen his seat for the Fed's board of governors.

In recent months, the president and his administration have put pressure on the independent central bank to lower borrowing costs to stimulate the economy. A stronger economy could help Trump's bid for re-election in 2020.

Fed officials said they would not bow to political pressure, but several officials said the growing risks to the economy warranted lower rates. Policymakers have expressed concern about the global economic slowdown and international trade conflicts that could hinder economic growth in the United States, despite recent signs of strong economic data.

The Fed is expected to lower interest rates significantly at the close of its July 30-31 political meeting.