Treasury Secretary Scott Bessent has brought in Judy Shelton, the economist President Trump once picked for the Federal Reserve Board, as a top adviser. The Treasury announced Friday that she will serve as a Counselor in the Office of the Secretary, advising Bessent on currency policy, with a particular focus on evaluating financial conditions in China.
The job does not need a vote. Counselor positions like this one do not require Senate approval, which matters because the Senate is exactly where Shelton’s last try at a top economic post ended. Trump nominated her to the Fed board during his first term, and on November 17, 2020, a key procedural vote on her nomination failed 47 to 50. Every Democrat and Republican Senators Mitt Romney and Susan Collins voted against moving her forward, while two Republicans who supported her were absent after exposure to COVID-19.
The opposition back then centered on her views about Fed independence, her support for a gold standard and her questioning of whether the United States needs a central bank at all. A gold standard would tie the dollar to physical gold, which would sharply limit how much money can be in circulation. In plain terms, every dollar printed would have to be backed by gold sitting in a vault, rather than by the Fed’s judgment about how much money the economy needs.
Her new assignment is narrower than a seat setting interest rates. Shelton is an economist and author who specializes in international finance and currency issues. She previously served as U.S. Director of the European Bank for Reconstruction and Development and as Chairman of the National Endowment for Democracy. Before joining Treasury, she was a Senior Fellow at the Independent Institute and earlier a senior research fellow at Stanford’s Hoover Institution, and she holds a Ph.D. in business administration from the University of Utah. She is not generally known as a China specialist.
The China focus is where this hire reaches American wallets. A country’s currency value decides how cheap its exports look overseas. When China’s yuan is held low against the dollar, Chinese-made goods land on American shelves at lower prices, while American-made goods cost more for buyers in China. That helps shoppers at the register but squeezes U.S. factories and farmers trying to compete.
Washington has argued for months that the yuan is priced too low. In January, Treasury called the yuan “substantially undervalued” and urged China to let it strengthen in a timely and orderly way. Goldman Sachs estimated in December that the currency was 25% undervalued, which works out to roughly 1 dollar of value missing for every 4 a fair price would carry. The International Monetary Fund has also tied China’s booming exports and record trade surplus partly to a weaker currency after adjusting for inflation.
In its most recent currency report in July, Treasury again said China stands out among U.S. trading partners for how little it discloses about managing its currency. That report kept 10 countries on its monitoring list, including China, Japan, South Korea, Taiwan, Singapore, Thailand, Vietnam, Germany, Ireland and Switzerland, and stopped short of labeling any major partner a currency manipulator. The last time Treasury put that label on any country was 2019, when it named China.
That is the fix Treasury is pressing: steady pressure on Beijing to let its currency rise, backed by the threat of a formal manipulator finding. Treasury has warned China could be designated a manipulator if evidence shows it is stepping in to stop the yuan from gaining value. Adding a dedicated adviser to watch China’s financial conditions gives Bessent more firepower on that front.
The timing lines up with a strong dollar. The dollar index hit its highest level since March 2025 this week, and a stronger dollar makes the yuan look even cheaper by comparison. That widens the price gap American producers already face against Chinese goods.
Shelton’s arrival also comes amid other high-level personnel changes at Treasury. Bessent recently named David Zervos, former chief market strategist at Jefferies, to the same counselor title, and that appointment also did not need Senate approval.
For now, Shelton’s role is advisory. She does not set interest rates or sign currency agreements. What she will shape is the advice Bessent gets on one of the biggest questions in American trade: how cheaply Chinese goods can be sold here, and how fairly American goods can compete there.
JBizNews Desk | Washington, D.C.
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