Trump foolishly thinks gold standard will usher in a golden age

The president's nominee for the Fed believes pegged exchange rates will fix the US trade deficit. Not so

There are now scores of efforts to psychoanalyse the US president Donald Trump's nomination of Judy Shelton to the Federal Reserve board. Some emphasise Shelton's fidelity as an early adviser to the Trump campaign. Others point to her conversion into "a low-interest-rate person". Still others highlight her advocacy of the gold standard as insulating US monetary policy from an unreliable Fed.

These interpretations all miss the point, which is that Shelton is a proponent of fixed exchange rates. Her belief in fixed rates is catnip to an administration that sees currency manipulation as a threat to winning its trade war.

Related: Trump adds a dismal dimension to the US-China trade dispute | Jeffrey Frankel