Coming out of its September FOMC meeting, the Federal Reserve is on the path to cut interest rates later today with Fed Chair Powell hosting a press conference at 2:30 p.m. ET.

Independent Institute senior fellow Judy Shelton joins the Morning Brief team to discuss the type of reforms she'd like to see from the Federal Reserve. Shelton previously served as an economic adviser for former President Donald Trump, who went on to nominate her for the Fed in 2019 before the process was eventually stalled in 2020.

"I think the reforms I would like to see have to do with the mechanism that the Fed uses to implement its monetary policy decisions. When the Fed talks about going from the current rate of 5.4% to 25 or 50 basis points lower, what they're really talking about doing is deciding whether they should keep paying commercial banks and money market mutual funds that very generous rate," Shelton tells Yahoo Finance.

Shelton, the author of Good as Gold: How to Unleash the Power of Sound Money, believes the central bank has created too much liquidity as it hiked rates, and now it needs to manage those funds to prevent any further inflation. She looks to the monetary policy under former Fed Chair Paul Volcker — who served from 1979 to 1987 — as a model that she would like to see the US get back to, as he focused on engaging the market through open market operations.

Recently, former President Donald Trump has commented that Tesla (TSLA) CEO Elon Musk could lead his administration's government reform initiatives if reelected. Shelton argues that Musk would be a great fit for rooting out inefficiency in the Fed, highlighting his ability to cut spending.

"I would like someone who has a pretty good eye for figuring out how to run more efficiently to take a look. He seems to be a willing candidate, he'd work for free, and I think he would be pretty good at spotting excess government spending in ways that taxpayers would approve," she explains.

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This post was written by Melanie Riehl