Elon Musk Supports Increased Presidential Control Over the Fed
Tesla CEO Elon Musk has shown support for an idea that could give the U.S. president more authority over the Federal Reserve, raising concerns about the institution’s independence.
Musk Backs Senator’s Call to Change the Fed
On Thursday night, Musk endorsed a post from Sen. Mike Lee, R-Utah, on his platform X (formerly Twitter). The senator’s post argued that the Executive Branch should align with the president’s control, pointing out deviations from the Constitution, including the Federal Reserve. Musk emphasized his agreement by adding the “100” emoji.
Fed Chairman’s Response Amidst Speculation
Lee’s post highlighted a recent report where Fed Chairman Jerome Powell asserted he would not resign if asked. When questioned during a Thursday briefing after a rate cut, Powell firmly stated he would not step down even if President-elect Donald Trump requested it. He also clarified that the law does not permit a president to fire or demote a Fed official.
The Importance of Fed Independence
Economists have long argued that the Federal Reserve’s independence is crucial for setting monetary policy free from political influence. They stress that any compromise in this independence could undermine the Fed’s ability to credibly manage inflation.
Historical Tensions Between Trump and Powell
Trump appointed Powell as Fed chair in 2018 but later expressed dissatisfaction when Powell resisted political pressure for more lenient monetary policy. Trump has also stated that the president should have an opinion on interest rate decisions.
Potential Impacts of Future Rate Cuts
While the Fed is expected to reduce rates again in December, persistent inflation or strong economic growth could prompt policymakers to reconsider further cuts. Analysts are closely watching these developments.
Musk’s Vision for Government Efficiency
Musk’s ambitions extend beyond the Federal Reserve. Trump has tapped the tech mogul to spearhead efforts to streamline government operations, with Musk suggesting $2 trillion could be cut from federal expenditures.
Criticism of Federal Bureaucracy
On Saturday, Musk voiced his concerns on X, stating, “The unelected and unconstitutional Federal bureaucracy currently has more power than the presidency, legislature or judiciary! This needs to change.” His statement adds to ongoing debates about governmental power and efficiency.
Musk’s Role in Post-Election Politics
Musk’s political presence has expanded significantly. He recently joined a call involving Trump and Ukrainian President Volodymyr Zelenskyy, who contacted Trump to offer congratulations after the election. Musk’s involvement underscores his influence in the evolving political landscape.