Fed Independence in Danger: Elon Musk’s Comment and Call to #EndTheFed. What Will President-Elect Donald Trump Do?
Is the Fed on the verge of losing its independence?
The second Trump administration could herald a new era of attacks on the Federal Reserve and its chairman, Jerome Powell, fueled by Elon Musk’s sharp criticism.
Tesla’s co-founder and CEO is expected to play a crucial role in helping Trump shape the U.S. economy.
The attacks may have already begun. Over the weekend, Musk reposted a tweet from the Utah Senator Mike Lee with the #EndTheFed hashtag.
Lee posted on X, stating that the Fed’s ’Executive Branch should be under the direction of the president’ of the United States, adding that “that’s how the Constitution was designed. The Federal Reserve is one of many examples of how we’ve deviated from the Constitution, in that regard. Yet another reason why we should end the Fed”.
In reposting Mike Lee’s post on X, Elon Musk agreed, posting via his social media account the “100” emoji.
Both President-elect Trump and Elon Musk have a history of criticizing Powell’s policies.
Powell has repeatedly been under fire for not cutting interest rates quickly enough after raising them in the past years to tackle US inflation.
It’s important to remember that the Federal Reserve has a dual statutory mandate: to promote maximum employment and stable prices.
In comparison, the main task of the ECB is to maintain price stability, making sure that the inflation remains low, stable, and predictable.
The ECB has also been criticized by the Meloni government for hiking the benchmark interest rate in the Euro Area many times in 2022 and 2023 and for not taking the courage to cut the cost of money further, this year.
President-elect Donald Trump has been notably critical of the Federal Reserve.
The Fed was accused by Trump of not helping the US economy recover more quickly, leaving the US interest rates higher for longer than necessary.
Speaking during a press conference held at his residence in Mar-a-Lago, Florida, Trump said last summer that the President of the United States “should at least have a say in it”:
“In my case, I made a lot of money, I was very successful, and I think I have a better instinct than, in many cases, people that would be on the Federal Reserve, or the chairman”, said Trump.
And yet, ironically, the very fiscal policy that the President-elect wants to launch as soon as possible is based on various tax cuts that could fuel higher inflation in the US.
The Federal Reserve has so far cut interest rates twice and is projected to announce other cuts.
Asked if he would resign if asked, Powell said “no” explaining that the president does not have the power to fire him.
“Not permitted under the law,” Powell told reporters at a news conference last week, when the Fed cut interest rates by a quarter percentage point.
It remains to be seen whether Powell will withstand the attacks coming from Elon Musk, who has often criticized the Federal Reserve.
Last August the billionaire said the Fed was foolish since it had not cut the interest rates yet.
Original article published on Money.it Italy 2024-11-11 07:47:18. Original title: Fed sotto attacco: Musk regista della presidenza Trump ne chiede la fine? Lo slogan #EndTheFed
Argomenti
