Musk backs presidential influence over Federal Reserve policy
Elon Musk, the CEO of Tesla and SpaceX, billionaire, and supporter of newly elected President Donald Trump, has endorsed allowing U.S. presidents to influence the Federal Reserve's policy. Recently, Fed Chair Jerome Powell stated he would not step down from his position.
As reported on CNBC's website, Elon Musk, billionaire and supporter of newly elected President Donald Trump, has shown support for presidents having a role in intervening in the Federal Reserve's policy.
#EndtheFed
In response to a social media post by Senator Mike Lee, a Republican from Utah, on Thursday, who called on the Fed to yield to the president, Musk posted the "100" emoji on Friday, which signifies approval.
According to Lee, the executive branch, including the Federal Reserve, should follow the president's leadership because, as he wrote on Platform X, "that's how the Constitution was designed." He described the Federal Reserve as "one of many examples of how we’ve deviated from the Constitution." Senator Lee concluded his post with the hashtag #EndtheFed.
Although Musk's comment was brief, it reflects a larger campaign to pressure the Federal Reserve's independence, potentially taking new form during the Trump administration's tenure.
Trump versus Powell
On Thursday, Fed Chair Jerome Powell stated he would not resign if Trump requested him to. "That's not allowed under law," Powell responded to reporters at a press conference after the Federal Reserve lowered interest rates by a quarter percentage point.
The Fed's independence is intended to enable the central bank to make decisions on monetary policy, such as adjusting interest rates, based only on the condition of the U.S. economy.
The market and investors will surely keep a close watch on the potentially contentious relationship between the president-elect and the Fed chair. It's important to note that Trump appointed Powell as the head of the central bank in 2017. Despite this, he regularly criticized him during his first presidential term, claiming he was not easing monetary policy quickly enough.
During the 2024 presidential campaign, Trump frequently mentioned the possibility of influencing the Federal Reserve's policy if he were to return to the White House.
"I feel the president should have at least a say in there. I feel that strongly," Trump said in August at a press conference at his Mar-a-Lago club in Florida. "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," he added.
