Musk backs Trump's push to influence Federal Reserve policy
Elon Musk, the CEO of Tesla and SpaceX and a billionaire supporter of newly elected President Donald Trump has endorsed the idea of allowing U.S. Presidents to influence the Federal Reserve's policy. Previously, Jerome Powell, the Fed Chair, stated that he would not resign from his position.
According to CNBC, Elon Musk, a billionaire supporter of newly elected President Donald Trump, supports the idea of allowing presidents to influence the policy of the Federal Reserve, the central bank of the United States.
#EndtheFed
In response to a Thursday social media post by Senator Mike Lee, a Republican from Utah, who called for the Fed to be subordinate to the President, Musk posted a "100" emoji on Friday, often used to express approval.
Senator Lee argued that the executive branch should be under the President's direction because, as he stated on platform X, "that's how the Constitution was designed." He added that the Federal Reserve "is one of many examples of how we’ve deviated from the Constitution." Senator Lee ended his post with the hashtag #EndtheFed.
Although Musk's comment is brief, it reflects a broader campaign of pressure on the Federal Reserve's independence, which could take on new dimensions in the Trump administration.
Trump versus Powell
On Thursday, Fed Chair Jerome Powell said he would not resign if Trump asked him to. "It's not permitted under law," Powell told reporters at a press conference after the Federal Reserve lowered interest rates by a quarter of a percentage point.
The Fed's independence is intended to allow the central bank to make decisions on monetary policy, such as adjusting interest rates, based solely on the state of the U.S. economy.
Investors and market observers will undoubtedly keep a close eye on the contentious relationship between the President-elect and the Fed Chair. Recall that Trump appointed Powell as the head of the central bank in 2017, yet frequently criticized him during his first presidential term for not easing monetary policy quickly enough.
During the 2024 presidential campaign, Trump often discussed having a say in Federal Reserve policy if he regained the White House.
"I feel the president should have at least a say in there. I feel that strongly," Trump stated 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.
