Fed Chair Sees Elon Musk’s Audit Push As Threat To Central Bank’s Existence | Global News Avenue

Fed Chairman Jerome Powell said he believes Elon Musk and others’ proposal to “review the Fed” last week was a step to “eliminate” the central bank

Musk, The richest person in the world President Donald Trump’s influential adviser has revived decades of debate over overseeing the country’s central bank. He has published several articles on social media Call for review of the Federal Reserve In Powell’s congressional testimony this week.

The Office of Government Responsibility is the independent regulatory body of the government that regularly reviews the activities of the Federal Reserve. However, GAO does not review the central bank’s monetary policy decisions.

Musk is restoring an idea of ​​origins by Ron Paul, who said billionaires may have a new audit. During Congress, Paul targeted the Federal Reserve through several ways, including audits that would look at how to make monetary policy decisions.

“The threat will be…you will investigate the decision on monetary policy. That will be another matter,” Powell said in an answer to a question. “I think it was designed by designers, it’s a way to eliminate the Fed.”

Many government entities have been caught in the crosshairs of a movement to significantly narrow the federal government. For example, The government has asked the Consumer Financial Protection Bureau Employees stopped most of their work, closed the agency’s headquarters and said they would not accept further funding. The actions were taken after Musk posted to his social media platform X “RIP CFPB”.

How audits become a threat to parenting independence

The audit proposal is the latest Salvo in the conflict about whether the Fed should operate independently of the White House.

Congress mandates the Federal Reserve to manage the country’s monetary policy Two goals to keep inflation low And the employment is high. The Fed does this primarily through changes Fed funding ratewhich affects the interest rates of various loans throughout the economy.

Powell believes the Fed must formulate monetary policy without being disturbed by politicians because the president may be tempted Push the Fed to adopt low interest rates. This will promote the economy during office, thereby achieving short-term political returns, but will increase the risk of inflation in the long run.

Trump has repeatedly asked the Fed to lower interest rates and said the president should have more say in the Fed’s decision.

Research on central banks around the world shows that banks operating independently from their governments control inflation more effectively than their less independent peers.

This is not the first time the Fed audit is proposed

The battle for who should review the Fed can be traced back to the early 2000s, when Paul, a former liberal and Republican politician, led the efforts to fully review the Fed. People who are 89 years old now A bill was proposed to do so in 2012.

Paul wrote a book in 2009 called “End the Fed” and proposed a bill to repeal banks, arguing that the central bank’s monetary policy caused inflation and the country should return Gold Standard.

Since then, some Republican lawmakers have proposed various bills to review the Fed, but have not passed.