Elon Musk’s call for fed audit raises wall street alarm
Elon Musk has expressed a desire to conduct an audit of the Federal Reserve, which is causing concern on Wall Street. Musk is questioning the Fed's monetary policy decisions, drawing sharp criticism from experts.
Elon Musk, the world's richest person, has suggested the need for an audit of the Federal Reserve, stirring up Wall Street. According to "Rzeczpospolita", Musk doubts the Fed's decisions concerning monetary policy. His comments follow remarks from Donald Trump, who calls for a loosening of control over the largest banks in the United States.
The idea of auditing the Fed is not new. Back in 2015, Republicans proposed making interest rate changes subject to a Congressional vote, but the bill did not pass. In 2024, Senators Chuck Grassley and Rand Paul made another attempt, without success. Musk, supporting this idea, emphasises that all government actions should be transparent.
Critics, including Roger Ferguson, a former vice chair of the Fed, stress that the independence of the Fed is crucial for the US economy. Treasury Secretary Scott Bessent assures that there are no plans to interfere with the Fed's independence. Experts on Wall Street also express concerns that an audit could harm the US economy – as "Rzeczpospolita" points out.
Political pressures on the Fed
Jerome Powell, the Fed Chair, strongly opposes political interference in the central bank's operations. He emphasised that the Fed's independence is key to making decisions based on the condition of the US economy. Despite the pressures, Powell does not intend to step down from his role.
During his presidential campaign, Donald Trump frequently criticised Powell for not rapidly easing monetary policy. Trump believes the president should have influence over the Fed's decisions, arguing that this could bring economic benefits. His stance raises concerns about the central bank's independence.
Reactions to the proposals from Musk and Trump are mixed. Wall Street fears that political interference with the Fed could harm economic stability. Experts emphasise that the independence of the central bank is crucial for maintaining investor confidence and the stability of financial markets.
