Elon Musk turns his attention back on US Federal Reserve, rallies behind the idea to 'end the Fed'

Tesla CEO and US President Donald Trump's adviser Elon Musk on Sunday (Eastern time) took to X to retweet a post demanding the closure of America's Central Bank, the Federal Reserve.

The post, which showcased a graph, was shared with the caption 'End the Fed', to which Musk wrote 'The Fed is absurdly overstaffed'.

This, however, is not the first time that the billionaire tech entreprenuer has rallied behind the idea of scrutinising the top independent body.

Federal Reserve's independence under Musk scrutiny

Last week, Musk brought his attention to the U.S. Federal Reserve, advocating for the idea of auditing the American central bank. While Musk, the world's wealthiest individual and head of numerous ventures, is not challenging the Fed's substantial balance sheet, he is calling for scrutiny of its decision-making process, particularly its monetary policies, according to a report by CNN.

These decisions, which influence interest rates and reverberate throughout the economy, have long been under the purview of the Federal Reserve without external review.

Musk’s interest isn’t about auditing the Fed’s finances, which are already thoroughly examined by the Government Accountability Office (GAO) and independent auditors. Instead, he’s focused on scrutinising the central bank's policy decisions.

At a conservative gathering, Musk expressed support for auditing the Fed’s policies, saying, “Yeah, sure” when asked if the Fed should be audited. This marks the second time this month that Musk has voiced backing for the initiative. As head of the Department of Government Efficiency (DOGE), Musk has led efforts to access key government data, though these efforts have faced legal challenges, such as a recent federal judge temporarily blocking DOGE from accessing a Treasury Department payment system.

Musk’s push for a review of the Federal Reserve’s monetary policies comes just after President Trump signed an executive order intended to weaken the central bank’s oversight of large banks. The order grants unprecedented power to Trump’s appointees over independent regulators, including the Federal Trade Commission and the Securities and Exchange Commission, but notably excluded the Fed’s monetary policies from this shift.

'Audit the Fed': A Republican first idea

This calls to mind past Republican efforts to audit the Fed. In 2015, the Federal Reserve Transparency Act, dubbed “Audit the Fed,” sought to make the Fed’s interest rate decisions subject to congressional approval, though the bill did not gain much traction. In 2023, Senators Chuck Grassley and Rand Paul introduced a similar bill, but it also failed to make significant progress.

However, under the Trump administration, the call to review the Fed’s policy decisions has gained renewed attention. Musk’s support for this initiative was sparked by an X (formerly Twitter) post calling for a “full audit” of the Fed’s monetary policies. In response, Musk expressed that “All aspects of the government must be fully transparent and accountable to the people,” including the Federal Reserve.

While it’s unclear whether Musk would advocate for his Department of Government Efficiency (DOGE) to directly audit the Fed, past Republican proposals suggested the GAO could take on the role of reviewing monetary policy decisions. Such an audit, however, would likely raise questions about the political influence over the Fed’s operations, which are designed to be independent and based solely on economic data aimed at achieving stable prices and full employment.

Wall Street, along with many former Fed officials, has strongly argued that the Fed’s independence is crucial for the stability of the U.S. economy.