'In his crosshairs': Fed 'on a crash course with Trump Administration'
The Federal Reserve is “potentially on a crash course with the Trump Administration,” CNN political commentator Catherine Rampell said Tuesday.
Rampell was speaking with CNN’s Jake Tapper about Fed Chair Jerome Powell’s testimony before the Senate Banking Committee, which Tapper noted is “part of [Powell’s] semiannual report.” During the hearing, Powell was asked about a December post by Department of Government Efficiency (DOGE) head Elon Musk that claimed the Fed is “absurdly overstaffed.”
President Donald Trump on Tuesday invited Musk to the Oval Office to address the press about DOGE’s controversial work with the federal government.
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Tapper noted Powell defended his agency against Musk’s December attack, arguing “Fed employees are overworked and the agency is not overstaffed.”
“[Powell] explained that the Fed is primarily self-funded through the interest it earns,” Tapper said. “In other words, cost cutting measures such as laying off Fed employees would ultimately not save taxpayers much money.”
Rampell, asked about the tension between the Fed and Trump’s administration, said the agency “is trying its darnedest not to let this escalate.”
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‘The Fed is potentially on a crash course with the Trump Administration for a whole bunch of reasons, “ Rampell said. “Not just DOGE, but the fact that they've been holding off, potentially, on continuing to cut interest rates — which Trump, the king of debt, wants to keep happening.”
“There are a bunch of reasons why the fed is potentially in Trump's crosshairs and really don't want to be,” Rampell continued. “They want to be politically independent. they have historically been politically independent. And that independence is crucial to their ability to continue to do their job, i.e., to get inflation down.”
“And just to remind people, inflation has come down quite a lot in the past few years,” the CNN commentator added. “It's not where it needs to be, certainly, but the fact that we have made as much progress as we have without tipping into recession, as many economists feared, is largely a credit to the Federal Reserve and its ongoing independence”
“So picking a fight here, whether Elon Musk is doing it or Trump is doing it, will end quite badly for the economy writ large,” she said.
Watch the video below or at this link.
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