Real estate mogul Grant Cardone backed former President Donald Trump’s proposal to take executive control of the Federal Reserve, citing concerns about the central bank’s impact on the U.S. economy.
Cardone endorsed the idea in a tweet, saying: “Why not? The President can order the Fed to do what’s best for the people.” He criticized Fed Chairman Jerome Powell, calling him “the enemy of the American middle class.” He argued that the Fed’s aggressive interest rate hikes aimed at controlling inflation triggered by the pandemic have made buying a home “impossible” and put hundreds of small banks at risk.
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Cardone’s comments follow a Wall Street Journal report that a small group of Trump allies had wrote a document describing a vision For the central bank, it would subject Fed policy to White House review and potentially allow the president to play a role in interest rate decisions.
Trump has long criticized the Fed’s policies, particularly under Chairman Powell, whom he appointed in 2017. During his presidency, when the Fed was raising interest rates from very low levels, Trump criticized the central bank for not keeping rates lower, arguing that higher rates hampered economic growth.
Since then, the landscape has changed. The Fed last year raised rates to their highest levels since the turn of the century and has kept them there to tame inflation, which hit a four-decade high in 2022 and remains above the central bank’s 2% target.
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“Jerome Powell has proven himself to be an enemy of the American middle class,” Cardone said on X. “He continues to complain about using interest rates to control inflation when all he has done is make it impossible to buy a home and put 600 small banks out of business. risk.”
Cardone’s support for Trump’s proposal was accompanied by a list of economic woes He blames current Fed policies, including a depressed housing market, growing credit card debt and rising bankruptcies.
The proposal, however, has raised concerns among some economists and lawmakers.
Sen. Kevin Cramer (R-N.D.) voiced his opposition, according to the WSJ. “Given their office, their independence is essential to act in an impartial and apolitical manner,” the senator said. “There is a reason why there is not just one decision maker: the safeguards are integrated within a board of governors.”
Experts warn that eroding the Fed’s independence could have far-reaching consequences. According to the report, Krishna Guha, vice president of Evercore ISI, noted in a client note: “The market would react very poorly to any effort to tame the Fed, and we believe this would cause the administration to back down.” »
Established in 1913, the Fed functions as an independent agency aimed at protecting monetary policy from short-term political pressures. Congress gave him a dual mandate: to promote maximum employment and stable prices, something that Chairman Powell frequently references during his speeches.
Trump’s attempt (if elected in November) to influence the Fed’s leadership would face institutional obstacles, the report said. Like Supreme Court justices, who serve for life, Fed governors have 14-year terms to ensure their independence from political pressure, making it difficult to remove them solely because of policy disagreements.
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This item Donald Trump’s Fed Takeover Proposal Gets Backed by Real Estate Mogul Grant Cardone: ‘I Like It’ originally appeared on Benzinga.com
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