Ever since the 2024 election cycle kicked into high gear, the whispers about the Federal Reserve’s independence have turned into a full-blown roar. Now that we're into 2026, the noise hasn't died down—it's actually gotten louder. Basically, the drama centers on a pretty radical idea: the President should have a direct say in how the nation’s central bank sets interest rates.
It's not just campaign talk anymore.
Elon Musk, the guy now synonymous with "efficiency" via the DOGE (Department of Government Efficiency) initiative, has leaned heavily into this. He didn't just mention it in passing; he famously used a "100" emoji to signal his total agreement with Senator Mike Lee’s call to put the Executive Branch back in charge of monetary policy. To Musk and his allies, the current setup is an "unelected fourth branch of government" that lacks accountability.
Elon Musk Supports Trump’s Proposal to Control the Federal Reserve: The "100" Emoji Heard Round the World
When Elon Musk supports Trump’s proposal to control the Federal Reserve, he’s not just backing a political ally; he’s pushing a philosophy that the Constitution never intended for the Fed to be this autonomous. Musk’s support was crystallized when he retweeted Senator Mike Lee of Utah. Lee’s argument is straightforward: the Constitution says the Executive Branch should be under the President's direction. Period.
By adding that 100% emoji, Musk signaled to his millions of followers that the Fed is an outlier that needs to be reined in.
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Trump has been banging this drum for years. He’s argued—quite loudly at Mar-a-Lago and on the trail—that his "instincts" as a successful businessman are better than the data-driven models used by Jerome Powell and the rest of the Board of Governors. Trump’s logic is that since he’s the one voters held accountable for the economy, he should have the levers to fix it.
Honestly, it’s a massive departure from how the U.S. has operated for over a century. Since 1913, the Fed has tried to keep a "firewall" between politics and the printing press. The fear is that if a President controls rates, they’ll just keep them low to juice the economy before an election, leading to runaway inflation later.
Why the "Audit the Fed" Movement Gained New Life
It’s not just about interest rates. Musk has also been calling the Federal Reserve "absurdly overstaffed." Through his work with DOGE, he’s been looking for places to cut, and the central bank is firmly in his sights.
In early 2025, Musk started rallying behind a "full audit" of the Fed’s policy decisions. This isn’t about checking their bank balance—that already happens. He wants to scrutinize why they make the choices they do. It’s a subtle but powerful way to exert pressure. If you can't fire the Chair easily, you can certainly make their life difficult by auditing every single meeting and memo.
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The Legal Tug-of-War Over Jerome Powell
We’re currently in a weird legal limbo. Jerome Powell’s term as Chair officially ends in May 2026. Trump has already called him "Too Late Powell" and has hinted at wanting him out sooner. But the law is tricky here. The Federal Reserve Act says governors can only be removed "for cause."
Does disagreeing with the President on a 25-basis-point rate cut count as "cause"? Most legal experts say no.
That hasn't stopped the administration from trying other tactics:
- The "Shadow Chair" Strategy: Some advisors suggested appointing a "Chair-in-waiting" to effectively ignore Powell until his term expires.
- Targeting Governors: We saw this with the attempt to fire Fed Governor Lisa Cook over alleged mortgage fraud issues—a move that ended up in the Supreme Court.
- Public Jawboning: Using X (formerly Twitter) to relentlessly criticize every Fed decision to sway market sentiment.
What This Means for Your Wallet
If you’re wondering why this matters to anyone who isn't a billionaire or a politician, it comes down to the "Sell America" trade that started popping up in early 2026.
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When markets think the Fed is losing its independence, they get twitchy. Investors like stability. They like knowing that interest rates are being set by people looking at employment data and CPI reports, not polling numbers in swing states.
If the President takes control, economists like Jamie Dimon and former Fed chairs have warned that inflation expectations could skyrocket. If people think the President will keep rates artificially low, they start raising prices and asking for higher wages preemptively. It’s a self-fulfilling prophecy. On the flip side, Musk and Trump argue that the current "high-rate" environment is what’s actually hurting families by making mortgages and car loans unaffordable.
Key Tensions in the 2026 Economy
- Market Credibility: Will foreign investors keep buying U.S. Treasuries if they think the currency is being manipulated for politics?
- The DOGE Influence: Can Musk actually force the Fed to "downsize" its workforce, and would that impact their ability to monitor the banking system?
- The 2026 Midterms: With elections looming, the pressure on the Fed to cut rates is hitting a fever pitch.
Is There a Middle Ground?
Not really. You’re either for a completely independent central bank or you believe the President should have a seat at the table.
Some Republicans have suggested a compromise where the Fed is more "transparent" but still maintains its final vote on rates. But for Musk, transparency is just the first step toward total accountability. He’s been very clear: he thinks the bureaucracy is a "fourth branch" that needs to be dismantled or at least brought under the thumb of the elected leader.
It’s a high-stakes game of chicken. If Trump pushes too hard, he risks a bond market revolt that could send interest rates higher regardless of what he says. If he doesn't push, he’s stuck with whatever Powell decides to do through May.
Actionable Insights for Navigating This Volatility:
- Watch the May 2026 Deadline: This is when Powell’s term ends. Whoever Trump nominates next will be the definitive signal of how much control he intends to seize.
- Diversify into Hedges: With the "Sell America" narrative gaining some traction, keeping an eye on traditional hedges like gold or even Bitcoin—which Musk often supports—might be wise as the dollar's "neutrality" is questioned.
- Monitor DOGE Reports: Musk’s X account is the primary source for upcoming "audits." If the Fed is targeted, expect immediate volatility in the banking sector.
- Fixed vs. Variable Rates: If you’re looking at a loan, be aware that while Trump wants lower rates, the market might push them higher if they fear inflation. Locking in a rate now might be safer than betting on a politically forced cut later this year.