Elon Musk has struck again – and this time, the world's most powerful central bank is at the center of his criticism. On the platform X, which he controls, the tech billionaire declared that the US Federal Reserve is "absurdly overstaffed." This statement, part of a lively discussion thread about the Fed's current interest rate decision, is more than just a casual remark. It marks the beginning of a broad campaign for efficiency, led by Musk and Donald Trump, who returns to the White House in January.
DOGE": Trump's New Super Weapon for Austerity Policy
Musk, considered one of the closest advisors to the future president, has taken on a key role in the newly established agency with the resounding name "Department of Government Efficiency" (DOGE). Together with entrepreneur Vivek Ramaswamy, he is set to implement a massive austerity program aimed at savings of over two trillion dollars.
At the center of these efforts is the Federal Reserve. The central bank, consisting of the Federal Reserve Board in Washington and 12 regional reserve banks, employs about 24,000 people – significantly fewer than comparable institutions like the European Central Bank (ECB) and its national partners. But Musk is not satisfied: "We don't need bureaucratic monsters making decisions like they're flipping a coin," he wrote mockingly.
Trump and Musk: An Unusual Duo with a Clear Mission
Donald Trump has already criticized the Federal Reserve and its chairman Jerome Powell in the past. Powell, whom Trump himself appointed during his first term, was recently mocked by him as the holder of the "best job in government": "You show up at the office once a month and flip a coin to make decisions.
The collaboration between Trump and Musk is remarkable. While Trump is often criticized for his populist demeanor, Musk pursues a pragmatic-technocratic approach. Together, however, they seem to have found a common mission: to make the government and its institutions leaner and more efficient. Whether this succeeds will largely depend on whether the Fed can maintain its position in a time full of challenges – from inflation to geopolitical uncertainties.
Lagarde strikes back: "Come to Frankfurt!
The sharp rhetoric of Trump and Musk does not go unanswered in Europe either. ECB President Christine Lagarde defended her institution vehemently: "I invite Donald Trump to visit us in Frankfurt. Thousands of people work here — economists, lawyers, IT specialists — and they give their best for the euro every day.
With this dig, Lagarde made it clear that the work of central banks is anything but easy. She reminded that behind every monetary policy decision lies enormous data analysis and strategic planning – far from the coin toss Trump mockingly suggested.
What remains: A new era for central banks
While the headlines focus on the controversy, the real story here could mark a deeper upheaval in the world of central banks. If Musk and Trump implement their plans, it could not only change the role of the Federal Reserve but also fundamentally alter international cooperation between central banks.
