Real estate tycoon Grant Cardone has supported former President Donald Trump’s proposal to take executive control of the Federal Reserve, citing concerns in regards to the central bank’s impact on the U.S. economy.
Cardone endorsed the thought in a tweet, saying, “Why not? The president can direct the Fed to do the perfect thing for the people.” He criticized Fed Chair Jerome Powell, calling him “an enemy of the American Middle class.” He argued that the Fed’s aggressive rate of interest hikes geared toward controlling inflation sparked by the pandemic have made homebuying “unimaginable” and put tons of of small banks in danger.
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Cardone’s comments are available in the wake of a Wall Street Journal report that said a small group of Trump’s allies had drafted a document outlining a vision for the central bank that will subject Fed policy to White House review and potentially allow the president to play a job in rate of interest decisions.
Trump has long been critical of the Fed’s policies, particularly under Chair Powell, whom he appointed in 2017. During his presidency, when the Fed was raising rates of interest from very low levels, Trump criticized the central bank for not keeping rates lower, arguing that higher rates were holding back economic growth.
The landscape has since shifted. The Fed raised rates last 12 months to their highest levels because the turn of the century and has kept them there to tame inflation that soared to a four-decade high in 2022 and stays above the central bank’s 2% goal.
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“Jerome Powell has proved to be an enemy of the American Middle class,” Cardone said on X. “He continues to rant about using rates of interest to manage inflation when all he has done is make buying a house unimaginable and put 600 small banks in danger.”
Cardone’s support for Trump’s proposal was accompanied by a list of economic woes he attributes to current Fed policy, including a depressed housing market, ballooning bank card debt, and increasing bankruptcies.
The proposal, nevertheless, has sparked concern amongst some economists and lawmakers.
Sen. Kevin Cramer (R-N.D.) expressed opposition, in response to the WSJ. “Given their charge, their independence is critical to doing it in an unbiased, nonpolitical way,” the Senator said. “There is a reason that there is not only one decision maker — that safeguards are built right into a board of governors.”
Experts warn that eroding the Fed’s independence could have far-reaching consequences. In response to the report, Krishna Guha, vice chairman at Evercore ISI, noted in a client memo, “The market would react very badly to any effort to tame the Fed, and we predict this might cause the administration to back off.”
Established in 1913, the Fed operates as an independent agency to insulate monetary policy from short-term political pressures. Congress has given it a dual mandate to advertise maximum employment and stable prices, which Chair Powell often references during his addresses.
The report said Trump’s attempt (if elected in November) to influence the Fed’s leadership would encounter institutional obstacles. Like Supreme Court justices with lifetime tenures, Fed governors serve 14-year terms to make sure their independence from political pressure, making it difficult to remove them solely over policy disagreements.
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This text Donald Trump’s Fed Takeover Proposal Gains Support From Real Estate Mogul Grant Cardone: ‘I Like It’ originally appeared on Benzinga.com
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