Musk Intensifies Scrutiny of Federal Reserve Spending

Elon Musk has turned his reformist lens toward the U.S. Federal Reserve, suggesting that its headquarters renovation in Washington be audited. During an April 30 press briefing at the White House, Musk questioned whether the central bank is overspending. “Given that this is taxpayer money, we should absolutely examine whether the Federal Reserve is spending $2.5 billion on its interior designer,” he said.

DOGE Expands Oversight Mandate

Musk was appointed by President Donald Trump to lead the Department of Government Efficiency (DOGE). Since then, he has cut workforce sizes, canceled contracts, and restructured several federal agencies. His proposal to examine the Fed aligns with his mission to reduce government spending and boost transparency.

Criticism of Fed Staffing and Transparency

Musk’s latest move is consistent with previous remarks on social media, where he labeled the Fed “absurdly overstaffed” and accused it of corruption. In February, he insisted that “all government sectors must be entirely transparent and accountable to the people — no exceptions, especially the Federal Reserve.”

Trump and Musk Echo Longstanding Fed Discontent

The initiative follows years of Trump administration criticisms targeting the Fed. During his first term, Trump demanded lower interest rates and called Fed Chairman Jerome Powell a “major loser.” Recent speculation about Powell’s job security caused temporary volatility in financial markets, despite Trump later clarifying that he had no intention of firing him.

U.S. Manufacturing Industry Slows Sharply in April

The US Manufacturing activity in contracted in April at the fastest pace in five months, driven by a sharp drop…

Fed Defends Its Autonomy and Budget

Chairman Powell responded by defending the Fed’s workforce, stating, “Overworked maybe, not overstaffed.” He emphasized the central bank’s statutory independence and noted that the Fed is self-funded through operations, primarily from interest on government securities, not taxpayer dollars.

Legal Barriers to DOGE Intervention

If DOGE attempts to access the Fed’s records or systems, it may encounter legal obstacles. The Board of Governors owns the Federal Reserve buildings, not the General Services Administration. The Fed also operates its own law enforcement force. Additionally, the Government Accountability Office (GAO) cannot audit the Fed’s monetary policy decisions.

Potential Risks to Market Stability

Any direct oversight by DOGE could set a precedent with unpredictable consequences for market confidence. Historically, political interference in Fed decisions — such as Nixon’s pressure on Chair Arthur Burns in 1972 — contributed to economic instability. Powell reaffirmed the Fed’s independence, asserting, “We will do what we do strictly without consideration of political or any other extraneous factors.”