Real estate tycoon Grant Cardone has supported 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 direct the Fed to do the best 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 interest rate hikes aimed at controlling inflation sparked by the pandemic have made homebuying “impossible” and put hundreds of small banks at risk.
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Cardone’s comments come 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 would subject Fed policy to White House review and potentially allow the president to play a role in interest rate 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 interest rates 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 year to their highest levels since the turn of the century and has kept them there to tame inflation that soared to a four-decade high in 2022 and remains above the central bank’s 2% target.
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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 interest rates to control inflation when all he has done is make buying a home impossible and put 600 small banks at risk.”
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 credit card debt, and increasing bankruptcies.
The proposal, however, has sparked concern among some economists and lawmakers.
Sen. Kevin Cramer (R-N.D.) expressed opposition, according to the WSJ. “Given their charge, their independence is critical to doing it in an unbiased, nonpolitical way,” the Senator said. “There’s a reason that there’s not just one decision maker — that safeguards are built into a board of governors.”
Experts warn that eroding the Fed’s independence could have far-reaching consequences. According 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 think this would 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 promote maximum employment and stable prices, which Chair Powell frequently 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 ensure their independence from political pressure, making it challenging to remove them solely over policy disagreements.
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This article 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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