Wharton School finance professor emeritus Jeremy Siegel shared his insights on the Federal Reserve’s decision to leave interest rates unchanged on “The Claman Countdown”. The discussion was sparked by a recent comment from Federal Reserve Chair Jerome Powell, who pushed back on a claim made by billionaire Elon Musk that the central bank is bloated.
Musk, who leads President Donald Trump’s Department of Government Efficiency (DOGE), had written in a post that “The Fed is absurdly overstaffed”. Powell was asked about this remark during a press conference following the Fed’s announcement to hold interest rates steady. Powell responded by saying that the Fed has a careful budgeting process, and that the central bank is fully aware of its expenses and believes it owes it to the public to run a tight budget.
This is not the first time Powell and the Fed have faced criticism from Musk. In May 2024, Musk posted that the Fed has a “crazy high number of employees”, and last summer, he said that the Fed was too slow in cutting interest rates. Musk’s DOGE has also proposed a number of budget cuts, including simplifying the U.S. tax code, auditing the Pentagon, and reevaluating expired congressional programs.
The Fed did cut interest rates at its September meeting, cutting the benchmark federal funds rate by 50 basis points, but paused this month amid economic uncertainty.