(Bloomberg) -- Elon Musk, the billionaire tasked with making the US government more efficient come January, has zeroed in on the Federal Reserve.
The central bank in charge of protecting the world’s largest economy is “absurdly overstaffed,” Musk wrote on social-media platform X. The remarks were part of a thread that began with another individual posting about the Fed’s latest policy decision. Musk, a prolific social-media commentator, didn’t expand on the remark.
Musk has become one of Trump’s closest advisers as the latter prepares to return to the White House, and is set to lead up a new agency — called the Department of Government Efficiency — along with entrepreneur Vivek Ramaswamy. DOGE, as it’s known, seeks to deliver a leaner, more efficient government, including $2 trillion in spending cuts.
The Federal Reserve Board in Washington and its 12 regional reserve banks across the US employed about 24,000 people last year. That’s significantly less than comparable institutions. In the Eurosystem, which comprises the European Central Bank and the region’s 20 national peers, the central banks of Germany, France and Italy together had more people on their payrolls.
Unlike many parts of the federal government, the US central bank doesn’t receive funding through the congressional budgetary process. Its income derives from its own operations — primarily from the interest on government securities that it has acquired through open market operations.
In usual times, the Fed is a source of revenue for the government. Before its rapid interest-rate hikes in 2022 — which boosted the amounts the Fed pays on deposits and shrank its net income — it sent roughly $100 billion a year of surplus earnings to the Treasury.
The Fed has more broadly been a target of President-elect Donald Trump in the past for its conduct of monetary policy. During the campaign, he argued that he should have a say in monetary policy and the setting of interest rates. Recently, he ridiculed Chair Jerome Powell’s role as “the greatest job in government,” saying, “you show up to the office once a month, and you say, ‘Let’s see, flip a coin.”
While Powell hasn’t responded directly, ECB President Christine Lagarde challenged Trump’s gripe, inviting him to come and observe the work of her team in Frankfurt.
“I have thousands of hard-working people — economists, jurists, computer scientists — and I can assure you that they work super hard every day, not just once a month,” she told Bloomberg TV. “We defend the euro, and we fight for the euro, just as the Fed defends the dollar, I’m sure — I don’t want to speak for Jay Powell, but I’m sure that’s how he sees his job.”
(Updates with context on Fed funding starting in fifth paragraph.)
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