Sen. Rand Paul, R-Ky., discusses the importance of cutting the federal budget on ‘Making Money.’
Federal Reserve Chair Jerome Powell renewed his pushback against Elon Musk’s claims that the Fed is overstaffed during a congressional hearing Tuesday.
Powell was testifying before the Senate Banking Committee for a semiannual update on monetary policy and the economy and was asked by Sen. Andy Kim, D-N.J., about whether the central bank is overstaffed.
“No, I would say that, you know, overworked maybe, not overstaffed. Everybody at the Fed works really hard,” Powell said.
Musk recently said the Federal Reserve is “absurdly overstaffed” and suggested the Department of Government Efficiency (DOGE) could set its sights on an audit of the Fed. He had previously criticized the Fed’s monetary policy decisions.
ELON MUSK WARNS FEDERAL RESERVE MAY FACE DOGE AUDIT
Fed Chair Jerome Powell said the Fed’s workforce is “overworked,” not “overstaffed.” (Seth Herald/Bloomberg via Getty Images / Getty Images)
Powell previously said the Fed goes through a careful budgeting process to determine its staffing levels. At Tuesday’s hearing, he also discussed the role played by the Federal Reserve’s workforce in the early stages of the COVID pandemic and how it was reliant on the knowledge of longtime employees.
“When the pandemic hit kind of out of the blue and economies all over the world are shutting down, the U.S. Treasury market is stopping to function, companies can’t roll over their commercial paper, economists are writing about a depression. People at the Fed who went through the global financial crisis 10 years before stepped forward to say, ‘We got this,’” Powell explained.
“We know what to do. Here’s what we do with money market funds, here’s what we do with companies that can’t get any financing. The markets were closed, and companies were having maturing debt that they had to roll over.”
POWELL PUSHES BACK ON MUSK’S CLAIM FED IS ‘ABSURDLY OVERSTAFFED’
Tesla and SpaceX CEO Elon Musk, who is leading DOGE, has criticized the Fed. (Saul Loeb/Pool/AFP via Getty Images / Getty Images)
“The people who knew what to do in that pretty dire emergency were working at the Federal Reserve and at other places, but I will tell you, it was impressive,” he added. “Really, our work during that acute phase of the crisis was very successful, and it’s entirely due to the knowledge base that resides with career people at the Fed.”
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After testifying before the Senate Banking Committee Tuesday, Powell is scheduled to appear before the House Financial Services Committee Wednesday to deliver his semiannual update on monetary policy and the economy to House lawmakers.
