Trump Shakes Fed After It Ignores 'Rate Cut' Demands

Executive Order to Strengthen Control Over Federal Agencies

Musk: "Will Audit Fed Board"

Controversy arises as U.S. President Donald Trump signs an executive order that could undermine the independence of the Federal Reserve (Fed). While the White House stated there would be no interference with monetary policy, concerns persist given the president's continued demands for 'interest rate cuts'.

According to The New York Times (NYT) and other sources on the 20th (local time), President Trump signed an executive order on the 18th strengthening control over traditionally autonomous agencies including the Fed, Federal Election Commission (FEC), Federal Communications Commission (FCC), and Securities and Exchange Commission (SEC). The White House clarified that the executive order would not apply to the Fed's monetary policy decisions, including interest rate determinations. However, this opens the door for White House influence on Wall Street financial firm supervision and budget matters.

This raises concerns about potential indirect White House influence on Fed monetary policy. The NYT pointed out that "this order is the president's attempt to concentrate executive power in the government" and that "a president with a history of trying to influence central bank rate decisions could eventually shake monetary policy." Graham Steel, a former Treasury official turned lawyer, stated that "if these agencies accept the effects of the executive order, only (Trump's) self-restraint can stop him."

Comments from Elon Musk, founder of Tesla and head of the Department of Government Efficiency (DOGE), further fueled these suspicions. At a conservative political gathering in National Harbor, Maryland, Musk announced "plans to audit the Fed board." President Trump has been pressuring the Fed to lower interest rates since his presidential campaign.

Reporter Kim Dong-hyun 3code@hankyung.com