White Home deputy chief of workers James Blair discusses President Donald Trump calling out Fed Chair Jerome Powell on the costly renovations to Fed Reserve headquarters on ‘Kudlow.’
The Federal Reserve (the “Fed”) is a behemoth company with the flexibility to govern and management your complete American economic system. Our jobs, our funds, our financial savings and, in the end, our livelihoods — all of them are topic to the choices made on the Fed.
However the Fed’s deliberations and operations occur behind closed doorways.
It’s time for us to know the way the Fed makes its selections. Congress should take quick steps to supply transparency for the American folks.
FOUR KEY TAKEAWAYS FROM TRUMP’S VISIT TO THE FEDERAL RESERVE WITH POWELL
No different establishment has a lot unchecked energy. Look no additional than the limitless authority the Fed utilized in response to the COVID-19 pandemic. The Fed printed cash, bought government-backed securities and doled out large quantities of cash to favored industries. These actions added nearly $5 trillion in debt to the Fed’s steadiness sheet.
The push to audit the Fed has change into bipartisan and there may be new laws that might just do that.
To be clear, representatives of the Fed are solely focused on transparency to the extent it offers them political cowl. As a result of, to them, the opacity of the Fed is a characteristic, not a bug, and their management considers secrecy to be an incredible asset.
When you ask them, accountability to the American folks and to the taxpayers who prop up their monetary home of playing cards is definitely unhealthy. From the Fed’s perspective, to even query this association is in a roundabout way dangerous or harmful.
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Our nation is now over $37 trillion in debt. Not sufficient folks in Washington are keen to say “no” as a result of they don’t wish to cease spending different folks’s cash — the “other people” being future generations of People who’re defenseless towards the voices of the current as they ask for tomorrow’s cash right this moment.
The Fed owns a share of duty for this, as their machinations and manipulations assist perpetuate this unsustainable state of affairs, however with rising problem annually.
‘Varney & Co.’ host Stuart Varney discusses President Donald Trump’s public ‘argument’ with Fed Chair Jerome Powell over constructing renovations.
Nobody pays consideration to the tons of of billions of {dollars} the Fed unnecessarily paid to banks to not lend cash to customers.
For practically a century, the Fed paid no curiosity to banks for holding Federal Reserves in these banks’ deposit containers, however all that modified within the wake of the 2008 monetary disaster.
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Paying curiosity to banks for holding Fed funds was initially supposed to regulate inflation. And from 2008 to 2016, the rate of interest on reserves was a paltry 0.25%, and annual funds averaged $5 billion.
However the scenario rapidly turned dramatically totally different. In the present day’s rate of interest is over 4% and, subsequently, the Fed’s subsidy to banks skyrocketed. To be clear, what this implies is that the Fed has paid tons of of billions of {dollars} to banks for not lending cash to customers.
When you ask them, accountability to the American folks and to the taxpayers who prop up their monetary home of playing cards is definitely unhealthy. From the Fed’s perspective, to even query this association is in a roundabout way dangerous or harmful.
In 2022, the Fed paid practically $60 billion to banks. In 2023, the Fed funds to banks rose to over $176 billion, and in 2024, the Fed’s subsidy to banks rose to about $186 billion. And 44% of those subsidies are paid to overseas banks.
It will get worse. The Fed is just not worthwhile and hasn’t been worthwhile for a number of years. The truth is, I’ve argued that the Client Monetary Safety Bureau, the leviathan company that infamously receives funding from the Fed, ought to be shut down as a result of the Fed has been working at a loss since 2022.
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One of many main causes the Fed has continued to function at a loss is due to its economically illiterate dedication to creating these curiosity funds, that are solely discretionary and never required.
The Fed has authority to reinstate reserve steadiness necessities and guarantee banks wouldn’t be entitled to those curiosity funds. Within the meantime, the Fed is selecting by way of its insurance policies to make its losses worse than they should be.
Secretary of Treasury Scott Bessent stated we have to study each side of the Fed. FILE: Bessent and President Donald Trump look on throughout The White Home Digital Property Summit within the State Eating Room of the White Home on March 7, 2025. (Anna Moneymaker/Getty Photos / Getty Photos)
Whereas the Fed not has income and has ceased returning any income to the taxpayers by remitting these funds to the Treasury, it has nonetheless paid tons of of billions of {dollars} to banks. In the meantime, the nation’s largest banks obtain the majority of the Fed funds.
Though, it’s arduous to say who and the way a lot, as a result of all of that may be a secret saved hidden by the Fed, and it might solely be the tip of the iceberg.
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Taxpayers have to know why the Fed can’t afford insurance policies that profit them, however can afford tons of of billions in financial institution payouts.
Azoria CEO James Fishback weighs in on Federal Reserve Chairman Jerome Powell’s broadly criticized transfer to not decrease charges.
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On July 21, I launched the “End the Fed’s Big Bank Bailout Act, which would terminate the Federal Reserve’s subsidy to big and foreign banks by prohibiting the payment of interest on reserve balances. Vermont Independent Sen. Bernie Sanders’s support of this legislation is indicative of the broad appeal of ending easy profits for banks at the expense of taxpayers.
I then proposed legislation to audit the Fed, the “Federal Reserve Transparency Act.” More and more figures in government are moving to hold the Fed accountable, and the momentum for transparency is building.
Now, in response to reports of hundreds of millions of dollars in cost overruns for what is now a $2.5 billion renovation of the Federal Reserve offices, the dam has broken.
In 2022, the Fed paid nearly $60 billion to banks. In 2023, the Fed payments to banks rose to over $176 billion, and in 2024, the Fed’s subsidy to banks rose to about $186 billion. And 44% of these subsidies are paid to foreign banks.
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U.S. Secretary of Treasury Scott Bessent indicated on July 21 that we need to “study your complete Federal Reserve establishment and whether or not they have been profitable[.] Has the group succeeded in its mission? … All these PhDs over there, I don’t know what they do.”
Without accountability and transparency, the Fed has manipulated the economy and squandered resources. The reality is undeniable. The urgency is real. The moment is now. It’s time to audit the Fed.
Republican Rand Paul represents Kentucky in the United States Senate. He is the author of the book “The Case In opposition to Socialism” (Broadside Books, October 2019).
