Elon Musk attacks the Federal Reserve: the reasons
by LORENZO CIOTTI | VIEW 834
Elon Musk attacks the Federal Reserve. The reason? Tesla's founder attacked the FR accusing it of being too slow to lower US interest rates. In an interview with CNBC, Musk expressed concern that the way the Fed is acting is too slow and will continue to be so in the coming months.
The billionaire said the data is somewhat outdated, predicting that the coming year will be difficult for Tesla and other companies as high interest rates weigh on consumers' budgets. On smart working, Musk says he is morally wrong, pointing out that turning on the computer at home reduces productivity.
And that it also sends the wrong signal to factory workers, or employees who don't have the option of remote work. "I say what I want, if it results in losing money, that's fine," he said. Tesla missed its margin target in the first quarter after aggressively cutting vehicle prices amid a slowing economy and growing competition.
About Tesla, Musk acknowledged that the company could take risks in the context of a global economy that will be weak for the next 12 months. At the company's annual shareholders' meeting in Austin, Texas, Musk also dismissed market rumors that he may step down as CEO of Tesla.
The Fed has a unique structure that is both public and private and is described as independent within the US government, with public purposes and some aspects of a private nature. The Fed is considered an independent central bank because its decisions are not ratified by any body of the executive or legislative branch.
The Federal System today consists of a central government agency, the Board of Governors of the Federal Reserve System, based in the capital Washington DC and made up of 7 governors appointed by the President of the United States, and twelve regional Federal Reserve Banks, whose presidents are appointed with complex procedures.
Both the Board and the 12 Reserve Banks share responsibilities for overseeing financial intermediaries and their activities, as well as for providing banking services to credit institutions and the government. One of the main components of the Federal Reserve System is the Federal Open Market Committee, composed of 12 members.
All 7 members of the Board of Governors, the president of the Federal Reserve Bank of New York and, in rotation, 4 of the remaining 11 presidents of the other federal Reserve Banks. The FOMC is responsible for setting up open market operations, the Fed's primary tool for influencing interest rates on the money and financial markets.
Furthermore, once appointed Board members cannot be removed until their term expires. The 12 regional federal banks represent the operational articulation of the central banking system of the United States and are organized as private law entities. The shares of each district can only be held by US banks.