Elon Musk Eyes Federal Reserve Efficiency, Citing Costly Renovation

Billionaire Elon Musk is considering deploying his government efficiency team to the Federal Reserve, pointing to the central bank’s $2.5 billion headquarters renovation as an example of potential taxpayer waste, Bloomberg reports.

“Since at the end of the day, this is all taxpayer money, I think we certainly — we should definitely — look to see if indeed the Federal Reserve is spending two and a half billion dollars on their interior designer,” Musk told reporters at the White House on Wednesday.

The Fed’s multiyear headquarters renovation, initially budgeted lower, reached $2.5 billion by 2022, attributed by the central bank to rising costs of building materials and labor since the project began in 2021, coinciding with the surge in inflation.

“That’s an eyebrow raiser,” Musk commented.

Musk’s remarks were made in the White House’s Roosevelt Room during an event touting the accomplishments of his Department of Government Efficiency (DOGE), an initiative launched earlier this year by the Trump administration. The event comes a week after Musk reportedly told investors he would reduce his time in Washington to focus on Tesla, amidst declining sales and a falling stock price.

While the Fed doesn’t rely on Congressional appropriations for its operations, instead funding itself through income generated from securities on its balance sheet, it has recently run a deficit due to rising interest expenses, drawing Musk’s scrutiny.

Musk’s proposal for DOGE to examine the Fed is the latest instance of President Trump’s efforts to increase political influence over the traditionally independent central bank, a move that could concern investors who rely on the Fed to manage inflation.

Since Trump appointed Musk to lead DOGE in January, the agency’s teams have been deployed to various federal agencies, tasked with identifying waste and fraud, reducing workforces, and even shutting down entire agencies.

Concerns have been raised regarding DOGE’s methods, including allegations of haphazard data analysis and lax security protocols. The Social Security Administration, for example, experienced online portal crashes after Musk’s team gained access to its systems.

Musk’s statements follow public comments from President Trump, who has expressed his dissatisfaction with Fed Chair Jerome Powell. While Trump initially suggested Powell’s termination “cannot come fast enough,” criticizing the Fed’s monetary policy, he later reversed his stance, stating he had no intention of firing the central bank leader.

For years, the Fed’s income exceeded its operating expenses, resulting in billions of dollars in profits remitted to the US Treasury. However, rising interest rates have reversed this trend, leading to operating losses for the Fed in 2023 and 2024 and a halt to remittances. These shortfalls have caught the attention of Musk, who is charged with reducing federal spending.

The Fed has defended its headquarters renovation, stating that it will consolidate most of its board staff into a single campus, reduce off-site leases, and modernize its workspace. The renovations are expected to take several years to complete.