DeSantis attacks Federal Reserve

US Republican presidential candidate Ron DeSantis attacked Federal Reserve monetary policy, suggesting he would replace chair Jerome Powell.

“We need to rein in the Federal Reserve,” DeSantis said in a July 31 economic policy speech in New Hampshire. He accused the central bank of “indulging in social justice or social engineering”, and blamed the Fed’s mismanagement for higher policy rates that make homeownership less affordable. DeSantis said the Fed has “one job, maintain stable prices, and it has departed from that with what it’s done over the last many years”.

The Fed actually has two mandates, to achieve “stable prices and maximum sustainable employment”.

DeSantis pledged to “appoint a chairman of the Federal Reserve… who understands the limited role that it has” and would focus on price stability. Powell is serving his second four-year term, which ends in May 2026.

DeSantis reiterated his opposition to a US central bank digital currency (CBDC), claiming it would be a threat to economic liberty. He said the Fed did not seem to believe that Congress needed to approve a CBDC.

Fed chair Jerome Powell has said Congress would have to explicitly authorise a retail CBDC, but that Congress might not need to legislate for a wholesale version. Neither the US Treasury nor the Federal Reserve currently have any concrete plans to introduce a CBDC.

DeSantis, governor of Florida, is currently the most significant challenger to former president Donald Trump for the Republican presidential nomination. However, he has fallen further behind Trump in recent polls.

Florida passed legislation earlier this year that denies a US CBDC the status of “money” under that state’s commercial law. DeSantis has previously said that policy-makers “are going to try to impose an ESG [environmental, social and governance] agenda on [CBDC]” to prevent purchases of items like gasoline or firearms.