WASHINGTON — Utah Sen. Mike Lee is spearheading efforts to dismantle the Federal Reserve, accusing the central banking system of being the cause of rising inflation nationwide.
Lee, R-Utah, along with Rep. Thomas Massie, R-Ky., in the House, introduced the Federal Reserve Board Abolition Act this week seeking to abolish the Board of Governors of the Federal Reserve as well as the Federal Reserve banks. Additionally, the legislation would repeal the Federal Reserve Act, a law enacted in 1913 that paved the way for the creation of the Federal Reserve System.
“The Federal Reserve has not only failed to achieve its mandate, it has become an economic manipulator, directly contributing to the financial instability many Americans face today,” Lee said in a statement. “We need to protect our economic future, end the monetization of federal debt that fuels unchecked federal spending, and put American money on solid ground. We need to End the Fed.”
The bill comes amid growing inflation over the last several months, particularly affecting prices for groceries and other consumer goods. Prices rose 0.5% from December to January, marking the fastest pace since August 2023, according to the most recent Consumer Price Index report released in mid-February.
The economy and groceries continue to be top of mind for voters, with 45% of U.S. adults saying the economy is faring fair and 31% say it is doing poorly, according to recent polling from Pew Research Center. Only 24% said the economy was in excellent or good shape.
Meanwhile, more Americans expect food affordability to worsen over the next year, 43%, compared to just 37% who say it will get better, the poll showed. Another 19% said they think it would stay the same.
“Americans have suffered under crippling inflation, and the Federal Reserve is to blame,” Massie said in a statement. “During COVID, the Federal Reserve created trillions of dollars out of thin air and loaned it to the Treasury Department to enable unprecedented deficit spending. By monetizing the debt, the Federal Reserve devalued the dollar and enabled free money policies that caused high inflation.”
It’s not yet clear when the bill will be brought to the floor for consideration, if ever. Opinions of the Federal Reserve are fairly mixed.
The Federal Reserve is meant to respond to economic pressures in a non-partisan way, and is shielded from politics to some degree by design.
But conservatives have long said the Fed has too much discretion. Late conservative economist Milton Friedman was critical of the central bank, and called for more constraints. More recently, critics have pointed to the bank’s failure to stop the increase in inflation after the COVID-19 pandemic, and over the collapse of institutions like the Silicon Valley Bank.
Those who defend the Fed say it leads to fewer panics and a healthier economy.
A survey from Pew Research in August 2024 showed 45% of Americans had a favorable view of the Federal Reserve compared to just 32% who held an unfavorable view. Another 23% said they were unsure.