Florida Governor Ron DeSantis has criticized the Federal Reserve for its handling of the US economy, claiming that the central bank has done a “horrible job” and “created potential significant turmoil.” He accused the Fed of causing dislocations in the banking sector and called for a ban on the use of central bank digital currencies (CBDCs) in Florida. DeSantis introduced legislation in March that would prohibit the use of any Fed-issued digital currency, while Republican Senator Ted Cruz has also proposed a bill banning CBDCs.[0] Meanwhile, on the Democratic side, Robert F. Kennedy Jr. has tweeted that CBDCs “grease the slippery slope to financial slavery and political tyranny.”[0]
DeSantis’s comments came as part of a nationwide book tour, during which he claimed that Fed Chair Jerome Powell had been a “total and complete disaster.”[1] He accused the central bank of mishandling inflation, which he said had started to “percolate” and had been dismissed as “transitory” by the Fed. When inflation continued to rise, DeSantis claimed that the Fed had responded by hiking rates rapidly, causing dislocations in the banking sector and harming individuals who had “taken their eye off the ball and didn’t know what they were doing.”[2]
DeSantis’s criticisms of the Fed echo those of other politicians and commentators who have expressed concerns about the central bank’s policies. Some have accused the Fed of fueling inflation by keeping interest rates too low for too long, while others have warned that its massive bond-buying program is distorting financial markets and could lead to a crash. Meanwhile, the push to ban CBDCs reflects a broader debate about the future of money and the role of central banks in a digital age.
Despite the criticisms, the Fed has maintained that its policies are necessary to support the US economy and ensure stable prices. Powell has defended the central bank’s response to inflation, arguing that it is “transitory” and will eventually subside as supply chains normalize and pandemic-related bottlenecks ease. He has also emphasized the need for the Fed to remain vigilant and take action if necessary to prevent inflation from spiraling out of control.
As the debate over the Fed’s policies and the future of money continues, it remains to be seen what impact DeSantis’s proposed ban on CBDCs will have. While it is unlikely to have much effect on the wider adoption of digital currencies, it could signal a growing backlash against central banks and their role in the financial system. As the world becomes increasingly digital, the debate over the future of money is likely to become more heated and contentious.
0. “Ron DeSantis’s Deranged Rant About the Fed Ought to Doom His Campaign” The New Republic, 7 Apr. 2023, https://newrepublic.com/article/171694/ron-desantiss-deranged-rant-fed-doom-campaign
1. “Gov. DeSantis calls out Fed Chair Powell” Yahoo Canada Finance, 6 Apr. 2023, https://ca.finance.yahoo.com/video/gov-desantis-calls-fed-powell-205300346.html
2. “Ron DeSantis flogs Fed for ‘perverse incentives’ in monetary policy, interest rates” Florida Politics, 29 Mar. 2023, https://floridapolitics.com/archives/599192-desantis-fed/
