With President-elect Donald Trump's anticipated return to the White House, the potential for significant alterations to the Federal Reserve's operations looms large. However, a more pressing issue has emerged: whether the central bank will continue to function at all. Elon Musk, a prominent Trump supporter expected to wield considerable influence in shaping Trump's policies, has sparked debate by reposting a message from Republican Senator Mike Lee of Utah on social media platform X, advocating for the abolition of the Federal Reserve.

Musk's repost included a "100" emoji, signifying his agreement. Senator Lee stated on X, "The Executive Branch should be under the president's direction," following Fed Chair Jerome Powell's announcement that he would not resign if Trump requested it. "The Federal Reserve is one of many examples of our deviation from the Constitution," Lee continued, "which is yet another reason why we should #EndTheFed."

When asked about Trump's stance on abolishing the Fed, Trump-Vance transition spokesperson Karoline Leavitt responded, "Policy should only be deemed official if it comes directly from President Trump." The idea of dismantling the Fed is not new; former Congressman Ron Paul, who ran for president as both a Libertarian and a Republican, published a book in 2009 titled "End the Fed."

In June, Republican Representatives Thomas Massie of Kentucky and Mike Lee introduced bills aimed at dismantling the central bank and transferring its responsibilities to the Treasury Department. However, Trump has not publicly expressed support for dismantling the Fed. During his campaign, he advocated for changes to the central bank's rules, much to the dismay of many economists.

"The American people have re-elected President Trump by a resounding margin, giving him a mandate to implement the promises he made on the campaign trail. He will deliver," Leavitt said in an emailed statement. Those promises include reducing interest rates significantly, a pledge Trump made at the National Association of Black Journalists' annual conference in August.

However, presidents do not have direct control over the rates Americans pay to borrow money. For over 70 years, it has been the central bank's responsibility to set rates aimed at achieving its congressional mandate for price stability and maximum employment. Throughout this period, Congress has also ensured the Fed's ability to act independently, free from political interference.

This autonomy has allowed Fed officials to make unpopular interest rate decisions that could benefit the nation's economy in the long run. For example, central bankers resisted calls to lower rates and instead kept them at a two-decade high for a year to curb stubborn inflation. It was only two months ago that they finally cut rates as inflation cooled to just below the Fed's 2% target.

During his campaign, Trump proposed requiring Fed officials to consult with him on interest rate decisions, which could pressure them to keep rates lower to satisfy his wishes, potentially reigniting inflation. In his first term, Trump also threatened to remove or demote Fed Chair Jerome Powell, whom he has blamed at times for keeping interest rates too high.

It is unclear whether Trump has the legal authority to alter the Fed's independence unilaterally, or to remove a Fed appointee before their term ends. Regarding the latter, Powell, a lawyer, made his stance clear when asked by a reporter at last week's press conference following the Fed's two-day monetary policy meeting. "Not permitted under the law," he responded succinctly. The head of America's central bank can only be fired "for cause," as specified in the Federal Reserve Act. The exact interpretation of what would constitute a for-cause firing has not been precisely defined, but it is reasonable to assume that it would involve more than just policy disagreements with the president. A spokesperson for the Fed declined to comment.

If there is a time for Trump to test the Fed's ability to maintain its status quo, it would likely be in 2025. While the balance of power in the House remains undetermined, Republicans hold a majority in the Senate. Additionally, six of the nine Supreme Court justices were appointed by Republican presidents, with half of those six appointed by Trump during his first term. However, anyone challenging the Fed in the nation's highest court should not expect an automatic victory.

In a 7-2 court ruling this year, the Supreme Court ruled that the Consumer Financial Protection Bureau could continue to operate in its current form, despite many Republican lawmakers' arguments that its structure was unconstitutional. Last month, the court declined to hear a case that threatened to dismantle the independent Consumer Product Safety Commission. Like officials on the Fed's Board of Governors, members of the Consumer Product Safety Commission's board can only be removed by a president for cause.