Calls for Federal Reserve Overhaul by Economist Larry Kudlow

On Wednesday, economist Larry Kudlow shared his thoughts on FOX Business, arguing that the Federal Reserve needs a comprehensive overhaul.

Following a two-day meeting, the Federal Reserve decided to cut interest rates, responding aggressively to pressure from President Trump. During the “Big Money Show” segment, Kudlow remarked that the Fed has seemingly lost its way in terms of mission and reliability, insisting it requires a fundamental restructuring.

“We absolutely need a completely different Fed. A total overhaul,” Kudlow stated. “Their financial and regulatory policies, the budget—everything seems to be out of control, with a 300% increase over recent years.”

Kudlow was particularly critical of the Fed’s “extraterrestrial” currency experiments, arguing that they have failed to produce healthy monetary conditions or stable dollars.

“The level of regulatory interference is astonishing. Their financial experiments? They’re absurd. They’ve not been effective for years. We’re not getting healthy money,” he commented. “There’s no assurance that the dollar you hold today will have the same value tomorrow.”

The Fed’s decision to lower interest rates also came after employment growth did not meet expectations. The August employment report indicated a modest increase of just 22,000 jobs, while revised data from the Bureau of Labor Statistics showed a much larger gain of 911,000 jobs than previously thought.

In the meantime, inflation saw a rise in the consumer price index from 2.7% the previous month to 2.9% in August.

On the same day as the interest rate discussions, the Senate confirmed Stephen Milan, head of the Economic Advisory Council, to succeed Adriana Kugler, who resigned in August. Additionally, a federal appeals court allowed Gov. Lisa Cook to remain in her position while she contests her dismissal by Trump.

Milan supported a deeper half-point cut, differing from the rest of the committee’s stance. Treasury Secretary Scott Bescent raised concerns about increasing partisanship among local board members, suggesting it had diminished public trust in the Fed.