Federal Reserve Plans to Cut 10% of Jobs Amid Trump's Budget Threats

amsterdam - The US Federal Reserve aims to reduce its workforce by 10% following President Trump's push for budget cuts. Chairman Jerome Powell cites efficiency in the decision.

Federal Reserve to Reduce Workforce by 10%

The Federal Reserve in the US is set to downsize its staff by 10% as revealed in a memo by Chairman Jerome Powell amidst pressure from President Trump. Powell argues that this move will lead to a more efficient organization.

Gradual Implementation

The downsizing plan is expected to be carried out gradually over several years with a focus on incremental adjustments. No mandatory layoffs have been announced at this time, and the Fed declined to provide further details.

Focus on Efficiency and Quality

Powell emphasized the importance of periodically evaluating the workforce and the use of taxpayer money, drawing comparisons to similar actions taken during President Clinton's tenure in the 1990s. The Fed, operating independently with its budget separate from Congress and the White House, stressed that the cuts should not compromise quality and independence.

Trump's Criticism and Market Response

President Trump has criticized Powell for not lowering the policy rate, previously condemning him for raising interest rates. Despite threats of dismissal, Trump later retracted his plans after market turmoil ensued, pledging to retain Powell until the end of his term in 2026.

Reports indicate that since Trump took office, around $140 billion in government spending has been saved through initiatives like DOGE. However, discrepancies in the calculations and inclusion of old contracts have raised uncertainties about the actual impact.