Construction fencing in front of the Marriner S. Eccles Federal Reserve building in Washington, DC, US, on Thursday, July 24, 2025. (Alex Wroblewski/Bloomberg via Getty Images)
The Federal Reserve plans to slash its banking oversight staff by 30% over the course of a year.
The banking supervision division would be reduced from 500 employees to 350 people, The Wall Street Journal reported. That part of the Fed is tasked with overseeing and regulating banks, which includes annually stress-testing their ability to withstand financial shocks.
Vice Chair Michelle Bowman serves as the top cop on banking issues, and she reportedly announced the staff cuts during a Thursday morning meeting.
A spokesperson for the Fed declined to comment.
Bowman is one of the five finalists that Trump is eyeing to replace Fed Chair Jerome Powell once his term is up in May 2026. Her move aligns with the Trump administration's efforts to ease up regulations on large banks.
She had raised concern about burdensome federal guidelines and their effectiveness in serving banks and their customers earlier on Thursday. "Over time, some of our regulations have unduly restrained the activities that banks can engage in, incentivizing banks to limit those activities and pushing those functions outside of the banking system," she said in a speech. "We need to ask whether this is appropriate."
The steep Fed staff cuts stirred quick criticism from one prominent Democratic senator.
"The Fed is actively undermining American financial stability at a moment when Donald Trump is taking a wrecking ball to our economy," Sen. Elizabeth Warren of Massachusetts, the ranking member on the Senate Banking panel, said in a statement. "We all know what happened the last time we let Wall Street run rampant, and I’m deeply concerned American families will pay the price once again."
