In the largest move since the financial crisis of 2008, Federal Reserve Chairman Jerome Powell announced a plan to reduce approximately 10% of the workforce in the institution, aiming to cut the number of employees from 24,000 to about 22,000 by the end of 2027.
📉 Background of the decision and internal controversy
This decision came after a secret meeting held in Philadelphia during the spring of 2025, attended by the presidents of the 12 regional reserve banks. The meeting discussed pressures from the Trump administration to reduce the size of the federal government. The decision sparked a divide within the institution, as some regional officials expressed concern about its impact on the operational capacity of the central bank.
🎯 Goal: Balancing political pressure while maintaining independence
The stated goal of the reduction plan is to achieve a balance that responds to political demands seeking to shrink the size of government institutions, while also ensuring the operational independence of the Federal Reserve and its ability to make monetary policy decisions freely without compromise.
📊 Reactions and effects on markets (including cryptocurrencies)
•Reactions: They were mixed, as some analysts warned of potential negative operational impacts, while broader financial markets remained relatively stable.
•Direct impact on cryptocurrencies: No direct impact on the digital currency market was observed from this announcement.
•Broader context for Bitcoin: At the time the news was published, Bitcoin was trading around $87,443, showing a slight decline over 24 hours. The "Coinco" team analyzes that reductions may not directly impact cryptocurrencies, but they could indicate broader economic shifts that may affect long-term market expectations.
In summary, this step represents an attempt by the Federal Reserve to maintain its independence and traditional authority in setting monetary policy, in the face of external political pressures to reduce spending and shrink the federal institution.
