Washington D.C. - While Federal Reserve Chair Jerome Powell remains optimistic about the US economy, the Federal Reserve system itself is undergoing a significant reduction in its workforce.
A spokesperson from the Federal Reserve confirmed to CNN on Friday that approximately 300 jobs will be cut by the end of the year, marking an unusual reduction in headcount for the central bank. This is the first such reduction since 2010. Currently, the Federal Reserve system employs around 21,000 individuals across its 12 regional reserve banks.
The spokesperson clarified that these reductions, which were previously reported by Reuters, will encompass a combination of layoffs, early retirements, and choosing not to fill vacant positions. However, the exact number of individuals affected was not disclosed.
Primarily, the job cuts will target support roles, particularly in the realm of technology, where certain positions have become redundant, according to the Federal Reserve spokesperson.
These layoffs come on the heels of Powell's recent expression of surprise at the resilience displayed by the US economy in the face of inflation and escalating interest rates.
During a press conference following the central bank's latest monetary policy meeting, Powell stated, "Economic activity has been stronger than we expected, stronger than I think everyone expected."
In line with this positive outlook, Fed officials have revised their forecasts, anticipating heightened economic growth while lowering projections for unemployment.
Nevertheless, Powell acknowledged that achieving a balanced level of inflation may necessitate some moderation in the job market. He also cautioned that achieving a soft landing, where inflation is controlled without slipping into a recession, is not guaranteed.
While Powell expressed that a soft landing is "possible," he acknowledged that external factors beyond their control may ultimately determine the outcome.
As the Federal Reserve navigates this internal restructuring, the broader economic landscape continues to evolve, leaving both policymakers and the public vigilant for any potential shifts in the trajectory of the US economy.