Musk Calls The Fed 'Absurdly Overstaffed', Implying A Major Personnel Cut

After what happened last week in the congress, Musk Now has set his sights on a new target—the Federal Reserve System of the United States.

On Monday morning, Musk suddenly stated that the staffing of the Federal Reserve is "absurdly overstaffed."Musk's remarks quickly attracted attention.

As a close ally of Trump, Musk also serves as the co-chair of the Department of Government Efficiency, whose main goal is to cut U.S. federal government spending by $2 trillion before July 2026.

However, by reaching out to the Federal Reserve, Musk may face a tough counterattack from Powell, just like Trump.

'A Fed Layoff' Is Harder Than It Looks?

The Federal Reserve, headquartered less than a kilometer from the White House, along with 12 regional reserve banks, employed about 24,000 people last year.

This figure comes from the Federal Reserve's first announcement of layoffs in more than a decade last year, expecting the number of employees to decrease from 24,428 to 23,895. The layoffs mainly reflect technological advancements, such as the widespread adoption of cloud computing, which made some information technology positions unnecessary, and some positions related to the payment system have also been integrated.

The Federal Reserve's annual expenditure is about $6 billion, mainly obtained from the interest on holding government bonds and various fees, and it even transfers surpluses to the Treasury in good years.

Given the unique situations faced by central banks, it is difficult to simply compare the number of personnel in various institutions. For example, the European Central Bank has about 5,000 employees, but if the employees of the member countries' central banks are also counted, it would be the largest central bank system in terms of employee numbers globally.

It is worth mentioning that, similar to the U.S. president's inability to dismiss the chairman of the Federal Reserve, the White House probably also lacks direct means to order the Federal Reserve to lay off staff. As a design to maintain the independence of the Federal Reserve under the U.S. Federal Reserve Act, the hiring and layoffs of Federal Reserve employees are part of internal management and are not subject to White House interference.

However, undoubtedly, Musk's latest remarks will add a new "headache" for Powell.

Battling For 'Monetary Power'

Although Trump has publicly confirmed that he will not try to fire him before Powell's term expires in 2026, he has not given up his vision of having some say in monetary policy and naturally has not given up his stance of pressuring Powell.

After previously mocking Powell's job as just going to the office to flip a coin once a month, Trump nominated economist Stephen Miran as the director of the White House Economic Committee on Sunday, adding some voices criticizing Powell.

During Trump's last term, Miran served as a senior advisor on economic policy at the Treasury Department. This year, Miran co-authored a famous paper accusing the Biden administration's Treasury Department of invisible quantitative easing, which hinders the reduction of inflation in the United States. The U.S. Treasury Department subsequently denied this situation.

Miran criticized Powell's call for more proactive fiscal policy before the 2020 election, saying that Powell was wrong politically and economically.