Finance

Michael Barr to step down as the Fed’s head of banking supervision to avoid clash with Trump

Published

4 months ago

January 6, 2025

The Federal Reserve’s top banking regulator will be stepping down next month, paving the way for President-elect Donald Trump to name a replacement and heading off a potential confrontation between the two.

Michael Barr’s resignation from the position, which is formally called the vice chair for supervision, takes effect as of Feb. 28, though he will stay on as a governor on the Fed board. His term as Fed governor lasts until 2026.

There had been speculation that Trump might seek to replace Barr after he takes office Jan. 20, the announcement will ease that transition amid speculation that the new president wants someone who is more bank-friendly to take the role.

Though he did not specifically mention the rumors that Trump would attempt to remove him, Barr said in a statement that “the risk of a dispute over the position could be a distraction from our mission. In the current environment, I’ve determined that I would be more effective in serving the American people from my role as governor.”

“It has been an honor and a privilege to serve as the Federal Reserve Board’s vice chair for supervision, and to work with colleagues to help maintain the stability and strength of the U.S. financial system so that it can meet the needs of American families and businesses,” he said.

Bank stocks rallied following the announcement. The SPDR S&P Bank exchange-traded fund that tracks the industry’s leaders gained more than 1%.

CNBC.com has reached out to the Trump transition team for comment.

In a release announcing the decision, the Fed noted that it will not make any major decisions on rules and regulations until a successor is named. The bank has been revising a set of new rules, dubbed the Basel endgame, that has been broadly unpopular in the industry.

Because the Fed is limited to seven board members, Trump will have to name someone from current group to the new position.

The position was created following the 2008 financial crisis that saw the implosion of multiple big names on Wall Street. Under Barr’s watch, the industry saw a crisis in early 2023 in which Silicon Valley Bank and a few other names collapsed, forcing the Fed to implement a liquidity facility to keep the issues from spreading.

In recent days, speculation had swelled that Trump might seek to force Barr from office. A Reuters report in late December indicated that Barr was consulting with a law firm over his legal options should the president-elect make a move.

Finance

Insiders at UnitedHealth are scooping up tarnished shares

Published

1 day ago

May 16, 2025

Business Finance News

Key Points

UnitedHealth Group saw some of its insiders step in and purchase declining shares this week.
Kristen Gil, a director at the firm, bought 3,700 shares worth roughly $1 million on Thursday.
Shares of UnitedHealth plunged nearly 11% to $274.35 on Thursday following a report in The Wall Street Journal that the Department of Justice is conducting a criminal investigation into possible Medicare fraud.

Finance

Federal Reserve will reduce staff by 10% in coming years, Powell memo says

Published

1 day ago

May 16, 2025

Business Finance News

U.S. Federal Reserve in Washington, DC, on January 30, 2024.

Mandel Ngan | Afp | Getty Images

The Federal Reserve will look to reduce its headcount by 10% over the next couple of years, including offering deferred resignation to some older employees, central bank chair Jerome Powell said in a memo.

“Experience here and elsewhere shows that it is healthy for any organization to periodically take a fresh look at its staffing and resources. The Fed has done that from time to time as our work, priorities, or external environment have changed,” Powell said in a memo obtained by CNBC.

The central bank chief added that he has instructed leaders throughout the Fed “to find incremental ways to consolidate functions where appropriate, modernize some business practices, and ensure that we are right-sized and able to meet our statutory mission.” One method for shrinking the staff will be to offer a voluntary deferred resignation program to employees of the Federal Reserve Board who would be fully eligible to retire at the end of 2027.

The central bank said in its 2023 annual report that it had just under 24,000 employees. A 10% reduction would bring that number below 22,000.

The memo comes as the Trump administration has pushed for cost cuts across civil service agencies, spearheaded by Elon Musk and the so-called Department of Government Efficiency. Musk has previously called the Fed “absurdly overstaffed.” Powell’s memo did not mention Musk or DOGE as a factor in the decision to shrink headcount.

The planned staff cuts were first reported by Bloomberg News.

— CNBC’s Matt Cuddy contributed reporting.