Treasury plans staff cuts at office that analyzes financial system risks

Think big government layoffs went out with Elon?

Not so fast. 2025 is back, at least in the Treasury Department.

Employees at the agency’s Office of Financial Research, a division created by Congress to analyze economic data in the wake of the 2008 financial crisis, were told to expect a reduction in force, according to the Federal News Network.

The OFR was created by the Dodd-Frank Act in 2010. Its mission, as stated on its website, is to “promote financial stability by delivering high-quality financial data, standards, and analysis” that the Financial Stability Oversight Council and its member agencies can use. It monitors financial stress in global markets, bank systemic risk, US money market funds, the repo market, and hedge fund activity, among other financial phenomena.

Treasury plans to reduce the OFR’s headcount by around 30%. The office lost about half of its staff in 2025, going from 196 employees to about 100, and the agency plans to reduce that to 70, according to Government Executive. The Treasury Department’s budget for fiscal year 2026 proposed cutting OFR headcount by more than 60% and its budget by nearly 23%.

The reductions will take place no later than May 15. Staff were given the opportunity to retire early or to take voluntary separation though the Deferred Resignation Program.

Political target? The OFR has been in Republican lawmakers’ crosshairs for years. In 2017 the House introduced a bill to eliminate the office, but it was defeated in the Senate. Senator Ted Cruz tried to end the OFR on three separate occasions, claiming its work was redundant and “lack[ed] fee oversight,” according to the Brookings Institution. (The OFR’s funding comes from fees on large financial institutions.) The OBBBA contained a measure that would have scuttled the OFR, but it was struck down by the Senate parliamentarian.

Shrinking the office could keep the public in the dark about financial risks, warned “a group of more than 50 former Federal Reserve chairs, other former government officials and academics” in a June 2025 letter to Congress, according to Government Executive.

“Defunding or significantly downsizing the OFR and its financial data and analytics would be a mistake,” the group wrote in its letter, “particularly so given today’s elevated macro-financial uncertainties.”