As a Result of the Trump Overhaul, Wall Street's "Cops" Have Gone

Senator Elizabeth Warren has sharply criticized former President Donald Trump's efforts to scale back federal regulatory agencies, warning that these moves could leave both consumers and financial markets vulnerable to abuse and instability. She expressed concern that such deregulation, paired with ongoing economic uncertainty from the Trump administration’s trade policies, could deepen the risks to the U.S. financial system.

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In an interview with Bloomberg News, Warren, a Democrat from Massachusetts and one of the key figures behind the creation of the Consumer Financial Protection Bureau (CFPB), said Trump is consistently working to appoint officials who favor rolling back regulations across the financial sector. “Trump at every turn is trying to put deregulators in place across the whole financial services space, and that is really dangerous,” she said.

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Her comments came amid a dramatic shake-up at the CFPB. According to a legal filing from the union representing CFPB employees, the agency could lose as many as 1,500 of its 1,700 staff members, as the Trump administration pushes forward with mass layoffs. Warren, who has long championed the agency's role in protecting consumers, sees these layoffs as a major blow to regulatory oversight.

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The Securities and Exchange Commission (SEC) has also seen significant downsizing. Around 500 staff have reportedly accepted buyout packages or postponed resignations, part of a broader plan to shrink the federal workforce. As a result, the SEC has pulled back from several high-profile enforcement cases involving cryptocurrency and has scrapped or paused rules that were enacted under President Joe Biden.

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“Now the cops are gone,” Warren stated bluntly, referring to what she sees as a deliberate effort to weaken oversight of financial markets.

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Trump and his senior officials, including National Economic Council Director Kevin Hassett and Office of Management and Budget chief Russ Vought, have argued that these moves are necessary to reduce federal spending and eliminate unnecessary bureaucracy. Trump’s administration has framed the rollback of regulatory agencies as a way to spur economic growth and reduce government inefficiencies.

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In particular, the CFPB has been a frequent target of Republican criticism, with detractors arguing that it imposes excessive and overreaching rules on the financial sector.

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The dismantling of the CFPB has been led by the Department of Government Efficiency (DOGE), an initiative spearheaded by billionaire adviser Elon Musk and Russ Vought. DOGE has not only suspended many of the CFPB’s functions, including its oversight of financial firms, but has also moved to close its Washington, D.C., headquarters. These actions have triggered a series of lawsuits aimed at preventing the mass layoffs and challenging DOGE’s attempts to access sensitive CFPB data systems.

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Warren views all of this as part of a broader pattern of what she calls “reckless” behavior by Trump. She grouped these deregulatory moves with other actions that have caused economic uncertainty, such as Trump’s abrupt imposition of tariffs followed by sudden policy reversals, threats to revoke the tax-exempt status of universities and nonprofits that oppose him, and his continued public attacks on Federal Reserve Chair Jerome Powell.

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Trump recently labeled Powell “a terrible” head of the Fed, criticizing him for not acting quickly enough to lower interest rates. Trump believes that rate cuts would help combat inflation and soften the economic fallout from his tariffs. “He’s too late — always too late,” Trump said. “And I’m not happy with him. I let him know it.” National Economic Council Director Hassett later told reporters that Trump was exploring the legality of removing Powell from his position.

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The accumulation of such erratic policy shifts, Warren warned, has left businesses unsettled and the broader economy on shaky ground. She pointed to turbulence in the bond markets as a troubling sign, suggesting the U.S. might be losing its historical role as a global safe haven during periods of economic turmoil.

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“We’re already paying a huge price for every hour that goes by that he gets out there and rattles his sabers about firing the chairman of the Fed,” Warren said. “Whatever the next thing he picks up is another cost and another blow and pushing the economy closer into recession that we just may not be able to reel back.”

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Economic indicators are already reflecting the public’s growing unease. According to data released by the University of Michigan, consumer confidence has plummeted by 30% since December. Meanwhile, inflation expectations have jumped to their highest levels since 1981.

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Warren noted that discontent is growing at the grassroots level. Across the country, from farmers in Iowa to factory workers in Pennsylvania and researchers in California, people are starting to question the direction the country is heading. “It’s farmers in Iowa and factory workers in Pennsylvania and researchers in California who are all saying, I may have voted for Donald Trump or not. But this has to stop,” she said.

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