Federal employees fearing job losses receive temporary respite as judge prevents 4,000 layoffs
A federal judge has blocked attempts by the Trump administration to trim the public workforce during the ongoing government shutdown, describing those efforts as “contrary to the laws” and issuing a temporary restraining order.
Last week, more than 4,000 federal workers received reduction-in-force notifications, following through on announcements by Trump and key allies that layoffs were on the way after the government ground to a halt.
On Friday morning, White House office of management director Russell Vought said in an X post that “the RIFs have begun.”
But San Francisco US district court judge Susan Yvonne Illston nixed those efforts Wednesday. “You can’t do this in a nation of laws,” she said, according to an NBC News report. “And we have laws here, and the things that are being articulated here are not within the law.”
She said the Trump administration was assuming “that all bets are off, the laws don’t apply to them anymore” during the shutdown, and that they “can impose the structures that they like on the government situation that they don’t like.”
How the shutdown is impacting the housing and economic outlooks
While a majority of hopeful American homebuyers reported no change in their plans to buy despite the shutdown, 17% said they were delaying a major home or car purchase because of the impasse and 7% canceled plans altogether, according to Redfin.
But the deadlock has also raised concerns about a possible scaling-back or disruptions to key agencies for the mortgage and housing sectors, including the Federal Housing Administration (FHA), Department of Housing and Urban Development (HUD), and Department of Agriculture.
DC-area mortgage brokers, meanwhile, have flagged the risk of a prolonged shutdown and the risk it could pose to federal employees who own homes.
Some of those workers were provided at least temporary respite Wednesday by Illston, even though assistant US attorney Elizabeth Themins Hedges argued during the hearing that employment loss was not an “irreparable harm”.
To date, the economic impact of the shutdown appears unclear. Ten-year US government bond yields – a key driver of 30-year fixed mortgage rates – have ticked sharply downwards over the past week, although a fresh escalation in trade tensions between the US and China fueled much of that drop.
The stock market, meanwhile, has recovered strongly from those geopolitical jitters this week. The S&P500 closed higher Wednesday despite plenty of ups and downs on the day, ultimately finishing in the green thanks in big part to spectacular earnings results from banking giants Morgan Stanley and Bank of America.
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