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President Trump says his decision on who he'll pick to succeed Jerome Powell as Chair of the Federal Reserve is coming out very soon. That's what he told reporters on Air Force one last Friday. The President hasn't been shy about criticizing Powell and Powell's approach to monetary policy. After we got new inflation numbers on Wednesday morning, Trump immediately took to truth social to demand the Fed lower interest rates by a full point. Powell's term is chair expires
in May of twenty twenty six. That's less than a year from now. But in recent weeks, President Trump seems to have accelerated his search for the next head of the Fed. Nancy Cook covers politics for Bloomberg.
It is something that people inside the administration and outside are starting to think about, particularly as Trump grows more and more frustrated with the Federal Reserve not cutting interest rates and he feels like that is a threat to his own economic agenda.
Kevin Warsh was long thought to be the front runner. He's a former Fed governor, but now there's a new name under consideration. According to reporting, from Nancy Cook and my co host Seleiah Mosen And that is Scott Bessont, the current Treasury secretary.
You know, a lot of the finance people that Sleay and I talked to sort of consider him the adult in the administration, has sort of great presence, is doing a lot of good policy stuff, and so it's interesting that his name is emerging to.
Then, of course, there is Trump's signature style when considering a high profile nomination like this.
How many more names can we put in there that makes Trump feel like he's got this apprentice style option in front of him.
Bestt responded to a question about Nancy and Selia's reporting during a hearing before the House Weighs and Means Committee on Wednesday. I am happy to do what President Trump wants.
Me to do.
He said, he has what he views as one of the best jobs in Washington, listed his goals for the Treasury under his leadership, and concluded.
And I would like to stay in my seat through twenty twenty nine to do that.
I'm David Gerret and this is the Big Take from Bloomberg News Today. On the show, Seleia and Nancy joined me to talk about their scoop and about what the President wants in a FED chair, what could be appealing to him about Scott bessen't in that role, and the state of play, what Trump is saying about when he'll make his decision, Nancy. Before we get into who President Trump wants to be the next FED chair, let's start with what the President wants in a FED chair. What's he looking for?
Well, I think President Trump has been so frustrated by the FED dating back to even his first term. He was frustrated with J. Powell, then he's frustrated with J. Powell now, and I think that what he really wants is, you know, someone who follows his economic lead a little bit more on what the FED should be doing, particular interest rates, and he wants someone who is going to make him look good on the economy, sort of do
what he wants, follow his lead. I don't think that that Trump wants a total sikofan who he can call up and just say you better do this this month. But I think he wants someone more malleable than Jay Powell is.
Right now, we've heard a lot about FED independence and Seleiah, let me ask you about that. You write in your piece. This person will have to prove to the world that the Fed's independence from political meddling remains intact. Is there a universal definition of what FED independence is?
The Federal Reserve is held to a very different standard than any other central bank because of the immense power that has across every economy, emerging markets, frontier markets, developed economies, g seven countries, the rich countries, the poor countries, and the world wants this central bank, the most powerful one, to be above politics because they don't want to be looking at short or medium term goals for the economy, but long term goals, and politicians are looking at midterms
or an eighteen month or Senate elections are coming up, where presidential cycle is coming up. I want to jews and goose the economy. So they want someone who is above an independent from any kind of political meddling that has to do with an elected official.
Nancy I said, we get from the what to the who. So who is President Trump? Considering what have you learned?
So Slayne I wrote a story yesterday just saying that the Treasury Secretary Scott Besson is under consideration for the FED job. And this is news because it's a new name that we hadn't heard before. Kevin Walsh, who was a Fed governor at one point and Trump considered in his first term, is still in the mix as well. But it's really interesting that Scott Bessant has emerged, because
you know, he's Treasury secretary. He sort of barely got the Treasury secretary job, but people inside the administration and on Wall Street have been very impressed by the way he's handled a lot of trade talks, by the way he has handled Trump, by the way he's calmed markets in Wall Street.
Without giving away secrets or sourcing sort of how did you learn about this learn his name is in the running? Is this process unfold?
Well?
Selene I said next to each other in the office, just to give you a little bit of a view of the DC office. And so she and I sort of talked to each other all day long, and we're both really interested in economics and politics, and so she had said to me last week, oh, you know, I
hear Scott besson for a feed, isn't that interesting? And so we both just started sort of asking sources and talking to people, you know, around DC, around Wall Street, throughout the political organizations, and his name kept coming up, and it came up often enough that we feel comfortable reporting it.
Selea, You reached out to the Treasury Secretary to Scott bessen for comment. What did he tell you?
His comment was interesting, was on the record, and he said that I have the best job in Washington, and it is up to the president to decide who is going to oversee the US economy. I found it interesting that he didn't take that moment to outright deny it. He didn't say I'm not going to comment on the story at all or thread the needle. Somehow he decided to just not fan the flats, but not put the story down.
So that's what the Treasury secretary said to you. What did the White House say?
The White House said that this is fake news.
They dispute the premise of the piece that they say that he's not in the running.
They said that this is not an accurate report.
Actually, the senior administration official just said to me, this is fake news and then wouldn't get into the specifics about what was wrong or what was fake, but this was their party line.
You know. So, lay before President Trump picked Scott Bessont to be as Treasury Secretary, you and I had conversations about who the president was looking at to be on his economic team. Was there any indication that this was a job, this being the FED chair was a job that Scott Bessant was interested in.
At the time. No, I had not heard this when I started hearing just recently that Bessant was his name was percolating for FED chair. I was a little surprised because throughout the campaign trail last year, during the presidential campaign cycle, Bessant was out there as a vocal booster of Trump's economic policy, as a Republican, as a card carrying MAGA economic populist who wanted to help build Trump's policies. When you want to be FED chair, you behave more
like Kevin worsh You're behind the scenes. You're not out there so much sort of outwardly and obviously talking about how the current Treasure secretary is bad and the current president is bad, because you're supposed to be a little bit above that as FED chair traditionally.
Part of the reason that it's so surprising, David is just that Besson spent so long campaigning to be Treasury Secretary. I mean, he was out there during the twenty twenty four campaign, you know, going on TV, writing op eds. You know, I would travel with Trump and he would be on the campaign plane. I mean, it was just a lot of jocking to get this job. And you have to remember that Commerce Secretary Howard Lutnik also really
wanted the job. The Treasury Secretary is such a plumb job that there was just a lot of effort that he expended to get it. And I'm not saying that he's now campaigning to get the Fed chair job. I think that it's more that people are eyeing him for it. But it is interesting because I feel like he wanted Treasury so badly narrowly got it, and it's interesting now that there are people both inside and outside the administration that are now already thinking about him for, you know, a different job.
Nancy, what have you observed about the dynamic between the President and Scott Best at the Treasury Secretary over these last six months or so.
I feel like when Scott Essant first got in to Treasury, he had sort of a steep learning curve, and so what I was hearing from my reporting was that some of his picks for IRS Commissioner, for instance, like that wasn't you know, Billy Long was not his pick, and so there were definitely key nominees, a sort of under treasury that the White House was ignoring his advice on.
And also when he first got in, I think, you know, he was excluded from some of the political stuff and he didn't have as much political juice as you know other people, and a lot of his aids are super smart but are more of like the economist types and sort of couldn't in the West wing with the political people.
That really changed when the trade talks really blew up, when the financial markets, particularly the bond markets, really reacted to the tariffs and a lot of Trump's trade policy, Scott Bessant was the one who was able to talk Trump off the ledge on the tariffs and sort of put a pause on them. He was also able to calm the markets, and I think at that point that was sort of the inflection point for him politically, sort of inside the White House and just the administration when
people thought, Okay, this guy is a real player. Trump listens to him and he actually has some juice.
Se Leiah, do we have a sense of how a fed share of Scott Bessant would operate how he'd approached this job.
I was talking to some of our FED colleagues or reporters who covered the FED, and they were saying, it's interesting that because Bessant has been in public policy in the public sector for less than two hundred days and he's had a couple of wins in terms of helping to calm markets and temper some of the trade policy that was coming out, and markets trust him all of a sudden, and he could become FED chair based on
just that performance. And we've seen how in the past year Bessent has managed to get Trump to be a little bit calmer when it comes to talking about Jay Powell. He was on the brink of firing him in twenty eighteen and nineteen, and now he didn't write off the batfire j Powell, when he's done a lot of bold moves when he came back into government. There are a lot of signs that besson is behind some of that
tempering or reporting has shown. That's one reason that people in the White House and outside of the White House like Bessont because he can handle Trump. But I don't know whether he would be hawkish or dubvish, and how he would react because we just don't know enough about Bessent and his thoughts on monetary policy.
After the break, what we know about how Scott Bessont could stack up against Kevin Warsh, what it could mean for the economy if Trump names the next FED chair, this bar in advance and the economic challenges facing the next FED Chair, whoever it may be. Jerome Powell has almost a year left in his term as Federal Reserve Chair, but the Trump administration is moving ahead in considering his successor. I spoke with Bloomberg, Sealiah Mosen and Nancy Cook about
how that's playing out. Nancy, where are we in this process? We've heard different things from different members of the administration about the timetable, but what's your sense of how this is unfolding?
So my sense is that from our story we reported that no formal interviews have taken place, But just to be clear, Trump has interviewed Kevin Walsh before he interviewed him to be FED chair during his last term when he ended up picking j. Powell, which was something he regretted, and he interviewed Kevin Walsh to be Treasury Secretary. Like Trump knows all the players sort of in the orbit
of people he could potentially pick already. He knows Kevin Walsh, he knows Scott Besant, Chris Waller, who's a current FED governor.
Chris Waller or is someone who Trump nominated to the board the first time around. Advisors were impressed with him. They've been watching carefully what he's been advising the Fed to do, what he's been doing with his vote on the Fed for interest rates. There's also David Malpass. His name has come up. He was the World Bank President. He's been in Trump's orbit for a long time. I don't know how serious that is, but his name has
come up. And then the other name is Kevin Hassett, who is right now Trump's White House National Economic Council Director. It's also unclear just how seriously he's being considered.
And Trump on Air Force One on Friday night was asked about this and said, oh, you know, it's something that we're considering. We're getting close. And then he was asked what he thought about Kevin Walsh, and he said he thought very highly of him. Now, Trump also sort of can be fuzzy with timelines, and we'll always say something is two weeks away when actually, like you know,
who knows when it'll happen. He knows that the economy, and his advisors know the economy will be a very key thing for the midterms, and that's something they're already thinking about, and so I could see them wanting to at least name a FED chair sort of sooner rather than later, even though Jay Powell's term as Fedchair does not end until May twenty twenty six.
So, Leiah, this gets to something that we heard Scott Besson float during the Trump campaign, and that is that there could be this shadow FED chair. This is something he walked back in the months that followed him proposing that. But you could get the president to nominate somebody who's essentially the heir apparent to Jay Powell while Jay Powell's in that job, and he or she could opine on what he or she would be doing as FED chair
or that person in that position. Could you just walk us through what the consequences of that would be, both for the FED and for investors as well. If you had somebody who's kind of in waiting for the job opining on monetary policy and what might happen next.
Well, the one thing to remember, is that the Senate has to confirm whoever is going to get this job. So far, all signs point to a Congress who wants to maintain the current status quo of FED independence, and so that is the be a big question for them when it comes to the shadow chair. I'm glad you brought this up, because Besson did talk about this. He
floated this in October. It was immediately widely panned that this is a terrible idea, and it would create a lot of confusion because then you would have a sitting FED chair who is navigating a board. Everyone has a say in interest rates, it's not the chair who decides.
You would have all of those people making public speeches minutes come out of meetings, you have the actual press statement in the chair's press conference when there are other interest rate decisions, and then Trump always wants to post on truth social and also make comments about the FED. And then you would have this other person also, whether it's Worsh or Besson or Waller or some other person, providing quote forward guidance as the shadow Chair in waiting
who has not been confirmed by the Senate. So who knows if it's really going to happen, and especially if it's a sitting Treasury secretary, it's going to really confuse market. And I think that we've seen how sensitive markets have become to the way people in Washington are speaking about policy coming up ahead. And we're also seeing how the thirty year bond and the dollar and American assets are tearing on the edge of maybe not demise, but just
something a little scary. We don't know what's around the corner, and I think that's just going to compound that effect.
Nancy. I'm hearing both of you talk about this, and I can't help but think of kind of Dick Cheney circa two thousand when he was kind of charged with picking George W. Bush's running mate, and lo and behold he became that running mate. There is a kind of funny echo there isn't there.
Yeah, And there was that echo during the transition with Howard Luttnik, who was running the personnel part of the presidential transition and then put himself up for Treasury secretary. I don't have any evidence that Bess and slay and I haven't seen any evidence of sort of him waging this quiet political campaign for it. But I do think that people are just impressed with him, and it's natural
that this is such a key job for Trump. This is something that Trump has been very focused on, and so I think it's natural that the people around him would look around and think, Okay, who could fill that slot? And I think the question is, though, the problem with Besson as a pick, if we were to just do a hypothetical on that, is that they also really like him as Treasury secretary. So if you pick him for the FED, who do you put in a Treasury Walsh, though,
has been auditioning for this job for years. You know, he wanted the job in Trump's first term. He didn't get it. He went down tomorrow lago and interviewed with Trump for the Treasury secretary. I think with the idea that actually he wanted the FED job. You know, he
is outed Hoover sort of giving more political speeches. Like I just I can't stress how long this campaign, how long his campaign for this job has been going on, and so it will just be super interesting to me if he doesn't get it, and if there's another candidate like Bessen who gets it, or just someone else who emerges.
That's just the last question here. Maybe you could describe what's going to be on this next FED SHARE's desk when he or she starts. What does that person face coming into the job in twenty twenty six.
Well, I just think that we don't know what's going to happen with the economy, and I think the tariffs and how Trump handles them and the effect that they have on the economy is just the huge question mark.
We are seeing economic growth slow down, We don't know what's going to happen with this tax package that Republicans are going to try to pass, and so I just think that this is a summer of real economic uncertainty in the US, and whoever takes over that FED job, you know, even if it's not till twenty twenty six, will face sort of a lot and of uncertainty about what the economy looks like potentially. And then just sort
of the whipsaw nature of Trump's economic policy making. You know, there's tariffs one day, no tariffs another day, Like what does that actually look like? And how does that seep into the job market, what does that look like for wage inflation? You know, all those things, and I think it's just going to be a real question Mark.
This is the Big Take from Bloomberg News. I'm David Gurat. To get more from The Big Take and unlimited access to all of bloomberg dot com, subscribe today at bloomberg dot com slash podcast offer. If you like this episode, make sure to follow and review The Big Take wherever you listen to podcasts. It helps people find the show. Thanks for listening. We'll be back tomorrow