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The Senator Standing file. Let's get to him right now. Senator Tom Taillis from North Carolina joins a small for more. Senator, welcome to the program. So you have been vouning to block any nomination to the Federal Reserve until the DJ wraps up its investigation. We have some news this morning. As you know, Kevin Walsh has been nominated by the President of the United States to succeed CHAIRM and Power. Does it change anything for you, sir, No, it does.
I am pleased with the nominee. I think that by most accounts he is well regarded. But we still have to clear the current matter. Look, they're pursuing a on the basis of criminal intent testimony and a banking committee hearing that clearly had no criminal intent. So to me, you got some assistant US attorney with a dream in the DC district that should really determine whether or not this frivolous prosecution is worth holding up a FED board seat.
So we have some time between now and May four that investigation to go away and for the confirmation process to open up. Have you given thoughts to what would happen if we don't have that time we get to May, this is still lingering and the chairman steps away. What happens that it's helping the feder reserve.
Well, I think that we all need to understand we still have a working quorum of members, whether or not they have an acting chair as a decision that the President and assume the Treasury Secretary and others can look at. But that's not my problem. We're here because of them, We're not here because of me, and so I think they should work expeditiously if they really do. I'm not an attorney. I watch a lot of crime shows, but
doesn't look like there was any criminal intent here. They have to determine whether or not it's worth grinding this out. Like I said, I didn't put us here. Some assisted US attorney the DC District decided to put us here, and they've got to determine if they have a case it's worth pursuing.
Senator Tillis, has anyone from the administration or the Department of Justice reached out to you about the process of how this could go down or giving you confidence that this will be dropped in time for the confirmation hearing to go forward?
Well, Lisa, I'd never talked about my conversations with any members. People always ask me what goes on at lunch. I just don't have those conversations. But my public statements stand for themselves.
Is closing the investigation enough a Senator?
Or do you need other assurances that you think this administration is going to respect the FED independence?
Well, right now, I think you do that by making a judgment. Look, we've got two cases here, right, We've got the cookcase and we have the Power case. Both of those to me are instances of independence, and I'm staying focused on that one goal. I'm not really persuaded or even willing to entertain any discussions that take me off that goal.
Okay, but you just mentioned the Lisa Cook case.
Do you also need to see that wrapped up either by the Supreme Court in order to move forward?
Yeah? I do. I mean, because look, I mean we're talking about what looks like a paperwork error or if there was, if there was a mistake long before she was confirmed for the board. It's like, my goodness, guys, I mean, I don't know, maybe Paulty or somebody thought that that was cute. I didn't, so just to.
Be clear, it is not just the DOJ investigation to the FED that you need wrapped up. You also need the Supreme Court case wrapped up. So it's two issues right now and blocks for you to move forward with Kevin.
Warsh Yeah, well no, let me let me buy far kate these one is moving forward with another that the case that will prevent me considering any board nominee is the Powell case. But I will not move forward. So for the for the chair, which we know expires in February. The other case we have, you know, the Myron term is about to expire because he was filling up basically six weeks I'm sorry, six months. We've got the Cook seat. Those are ones that are really going to be I'll
take a look at the candidate. I'll take a look at how it would affect the board. Look, this is all in my opinion, this is all about sending a signal to the markets and to the business community that FED independence is critically important. And going after the chair I think took a stool out of the foundation of people's confidence, or a lag out of the stool. In the case of Cook, I do believe that it's another example of a trend, and the Senate has to stand
in the breach. We have to make sure that the Fed maintains its independence and we cannot reward any bad behavior that seems like it's surely motivated. How about the substance of the allegations, but by the interest and trying to undermind the FED independence.
Senator, what's your understanding as to whether the Federal Reserve is cooperating with that investigation? Some conflicting reports over the past few days. What you'll read on the situation.
I you know, I'm not really sure, Jonathan. I'm going to leave that that's a better question to ask the administration of the DOJ.
What if we get the opportunity to speak to them, I'm sure we'll ask. I've got the opportunity to ask you about the man and not just the process. You said this morning, and you've said it again that Kevin Walsh is a qualified nominee with a deep understanding of
monetary policy. For those familiar with Kevin Walsh in his time at the Federal Reserve back in the financial crisis, they have considered him to be on the more hawkish side of the spectrum on the FMC, and there is some debate this morning, Senator about what Kevin Walsh actually stands for. Given that we know the president wants lower interest rates, what's your understanding of what he stands for.
Well, you know, I with Sir Powell, I haven't agreed with all of the opinions. I'm not an economist or his positions, and sometimes I may be more hawkers than share Powell. So coming in, I think Walsh is a good independent. He's got an extraordinary reputation in a community of economists and people focused on the FED. I don't think that he would want to destroy his reputation by being independent. You know, you could have hawkish members like Waller and others, and I'm fine with them on the
board to stretch the thinking. But I don't believe he comes in is more or less going to do the bidding of the administration, which is critically important and incidentally, I should say it's critically important for the health and hygiene of the administration.
Senator tell Us, does this give you any more confidence that actually the independence of the Federal Reserve will not be undermined, that this actually is going to be a proper process. Once some of the roadblocks you're talking about are going to be cleared.
Yeah, I think so, Lisa. And look, this is this is actually democracy and institutional separation at its finest. We have a disagreement, and we have a mechanism in place for resolving this and moving on. I hope that no one in the administration takes personal offense to this. I'm doing my job, Senator.
Do you have any understanding of the timeline?
Well, you know, the investigations can go on forever. I mean, you could see one scenario where Chair Powell has two years left on his term even after he comes off the board. So I mean you could see this going on for two years or in my case, three hundred and thirty nine.
Days, because three hundred and thirty nine days that's when you're going to be retiring. And I know, Lisa, as you have had any conversations, I want to ask you about those conversations. But have you, guys seen any indications from anyone that they do want to wrap up the DOJ investigation as soon as possible?
Well, you know, I think, Andrew, I think that the fact that they're putting for this nominee knowing that it would be impossible to get him through with the current position that I've taken, it suggests to me that maybe they are trying to find a way to deal with this. It could be adjudicated expeditiously, or it could be just determining that they also agreed that there was no criminal intent and the chairs testimony and the banking committee that I participated in.
Senator, just quickly, have you spoken to the White House? Have they reached out? You know?
Like I said, I have ongoing discussions, so the President I probably communicate once or twice a week at least through texts. So I have ongoing discussions. I'm not going to talk about the content of them, Jonathan. Kind of like groundhog Day, I'm going to answer the same question every day the same way.
Good movie I heard, Senator.
We appreciate your time, Thanks for jumping on the cod Thank you, sir, Thank you very much. Senator Tom tillis there on his way to the gym. The Senator made me watch groundhog Day.