June 11, 2025 • 18 mins
President Trump says his decision on who will succeed Fed Chair Jerome Powell “is coming out very soon.” And according to new reporting from Bloomberg’s Nancy Cook and Saleha Mohsin, Treasury Secretary Scott Bessent is a contender for the job.
On today’s Big Take podcast, Nancy and Saleha join host David Gura to discuss the president’s Apprentice-style approach to selecting a Fed Chair, what he wants in Powell’s replacement and how that might impact Fed independence.
Read more: Bessent Emerging as a Contender to Succeed Fed’s Powell
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Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
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
(00:30):
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.
Speaker 1 (00:48):
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.
Speaker 2 (01:01):
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.
Speaker 1 (01:16):
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.
Speaker 2 (01:30):
Then, of course, there is Trump's signature style when considering
a high profile nomination like this.
Speaker 3 (01:36):
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.
Speaker 2 (01:43):
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.
Speaker 3 (01:54):
Me to do.
Speaker 2 (01:55):
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.
Speaker 3 (02:02):
And I would like to stay in my seat through
twenty twenty nine to do that.
Speaker 2 (02:11):
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
(02:35):
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?
Speaker 1 (02:41):
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
(03:03):
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.
Speaker 2 (03:17):
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?
Speaker 3 (03:32):
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,
(03:55):
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.
Speaker 2 (04:12):
Nancy I said, we get from the what to the who.
So who is President Trump? Considering what have you learned?
Speaker 1 (04:17):
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
(04:39):
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.
Speaker 2 (04:54):
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?
Speaker 3 (05:02):
Well?
Speaker 1 (05:03):
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
(05:23):
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.
Speaker 2 (05:33):
Selea, You reached out to the Treasury Secretary to Scott
bessen for comment. What did he tell you?
Speaker 3 (05:38):
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
(05:58):
to just not fan the flats, but not put the
story down.
Speaker 2 (06:01):
So that's what the Treasury secretary said to you. What
did the White House say?
Speaker 3 (06:05):
The White House said that this is fake news.
Speaker 2 (06:09):
They dispute the premise of the piece that they say
that he's not in the running.
Speaker 3 (06:12):
They said that this is not an accurate report.
Speaker 1 (06:14):
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.
Speaker 2 (06:26):
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.
Speaker 3 (06:39):
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
(07:01):
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.
Speaker 1 (07:21):
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
(07:42):
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
(08:05):
that there are people both inside and outside the administration
that are now already thinking about him for, you know,
a different job.
Speaker 2 (08:13):
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.
Speaker 1 (08:21):
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
(08:41):
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.
(09:02):
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
(09:24):
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.
Speaker 2 (09:34):
Se Leiah, do we have a sense of how a
fed share of Scott Bessant would operate how he'd approached
this job.
Speaker 3 (09:40):
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
(10:02):
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
(10:23):
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
(10:44):
Bessent and his thoughts on monetary policy.
Speaker 2 (10:47):
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
(11:10):
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?
Speaker 1 (11:30):
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
(11:53):
of people he could potentially pick already. He knows Kevin Walsh,
he knows Scott Besant, Chris Waller, who's a current FED governor.
Speaker 3 (11:59):
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
(12:20):
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.
Speaker 1 (12:32):
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,
(12:54):
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.
Speaker 2 (13:11):
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
(13:32):
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.
Speaker 3 (13:49):
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
(14:09):
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
(14:31):
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
(14:53):
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
(15:15):
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.
Speaker 2 (15:25):
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.
Speaker 1 (15:42):
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
(16:04):
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
(16:24):
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
(16:46):
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.
Speaker 2 (17:02):
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.
Speaker 1 (17:14):
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
(17:35):
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
(17:56):
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.
Speaker 2 (18:14):
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
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
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
(00:30):
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.
Speaker 1 (00:48):
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.
Speaker 2 (01:01):
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.
Speaker 1 (01:16):
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.
Speaker 2 (01:30):
Then, of course, there is Trump's signature style when considering
a high profile nomination like this.
Speaker 3 (01:36):
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.
Speaker 2 (01:43):
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.
Speaker 3 (01:54):
Me to do.
Speaker 2 (01:55):
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.
Speaker 3 (02:02):
And I would like to stay in my seat through
twenty twenty nine to do that.
Speaker 2 (02:11):
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
(02:35):
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?
Speaker 1 (02:41):
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
(03:03):
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.
Speaker 2 (03:17):
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?
Speaker 3 (03:32):
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,
(03:55):
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.
Speaker 2 (04:12):
Nancy I said, we get from the what to the who.
So who is President Trump? Considering what have you learned?
Speaker 1 (04:17):
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
(04:39):
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.
Speaker 2 (04:54):
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?
Speaker 3 (05:02):
Well?
Speaker 1 (05:03):
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
(05:23):
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.
Speaker 2 (05:33):
Selea, You reached out to the Treasury Secretary to Scott
bessen for comment. What did he tell you?
Speaker 3 (05:38):
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
(05:58):
to just not fan the flats, but not put the
story down.
Speaker 2 (06:01):
So that's what the Treasury secretary said to you. What
did the White House say?
Speaker 3 (06:05):
The White House said that this is fake news.
Speaker 2 (06:09):
They dispute the premise of the piece that they say
that he's not in the running.
Speaker 3 (06:12):
They said that this is not an accurate report.
Speaker 1 (06:14):
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.
Speaker 2 (06:26):
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.
Speaker 3 (06:39):
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
(07:01):
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.
Speaker 1 (07:21):
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
(07:42):
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
(08:05):
that there are people both inside and outside the administration
that are now already thinking about him for, you know,
a different job.
Speaker 2 (08:13):
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.
Speaker 1 (08:21):
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
(08:41):
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.
(09:02):
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
(09:24):
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.
Speaker 2 (09:34):
Se Leiah, do we have a sense of how a
fed share of Scott Bessant would operate how he'd approached
this job.
Speaker 3 (09:40):
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
(10:02):
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
(10:23):
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
(10:44):
Bessent and his thoughts on monetary policy.
Speaker 2 (10:47):
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
(11:10):
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?
Speaker 1 (11:30):
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
(11:53):
of people he could potentially pick already. He knows Kevin Walsh,
he knows Scott Besant, Chris Waller, who's a current FED governor.
Speaker 3 (11:59):
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
(12:20):
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.
Speaker 1 (12:32):
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,
(12:54):
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.
Speaker 2 (13:11):
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
(13:32):
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.
Speaker 3 (13:49):
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
(14:09):
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
(14:31):
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
(14:53):
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
(15:15):
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.
Speaker 2 (15:25):
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.
Speaker 1 (15:42):
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
(16:04):
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
(16:24):
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
(16:46):
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.
Speaker 2 (17:02):
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.
Speaker 1 (17:14):
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
(17:35):
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
(17:56):
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.
Speaker 2 (18:14):
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,
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Thanks for listening. We'll be back tomorrow
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