November 26, 2025 • 18 mins
Weeks before the Trump administration is expected to name its pick for the next US Federal Reserve chair, current White House economic adviser Kevin Hassett leads a group of five finalists. Whoever prevails will have the significant job of guiding the US through challenging economic times, while balancing the Fed’s long-standing independence against a hands-on president.
On today’s Big Take podcast, Bloomberg Fed reporters Amara Omeokwe and Enda Curran join David Gura to discuss what the leading candidates bring to the job.
Read more: Hassett Emerges as Frontrunner in Trump Fed Chair Audition
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
President Trump is hiring and a month's long search is
nearing an end. The job is Chair of the Federal Reserve,
and the job requirements.
Speaker 3 (00:17):
Number one, you need to inspire confidence, confidence from markets
and investors, that you bring authority and cachet to the role.
Speaker 2 (00:26):
Bloomberg's end. The current covers the FED, and.
Speaker 3 (00:28):
Then of course you need to be well able to
navigate the political wins between the White House, Congress and
the Fed. Make sure that you're protecting the Fed from
ongoing political criticism. So winning over investor confidence, winning over
business confidence, winning over household confidence, and steering through the
political wins of today.
Speaker 2 (00:47):
That last qualification wasn't top of mind when previous presidents
set out to fill this important position. But President Trump's
perspective on the role is different.
Speaker 1 (00:57):
The number one thing that he's looking for is some
one who will be in favor of lower rates.
Speaker 2 (01:03):
That's Amara Mokway, who also covers the FED for Bloomberg,
and she says that during President Trump's first term, when
he nominated Jerome Powell to be the sixteenth Chair of
the Federal Reserve, Trump deferred to his first Treasury Secretary
Steven Manuchin suggested Trump pick Powell.
Speaker 1 (01:18):
I think he feels that he made a mistake with
Jerome Powell, and he does not want to repeat that
mistake this time.
Speaker 2 (01:26):
A second round of interviews wrapped up on Tuesday of
this week, and according to Bloomberg's reporting, the front runner
is Kevin Hassett, President Trump's chief economic advisor, but Trump's
White House Press Secretary Caroline Levitt cautioned that nobody actually
knows what President Trump will do until he does it.
That's the layer of political complexity awaiting the next FED chief,
(01:46):
on top of the responsibilities of navigating complex economic times.
Speaker 1 (01:51):
Right now, the economic outlook is very complicated for the FED.
We see that there is a faction that is in
favor of continuing rate cuts because they are concerned about
the labor market. And there's another faction that is very
concerned about inflation because inflation has been above the Fed's
two percent target for several years, and because there is
still the threat of tariffs out there. And then the
(02:13):
political backdrop is really really a challenge. Right the next year,
we'll have to navigate the reality that no matter what
the economy brings, it seems this president is going to
want to lower rate.
Speaker 2 (02:28):
I'm David Gera and this is the big take from
Bloomberg News Today. On the show Who's Who on the
Trump administration shortlist for Federal Reserve Chair? We tick through
what the front runners have going for them, what they don't,
and we dig into how a new chair could change
the way the FED is run. For years, President Trump
(02:52):
has criticized Federal Reserve Chair Jerome Powell. He's threatened to
fire Powell and replace him. Now there's less than a
year left in Powell's tenures chair, and Trump's search for
his successor is almost over. I sat down with Bloomberg's
endocour in Amera Mokway, who have been reporting extensively on
the options President Trump is considering, and ask them about
(03:13):
the list. And there's this list of potential FED chairs.
Five names are on it. Treasury Secretary Scott Best announced
it publicly back in October, and I should say he's
overseeing this search for the president for the next FED chair.
And he's someone the President has said a few times
now was his pick for the job. Well, I like
to him, but he's not going to take the job.
Speaker 4 (03:32):
He revesed you like Treasury better right, much better, sir.
Speaker 2 (03:36):
He's not on the list so far as we know,
this is not a job that Scott Bessant wants.
Speaker 3 (03:40):
Well publicly, the Treasure Sectuary has said he's got the
best job in the world already running the Treasury. He
doesn't want to take over the FED, despite the fact
that the President would clearly like him to think about it.
But you're right, David, he's not on the list right now.
We've had kind of a very public beauty prey for
this FED interview process with Scott Best interviewing. I think
it was around eleven people originally on the list outstand
(04:01):
to five. Those five are a mixture of existing FED
officials and so on the outside of our sphere, so
to speak. So we're expected to have shortening of that
list in two weeks ahead down to mind three. Maybe
that's what's Sexuary Best and has said publicly, and then
a decision perhaps by Christmas. That's what he's also said publicly.
Speaker 2 (04:18):
So we have this group of five finalists, one woman,
four men. Two of them are named Kevin. I'll not
all of them have said they're in favor of rate
cuts right now, which is what President Trump wants. Ahead
of this interview, I looked at polymarket, where you can
bet on probabilities of all sorts of things, and the
long shot candidates, according to Better seem to be Michelle Bowman,
the current vice chair of the FED, and Rick Reader,
(04:39):
who oversees fixed income a black Rock. So let's start
with those apparently longer shot candidates, and then let me
ask you first about Rick Reader, who I think is
a familiar name to people who watch a lot of
Bloomberg television, who listened to Bloomberg Radio. He's somebody at
Blackrock who often comes on our air to talk about
what's happening in the market and the economy. What are
the pros and cons of his potential candidacy.
Speaker 3 (05:00):
Rick Reader is certainly well known in flancial markets world,
a long time Wall Street veteran, as you mentioned, David
senior executive at black Rock, and his views on the
economy and flangal markets are well known over the years.
What he isn't though, is he's most certainly not in Washington,
DC insider, but neither has he necessarily been in the
(05:20):
public policy world per se. Now you can argue that
stacks up in his advantage in his favor. Perhaps that's
what President Trump wants, or he could argue that might
count against him just because he hasn't actually been in
the policy world and it will be quite adjustment. But
nonetheless he hasn't been explicit in terms of how he
would change up the FED. He has spoken about and
he believes interest rates should be lower, So.
Speaker 4 (05:40):
I think it's quite consistent to bring the interest rate
down even though the economy is operating at a pretty
good level. Where we're going is to a lower level
of inflation, and I think we can bring it down.
Speaker 3 (05:50):
He has spoken about the need to think about new
alternative sets of research. For example, He's given some hints
around that, giving respect for the institution and the penance
of the institution, so he might be able to straddle
all sides of this world here, about the macro policy
world and the Wall Street world, and also navigate the
political side. What we do know, though, is considered something
(06:11):
of an outsider in its race. But our colleagues here
have reported that reader impressed during his interview with Treasure
Secrety bestent Amara.
Speaker 2 (06:20):
How about Michelle Bowen. Mickey Bowman, who was a FED governor,
was elevated to vice chair by President Trump. Has a
supervisory role now at the FED. What do we know
about the way in which the president is looking at
her and her potential candidacy.
Speaker 1 (06:32):
I think Mickey Bowman is viewed as someone who is
in many ways aligned with the administration's goals on the
regulatory front. So she is the Fed's top bank official,
so she's overseeing supervision and regulation, and I think she
has in her few months in the job, done things
that are seen as aligned with what the administration wants
(06:52):
on regulation.
Speaker 5 (06:53):
Some of our regulations have unduly restrained the activities that
banks can engage in incentivize them to limit those activities,
and pushing those functions outside of the banking system.
Speaker 1 (07:05):
She's doing staff cuts of supervision and regulation, and so
if you're thinking about a person who might be willing
to shake the FED up in ways that the administration
might be looking for, Mickey Bowman is seen as someone
who would potentially be open to that. She also doesn't
have a traditional sort of monetary policy background. She came
from the banking world. Her family has been in banking
(07:28):
over many generations, and so she's kind of seen kind
of like reader as a Washington outsider, and so in
that way, she could be an appealing option for the administration.
Speaker 2 (07:39):
And then there's the front runner and two other favorites.
Speaker 1 (07:42):
We know that the President has talked about the two
Kevins in the past and talked about how he likes
both of them.
Speaker 2 (07:47):
I say, Kevin and Kevin, both Kevins are very good.
Speaker 1 (07:50):
And then there's also Chris Waller.
Speaker 2 (07:51):
What can you tell us about him? You've profiled him recently,
kind of looked at his career trajectory. What would he
bring to the table.
Speaker 1 (07:59):
So I think think he would bring two main things.
A deep understanding of the FED as an institution. Before
he was a Fed governor, he was the research director
at the Saint Louis FED for many years. So he
is someone who understands both the Fed's Board of Governors
here in Washington and the regional Fed banks throughout the country.
And in his job now on the Fed's Board, one
(08:21):
of the things he oversees are the operations of the
regional Fed banks. He's kind of the liaison between the
regional Fed banks and the Board, and so I think
he has a deep understanding of the institution. I think
he would also bring a little bit of comfort to
investors and the markets because Chris Waller, when he makes
calls for policy and the economy, he's viewed as someone
(08:43):
who bases those calls in credible analysis.
Speaker 4 (08:46):
Right.
Speaker 1 (08:47):
So, even back over the summer when he was the
first FED official to say we should be cutting rates again.
Speaker 4 (08:53):
The headline numbers for the layor mark what we're seeing
are okay, But it's like when you get underneath and
start working at the data, the private sector is not
doing as well as everybody thinks it is.
Speaker 1 (09:05):
There were a lot of economists who didn't agree with
his analysis of the labor market at the time, but
nobody really went out there and said, oh, he's only
doing this because he wants to be FED chair. Right.
People were like, Okay, Like I don't agree with him,
but I can see how he's looking at the numbers
and coming to this conclusion, and so I think he
would bring that presumption of credibility and a deep knowledge
(09:27):
of the institution to the job.
Speaker 2 (09:28):
And a rounding out this list are the two Kevins.
Let's start with Kevin Warsh, who has been in this
position before. He was somebody who we know the President
was considering for the top job at the FED back
during his first term.
Speaker 3 (09:40):
He came very close to getting the FED chair back
in twenty seventeen. Actually, he has previously served on the
FED board. He was the youngest ever governor when he
was appointed back in twenty h sixt He served in
twenty six to twenty eleven. He was on the board
during the financial crisis, and at that time he was
seen as playing a pivotal role in linking Wall Street
and the policy world because he had worked on Wall Street.
(10:03):
Now more recently, he has become very vocal in his
criticism of the FED. He has a term that he uses,
which is regime change. He wants change of personality, change
of thinking, change of how to do their business. He
has been critical of how they been managing their balance sheet,
which is basically how they buy and sell securities and
how that impacts the economy. And of course he's certainly
(10:25):
saying their scope obviously for much lower interest rates and
cheaper boring costs. As a result, he's pushing hard for
the role this time around, and he's seen as one
of the top contenders when it comes down to it.
Speaker 2 (10:37):
And let's talk about the person the president's allies and
advisors see as the front runner. According to Bloomberg's latest reporting,
that's Kevin Hassett. Tell me about him and how we
should be thinking about his candidacy.
Speaker 3 (10:48):
Well, Kevin hasse is central casting public policy wonk here
in motion in DC, at least on paper. He's previously
worked at the Federal Reserve, has god at PhD in economics.
He also was director of research at American Enterprise Institute,
so he's a well established economist around town. The issue
around Kevin Hasset is that he's also viewed as being
(11:09):
very politically aligned with President Trump, not just on the
economics front, but politically aligned with him. And the thinking
is is that if he went from the White House
to the Fed, well then he probably would be not
just implicitly but explicitly reinforcing the message in the President
Trump wants there. And again, like some of the other candidates,
Kevin Hasset has called for lower interest rates. He has
(11:31):
been critical of Chair Powell as well, and he wants
to see the Fed change how they do business. So
and established economist, not question but seen is very politically
aligned with President Trump.
Speaker 2 (11:42):
So that's the slate of candidates, the five front runners,
But what could the winning pick mean for the future
of the FED and for the US economy more broadly.
That's after the break with the independence of the Federal
Reserve under threat. A key factor shaping the central Bank's
(12:05):
future is who leads it. I've been speaking with Bloomberg's amera,
a moke way and and a current. But how its
next leader will guide the organization and therefore the economy.
And how much power and influence does the FED chair have? Yes,
he is the most public phase of the FED, but
he's someone who chairs a committee of twelve voting members
who set interest rates.
Speaker 3 (12:26):
I mean it's a critical role. The FED chair is
the number one spokesperson for the institution. By extension, is
a very important spokesperson on the economy. And remember is
meant to be an impartial spokesperson on the economy. So
the whitehase can say one thing, that's fine, but the
average voter would like to hear a referees point of
view as well, and that's where the FED is meant
(12:46):
to play its role in all of this. The FED Chair,
of course, also sets a critical role in terms of
setting the tone for policy. Does the economy need higher
boring costs? Does economy need lower boring costs? The FED
is meant to help steer that narrow and bring along
the whole FED Committee with the Chair in terms of
what they want to do, either cutting interest rates or
(13:07):
raising interest rates. It doesn't have to be all consensus
and it's not meant to be an authoritarian regime managing
all of these FED presidents and governors have their say
and have their voice, but neither should it be fragmented
and split in the way. We're sort of getting closer
to you right here right now. So the FED Chair
very important for steering, It very important for influence and
for being a figure of authority and respect when it
(13:29):
comes to commenting on the economy.
Speaker 2 (13:31):
Ameron, let's talk about Federal reserve independence, which is the
ability for the FED to make decisions without political interference.
And we've been through this period over these last many months,
when the President has called for the FED to lower
interest rates, the President has threatened to fire the current
FED Chair to Roam Powell over decisions the FED has made.
When you look at this list, when you look at
these five names, what does it tell you about the
(13:51):
future of FED independence?
Speaker 1 (13:53):
I think talking to Fed watchers and people who care
about the FED. He gets there to say that there
is a fair degree of concern about what some of
these candidates could mean for FED independence. For instance, Kevin Hasset,
he works in the White House right now and on
most FED issues this year, he has been completely aligned
(14:17):
with the President, and so that then raises questions about
the degree to which he potentially will be independent. There
are similar concerns about some of these other candidates, and
even Waller, who has looked at as a credible voice
on the economy, I think would be open to some
of the types of changes that the Trump administration has
(14:39):
made clear that it would want. Like we know, in
his current role as the governor kind of responsible for
the reserve banks that he has pushed to a degree
for cost cuts and staff cuts. And so it's not
like it would necessarily the case that Chris Waller would be,
you know, totally against shaking things up and doing things differently.
Speaker 2 (15:02):
Emera, where are we in this vetting process and what
do we know of what comes next?
Speaker 1 (15:06):
The thinking is that we could get a pick by
the end of this year or early next. Chair Jerom
Powell's term is up in May and so yeah, we're
just waiting to see who the final names that go
to the president are and then waiting for the pick.
But as we know with President Trump, you know, things
are things will be very unpredictable.
Speaker 2 (15:23):
And the approval is ultimately up to the Senate. And
I'm curious, as you think about these five individuals, would
any of these cand's be an easier or tougher sell
to the Senate? How do you see that nomination process
playing out on Capitol Hill?
Speaker 3 (15:36):
Whoever it is will certainly come on a scrutiny from
the Democratic side, no question about it, because they will
be perceived as being sympathetic to President Trump's worldview on
the economy. They'll want to ask questions around what are
you going to do in terms of protecting the Fed's independence,
what your links be with the White House, et cetera.
But also on the Republican side, we'll have to see
will there be any voices of concern there, Will they
(15:56):
too be worried about fedting independence? Or will they be
just willing to go night through a candidate that President
Trump picks.
Speaker 2 (16:03):
And I started out by asking both if you about
sort of what the qualities are that make a good
FED Chair, and I think something we've seen come out
in j. Powell in recent months is the ability to
not answer some specific questions, and one has to do
with what happens next for him.
Speaker 3 (16:18):
You know, I would just say.
Speaker 2 (16:21):
I'll certainly serve to the end of my to the
end of my chare term, and that's really all all
I've decided and all I was thinking about. Any insight
we have into sort of how he's thinking about his
future at the FED, if he's open to or would
be willing to consider serving as a FED governor after
his tenure is as FED chair ends.
Speaker 3 (16:38):
Yeah, it's probably a detail that maybe that brought up,
probably wouldn't pick up on, but his term as chair
will end in May, but mister Powell will remain on
the board as a governor for I think it's another
two years or so after that. That's important because if
Chair Powell said I'm going to retire altogether and leave
the FED, well, it would open up a vacancy on
(16:59):
the board. That will President Trump to appoint someone to
fill that seat, and obviously, in the current political environment,
the expectation would be somebody who again would be willing
to listen to the white hairs view in the economy
and probably lower interest rates and then be seen as
a threat to the Fed's independence. Of course, Chairpell might
choose to carry on and serve out his full term
and continue to engage in FED debate on the economy,
(17:20):
in which case he's blocking that seat and acting as
a pressure point against what President Trump is trying to
do in terms of change up the FED board.
Speaker 2 (17:29):
Overall.
Speaker 1 (17:30):
You know, the economy is in a strange place. The
Trump administration has implemented a lot of different economic policy changes,
from immigration to tariffs to regulation. There are all these
things happening, and the next FED chair is going to
have to navigate all of that and lead the institution
through all these changes and how they're impacting the economy.
(17:52):
And as we're seeing right now, how is having a
more difficult time getting consensus and the Committee as a
whole is having a difficult time figuring out what to do.
And so this next person is going to have to
lead the FED through this very uncertain time, and you
just hope that they have the right temperament and the
(18:13):
right wisdom to do that, because they are trying to
answer very difficult questions.
Speaker 2 (18:23):
This is The Big Take from Bloomberg News. I'm David Gura.
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.
Tomorrow is Thanksgiving in the US. Our team is off
for the holiday. We'll be back on Friday.
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
President Trump is hiring and a month's long search is
nearing an end. The job is Chair of the Federal Reserve,
and the job requirements.
Speaker 3 (00:17):
Number one, you need to inspire confidence, confidence from markets
and investors, that you bring authority and cachet to the role.
Speaker 2 (00:26):
Bloomberg's end. The current covers the FED, and.
Speaker 3 (00:28):
Then of course you need to be well able to
navigate the political wins between the White House, Congress and
the Fed. Make sure that you're protecting the Fed from
ongoing political criticism. So winning over investor confidence, winning over
business confidence, winning over household confidence, and steering through the
political wins of today.
Speaker 2 (00:47):
That last qualification wasn't top of mind when previous presidents
set out to fill this important position. But President Trump's
perspective on the role is different.
Speaker 1 (00:57):
The number one thing that he's looking for is some
one who will be in favor of lower rates.
Speaker 2 (01:03):
That's Amara Mokway, who also covers the FED for Bloomberg,
and she says that during President Trump's first term, when
he nominated Jerome Powell to be the sixteenth Chair of
the Federal Reserve, Trump deferred to his first Treasury Secretary
Steven Manuchin suggested Trump pick Powell.
Speaker 1 (01:18):
I think he feels that he made a mistake with
Jerome Powell, and he does not want to repeat that
mistake this time.
Speaker 2 (01:26):
A second round of interviews wrapped up on Tuesday of
this week, and according to Bloomberg's reporting, the front runner
is Kevin Hassett, President Trump's chief economic advisor, but Trump's
White House Press Secretary Caroline Levitt cautioned that nobody actually
knows what President Trump will do until he does it.
That's the layer of political complexity awaiting the next FED chief,
(01:46):
on top of the responsibilities of navigating complex economic times.
Speaker 1 (01:51):
Right now, the economic outlook is very complicated for the FED.
We see that there is a faction that is in
favor of continuing rate cuts because they are concerned about
the labor market. And there's another faction that is very
concerned about inflation because inflation has been above the Fed's
two percent target for several years, and because there is
still the threat of tariffs out there. And then the
(02:13):
political backdrop is really really a challenge. Right the next year,
we'll have to navigate the reality that no matter what
the economy brings, it seems this president is going to
want to lower rate.
Speaker 2 (02:28):
I'm David Gera and this is the big take from
Bloomberg News Today. On the show Who's Who on the
Trump administration shortlist for Federal Reserve Chair? We tick through
what the front runners have going for them, what they don't,
and we dig into how a new chair could change
the way the FED is run. For years, President Trump
(02:52):
has criticized Federal Reserve Chair Jerome Powell. He's threatened to
fire Powell and replace him. Now there's less than a
year left in Powell's tenures chair, and Trump's search for
his successor is almost over. I sat down with Bloomberg's
endocour in Amera Mokway, who have been reporting extensively on
the options President Trump is considering, and ask them about
(03:13):
the list. And there's this list of potential FED chairs.
Five names are on it. Treasury Secretary Scott Best announced
it publicly back in October, and I should say he's
overseeing this search for the president for the next FED chair.
And he's someone the President has said a few times
now was his pick for the job. Well, I like
to him, but he's not going to take the job.
Speaker 4 (03:32):
He revesed you like Treasury better right, much better, sir.
Speaker 2 (03:36):
He's not on the list so far as we know,
this is not a job that Scott Bessant wants.
Speaker 3 (03:40):
Well publicly, the Treasure Sectuary has said he's got the
best job in the world already running the Treasury. He
doesn't want to take over the FED, despite the fact
that the President would clearly like him to think about it.
But you're right, David, he's not on the list right now.
We've had kind of a very public beauty prey for
this FED interview process with Scott Best interviewing. I think
it was around eleven people originally on the list outstand
(04:01):
to five. Those five are a mixture of existing FED
officials and so on the outside of our sphere, so
to speak. So we're expected to have shortening of that
list in two weeks ahead down to mind three. Maybe
that's what's Sexuary Best and has said publicly, and then
a decision perhaps by Christmas. That's what he's also said publicly.
Speaker 2 (04:18):
So we have this group of five finalists, one woman,
four men. Two of them are named Kevin. I'll not
all of them have said they're in favor of rate
cuts right now, which is what President Trump wants. Ahead
of this interview, I looked at polymarket, where you can
bet on probabilities of all sorts of things, and the
long shot candidates, according to Better seem to be Michelle Bowman,
the current vice chair of the FED, and Rick Reader,
(04:39):
who oversees fixed income a black Rock. So let's start
with those apparently longer shot candidates, and then let me
ask you first about Rick Reader, who I think is
a familiar name to people who watch a lot of
Bloomberg television, who listened to Bloomberg Radio. He's somebody at
Blackrock who often comes on our air to talk about
what's happening in the market and the economy. What are
the pros and cons of his potential candidacy.
Speaker 3 (05:00):
Rick Reader is certainly well known in flancial markets world,
a long time Wall Street veteran, as you mentioned, David
senior executive at black Rock, and his views on the
economy and flangal markets are well known over the years.
What he isn't though, is he's most certainly not in Washington,
DC insider, but neither has he necessarily been in the
(05:20):
public policy world per se. Now you can argue that
stacks up in his advantage in his favor. Perhaps that's
what President Trump wants, or he could argue that might
count against him just because he hasn't actually been in
the policy world and it will be quite adjustment. But
nonetheless he hasn't been explicit in terms of how he
would change up the FED. He has spoken about and
he believes interest rates should be lower, So.
Speaker 4 (05:40):
I think it's quite consistent to bring the interest rate
down even though the economy is operating at a pretty
good level. Where we're going is to a lower level
of inflation, and I think we can bring it down.
Speaker 3 (05:50):
He has spoken about the need to think about new
alternative sets of research. For example, He's given some hints
around that, giving respect for the institution and the penance
of the institution, so he might be able to straddle
all sides of this world here, about the macro policy
world and the Wall Street world, and also navigate the
political side. What we do know, though, is considered something
(06:11):
of an outsider in its race. But our colleagues here
have reported that reader impressed during his interview with Treasure
Secrety bestent Amara.
Speaker 2 (06:20):
How about Michelle Bowen. Mickey Bowman, who was a FED governor,
was elevated to vice chair by President Trump. Has a
supervisory role now at the FED. What do we know
about the way in which the president is looking at
her and her potential candidacy.
Speaker 1 (06:32):
I think Mickey Bowman is viewed as someone who is
in many ways aligned with the administration's goals on the
regulatory front. So she is the Fed's top bank official,
so she's overseeing supervision and regulation, and I think she
has in her few months in the job, done things
that are seen as aligned with what the administration wants
(06:52):
on regulation.
Speaker 5 (06:53):
Some of our regulations have unduly restrained the activities that
banks can engage in incentivize them to limit those activities,
and pushing those functions outside of the banking system.
Speaker 1 (07:05):
She's doing staff cuts of supervision and regulation, and so
if you're thinking about a person who might be willing
to shake the FED up in ways that the administration
might be looking for, Mickey Bowman is seen as someone
who would potentially be open to that. She also doesn't
have a traditional sort of monetary policy background. She came
from the banking world. Her family has been in banking
(07:28):
over many generations, and so she's kind of seen kind
of like reader as a Washington outsider, and so in
that way, she could be an appealing option for the administration.
Speaker 2 (07:39):
And then there's the front runner and two other favorites.
Speaker 1 (07:42):
We know that the President has talked about the two
Kevins in the past and talked about how he likes
both of them.
Speaker 2 (07:47):
I say, Kevin and Kevin, both Kevins are very good.
Speaker 1 (07:50):
And then there's also Chris Waller.
Speaker 2 (07:51):
What can you tell us about him? You've profiled him recently,
kind of looked at his career trajectory. What would he
bring to the table.
Speaker 1 (07:59):
So I think think he would bring two main things.
A deep understanding of the FED as an institution. Before
he was a Fed governor, he was the research director
at the Saint Louis FED for many years. So he
is someone who understands both the Fed's Board of Governors
here in Washington and the regional Fed banks throughout the country.
And in his job now on the Fed's Board, one
(08:21):
of the things he oversees are the operations of the
regional Fed banks. He's kind of the liaison between the
regional Fed banks and the Board, and so I think
he has a deep understanding of the institution. I think
he would also bring a little bit of comfort to
investors and the markets because Chris Waller, when he makes
calls for policy and the economy, he's viewed as someone
(08:43):
who bases those calls in credible analysis.
Speaker 4 (08:46):
Right.
Speaker 1 (08:47):
So, even back over the summer when he was the
first FED official to say we should be cutting rates again.
Speaker 4 (08:53):
The headline numbers for the layor mark what we're seeing
are okay, But it's like when you get underneath and
start working at the data, the private sector is not
doing as well as everybody thinks it is.
Speaker 1 (09:05):
There were a lot of economists who didn't agree with
his analysis of the labor market at the time, but
nobody really went out there and said, oh, he's only
doing this because he wants to be FED chair. Right.
People were like, Okay, Like I don't agree with him,
but I can see how he's looking at the numbers
and coming to this conclusion, and so I think he
would bring that presumption of credibility and a deep knowledge
(09:27):
of the institution to the job.
Speaker 2 (09:28):
And a rounding out this list are the two Kevins.
Let's start with Kevin Warsh, who has been in this
position before. He was somebody who we know the President
was considering for the top job at the FED back
during his first term.
Speaker 3 (09:40):
He came very close to getting the FED chair back
in twenty seventeen. Actually, he has previously served on the
FED board. He was the youngest ever governor when he
was appointed back in twenty h sixt He served in
twenty six to twenty eleven. He was on the board
during the financial crisis, and at that time he was
seen as playing a pivotal role in linking Wall Street
and the policy world because he had worked on Wall Street.
(10:03):
Now more recently, he has become very vocal in his
criticism of the FED. He has a term that he uses,
which is regime change. He wants change of personality, change
of thinking, change of how to do their business. He
has been critical of how they been managing their balance sheet,
which is basically how they buy and sell securities and
how that impacts the economy. And of course he's certainly
(10:25):
saying their scope obviously for much lower interest rates and
cheaper boring costs. As a result, he's pushing hard for
the role this time around, and he's seen as one
of the top contenders when it comes down to it.
Speaker 2 (10:37):
And let's talk about the person the president's allies and
advisors see as the front runner. According to Bloomberg's latest reporting,
that's Kevin Hassett. Tell me about him and how we
should be thinking about his candidacy.
Speaker 3 (10:48):
Well, Kevin hasse is central casting public policy wonk here
in motion in DC, at least on paper. He's previously
worked at the Federal Reserve, has god at PhD in economics.
He also was director of research at American Enterprise Institute,
so he's a well established economist around town. The issue
around Kevin Hasset is that he's also viewed as being
(11:09):
very politically aligned with President Trump, not just on the
economics front, but politically aligned with him. And the thinking
is is that if he went from the White House
to the Fed, well then he probably would be not
just implicitly but explicitly reinforcing the message in the President
Trump wants there. And again, like some of the other candidates,
Kevin Hasset has called for lower interest rates. He has
(11:31):
been critical of Chair Powell as well, and he wants
to see the Fed change how they do business. So
and established economist, not question but seen is very politically
aligned with President Trump.
Speaker 2 (11:42):
So that's the slate of candidates, the five front runners,
But what could the winning pick mean for the future
of the FED and for the US economy more broadly.
That's after the break with the independence of the Federal
Reserve under threat. A key factor shaping the central Bank's
(12:05):
future is who leads it. I've been speaking with Bloomberg's amera,
a moke way and and a current. But how its
next leader will guide the organization and therefore the economy.
And how much power and influence does the FED chair have? Yes,
he is the most public phase of the FED, but
he's someone who chairs a committee of twelve voting members
who set interest rates.
Speaker 3 (12:26):
I mean it's a critical role. The FED chair is
the number one spokesperson for the institution. By extension, is
a very important spokesperson on the economy. And remember is
meant to be an impartial spokesperson on the economy. So
the whitehase can say one thing, that's fine, but the
average voter would like to hear a referees point of
view as well, and that's where the FED is meant
(12:46):
to play its role in all of this. The FED Chair,
of course, also sets a critical role in terms of
setting the tone for policy. Does the economy need higher
boring costs? Does economy need lower boring costs? The FED
is meant to help steer that narrow and bring along
the whole FED Committee with the Chair in terms of
what they want to do, either cutting interest rates or
(13:07):
raising interest rates. It doesn't have to be all consensus
and it's not meant to be an authoritarian regime managing
all of these FED presidents and governors have their say
and have their voice, but neither should it be fragmented
and split in the way. We're sort of getting closer
to you right here right now. So the FED Chair
very important for steering, It very important for influence and
for being a figure of authority and respect when it
(13:29):
comes to commenting on the economy.
Speaker 2 (13:31):
Ameron, let's talk about Federal reserve independence, which is the
ability for the FED to make decisions without political interference.
And we've been through this period over these last many months,
when the President has called for the FED to lower
interest rates, the President has threatened to fire the current
FED Chair to Roam Powell over decisions the FED has made.
When you look at this list, when you look at
these five names, what does it tell you about the
(13:51):
future of FED independence?
Speaker 1 (13:53):
I think talking to Fed watchers and people who care
about the FED. He gets there to say that there
is a fair degree of concern about what some of
these candidates could mean for FED independence. For instance, Kevin Hasset,
he works in the White House right now and on
most FED issues this year, he has been completely aligned
(14:17):
with the President, and so that then raises questions about
the degree to which he potentially will be independent. There
are similar concerns about some of these other candidates, and
even Waller, who has looked at as a credible voice
on the economy, I think would be open to some
of the types of changes that the Trump administration has
(14:39):
made clear that it would want. Like we know, in
his current role as the governor kind of responsible for
the reserve banks that he has pushed to a degree
for cost cuts and staff cuts. And so it's not
like it would necessarily the case that Chris Waller would be,
you know, totally against shaking things up and doing things differently.
Speaker 2 (15:02):
Emera, where are we in this vetting process and what
do we know of what comes next?
Speaker 1 (15:06):
The thinking is that we could get a pick by
the end of this year or early next. Chair Jerom
Powell's term is up in May and so yeah, we're
just waiting to see who the final names that go
to the president are and then waiting for the pick.
But as we know with President Trump, you know, things
are things will be very unpredictable.
Speaker 2 (15:23):
And the approval is ultimately up to the Senate. And
I'm curious, as you think about these five individuals, would
any of these cand's be an easier or tougher sell
to the Senate? How do you see that nomination process
playing out on Capitol Hill?
Speaker 3 (15:36):
Whoever it is will certainly come on a scrutiny from
the Democratic side, no question about it, because they will
be perceived as being sympathetic to President Trump's worldview on
the economy. They'll want to ask questions around what are
you going to do in terms of protecting the Fed's independence,
what your links be with the White House, et cetera.
But also on the Republican side, we'll have to see
will there be any voices of concern there, Will they
(15:56):
too be worried about fedting independence? Or will they be
just willing to go night through a candidate that President
Trump picks.
Speaker 2 (16:03):
And I started out by asking both if you about
sort of what the qualities are that make a good
FED Chair, and I think something we've seen come out
in j. Powell in recent months is the ability to
not answer some specific questions, and one has to do
with what happens next for him.
Speaker 3 (16:18):
You know, I would just say.
Speaker 2 (16:21):
I'll certainly serve to the end of my to the
end of my chare term, and that's really all all
I've decided and all I was thinking about. Any insight
we have into sort of how he's thinking about his
future at the FED, if he's open to or would
be willing to consider serving as a FED governor after
his tenure is as FED chair ends.
Speaker 3 (16:38):
Yeah, it's probably a detail that maybe that brought up,
probably wouldn't pick up on, but his term as chair
will end in May, but mister Powell will remain on
the board as a governor for I think it's another
two years or so after that. That's important because if
Chair Powell said I'm going to retire altogether and leave
the FED, well, it would open up a vacancy on
(16:59):
the board. That will President Trump to appoint someone to
fill that seat, and obviously, in the current political environment,
the expectation would be somebody who again would be willing
to listen to the white hairs view in the economy
and probably lower interest rates and then be seen as
a threat to the Fed's independence. Of course, Chairpell might
choose to carry on and serve out his full term
and continue to engage in FED debate on the economy,
(17:20):
in which case he's blocking that seat and acting as
a pressure point against what President Trump is trying to
do in terms of change up the FED board.
Speaker 2 (17:29):
Overall.
Speaker 1 (17:30):
You know, the economy is in a strange place. The
Trump administration has implemented a lot of different economic policy changes,
from immigration to tariffs to regulation. There are all these
things happening, and the next FED chair is going to
have to navigate all of that and lead the institution
through all these changes and how they're impacting the economy.
(17:52):
And as we're seeing right now, how is having a
more difficult time getting consensus and the Committee as a
whole is having a difficult time figuring out what to do.
And so this next person is going to have to
lead the FED through this very uncertain time, and you
just hope that they have the right temperament and the
(18:13):
right wisdom to do that, because they are trying to
answer very difficult questions.
Speaker 2 (18:23):
This is The Big Take from Bloomberg News. I'm David Gura.
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.
Tomorrow is Thanksgiving in the US. Our team is off
for the holiday. We'll be back on Friday.
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