WEBVTT - What the DOJ Subpoenas Mean for the Fed 0:00:02.720 --> 0:00:07.560 Bloomberg, Audio Studios, podcasts, radio News. 0:00:08.720 --> 0:00:09.280 Good Evening. 0:00:10.119 --> 0:00:13.840 Federal Reserve Chair Jerome Powell issued an extraordinary statement on 0:00:13.920 --> 0:00:16.840 Sunday night. The FED posted a video of Powell reading 0:00:16.840 --> 0:00:17.319 it in full. 0:00:17.920 --> 0:00:21.079 On Friday, the Department of Justice served the Federal Reserve 0:00:21.120 --> 0:00:25.200 with grand jury subpoenas threatening a criminal indictment related to 0:00:25.239 --> 0:00:28.920 my testimony before the Senate Banking Committee last June. That 0:00:29.000 --> 0:00:33.159 testimony concerned, in part, a multi year project to renovate 0:00:33.280 --> 0:00:35.199 historic Federal Reserve office buildings. 0:00:35.960 --> 0:00:40.839 These developments represent an extreme excavation of the pressure campaign 0:00:40.920 --> 0:00:44.000 that the Trump administration has been putting on the FED 0:00:44.040 --> 0:00:47.240 and chaired Jerome Powell for months now. 0:00:47.600 --> 0:00:50.240 That's Amera amok Way. She covers the Federal Reserve for 0:00:50.280 --> 0:00:51.920 Bloomberg along with Enda Current. 0:00:52.400 --> 0:00:55.320 What you're talking about is effectively threatening the Federal Reserve 0:00:55.440 --> 0:01:00.000 chair with criminal charges over the costs of a building project, 0:01:00.440 --> 0:01:03.560 when we know the backstory is that the White House 0:01:03.640 --> 0:01:06.720 is very unhappy with where interest rates are at and 0:01:06.800 --> 0:01:09.560 they want to use his current opportunity to remold the 0:01:09.840 --> 0:01:10.680 Federal Reserves. 0:01:11.200 --> 0:01:13.840 Enda and emer have been tracking how the relationship between 0:01:13.880 --> 0:01:17.760 Trump and Powell has evolved or devolved since Trump first 0:01:17.800 --> 0:01:19.800 tapped Powell to be the chair of the Federal Reserve 0:01:19.959 --> 0:01:23.520 in twenty seventeen, and they've reported on the President's efforts 0:01:23.600 --> 0:01:26.679 to try to fire Powell and to reshape the Central Bank. 0:01:27.120 --> 0:01:30.160 Powell's term is fed share ends in May, and Preston 0:01:30.200 --> 0:01:33.040 Trump says he's close to naming someone to succeed him. 0:01:33.640 --> 0:01:37.360 In the face of insults and threats, Powell has kept quiet. 0:01:37.680 --> 0:01:41.520 He's been reluctant and often unwilling to answer reporter's questions 0:01:41.640 --> 0:01:44.520 about what President Trump has said about him. So his 0:01:44.600 --> 0:01:47.040 statement on Sunday is a sea change. 0:01:47.200 --> 0:01:50.560 This unprecedented action should be seen in the broader context 0:01:50.640 --> 0:01:53.520 of the administration's threats and ongoing. 0:01:53.120 --> 0:01:57.960 Pressure, controversy over that renovation, and allegations he misled Congress 0:01:57.960 --> 0:02:01.720 in testimony last summer. Those are pretacts, Powell said. 0:02:01.880 --> 0:02:04.560 The threat of criminal charges is a consequence of the 0:02:04.600 --> 0:02:08.680 Federal Reserve setting interest rates based on our best assessment 0:02:08.840 --> 0:02:11.640 of what will serve the public, rather than following the 0:02:11.680 --> 0:02:13.040 preferences of the President. 0:02:20.680 --> 0:02:22.480 I'm David Gera, and this is the big take from 0:02:22.520 --> 0:02:26.040 Bloomberg News today. On the show, the Department of Justice 0:02:26.080 --> 0:02:28.840 subpoenas the Federal Reserve, what it means for one of 0:02:28.880 --> 0:02:32.160 the most important financial institutions in the world, for its leader, 0:02:32.280 --> 0:02:35.160 Jerome Powell, and for the White House, and where things 0:02:35.200 --> 0:02:43.080 could go from here. In Feed Reserve Chair Jerome Powell's 0:02:43.080 --> 0:02:45.880 statement about the subpoenas the Department of Justice served the 0:02:45.880 --> 0:02:49.360 FED on Friday, Powell said, they're part of something bigger. 0:02:49.720 --> 0:02:52.399 They're a threat to the Fed's long standing independence. 0:02:52.760 --> 0:02:54.560 This is about whether the FED will be able to 0:02:54.600 --> 0:02:58.160 continue to set interest rates based on evidence and economic conditions, 0:02:58.639 --> 0:03:02.079 or whether instead monetary policy will be directed by political 0:03:02.120 --> 0:03:03.399 pressure or intimidation. 0:03:03.760 --> 0:03:06.560 Amara, let's start with this statement and what made it 0:03:07.280 --> 0:03:10.520 unique or unprecedented. Why in terms of medium and message 0:03:10.520 --> 0:03:11.840 was the statement so significant? 0:03:12.280 --> 0:03:15.120 Wow, David, when I read this statement, I had to 0:03:15.160 --> 0:03:17.800 take I mean, usually take a minute before you start writing, 0:03:17.800 --> 0:03:19.800 but I took like an extra minute because I was like, 0:03:19.880 --> 0:03:24.720 this is this is truly remarkable that j. Powell is 0:03:24.760 --> 0:03:28.400 coming out with both video and text and doing a 0:03:28.560 --> 0:03:33.480 very direct response to the administration, a very forceful response 0:03:33.520 --> 0:03:37.119 to the administration. Usually, when Chair Pale is asked about 0:03:37.520 --> 0:03:39.600 things that President Trump is saying or things that the 0:03:39.600 --> 0:03:42.240 administration is doing, you can almost predict what he's going 0:03:42.320 --> 0:03:45.320 to say. It is usually we at the FED, we 0:03:45.400 --> 0:03:46.880 just try to stick to our knitting. We try to 0:03:46.880 --> 0:03:48.560 stay out of politics. We just want to do a 0:03:48.560 --> 0:03:50.680 good job for the American people, some version of that. 0:03:51.400 --> 0:03:54.440 This was so very different than what he usually says 0:03:54.480 --> 0:03:58.800 in response to attack and pressure from the administration. He said, 0:03:58.800 --> 0:04:02.240 this issue of the building renovation and what he said 0:04:02.280 --> 0:04:05.680 to Congress last year about it are essentially pretexts for 0:04:06.080 --> 0:04:08.760 the administration to go after him and go after the 0:04:08.800 --> 0:04:11.880 FED because the FED has not delivered their preferred policy, 0:04:12.080 --> 0:04:15.240 and he basically just came out swinging and for the FED, 0:04:15.320 --> 0:04:18.560 which just likes to kind of take sort of a detached, 0:04:18.720 --> 0:04:22.160 above the freight approach, this is really a departure from 0:04:22.160 --> 0:04:25.440 how they usually respond to these kinds of situations, and 0:04:25.480 --> 0:04:27.840 it just shows that they, I think that they are 0:04:27.880 --> 0:04:30.840 taking it very seriously and they do see this as 0:04:31.160 --> 0:04:33.960 perhaps the realist and most serious threat to the Fed's 0:04:33.960 --> 0:04:37.240 independence since President Trump returned to office. 0:04:37.720 --> 0:04:40.479 That was your reaction? What was the reaction of markets 0:04:40.480 --> 0:04:42.480 to this news, both of the subpoenas and the statement 0:04:42.480 --> 0:04:43.120 from the FED chair. 0:04:43.440 --> 0:04:45.920 So initially we saw and I think we are still 0:04:45.960 --> 0:04:48.840 seeing sort of this selloff in sort of the America 0:04:48.880 --> 0:04:51.479 trade right. As ND and I have written about, markets 0:04:51.560 --> 0:04:55.240 have tended to take these threats to FED independence kind 0:04:55.240 --> 0:04:58.640 of enstride, and it'll be interesting to see if people 0:04:58.800 --> 0:05:04.800 see this development something that is more serious than previous developments. 0:05:04.839 --> 0:05:07.839 You know, even when the President moved to FIREFED Governor 0:05:07.880 --> 0:05:09.880 Lisa Cook, we didn't really see much of a reaction 0:05:10.400 --> 0:05:13.200 in markets, and that was really surprising because people were like, WHOA, 0:05:13.400 --> 0:05:15.680 that is unprecedented that the President is trying to remove 0:05:15.720 --> 0:05:16.440 a FED governor. 0:05:16.800 --> 0:05:20.880 I think in terms of attacks on an institution that 0:05:21.040 --> 0:05:23.880 is at the center of steering the economy, at an 0:05:23.920 --> 0:05:26.760 institution that is meant to be independent of politics and 0:05:26.760 --> 0:05:30.360 a scene as such, it's pretty unprecedented in its nature, David, 0:05:30.520 --> 0:05:33.039 no doubt about it. So on paper, it's an argument 0:05:33.080 --> 0:05:36.640 about classic government cost overrun, but we know the backstory 0:05:36.720 --> 0:05:37.839 runs much deeper than that. 0:05:39.160 --> 0:05:41.800 And it didn't take long before we heard from members 0:05:41.839 --> 0:05:45.080 of the Senate Banking Committee. What have lawmakers said in 0:05:45.120 --> 0:05:48.039 response to again the news of the subpoenas and also 0:05:48.360 --> 0:05:49.760 what Chair Powell said about them. 0:05:50.000 --> 0:05:53.599 Well, we've had one interesting intervention in particular, David, with 0:05:53.760 --> 0:05:57.680 a Republican Party. Senator phyllis making the point that he 0:05:58.320 --> 0:06:00.560 first of all views this as a police little attack 0:06:00.640 --> 0:06:02.880 on the FED, and he has made the point that 0:06:02.960 --> 0:06:05.640 he will use his role on the relevant committee in 0:06:05.680 --> 0:06:09.120 the Senate, the Banking Committee, to block the approval of 0:06:09.160 --> 0:06:11.000 wherever the White House puts up to be the next 0:06:11.160 --> 0:06:14.520 FED Chair or any other Federal Reserve appointment in the meantime. Now, 0:06:14.520 --> 0:06:17.640 that's very important because it's the first major intervention from 0:06:17.680 --> 0:06:20.840 the Hill and into the pressure that the White has 0:06:21.000 --> 0:06:23.400 have been putting on the FED. Number one, it comes 0:06:23.440 --> 0:06:26.320 from the Republican side of things as well. But number two, 0:06:26.400 --> 0:06:30.000 it means that President Trump and the treasure Tecuy Bestin 0:06:30.080 --> 0:06:31.760 had been floating we're going to announce a new FED 0:06:31.839 --> 0:06:34.040 chair at some point soon overcoming weeks. Well, if they 0:06:34.040 --> 0:06:36.400 go ahead and make that announcement, now, the entire FED 0:06:36.440 --> 0:06:38.200 watching world in the rest of the world will say, well, 0:06:38.200 --> 0:06:40.159 hold on, you don't have the numbers to get that 0:06:40.200 --> 0:06:41.080 person approved. 0:06:42.640 --> 0:06:44.280 Mara at the center of all of this is this 0:06:44.360 --> 0:06:47.960 renovation project of these two feder Reserve buildings in Washington. 0:06:48.160 --> 0:06:50.839 Just remind us what that issue is and sort of 0:06:50.839 --> 0:06:52.520 why it's become so controversial. 0:06:52.960 --> 0:06:57.080 Yes, So this issue really bubbled up over last summer 0:06:57.680 --> 0:07:00.400 after there were media reports about this and a half 0:07:00.400 --> 0:07:03.600 billion dollar renovation of two historic buildings that the FED 0:07:03.680 --> 0:07:07.040 is doing at its headquarters in DC. The media reports 0:07:07.120 --> 0:07:10.720 kind of characterized the project as very extravagant, that it 0:07:10.800 --> 0:07:14.080 had all these fancy design features and things like that. 0:07:14.280 --> 0:07:17.560 And so when Chirpal went to do his semi annual 0:07:17.640 --> 0:07:21.600 testimony before Congress, he was asked about this and he 0:07:21.640 --> 0:07:23.679 sort of pushed back against the idea that the project 0:07:23.720 --> 0:07:26.880 is very extravagant. He did have to answer questions about 0:07:26.880 --> 0:07:29.360 the fact that the project's costs have risen over time, 0:07:30.080 --> 0:07:33.120 and that testimony is really at the center of the 0:07:33.240 --> 0:07:38.120 subpoenas because you had allies of President Trump after the 0:07:38.160 --> 0:07:41.640 testimony say that Palell was not honest during that testimony, 0:07:42.160 --> 0:07:45.640 and they called on Congress and the DOJ to investigate 0:07:46.120 --> 0:07:49.480 whether he had lied to Congress, And evidently we now 0:07:49.480 --> 0:07:52.920 have that DOJ investigation now. For his part, pal has 0:07:52.920 --> 0:07:56.080 said that he was truthful during that testimony, and he's 0:07:56.120 --> 0:07:59.120 also said that during the entire course of the project 0:07:59.400 --> 0:08:01.880 that the FED has aimed to be transparent about its 0:08:01.920 --> 0:08:04.920 costs and other issues and keep Congress informed. 0:08:05.800 --> 0:08:08.760 It was maybe like a month after that congressional testimony 0:08:08.800 --> 0:08:12.480 that President Trump made that unprecedented trip to Federal Serve 0:08:12.520 --> 0:08:15.600 headquarters the ERA and got a tour of the construction site. 0:08:15.880 --> 0:08:19.840 Could you just describe that moment, both the tours of 0:08:19.840 --> 0:08:22.080 what the President said afterward, there was this kind of 0:08:22.160 --> 0:08:25.160 memorable exchange between the FED Chair and the President about 0:08:25.160 --> 0:08:26.360 how big those overruns are. 0:08:26.560 --> 0:08:29.440 President Trump went over there, walked around, and then he 0:08:29.520 --> 0:08:32.719 threw out a number about how much the project costs. 0:08:33.000 --> 0:08:35.680 It looks like it's about three point one billion, one up. 0:08:35.559 --> 0:08:37.040 A little bit or a lot. 0:08:37.880 --> 0:08:40.200 And you may have seen the memes. 0:08:41.360 --> 0:08:43.960 Yeah, it just came out. 0:08:44.480 --> 0:08:45.560 I haven't heard that from anybody. 0:08:45.559 --> 0:08:48.920 To FED Chairpaul was like what like looking at a 0:08:48.960 --> 0:08:51.400 piece of paper and it went completely viral because Cherpaul 0:08:51.480 --> 0:08:53.400 was like, no, actually, that's not how much it costs. 0:08:53.760 --> 0:08:55.760 You just added into third buildings. 0:08:55.760 --> 0:08:56.280 What that is. 0:08:56.320 --> 0:08:59.360 That's a third building. It's a building that's being built 0:09:00.040 --> 0:09:01.400 and he was built five years ago. 0:09:02.160 --> 0:09:04.480 That visit by President Trump's of the construction site was 0:09:04.520 --> 0:09:08.520 actually really surprising because given all the pressure and all 0:09:08.559 --> 0:09:12.160 the criticisms that he and his administration have been lobbing 0:09:12.200 --> 0:09:14.280 about the project. You would have expected him to go 0:09:14.320 --> 0:09:16.440 over there and come out and really be critical, but 0:09:16.520 --> 0:09:18.880 he was kind of nice. He was like, oh, you know, 0:09:19.840 --> 0:09:21.760 it's okay. You know, this is not a reason to 0:09:21.800 --> 0:09:22.319 fire him. 0:09:23.520 --> 0:09:25.920 Are there are things the Chairman can say to you 0:09:26.000 --> 0:09:26.480 today that. 0:09:26.440 --> 0:09:29.000 Would make you back off some of the earlier criticisms. 0:09:29.280 --> 0:09:32.440 Well, I'd love him to lower interest rates. 0:09:32.480 --> 0:09:33.959 Other than that, I tell you. 0:09:34.040 --> 0:09:36.480 So, you left with the impression that maybe the construction 0:09:36.600 --> 0:09:40.400 project was something that the administration was kind of leaving behind, 0:09:40.679 --> 0:09:44.360 because President Trump really was kind of tame when he 0:09:44.480 --> 0:09:46.320 visited the site over the summer. 0:09:47.640 --> 0:09:50.160 And the Fed chair in his statement counseled everybody to 0:09:50.240 --> 0:09:52.679 kind of look at what's happened here over the weekend. 0:09:52.800 --> 0:09:55.320 In this broader context, it does seem that, you know, 0:09:55.760 --> 0:09:58.760 after that tour, things quieted down a little bit. Yes, 0:09:58.800 --> 0:10:00.959 there's this matter involving le A Cook that's still kind 0:10:00.960 --> 0:10:04.000 of roiling in the background. The President tried to fire her. 0:10:04.480 --> 0:10:06.080 She's a FED governor in the Supreme Court is going 0:10:06.120 --> 0:10:08.120 to wait the legality of that in the coming weeks. 0:10:08.800 --> 0:10:12.160 Help us understand the broader context here of the relationship 0:10:12.160 --> 0:10:14.840 between the Trump, White House, and the Federal Reserve. Going 0:10:14.880 --> 0:10:15.160 into the. 0:10:15.160 --> 0:10:18.240 Weekend, it's obviously a very tense day, but it is kind 0:10:18.240 --> 0:10:20.680 of two front suit. On the one hand, there is 0:10:20.679 --> 0:10:23.600 the headline that the White House wants lower boring costs, 0:10:23.880 --> 0:10:27.120 you know, cheaper money, and the Federalerserve policymakers have been 0:10:27.400 --> 0:10:29.480 reluctant to move as fast as the White House because 0:10:29.520 --> 0:10:31.679 they're still worried about where inflation is at and if 0:10:31.679 --> 0:10:34.000 you cut indust rates too low too quickly, they're worried 0:10:34.000 --> 0:10:35.960 that inflation would take off. So that's the first point 0:10:35.960 --> 0:10:39.880 of tension between them. But the subplot underneath this is 0:10:39.880 --> 0:10:42.520 that President Trump is also looking for opportunities to reshape 0:10:42.520 --> 0:10:44.640 and remold the FED in the way he wants it 0:10:44.679 --> 0:10:46.920 to be, to share his worldview on the economy, and 0:10:46.960 --> 0:10:49.880 in particular, he has the opportunity to of course appoint 0:10:49.920 --> 0:10:52.600 a new FED chair at some point soon to replace 0:10:52.800 --> 0:10:55.120 a chair Palell when he steps down his chair in May. 0:10:55.600 --> 0:10:58.800 Chair Powell can actually remain on the FED board until 0:10:58.880 --> 0:11:02.240 early twenty twenty eight, and the thinking speaking to FED 0:11:02.320 --> 0:11:04.800 watchers is that the White House are very concerned that 0:11:05.160 --> 0:11:07.880 Chapell might stay on the board for some time and 0:11:07.920 --> 0:11:11.040 deny them the opportunity to fill that gap with somebody 0:11:11.040 --> 0:11:13.680 who shares their view and where interest rates should be. 0:11:13.720 --> 0:11:15.800 And that's why this is thinking that this is part 0:11:15.800 --> 0:11:19.360 of a concerted pressure campaign to you know, pressure mister 0:11:19.400 --> 0:11:22.320 Powell to move on off the board once his termers 0:11:22.400 --> 0:11:25.120 chair steps up. So there's been that pressure, of course 0:11:25.120 --> 0:11:28.600 on Governor Cook with that unprecedented attempt to fire her. 0:11:29.200 --> 0:11:32.520 We had the insulation of Governor Myron. It adds up 0:11:32.559 --> 0:11:35.920 to this idea that we're in a moment where, you know, 0:11:35.920 --> 0:11:37.839 Trump really is trying to remold the FED the way 0:11:37.840 --> 0:11:38.600 Trump wants it to be. 0:11:40.679 --> 0:11:42.920 So what do we know about the Department of Justice's 0:11:43.000 --> 0:11:56.840 threat of a criminal indictment? That's after the break Federal 0:11:56.800 --> 0:11:59.960 Reserve Church. Jerome Powell acknowledged the FED was served grand 0:12:00.080 --> 0:12:04.320 jerysapoena's late last week. The Justice Department is investigating whether 0:12:04.400 --> 0:12:07.840 Powell lied to lawmakers in June when he testified before 0:12:07.840 --> 0:12:10.640 the Senate Banking Committee. Bloomberg is reporting this effort was 0:12:10.720 --> 0:12:14.320 largely driven by the director of the Federal Housing Finance Agency, 0:12:14.360 --> 0:12:17.480 Bill Poulti. Pulty declined to comment on that during an 0:12:17.480 --> 0:12:20.920 interview on Bloomberg television on Monday morning. The DOJ's outside 0:12:20.960 --> 0:12:21.640 of my purview. 0:12:21.800 --> 0:12:23.559 This is out of my purview. I don't know anything 0:12:23.600 --> 0:12:25.680 about it, and I would defer you to the DOJ. 0:12:26.320 --> 0:12:29.360 According to Bloomberg FED reporters Enda Curran and Amara amok Way, 0:12:29.600 --> 0:12:32.160 President Trump has said he was not briefed on the 0:12:32.240 --> 0:12:35.960 Justice Department's investigation and he had no prior knowledge of it. 0:12:36.280 --> 0:12:40.120 He did an interview with NBC News on Sunday night 0:12:40.280 --> 0:12:43.400 after news of these subpoenas came out, and he said 0:12:43.440 --> 0:12:46.040 he didn't know anything about the subpoenas, and he said 0:12:46.120 --> 0:12:49.280 that they didn't have anything to do with his desire 0:12:49.360 --> 0:12:53.960 for lower interest rates. So make of that what you will. 0:12:55.920 --> 0:12:58.040 And I posted the FED chair statement the text of 0:12:58.080 --> 0:13:00.800 it on LinkedIn shortly after the FED public And this 0:13:00.880 --> 0:13:02.839 is what our colleague John Author has commented. He's a 0:13:02.920 --> 0:13:05.679 commist for Bloomberg Opinion friend of the show. He said, quote, 0:13:05.840 --> 0:13:08.920 this is quite extraordinary. Powell steps down and Trump nominates 0:13:08.960 --> 0:13:11.439 his success for only months from now. It's hard to 0:13:11.480 --> 0:13:13.680 see the point of this. Even if there were a 0:13:13.760 --> 0:13:17.199 study basis for prosecution, is it possible for you to 0:13:17.240 --> 0:13:19.439 see what the point of this is? Given the timeline 0:13:19.440 --> 0:13:20.280 that John laid out. 0:13:20.200 --> 0:13:23.800 There, Well, there's no doubt it's very damaging optically for 0:13:23.840 --> 0:13:26.120 the policy making process in the US. David, I mean, 0:13:26.160 --> 0:13:28.160 if you're looking at this from the outside, the FED 0:13:28.280 --> 0:13:31.280 is this pre eminent institution. It's independent, as we've been discussing, 0:13:31.280 --> 0:13:33.120 and it's meant to set the rules of the road 0:13:33.160 --> 0:13:36.079 based on month the economy needs, not on politics. That's 0:13:36.120 --> 0:13:37.679 important not just for the US but the rest of 0:13:37.720 --> 0:13:39.800 the world. But now, of course we have the situation 0:13:39.840 --> 0:13:44.199 whereby it looks like a fairly deliberate attack on share 0:13:44.240 --> 0:13:47.400 Powell himself through using the root of what's going on 0:13:47.480 --> 0:13:50.280 with the building site and the costover runs there. And 0:13:50.400 --> 0:13:53.200 of course, how will that impact the internal freed dynamic? 0:13:53.240 --> 0:13:55.520 I mean, when the new FED chair takes over, will 0:13:55.520 --> 0:13:57.560 the rest of the committee be willing to cooperate with 0:13:57.679 --> 0:13:59.720 him or horror, or will they view that person as 0:13:59.800 --> 0:14:02.680 very deliberately political? And will the new FED chair have 0:14:02.760 --> 0:14:04.800 trouble convincing the rest of the FED team that is 0:14:04.840 --> 0:14:07.400 on their side? For example, there's a question mark? Is 0:14:07.400 --> 0:14:09.640 the question mark now over Chair Powell? I mean, I 0:14:09.640 --> 0:14:11.640 think a lot of people would have thought he'd move on, 0:14:11.720 --> 0:14:13.680 but will he now stay for a little while in 0:14:13.720 --> 0:14:16.200 a deliberate attempt to push back against the administration. So, I 0:14:16.200 --> 0:14:20.400 think in terms of the optics the policy making process, 0:14:21.080 --> 0:14:23.640 this idea that this is really unprecedent and now political 0:14:23.680 --> 0:14:25.600 assault on the FED, I think that raises a lot 0:14:25.600 --> 0:14:29.120 of question marks over what happens next, how this process 0:14:29.120 --> 0:14:31.680 plays out, and the reputational damage that it leaves both 0:14:31.720 --> 0:14:34.600 on the FED and I think the US policy making process. 0:14:36.200 --> 0:14:39.600 There is this conversation about what FED Chair Powell does 0:14:39.680 --> 0:14:42.400 in the medium to long term. In the nearer term, 0:14:42.560 --> 0:14:45.160 there's another FED meeting just days from now. What did 0:14:45.160 --> 0:14:46.760 he say just about what's going to happen in the 0:14:46.920 --> 0:14:48.760 coming days versus the coming months and years. 0:14:48.880 --> 0:14:51.560 Well, he didn't comment on monetary policy in his statement 0:14:51.720 --> 0:14:54.160 and video last night, David, I think most people following 0:14:54.200 --> 0:14:56.360 this would say, this isn't really going to impact the 0:14:56.440 --> 0:14:59.640 near term path for moneged policy in Chair Powell, whether 0:14:59.680 --> 0:15:02.800 you or not, and the FMC committee have been setting 0:15:02.800 --> 0:15:05.560 policy based on the other reasoning they set out for it, 0:15:05.560 --> 0:15:07.360 which is they've been cutting rates because they're worried about 0:15:07.440 --> 0:15:10.080 the employment market. Would have been cutting fast enough. Courting 0:15:10.120 --> 0:15:13.200 to President Trump that story probably won't change near term, 0:15:13.440 --> 0:15:15.320 but then you know, you go a few months out 0:15:15.360 --> 0:15:17.400 from nine, if we have that new FED chair arriving 0:15:18.040 --> 0:15:19.800 on the board as I mentioned, then does that FED 0:15:19.880 --> 0:15:22.240 chair committed or saying we need lower interest rates at 0:15:22.240 --> 0:15:23.960 a time when the rest of the FMC committee or 0:15:24.000 --> 0:15:25.960 maybe a skeptical about the need for lower interest rates 0:15:26.160 --> 0:15:29.720 and b they're already smarting over it's extraordinaryssault on the FED. 0:15:30.000 --> 0:15:32.360 I mean, that's where things will get complicated pretty quickly. 0:15:32.400 --> 0:15:34.120 So we're in for I think a very uncertain few 0:15:34.120 --> 0:15:34.640 months ahead. 0:15:35.200 --> 0:15:38.360 I have served at the Federal Reserve under four administrations, 0:15:38.480 --> 0:15:42.760 Republicans and Democrats alike. In every case, I have carried 0:15:42.800 --> 0:15:47.040 out my duties without political fear or favor, focused solely 0:15:47.120 --> 0:15:48.760 on our mandate of price stability. 0:15:50.480 --> 0:15:53.440 Who is the audience for that statement from FED Chair Jerome. 0:15:53.240 --> 0:15:55.400 Pal Do you think I think he went directly to 0:15:55.520 --> 0:15:58.760 the American people? The message is different this time, right. 0:15:58.800 --> 0:16:00.640 It's not We're just going to do our jobs and 0:16:00.720 --> 0:16:03.040 keep our heads down. It's Look, you all need to 0:16:03.120 --> 0:16:08.440 understand that these subpoenas are directly related to the President 0:16:08.520 --> 0:16:11.960 trying to bend this institution to his will and I 0:16:12.000 --> 0:16:14.560 think he wanted the American people to know that and to. 0:16:14.480 --> 0:16:18.120 Hear that public service sometimes requires standing firm in the 0:16:18.160 --> 0:16:21.520 face of threats. I will continue to do the job 0:16:21.600 --> 0:16:25.280 the said confirmed me to do with integrity and a 0:16:25.320 --> 0:16:27.440 commitment to serving the American people. 0:16:28.160 --> 0:16:28.520 Thank you. 0:16:34.200 --> 0:16:36.400 This is the Big Take from Bloomberg News. I'm David 0:16:36.440 --> 0:16:38.880 gurat To get more from The Big Take and unlimited 0:16:38.880 --> 0:16:41.720 access to all of Bloomberg dot com, subscribe today at 0:16:41.760 --> 0:16:45.840 Bloomberg dot com slash podcast offer. If you like this episode, 0:16:45.880 --> 0:16:47.920 make sure to follow and review The Big Take wherever 0:16:47.960 --> 0:16:50.360 you listen to podcasts. It helps people find the show. 0:16:50.760 --> 0:16:52.640 Thanks for listening. We'll be back tomorrow.