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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: President Trump says his decision on who he'll pick to

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Speaker 2: succeed Jerome Powell as Chair of the Federal Reserve is

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Speaker 2: coming out very soon. That's what he told reporters on

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Speaker 2: Air Force one last Friday. The President hasn't been shy

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Speaker 2: about criticizing Powell and Powell's approach to monetary policy. After

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Speaker 2: we got new inflation numbers on Wednesday morning, Trump immediately

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Speaker 2: took to truth social to demand the Fed lower interest

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Speaker 2: rates by a full point. Powell's term is chair expires

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Speaker 2: in May of twenty twenty six. That's less than a

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Speaker 2: year from now. But in recent weeks, President Trump seems

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Speaker 2: to have accelerated his search for the next head of

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Speaker 2: the Fed. Nancy Cook covers politics for Bloomberg.

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Speaker 1: It is something that people inside the administration and outside

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Speaker 1: are starting to think about, particularly as Trump grows more

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Speaker 1: and more frustrated with the Federal Reserve not cutting interest

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Speaker 1: rates and he feels like that is a threat to

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Speaker 1: his own economic agenda.

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Speaker 2: Kevin Warsh was long thought to be the front runner.

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Speaker 2: He's a former Fed governor, but now there's a new

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Speaker 2: name under consideration. According to reporting, from Nancy Cook and

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Speaker 2: my co host Seleiah Mosen And that is Scott Bessont,

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Speaker 2: the current Treasury secretary.

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Speaker 1: You know, a lot of the finance people that Sleay

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Speaker 1: and I talked to sort of consider him the adult

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Speaker 1: in the administration, has sort of great presence, is doing

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Speaker 1: a lot of good policy stuff, and so it's interesting

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Speaker 1: that his name is emerging to.

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Speaker 2: Then, of course, there is Trump's signature style when considering

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Speaker 2: a high profile nomination like this.

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Speaker 3: How many more names can we put in there that

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Speaker 3: makes Trump feel like he's got this apprentice style option

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Speaker 3: in front of him.

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Speaker 2: Bestt responded to a question about Nancy and Selia's reporting

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Speaker 2: during a hearing before the House Weighs and Means Committee

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Speaker 2: on Wednesday. I am happy to do what President Trump wants.

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Speaker 3: Me to do.

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Speaker 2: He said, he has what he views as one of

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Speaker 2: the best jobs in Washington, listed his goals for the

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Speaker 2: Treasury under his leadership, and concluded.

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Speaker 3: And I would like to stay in my seat through

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Speaker 3: twenty twenty nine to do that.

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Speaker 2: I'm David Gerret and this is the Big Take from

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Speaker 2: Bloomberg News Today. On the show, Seleia and Nancy joined

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Speaker 2: me to talk about their scoop and about what the

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Speaker 2: President wants in a FED chair, what could be appealing

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Speaker 2: to him about Scott bessen't in that role, and the

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Speaker 2: state of play, what Trump is saying about when he'll

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Speaker 2: make his decision, Nancy. Before we get into who President

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Speaker 2: Trump wants to be the next FED chair, let's start

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Speaker 2: with what the President wants in a FED chair. What's

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Speaker 2: he looking for?

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Speaker 1: Well, I think President Trump has been so frustrated by

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Speaker 1: the FED dating back to even his first term. He

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Speaker 1: was frustrated with J. Powell, then he's frustrated with J.

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Speaker 1: Powell now, and I think that what he really wants is,

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Speaker 1: you know, someone who follows his economic lead a little

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Speaker 1: bit more on what the FED should be doing, particular

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Speaker 1: interest rates, and he wants someone who is going to

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Speaker 1: make him look good on the economy, sort of do

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Speaker 1: what he wants, follow his lead. I don't think that

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Speaker 1: that Trump wants a total sikofan who he can call

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Speaker 1: up and just say you better do this this month.

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Speaker 1: But I think he wants someone more malleable than Jay

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Speaker 1: Powell is.

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Speaker 2: Right now, we've heard a lot about FED independence and Seleiah,

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Speaker 2: let me ask you about that. You write in your piece.

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Speaker 2: This person will have to prove to the world that

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Speaker 2: the Fed's independence from political meddling remains intact. Is there

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Speaker 2: a universal definition of what FED independence is?

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Speaker 3: The Federal Reserve is held to a very different standard

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Speaker 3: than any other central bank because of the immense power

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Speaker 3: that has across every economy, emerging markets, frontier markets, developed economies,

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Speaker 3: g seven countries, the rich countries, the poor countries, and

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Speaker 3: the world wants this central bank, the most powerful one,

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Speaker 3: to be above politics because they don't want to be

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Speaker 3: looking at short or medium term goals for the economy,

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Speaker 3: but long term goals, and politicians are looking at midterms

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Speaker 3: or an eighteen month or Senate elections are coming up,

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Speaker 3: where presidential cycle is coming up. I want to jews

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Speaker 3: and goose the economy. So they want someone who is

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Speaker 3: above an independent from any kind of political meddling that

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Speaker 3: has to do with an elected official.

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Speaker 2: Nancy I said, we get from the what to the who.

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Speaker 2: So who is President Trump? Considering what have you learned?

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Speaker 1: So Slayne I wrote a story yesterday just saying that

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Speaker 1: the Treasury Secretary Scott Besson is under consideration for the

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Speaker 1: FED job. And this is news because it's a new

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Speaker 1: name that we hadn't heard before. Kevin Walsh, who was

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Speaker 1: a Fed governor at one point and Trump considered in

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Speaker 1: his first term, is still in the mix as well.

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Speaker 1: But it's really interesting that Scott Bessant has emerged, because

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Speaker 1: you know, he's Treasury secretary. He sort of barely got

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Speaker 1: the Treasury secretary job, but people inside the administration and

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Speaker 1: on Wall Street have been very impressed by the way

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Speaker 1: he's handled a lot of trade talks, by the way

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Speaker 1: he has handled Trump, by the way he's calmed markets

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Speaker 1: in Wall Street.

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Speaker 2: Without giving away secrets or sourcing sort of how did

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Speaker 2: you learn about this learn his name is in the running?

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Speaker 2: Is this process unfold?

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Speaker 3: Well?

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Speaker 1: Selene I said next to each other in the office,

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Speaker 1: just to give you a little bit of a view

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Speaker 1: of the DC office. And so she and I sort

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Speaker 1: of talked to each other all day long, and we're

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Speaker 1: both really interested in economics and politics, and so she

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Speaker 1: had said to me last week, oh, you know, I

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Speaker 1: hear Scott besson for a feed, isn't that interesting? And

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Speaker 1: so we both just started sort of asking sources and

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Speaker 1: talking to people, you know, around DC, around Wall Street,

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Speaker 1: throughout the political organizations, and his name kept coming up,

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Speaker 1: and it came up often enough that we feel comfortable

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Speaker 1: reporting it.

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Speaker 2: Selea, You reached out to the Treasury Secretary to Scott

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Speaker 2: bessen for comment. What did he tell you?

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Speaker 3: His comment was interesting, was on the record, and he

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Speaker 3: said that I have the best job in Washington, and

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Speaker 3: it is up to the president to decide who is

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Speaker 3: going to oversee the US economy. I found it interesting

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Speaker 3: that he didn't take that moment to outright deny it.

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Speaker 3: He didn't say I'm not going to comment on the

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Speaker 3: story at all or thread the needle. Somehow he decided

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Speaker 3: to just not fan the flats, but not put the

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Speaker 3: story down.

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Speaker 2: So that's what the Treasury secretary said to you. What

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Speaker 2: did the White House say?

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Speaker 3: The White House said that this is fake news.

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Speaker 2: They dispute the premise of the piece that they say

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Speaker 2: that he's not in the running.

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Speaker 3: They said that this is not an accurate report.

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Speaker 1: Actually, the senior administration official just said to me, this

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Speaker 1: is fake news and then wouldn't get into the specifics

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Speaker 1: about what was wrong or what was fake, but this

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Speaker 1: was their party line.

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Speaker 2: You know. So, lay before President Trump picked Scott Bessont

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Speaker 2: to be as Treasury Secretary, you and I had conversations

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Speaker 2: about who the president was looking at to be on

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Speaker 2: his economic team. Was there any indication that this was

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Speaker 2: a job, this being the FED chair was a job

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Speaker 2: that Scott Bessant was interested in.

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Speaker 3: At the time. No, I had not heard this when

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Speaker 3: I started hearing just recently that Bessant was his name

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Speaker 3: was percolating for FED chair. I was a little surprised

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Speaker 3: because throughout the campaign trail last year, during the presidential

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Speaker 3: campaign cycle, Bessant was out there as a vocal booster

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Speaker 3: of Trump's economic policy, as a Republican, as a card

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Speaker 3: carrying MAGA economic populist who wanted to help build Trump's policies.

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Speaker 3: When you want to be FED chair, you behave more

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Speaker 3: like Kevin worsh You're behind the scenes. You're not out

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Speaker 3: there so much sort of outwardly and obviously talking about

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Speaker 3: how the current Treasure secretary is bad and the current

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Speaker 3: president is bad, because you're supposed to be a little

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Speaker 3: bit above that as FED chair traditionally.

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Speaker 1: Part of the reason that it's so surprising, David is

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Speaker 1: just that Besson spent so long campaigning to be Treasury Secretary.

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Speaker 1: I mean, he was out there during the twenty twenty

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Speaker 1: four campaign, you know, going on TV, writing op eds.

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Speaker 1: You know, I would travel with Trump and he would

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Speaker 1: be on the campaign plane. I mean, it was just

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Speaker 1: a lot of jocking to get this job. And you

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Speaker 1: have to remember that Commerce Secretary Howard Lutnik also really

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Speaker 1: wanted the job. The Treasury Secretary is such a plumb

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Speaker 1: job that there was just a lot of effort that

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Speaker 1: he expended to get it. And I'm not saying that

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Speaker 1: he's now campaigning to get the Fed chair job. I

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Speaker 1: think that it's more that people are eyeing him for it.

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Speaker 1: But it is interesting because I feel like he wanted

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Speaker 1: Treasury so badly narrowly got it, and it's interesting now

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Speaker 1: that there are people both inside and outside the administration

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Speaker 1: that are now already thinking about him for, you know,

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Speaker 1: a different job.

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Speaker 2: Nancy, what have you observed about the dynamic between the

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Speaker 2: President and Scott Best at the Treasury Secretary over these

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Speaker 2: last six months or so.

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Speaker 1: I feel like when Scott Essant first got in to Treasury,

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Speaker 1: he had sort of a steep learning curve, and so

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Speaker 1: what I was hearing from my reporting was that some

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Speaker 1: of his picks for IRS Commissioner, for instance, like that

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Speaker 1: wasn't you know, Billy Long was not his pick, and

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Speaker 1: so there were definitely key nominees, a sort of under

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Speaker 1: treasury that the White House was ignoring his advice on.

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Speaker 1: And also when he first got in, I think, you know,

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Speaker 1: he was excluded from some of the political stuff and

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Speaker 1: he didn't have as much political juice as you know

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Speaker 1: other people, and a lot of his aids are super

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Speaker 1: smart but are more of like the economist types and

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Speaker 1: sort of couldn't in the West wing with the political people.

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Speaker 1: That really changed when the trade talks really blew up,

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Speaker 1: when the financial markets, particularly the bond markets, really reacted

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Speaker 1: to the tariffs and a lot of Trump's trade policy,

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Speaker 1: Scott Bessant was the one who was able to talk

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Speaker 1: Trump off the ledge on the tariffs and sort of

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Speaker 1: put a pause on them. He was also able to

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Speaker 1: calm the markets, and I think at that point that

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Speaker 1: was sort of the inflection point for him politically, sort

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Speaker 1: of inside the White House and just the administration when

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Speaker 1: people thought, Okay, this guy is a real player. Trump

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Speaker 1: listens to him and he actually has some juice.

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Speaker 2: Se Leiah, do we have a sense of how a

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Speaker 2: fed share of Scott Bessant would operate how he'd approached

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Speaker 2: this job.

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Speaker 3: I was talking to some of our FED colleagues or

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Speaker 3: reporters who covered the FED, and they were saying, it's

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Speaker 3: interesting that because Bessant has been in public policy in

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Speaker 3: the public sector for less than two hundred days and

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Speaker 3: he's had a couple of wins in terms of helping

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Speaker 3: to calm markets and temper some of the trade policy

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Speaker 3: that was coming out, and markets trust him all of

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Speaker 3: a sudden, and he could become FED chair based on

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Speaker 3: just that performance. And we've seen how in the past

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Speaker 3: year Bessent has managed to get Trump to be a

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Speaker 3: little bit calmer when it comes to talking about Jay Powell.

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Speaker 3: He was on the brink of firing him in twenty

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Speaker 3: eighteen and nineteen, and now he didn't write off the

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Speaker 3: batfire j Powell, when he's done a lot of bold

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Speaker 3: moves when he came back into government. There are a

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Speaker 3: lot of signs that besson is behind some of that

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Speaker 3: tempering or reporting has shown. That's one reason that people

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Speaker 3: in the White House and outside of the White House

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Speaker 3: like Bessont because he can handle Trump. But I don't

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Speaker 3: know whether he would be hawkish or dubvish, and how

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Speaker 3: he would react because we just don't know enough about

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Speaker 3: Bessent and his thoughts on monetary policy.

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Speaker 2: After the break, what we know about how Scott Bessont

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Speaker 2: could stack up against Kevin Warsh, what it could mean

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Speaker 2: for the economy if Trump names the next FED chair,

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Speaker 2: this bar in advance and the economic challenges facing the

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Speaker 2: next FED Chair, whoever it may be. Jerome Powell has

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Speaker 2: almost a year left in his term as Federal Reserve Chair,

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Speaker 2: but the Trump administration is moving ahead in considering his successor.

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Speaker 2: I spoke with Bloomberg, Sealiah Mosen and Nancy Cook about

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Speaker 2: how that's playing out. Nancy, where are we in this process?

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Speaker 2: We've heard different things from different members of the administration

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Speaker 2: about the timetable, but what's your sense of how this

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Speaker 2: is unfolding?

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Speaker 1: So my sense is that from our story we reported

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Speaker 1: that no formal interviews have taken place, But just to

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Speaker 1: be clear, Trump has interviewed Kevin Walsh before he interviewed

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Speaker 1: him to be FED chair during his last term when

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Speaker 1: he ended up picking j. Powell, which was something he regretted,

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Speaker 1: and he interviewed Kevin Walsh to be Treasury Secretary. Like

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Speaker 1: Trump knows all the players sort of in the orbit

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Speaker 1: of people he could potentially pick already. He knows Kevin Walsh,

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Speaker 1: he knows Scott Besant, Chris Waller, who's a current FED governor.

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Speaker 3: Chris Waller or is someone who Trump nominated to the

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Speaker 3: board the first time around. Advisors were impressed with him.

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Speaker 3: They've been watching carefully what he's been advising the Fed

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Speaker 3: to do, what he's been doing with his vote on

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Speaker 3: the Fed for interest rates. There's also David Malpass. His

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Speaker 3: name has come up. He was the World Bank President.

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Speaker 3: He's been in Trump's orbit for a long time. I

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Speaker 3: don't know how serious that is, but his name has

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Speaker 3: come up. And then the other name is Kevin Hassett,

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Speaker 3: who is right now Trump's White House National Economic Council Director.

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Speaker 3: It's also unclear just how seriously he's being considered.

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Speaker 1: And Trump on Air Force One on Friday night was

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Speaker 1: asked about this and said, oh, you know, it's something

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Speaker 1: that we're considering. We're getting close. And then he was

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Speaker 1: asked what he thought about Kevin Walsh, and he said

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Speaker 1: he thought very highly of him. Now, Trump also sort

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Speaker 1: of can be fuzzy with timelines, and we'll always say

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Speaker 1: something is two weeks away when actually, like you know,

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Speaker 1: who knows when it'll happen. He knows that the economy,

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Speaker 1: and his advisors know the economy will be a very

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Speaker 1: key thing for the midterms, and that's something they're already

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Speaker 1: thinking about, and so I could see them wanting to

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Speaker 1: at least name a FED chair sort of sooner rather

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Speaker 1: than later, even though Jay Powell's term as Fedchair does

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Speaker 1: not end until May twenty twenty six.

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Speaker 2: So, Leiah, this gets to something that we heard Scott

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Speaker 2: Besson float during the Trump campaign, and that is that

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Speaker 2: there could be this shadow FED chair. This is something

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Speaker 2: he walked back in the months that followed him proposing that.

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Speaker 2: But you could get the president to nominate somebody who's

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Speaker 2: essentially the heir apparent to Jay Powell while Jay Powell's

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Speaker 2: in that job, and he or she could opine on

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Speaker 2: what he or she would be doing as FED chair

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Speaker 2: or that person in that position. Could you just walk

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Speaker 2: us through what the consequences of that would be, both

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Speaker 2: for the FED and for investors as well. If you

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Speaker 2: had somebody who's kind of in waiting for the job

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Speaker 2: opining on monetary policy and what might happen next.

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Speaker 3: Well, the one thing to remember, is that the Senate

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Speaker 3: has to confirm whoever is going to get this job.

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Speaker 3: So far, all signs point to a Congress who wants

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Speaker 3: to maintain the current status quo of FED independence, and

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Speaker 3: so that is the be a big question for them

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Speaker 3: when it comes to the shadow chair. I'm glad you

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Speaker 3: brought this up, because Besson did talk about this. He

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Speaker 3: floated this in October. It was immediately widely panned that

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Speaker 3: this is a terrible idea, and it would create a

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Speaker 3: lot of confusion because then you would have a sitting

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Speaker 3: FED chair who is navigating a board. Everyone has a

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Speaker 3: say in interest rates, it's not the chair who decides.

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Speaker 3: You would have all of those people making public speeches

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Speaker 3: minutes come out of meetings, you have the actual press

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Speaker 3: statement in the chair's press conference when there are other

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Speaker 3: interest rate decisions, and then Trump always wants to post

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Speaker 3: on truth social and also make comments about the FED.

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Speaker 3: And then you would have this other person also, whether

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Speaker 3: it's Worsh or Besson or Waller or some other person,

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Speaker 3: providing quote forward guidance as the shadow Chair in waiting

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Speaker 3: who has not been confirmed by the Senate. So who

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Speaker 3: knows if it's really going to happen, and especially if

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Speaker 3: it's a sitting Treasury secretary, it's going to really confuse market.

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Speaker 3: And I think that we've seen how sensitive markets have

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Speaker 3: become to the way people in Washington are speaking about

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Speaker 3: policy coming up ahead. And we're also seeing how the

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Speaker 3: thirty year bond and the dollar and American assets are

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Speaker 3: tearing on the edge of maybe not demise, but just

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Speaker 3: something a little scary. We don't know what's around the corner,

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Speaker 3: and I think that's just going to compound that effect.

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Speaker 2: Nancy. I'm hearing both of you talk about this, and

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Speaker 2: I can't help but think of kind of Dick Cheney

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Speaker 2: circa two thousand when he was kind of charged with

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Speaker 2: picking George W. Bush's running mate, and lo and behold

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Speaker 2: he became that running mate. There is a kind of

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Speaker 2: funny echo there isn't there.

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Speaker 1: Yeah, And there was that echo during the transition with

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Speaker 1: Howard Luttnik, who was running the personnel part of the

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Speaker 1: presidential transition and then put himself up for Treasury secretary.

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Speaker 1: I don't have any evidence that Bess and slay and

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Speaker 1: I haven't seen any evidence of sort of him waging

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Speaker 1: this quiet political campaign for it. But I do think

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Speaker 1: that people are just impressed with him, and it's natural

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Speaker 1: that this is such a key job for Trump. This

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Speaker 1: is something that Trump has been very focused on, and

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Speaker 1: so I think it's natural that the people around him

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Speaker 1: would look around and think, Okay, who could fill that slot?

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Speaker 1: And I think the question is, though, the problem with

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Speaker 1: Besson as a pick, if we were to just do

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Speaker 1: a hypothetical on that, is that they also really like

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Speaker 1: him as Treasury secretary. So if you pick him for

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Speaker 1: the FED, who do you put in a Treasury Walsh, though,

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Speaker 1: has been auditioning for this job for years. You know,

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Speaker 1: he wanted the job in Trump's first term. He didn't

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Speaker 1: get it. He went down tomorrow lago and interviewed with

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Speaker 1: Trump for the Treasury secretary. I think with the idea

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Speaker 1: that actually he wanted the FED job. You know, he

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Speaker 1: is outed Hoover sort of giving more political speeches. Like

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Speaker 1: I just I can't stress how long this campaign, how

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Speaker 1: long his campaign for this job has been going on,

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Speaker 1: and so it will just be super interesting to me

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Speaker 1: if he doesn't get it, and if there's another candidate

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Speaker 1: like Bessen who gets it, or just someone else who emerges.

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Speaker 2: That's just the last question here. Maybe you could describe

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Speaker 2: what's going to be on this next FED SHARE's desk

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Speaker 2: when he or she starts. What does that person face

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Speaker 2: coming into the job in twenty twenty six.

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Speaker 1: Well, I just think that we don't know what's going

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Speaker 1: to happen with the economy, and I think the tariffs

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Speaker 1: and how Trump handles them and the effect that they

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Speaker 1: have on the economy is just the huge question mark.

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Speaker 1: We are seeing economic growth slow down, We don't know

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Speaker 1: what's going to happen with this tax package that Republicans

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Speaker 1: are going to try to pass, and so I just

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Speaker 1: think that this is a summer of real economic uncertainty

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Speaker 1: in the US, and whoever takes over that FED job,

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Speaker 1: you know, even if it's not till twenty twenty six,

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Speaker 1: will face sort of a lot and of uncertainty about

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Speaker 1: what the economy looks like potentially. And then just sort

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Speaker 1: of the whipsaw nature of Trump's economic policy making. You know,

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Speaker 1: there's tariffs one day, no tariffs another day, Like what

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Speaker 1: does that actually look like? And how does that seep

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Speaker 1: into the job market, what does that look like for

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Speaker 1: wage inflation? You know, all those things, and I think

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Speaker 1: it's just going to be a real question Mark.

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Speaker 2: This is the Big Take from Bloomberg News. I'm David Gurat.

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