Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Joining us now from
Speaker 1: Capitol Hill is Democratic Senator Elizabeth Warren of Massachusetts, the
Speaker 1: ranking member on the Senate Banking Committee, who I suspect
Speaker 1: has a few questions ready for mister Myron. Senator, welcome
Speaker 1: back to Bloomberg's TV and radio. In the first hearing
Speaker 1: for Stephen Myron to join the Federal Reserve Board of Governors,
Speaker 1: we'll see this tomorrow. His opening remarks, some of his
Speaker 1: prepared remarks were released, and he writes, in my view,
Speaker 1: the most important job of the Central Bank is to
Speaker 1: prevent depressions and hyper inflations. Do you agree with him?
Speaker 1: And do you believe him?
Speaker 2: Look, can we just back up just a tiny little bit,
Speaker 2: and that is the Banking Committee should be holding hearing tomorrow,
Speaker 2: but it should not be a business as usual. Let's
Speaker 2: grease the skids and run through Donald Trump's nominee for
Speaker 2: the FED. Instead, we should be heavy an oversight hearing
Speaker 2: about Donald Trump's unprecedented attacks on the independence of the FED.
Speaker 2: He has made three hard runs at the FED over
Speaker 2: the past few months, trying to fire Jerome Pal just
Speaker 2: on his own, trying to fire Jerome Pal for cause,
Speaker 2: trumping up charges around how much money he had spent
Speaker 2: in the FED building rehabilitation, and now trying to fire
Speaker 2: Lisa Cook. Donald Trump is making a move to try
Speaker 2: to destroy the independence of the Federal Reserve Bank, unlike
Speaker 2: anything that has ever been done in American history. And
Speaker 2: right now the Republicans who run the committee are saying,
Speaker 2: let's just have a business as usual, Let's bring up
Speaker 2: the Donald Trump nominee, move him on through. And I
Speaker 2: just want to be clear, I think that is a mistake.
Speaker 2: I think we have a responsibility to address this question
Speaker 2: of FED independence.
Speaker 3: First, Senator Warren, let's talk about Lisa Cook there in
Speaker 3: the seat, that of course is getting a lot of attention,
Speaker 3: your colleague, FM. North Carolina Senator Tillis earlier today said
Speaker 3: he would not consider nominating someone to take her place
Speaker 3: while the litigation was ongoing. If the Supreme Court, for example,
Speaker 3: does rule in fact that while the litigation is on
Speaker 3: going to figure out whether her firing was in fact legal,
Speaker 3: would you be willing to block Donald Trump's nominee to
Speaker 3: fill that seat.
Speaker 2: Look, Donald Trump cannot fire Lisa Cook based on at
Speaker 2: least the facts or non facts that have been presented
Speaker 2: thus far. Again, this is about independence of the FED
Speaker 2: and Donald Trump's efforts to seize control over the FED,
Speaker 2: and yes, I would try to block that, and I
Speaker 2: would think the Republican senators, who also care about independence
Speaker 2: of the FED would do the same. You know, I
Speaker 2: just want to remind everyone why we have an independent FED.
Speaker 2: And that's true whether you have a Democrat in the
Speaker 2: White House or a Republican in the White House. You
Speaker 2: in theory, have a group of people out there who
Speaker 2: look at the economic numbers and they make decisions on
Speaker 2: things like interest rates as best they can based on
Speaker 2: those numbers, not based on political pressure from the President
Speaker 2: of the United States. If Donald Trump destroys that, sure
Speaker 2: he may be able to get what he wants on
Speaker 2: interest rates in the short term, but he undermines confidence
Speaker 2: in the FED and its decision making and its rate setting.
Speaker 2: We've seen this before when autocrats have taken over central
Speaker 2: bank in places like Turkey. What happens is interest rates
Speaker 2: shoot through the roof, and that is a real problem
Speaker 2: for our economy. Everybody has a stake in an independent
Speaker 2: FED and to let Donald Trump just destroy that without
Speaker 2: even pushing back is a terrible.
Speaker 3: Mistake, Senator Warren, I hear you, But if the Supreme
Speaker 3: Court rules that a nominee can actually take her place,
Speaker 3: how do you plan on blocking that.
Speaker 2: I'm in the minority. I understand that, but I would
Speaker 2: try to persuade my Republican colleagues that it would be
Speaker 2: a terrible mistake to help Donald Trump in effect destroy
Speaker 2: the independence of the FED. Look, this is nothing new
Speaker 2: in the sense that go back and look at it.
Speaker 2: There are many Republican senators who in times past have
Speaker 2: talked about the importance of the independence of the FED, because,
Speaker 2: like I say, that's not like a democratic position or
Speaker 2: a Republican position. Nope, it's a position that those of
Speaker 2: us who try to watch this about how regulation of
Speaker 2: the economy works understand that from the beginning, providing some
Speaker 2: insulation for the financial decision makers, like the people who
Speaker 2: said interest rates, to insulate them from the political side
Speaker 2: of the House, from the President of the United States,
Speaker 2: is ultimately good for the economy. And it's why our
Speaker 2: Fed's interst rate setting is the gold standard for the world,
Speaker 2: and Donald Trump wants to burn that down.
Speaker 1: Senator, I know that this sounds like it's turning into
Speaker 1: a hearing that will be atypical tomorrow and something that
Speaker 1: we're going to be watching and bringing to our viewers
Speaker 1: and listeners here on Bloomberg. I do want to ask
Speaker 1: you about a couple of other stories that are making
Speaker 1: news today, and one that's from the New York Times
Speaker 1: that has to do strangely with the New York mayoral race.
Speaker 1: Not something I would tend to ask you about, but
Speaker 1: Donald Trump is reportedly considering giving roles to some of
Speaker 1: the candidates in the New York mayoral race, including Eric Adams,
Speaker 1: for potentially a job at HUD. The idea would be including,
Speaker 1: by the way, Curtis Lea as well, that clear Aleen
Speaker 1: for Andrew Cuomo. I don't know if you buy that reporting,
Speaker 1: but you would have to clear a nominee to run HUD. Correct.
Speaker 1: Is that something you would be prepared to do Secretary Adams.
Speaker 2: Well, it depends on what he is nominated for. There
Speaker 2: are a lot of jobs at HUD that don't require
Speaker 2: Senate confirmation. We already have ahead of HUD. I don't
Speaker 2: know what Donald Trump is proposing that. The part that's
Speaker 2: triple underlined here is that Donald Trump supports Andrew Cuomo
Speaker 2: to be mayor of New York period. That's all this
Speaker 2: is about. And he is willing to bring the force
Speaker 2: of the United States government to use his tools as
Speaker 2: President of the United States, not on behalf of the
Speaker 2: people of the United States, not on behalf of finding
Speaker 2: the best nominee for position at HUD but to be
Speaker 2: able to manipulate the mayoral race to try to help
Speaker 2: and Drew Cuomo in New York City. I think that's
Speaker 2: not only wrong for Donald Trump. I can't imagine that
Speaker 2: this is going to make the people of New York
Speaker 2: City say, woo, who Andrew Cuomo is my guy. I
Speaker 2: think this is going to make the people of New
Speaker 2: York City say, our city is not for sale to
Speaker 2: Donald Trump.
Speaker 1: Well, we'll see where this story goes. Senator. It does
Speaker 1: seem we can't get away from the story surrounding the
Speaker 1: Jeffrey Epstein files. And I know that there are a
Speaker 1: series of approaches on Capitol Hill right now to get
Speaker 1: the files released and to shed a light on the
Speaker 1: stories of victims who held a news conference today, President
Speaker 1: Trump was asked about this in the Oval office as
Speaker 1: he sat next to the President of Poland. Part of
Speaker 1: his response was, quote, it's really a Democrat hoax. I
Speaker 1: know that no matter what you do, it's going to
Speaker 1: keep going. Unquote. Is he right, this is a Democrat hoax?
Speaker 2: No, Look, this is not the Democrats. This is Donald
Speaker 2: Trump's own statements when he was running for president of
Speaker 2: the United States. Go back and play the clips when
Speaker 2: he and other Republicans promised, promised, promised that if Donald
Speaker 2: Trump became president and Republicans were in control, they were
Speaker 2: going to replay release all of the Epstein files. So
Speaker 2: do it. Just do it, and I don't mean release
Speaker 2: part of them. Do a little blackout, a little hair,
Speaker 2: a little there. That's what's keeping this story alive. And
Speaker 2: you really have to ask yourself, if Donald Trump wants
Speaker 2: this story to go away, the way to do that
Speaker 2: is release all of the documents. And if he thinks
Speaker 2: that's not going to work, what's in those files?
Speaker 3: Elizabeth Warren, I'm sure we will find out. A final
Speaker 3: question to you, were perhaps circling back to where we
Speaker 3: started this time on the economy. One of the big
Speaker 3: criticisms that we know J. Powell has based from various
Speaker 3: members of Washington, including Donald Trump, and I believe in
Speaker 3: yourself as well, is not cutting interest rates in the
Speaker 3: face of inflation, as something Stephen Myron has been talking
Speaker 3: about quite significantly as well. Can you just explain to
Speaker 3: our Wall Street audience that's tuning into this program here
Speaker 3: why rate cuts make sense if there's a risk of
Speaker 3: exacerbating the impact of Donald Trump's tariffs on inflation.
Speaker 2: So I started in two years ago saying that the
Speaker 2: data on inflation showing that inflation was coming down, that
Speaker 2: inflation was under better control, meant that Powell should start
Speaker 2: rate cuts. I thought that was entirely appropriate. I did
Speaker 2: my best to persuade him in a very public way,
Speaker 2: and obviously I did not succeed. They did one rate cut,
Speaker 2: but that was it. Now, what Powell himself said last
Speaker 2: month was if Donald Trump had not created so much
Speaker 2: chaos with the with the tariffs and what he's done
Speaker 2: to the economy, that the Fed would have cut rates
Speaker 2: last February. So think about that. That means that basically,
Speaker 2: for six months now, Americans have been paying more on
Speaker 2: their credit cards, They've been paying more on interest on
Speaker 2: their car loans, and more on interest on home mortgage
Speaker 2: home equity lines of credit, paying more because of the
Speaker 2: chaos that Donald Trump has created with tariffs. So look,
Speaker 2: I've been someone who thinks interest rates should come down,
Speaker 2: but the biggest obstacle to that happening is Donald Trump himself.
Speaker 2: If he wants to see interest rates come down, then
Speaker 2: stop creating this kind of chaos in the economy and
Speaker 2: stop this tear of fifty percent, ten percent, one hundred
Speaker 2: and twenty seven percent that keeps businesses from being able
Speaker 2: to plan, keeps businesses from buying new equipment and making investments,
Speaker 2: keeps businesses from hiring more people. Donald Trump is the
Speaker 2: number one reason in America that we do not have
Speaker 2: a lower interest rate.
Speaker 3: Today, Senator Warren will have to wrap up the conversation there.
Speaker 3: Ranking Banking Committee Member Elizabeth Warren in Massachusetts, we thank
Speaker 3: you so much for your time