1 00:00:02,520 --> 00:00:07,360 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:07,400 --> 00:00:09,720 Speaker 2: The Senator Standing file. Let's get to him right now. 3 00:00:09,880 --> 00:00:13,360 Speaker 2: Senator Tom Taillis from North Carolina joins a small for more. Senator, 4 00:00:13,400 --> 00:00:15,520 Speaker 2: welcome to the program. So you have been vouning to 5 00:00:15,520 --> 00:00:18,800 Speaker 2: block any nomination to the Federal Reserve until the DJ 6 00:00:18,960 --> 00:00:22,040 Speaker 2: wraps up its investigation. We have some news this morning. 7 00:00:22,160 --> 00:00:24,720 Speaker 2: As you know, Kevin Walsh has been nominated by the 8 00:00:24,760 --> 00:00:27,800 Speaker 2: President of the United States to succeed CHAIRM and Power. 9 00:00:27,840 --> 00:00:31,160 Speaker 2: Does it change anything for you, sir, No, it does. 10 00:00:31,480 --> 00:00:34,559 Speaker 1: I am pleased with the nominee. I think that by 11 00:00:34,600 --> 00:00:37,680 Speaker 1: most accounts he is well regarded. But we still have 12 00:00:37,760 --> 00:00:43,320 Speaker 1: to clear the current matter. Look, they're pursuing a on 13 00:00:43,360 --> 00:00:47,360 Speaker 1: the basis of criminal intent testimony and a banking committee 14 00:00:47,440 --> 00:00:51,879 Speaker 1: hearing that clearly had no criminal intent. So to me, 15 00:00:53,360 --> 00:00:56,440 Speaker 1: you got some assistant US attorney with a dream in 16 00:00:56,520 --> 00:01:01,640 Speaker 1: the DC district that should really determine whether or not 17 00:01:01,840 --> 00:01:07,000 Speaker 1: this frivolous prosecution is worth holding up a FED board seat. 18 00:01:07,040 --> 00:01:09,280 Speaker 2: So we have some time between now and May four 19 00:01:09,400 --> 00:01:12,280 Speaker 2: that investigation to go away and for the confirmation process 20 00:01:12,319 --> 00:01:14,520 Speaker 2: to open up. Have you given thoughts to what would 21 00:01:14,520 --> 00:01:17,520 Speaker 2: happen if we don't have that time we get to May, 22 00:01:17,959 --> 00:01:21,000 Speaker 2: this is still lingering and the chairman steps away. What 23 00:01:21,120 --> 00:01:22,639 Speaker 2: happens that it's helping the feder reserve. 24 00:01:23,520 --> 00:01:26,480 Speaker 1: Well, I think that we all need to understand we 25 00:01:26,600 --> 00:01:31,440 Speaker 1: still have a working quorum of members, whether or not 26 00:01:31,480 --> 00:01:33,640 Speaker 1: they have an acting chair as a decision that the 27 00:01:33,720 --> 00:01:38,200 Speaker 1: President and assume the Treasury Secretary and others can look at. 28 00:01:38,280 --> 00:01:40,840 Speaker 1: But that's not my problem. We're here because of them, 29 00:01:41,000 --> 00:01:43,759 Speaker 1: We're not here because of me, and so I think 30 00:01:43,800 --> 00:01:46,440 Speaker 1: they should work expeditiously if they really do. I'm not 31 00:01:46,480 --> 00:01:48,600 Speaker 1: an attorney. I watch a lot of crime shows, but 32 00:01:49,000 --> 00:01:52,320 Speaker 1: doesn't look like there was any criminal intent here. They 33 00:01:52,360 --> 00:01:54,920 Speaker 1: have to determine whether or not it's worth grinding this out. 34 00:01:55,240 --> 00:01:58,240 Speaker 1: Like I said, I didn't put us here. Some assisted 35 00:01:58,400 --> 00:02:02,720 Speaker 1: US attorney the DC District decided to put us here, 36 00:02:02,760 --> 00:02:05,080 Speaker 1: and they've got to determine if they have a case 37 00:02:05,120 --> 00:02:05,960 Speaker 1: it's worth pursuing. 38 00:02:06,320 --> 00:02:09,320 Speaker 3: Senator Tillis, has anyone from the administration or the Department 39 00:02:09,320 --> 00:02:12,320 Speaker 3: of Justice reached out to you about the process of 40 00:02:12,360 --> 00:02:15,120 Speaker 3: how this could go down or giving you confidence that 41 00:02:15,400 --> 00:02:18,119 Speaker 3: this will be dropped in time for the confirmation hearing 42 00:02:18,160 --> 00:02:18,720 Speaker 3: to go forward? 43 00:02:19,520 --> 00:02:24,320 Speaker 1: Well, Lisa, I'd never talked about my conversations with any members. 44 00:02:24,600 --> 00:02:27,080 Speaker 1: People always ask me what goes on at lunch. I 45 00:02:27,160 --> 00:02:30,080 Speaker 1: just don't have those conversations. But my public statements stand 46 00:02:30,120 --> 00:02:30,880 Speaker 1: for themselves. 47 00:02:31,160 --> 00:02:33,440 Speaker 4: Is closing the investigation enough a Senator? 48 00:02:33,480 --> 00:02:35,680 Speaker 5: Or do you need other assurances that you think this 49 00:02:35,760 --> 00:02:38,279 Speaker 5: administration is going to respect the FED independence? 50 00:02:39,320 --> 00:02:42,600 Speaker 1: Well, right now, I think you do that by making 51 00:02:42,639 --> 00:02:45,560 Speaker 1: a judgment. Look, we've got two cases here, right, We've 52 00:02:45,560 --> 00:02:48,119 Speaker 1: got the cookcase and we have the Power case. Both 53 00:02:48,160 --> 00:02:53,520 Speaker 1: of those to me are instances of independence, and I'm 54 00:02:53,560 --> 00:02:56,800 Speaker 1: staying focused on that one goal. I'm not really persuaded 55 00:02:56,919 --> 00:02:59,720 Speaker 1: or even willing to entertain any discussions that take me 56 00:02:59,760 --> 00:03:00,440 Speaker 1: off that goal. 57 00:03:00,800 --> 00:03:03,080 Speaker 4: Okay, but you just mentioned the Lisa Cook case. 58 00:03:03,240 --> 00:03:05,239 Speaker 5: Do you also need to see that wrapped up either 59 00:03:05,280 --> 00:03:07,720 Speaker 5: by the Supreme Court in order to move forward? 60 00:03:08,600 --> 00:03:11,560 Speaker 1: Yeah? I do. I mean, because look, I mean we're 61 00:03:11,600 --> 00:03:15,960 Speaker 1: talking about what looks like a paperwork error or if 62 00:03:16,000 --> 00:03:19,720 Speaker 1: there was, if there was a mistake long before she 63 00:03:20,000 --> 00:03:24,040 Speaker 1: was confirmed for the board. It's like, my goodness, guys, 64 00:03:24,200 --> 00:03:26,919 Speaker 1: I mean, I don't know, maybe Paulty or somebody thought 65 00:03:26,960 --> 00:03:29,840 Speaker 1: that that was cute. I didn't, so just to. 66 00:03:29,720 --> 00:03:32,800 Speaker 5: Be clear, it is not just the DOJ investigation to 67 00:03:32,840 --> 00:03:35,240 Speaker 5: the FED that you need wrapped up. You also need 68 00:03:35,280 --> 00:03:38,400 Speaker 5: the Supreme Court case wrapped up. So it's two issues 69 00:03:38,480 --> 00:03:42,320 Speaker 5: right now and blocks for you to move forward with Kevin. 70 00:03:42,120 --> 00:03:45,480 Speaker 1: Warsh Yeah, well no, let me let me buy far 71 00:03:45,560 --> 00:03:50,080 Speaker 1: kate these one is moving forward with another that the 72 00:03:50,280 --> 00:03:55,040 Speaker 1: case that will prevent me considering any board nominee is 73 00:03:55,080 --> 00:03:58,880 Speaker 1: the Powell case. But I will not move forward. So 74 00:03:59,160 --> 00:04:03,240 Speaker 1: for the for the chair, which we know expires in February. 75 00:04:03,960 --> 00:04:08,240 Speaker 1: The other case we have, you know, the Myron term 76 00:04:08,400 --> 00:04:13,640 Speaker 1: is about to expire because he was filling up basically 77 00:04:13,680 --> 00:04:17,359 Speaker 1: six weeks I'm sorry, six months. We've got the Cook seat. 78 00:04:18,040 --> 00:04:21,480 Speaker 1: Those are ones that are really going to be I'll 79 00:04:21,480 --> 00:04:23,560 Speaker 1: take a look at the candidate. I'll take a look 80 00:04:23,600 --> 00:04:25,880 Speaker 1: at how it would affect the board. Look, this is 81 00:04:25,960 --> 00:04:28,279 Speaker 1: all in my opinion, this is all about sending a 82 00:04:28,320 --> 00:04:31,240 Speaker 1: signal to the markets and to the business community that 83 00:04:31,320 --> 00:04:37,880 Speaker 1: FED independence is critically important. And going after the chair 84 00:04:38,560 --> 00:04:41,520 Speaker 1: I think took a stool out of the foundation of 85 00:04:41,520 --> 00:04:45,160 Speaker 1: people's confidence, or a lag out of the stool. In 86 00:04:45,200 --> 00:04:47,919 Speaker 1: the case of Cook, I do believe that it's another 87 00:04:48,040 --> 00:04:50,840 Speaker 1: example of a trend, and the Senate has to stand 88 00:04:50,880 --> 00:04:52,800 Speaker 1: in the breach. We have to make sure that the 89 00:04:52,800 --> 00:04:56,400 Speaker 1: Fed maintains its independence and we cannot reward any bad 90 00:04:56,440 --> 00:05:00,360 Speaker 1: behavior that seems like it's surely motivated. How about the 91 00:05:00,440 --> 00:05:03,760 Speaker 1: substance of the allegations, but by the interest and trying 92 00:05:03,760 --> 00:05:05,200 Speaker 1: to undermind the FED independence. 93 00:05:05,320 --> 00:05:07,479 Speaker 2: Senator, what's your understanding as to whether the Federal Reserve 94 00:05:07,520 --> 00:05:11,040 Speaker 2: is cooperating with that investigation? Some conflicting reports over the 95 00:05:11,080 --> 00:05:13,040 Speaker 2: past few days. What you'll read on the situation. 96 00:05:14,000 --> 00:05:18,360 Speaker 1: I you know, I'm not really sure, Jonathan. I'm going 97 00:05:18,400 --> 00:05:20,480 Speaker 1: to leave that that's a better question to ask the 98 00:05:20,520 --> 00:05:21,840 Speaker 1: administration of the DOJ. 99 00:05:22,240 --> 00:05:23,760 Speaker 2: What if we get the opportunity to speak to them, 100 00:05:23,760 --> 00:05:25,800 Speaker 2: I'm sure we'll ask. I've got the opportunity to ask 101 00:05:25,800 --> 00:05:28,359 Speaker 2: you about the man and not just the process. You 102 00:05:28,440 --> 00:05:30,680 Speaker 2: said this morning, and you've said it again that Kevin 103 00:05:30,720 --> 00:05:33,320 Speaker 2: Walsh is a qualified nominee with a deep understanding of 104 00:05:33,360 --> 00:05:36,159 Speaker 2: monetary policy. For those familiar with Kevin Walsh in his 105 00:05:36,240 --> 00:05:38,920 Speaker 2: time at the Federal Reserve back in the financial crisis, 106 00:05:39,200 --> 00:05:41,679 Speaker 2: they have considered him to be on the more hawkish 107 00:05:41,760 --> 00:05:44,599 Speaker 2: side of the spectrum on the FMC, and there is 108 00:05:44,600 --> 00:05:47,400 Speaker 2: some debate this morning, Senator about what Kevin Walsh actually 109 00:05:47,440 --> 00:05:50,159 Speaker 2: stands for. Given that we know the president wants lower 110 00:05:50,200 --> 00:05:53,080 Speaker 2: interest rates, what's your understanding of what he stands for. 111 00:05:53,880 --> 00:05:58,960 Speaker 1: Well, you know, I with Sir Powell, I haven't agreed 112 00:05:59,279 --> 00:06:02,960 Speaker 1: with all of the opinions. I'm not an economist or 113 00:06:03,000 --> 00:06:06,240 Speaker 1: his positions, and sometimes I may be more hawkers than 114 00:06:06,279 --> 00:06:12,560 Speaker 1: share Powell. So coming in, I think Walsh is a 115 00:06:12,720 --> 00:06:18,120 Speaker 1: good independent. He's got an extraordinary reputation in a community 116 00:06:18,120 --> 00:06:22,280 Speaker 1: of economists and people focused on the FED. I don't 117 00:06:22,320 --> 00:06:25,000 Speaker 1: think that he would want to destroy his reputation by 118 00:06:25,040 --> 00:06:27,839 Speaker 1: being independent. You know, you could have hawkish members like 119 00:06:27,880 --> 00:06:30,000 Speaker 1: Waller and others, and I'm fine with them on the 120 00:06:30,080 --> 00:06:34,279 Speaker 1: board to stretch the thinking. But I don't believe he 121 00:06:34,360 --> 00:06:36,080 Speaker 1: comes in is more or less going to do the 122 00:06:36,080 --> 00:06:39,200 Speaker 1: bidding of the administration, which is critically important and incidentally, 123 00:06:39,240 --> 00:06:41,440 Speaker 1: I should say it's critically important for the health and 124 00:06:41,480 --> 00:06:42,800 Speaker 1: hygiene of the administration. 125 00:06:43,680 --> 00:06:45,600 Speaker 3: Senator tell Us, does this give you any more confidence 126 00:06:45,920 --> 00:06:48,359 Speaker 3: that actually the independence of the Federal Reserve will not 127 00:06:48,480 --> 00:06:51,839 Speaker 3: be undermined, that this actually is going to be a 128 00:06:51,880 --> 00:06:54,839 Speaker 3: proper process. Once some of the roadblocks you're talking about 129 00:06:55,320 --> 00:06:56,400 Speaker 3: are going to be cleared. 130 00:06:57,279 --> 00:06:59,480 Speaker 1: Yeah, I think so, Lisa. And look, this is this 131 00:06:59,560 --> 00:07:04,039 Speaker 1: is actually democracy and institutional separation at its finest. We 132 00:07:04,120 --> 00:07:06,839 Speaker 1: have a disagreement, and we have a mechanism in place 133 00:07:06,880 --> 00:07:09,920 Speaker 1: for resolving this and moving on. I hope that no 134 00:07:09,960 --> 00:07:12,600 Speaker 1: one in the administration takes personal offense to this. I'm 135 00:07:12,640 --> 00:07:14,880 Speaker 1: doing my job, Senator. 136 00:07:14,960 --> 00:07:17,320 Speaker 4: Do you have any understanding of the timeline? 137 00:07:19,000 --> 00:07:22,720 Speaker 1: Well, you know, the investigations can go on forever. I mean, 138 00:07:22,960 --> 00:07:25,560 Speaker 1: you could see one scenario where Chair Powell has two 139 00:07:25,600 --> 00:07:29,000 Speaker 1: years left on his term even after he comes off 140 00:07:29,000 --> 00:07:31,280 Speaker 1: the board. So I mean you could see this going 141 00:07:31,280 --> 00:07:33,760 Speaker 1: on for two years or in my case, three hundred 142 00:07:33,760 --> 00:07:34,400 Speaker 1: and thirty nine. 143 00:07:34,320 --> 00:07:37,880 Speaker 5: Days, because three hundred and thirty nine days that's when 144 00:07:37,920 --> 00:07:41,440 Speaker 5: you're going to be retiring. And I know, Lisa, as 145 00:07:41,520 --> 00:07:43,560 Speaker 5: you have had any conversations, I want to ask you 146 00:07:43,560 --> 00:07:47,040 Speaker 5: about those conversations. But have you, guys seen any indications 147 00:07:47,040 --> 00:07:49,120 Speaker 5: from anyone that they do want to wrap up the 148 00:07:49,200 --> 00:07:51,560 Speaker 5: DOJ investigation as soon as possible? 149 00:07:52,280 --> 00:07:56,640 Speaker 1: Well, you know, I think, Andrew, I think that the 150 00:07:58,680 --> 00:08:03,000 Speaker 1: fact that they're putting for this nominee knowing that it 151 00:08:03,000 --> 00:08:06,280 Speaker 1: would be impossible to get him through with the current 152 00:08:06,320 --> 00:08:09,520 Speaker 1: position that I've taken, it suggests to me that maybe 153 00:08:09,560 --> 00:08:12,080 Speaker 1: they are trying to find a way to deal with this. 154 00:08:12,360 --> 00:08:15,760 Speaker 1: It could be adjudicated expeditiously, or it could be just 155 00:08:15,800 --> 00:08:18,440 Speaker 1: determining that they also agreed that there was no criminal 156 00:08:18,480 --> 00:08:21,480 Speaker 1: intent and the chairs testimony and the banking committee that 157 00:08:21,520 --> 00:08:22,400 Speaker 1: I participated in. 158 00:08:22,640 --> 00:08:24,679 Speaker 2: Senator, just quickly, have you spoken to the White House? 159 00:08:24,880 --> 00:08:27,320 Speaker 2: Have they reached out? You know? 160 00:08:27,760 --> 00:08:31,480 Speaker 1: Like I said, I have ongoing discussions, so the President 161 00:08:31,560 --> 00:08:34,480 Speaker 1: I probably communicate once or twice a week at least 162 00:08:34,520 --> 00:08:37,080 Speaker 1: through texts. So I have ongoing discussions. I'm not going 163 00:08:37,120 --> 00:08:40,120 Speaker 1: to talk about the content of them, Jonathan. Kind of 164 00:08:40,120 --> 00:08:42,160 Speaker 1: like groundhog Day, I'm going to answer the same question 165 00:08:42,240 --> 00:08:43,320 Speaker 1: every day the same way. 166 00:08:44,360 --> 00:08:45,840 Speaker 4: Good movie I heard, Senator. 167 00:08:45,920 --> 00:08:48,320 Speaker 2: We appreciate your time, Thanks for jumping on the cod 168 00:08:48,720 --> 00:08:52,160 Speaker 2: Thank you, sir, Thank you very much. Senator Tom tillis 169 00:08:52,200 --> 00:08:54,480 Speaker 2: there on his way to the gym. The Senator made 170 00:08:54,520 --> 00:08:55,520 Speaker 2: me watch groundhog Day.