Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: The Senator Standing file. Let's get to him right now.
Speaker 2: Senator Tom Taillis from North Carolina joins a small for more. Senator,
Speaker 2: welcome to the program. So you have been vouning to
Speaker 2: block any nomination to the Federal Reserve until the DJ
Speaker 2: wraps up its investigation. We have some news this morning.
Speaker 2: As you know, Kevin Walsh has been nominated by the
Speaker 2: President of the United States to succeed CHAIRM and Power.
Speaker 2: Does it change anything for you, sir, No, it does.
Speaker 1: I am pleased with the nominee. I think that by
Speaker 1: most accounts he is well regarded. But we still have
Speaker 1: to clear the current matter. Look, they're pursuing a on
Speaker 1: the basis of criminal intent testimony and a banking committee
Speaker 1: hearing that clearly had no criminal intent. So to me,
Speaker 1: you got some assistant US attorney with a dream in
Speaker 1: the DC district that should really determine whether or not
Speaker 1: this frivolous prosecution is worth holding up a FED board seat.
Speaker 2: So we have some time between now and May four
Speaker 2: that investigation to go away and for the confirmation process
Speaker 2: to open up. Have you given thoughts to what would
Speaker 2: happen if we don't have that time we get to May,
Speaker 2: this is still lingering and the chairman steps away. What
Speaker 2: happens that it's helping the feder reserve.
Speaker 1: Well, I think that we all need to understand we
Speaker 1: still have a working quorum of members, whether or not
Speaker 1: they have an acting chair as a decision that the
Speaker 1: President and assume the Treasury Secretary and others can look at.
Speaker 1: But that's not my problem. We're here because of them,
Speaker 1: We're not here because of me, and so I think
Speaker 1: they should work expeditiously if they really do. I'm not
Speaker 1: an attorney. I watch a lot of crime shows, but
Speaker 1: doesn't look like there was any criminal intent here. They
Speaker 1: have to determine whether or not it's worth grinding this out.
Speaker 1: Like I said, I didn't put us here. Some assisted
Speaker 1: US attorney the DC District decided to put us here,
Speaker 1: and they've got to determine if they have a case
Speaker 1: it's worth pursuing.
Speaker 3: Senator Tillis, has anyone from the administration or the Department
Speaker 3: of Justice reached out to you about the process of
Speaker 3: how this could go down or giving you confidence that
Speaker 3: this will be dropped in time for the confirmation hearing
Speaker 3: to go forward?
Speaker 1: Well, Lisa, I'd never talked about my conversations with any members.
Speaker 1: People always ask me what goes on at lunch. I
Speaker 1: just don't have those conversations. But my public statements stand
Speaker 1: for themselves.
Speaker 4: Is closing the investigation enough a Senator?
Speaker 5: Or do you need other assurances that you think this
Speaker 5: administration is going to respect the FED independence?
Speaker 1: Well, right now, I think you do that by making
Speaker 1: a judgment. Look, we've got two cases here, right, We've
Speaker 1: got the cookcase and we have the Power case. Both
Speaker 1: of those to me are instances of independence, and I'm
Speaker 1: staying focused on that one goal. I'm not really persuaded
Speaker 1: or even willing to entertain any discussions that take me
Speaker 1: off that goal.
Speaker 4: Okay, but you just mentioned the Lisa Cook case.
Speaker 5: Do you also need to see that wrapped up either
Speaker 5: by the Supreme Court in order to move forward?
Speaker 1: Yeah? I do. I mean, because look, I mean we're
Speaker 1: talking about what looks like a paperwork error or if
Speaker 1: there was, if there was a mistake long before she
Speaker 1: was confirmed for the board. It's like, my goodness, guys,
Speaker 1: I mean, I don't know, maybe Paulty or somebody thought
Speaker 1: that that was cute. I didn't, so just to.
Speaker 5: Be clear, it is not just the DOJ investigation to
Speaker 5: the FED that you need wrapped up. You also need
Speaker 5: the Supreme Court case wrapped up. So it's two issues
Speaker 5: right now and blocks for you to move forward with Kevin.
Speaker 1: Warsh Yeah, well no, let me let me buy far
Speaker 1: kate these one is moving forward with another that the
Speaker 1: case that will prevent me considering any board nominee is
Speaker 1: the Powell case. But I will not move forward. So
Speaker 1: for the for the chair, which we know expires in February.
Speaker 1: The other case we have, you know, the Myron term
Speaker 1: is about to expire because he was filling up basically
Speaker 1: six weeks I'm sorry, six months. We've got the Cook seat.
Speaker 1: Those are ones that are really going to be I'll
Speaker 1: take a look at the candidate. I'll take a look
Speaker 1: at how it would affect the board. Look, this is
Speaker 1: all in my opinion, this is all about sending a
Speaker 1: signal to the markets and to the business community that
Speaker 1: FED independence is critically important. And going after the chair
Speaker 1: I think took a stool out of the foundation of
Speaker 1: people's confidence, or a lag out of the stool. In
Speaker 1: the case of Cook, I do believe that it's another
Speaker 1: example of a trend, and the Senate has to stand
Speaker 1: in the breach. We have to make sure that the
Speaker 1: Fed maintains its independence and we cannot reward any bad
Speaker 1: behavior that seems like it's surely motivated. How about the
Speaker 1: substance of the allegations, but by the interest and trying
Speaker 1: to undermind the FED independence.
Speaker 2: Senator, what's your understanding as to whether the Federal Reserve
Speaker 2: is cooperating with that investigation? Some conflicting reports over the
Speaker 2: past few days. What you'll read on the situation.
Speaker 1: I you know, I'm not really sure, Jonathan. I'm going
Speaker 1: to leave that that's a better question to ask the
Speaker 1: administration of the DOJ.
Speaker 2: What if we get the opportunity to speak to them,
Speaker 2: I'm sure we'll ask. I've got the opportunity to ask
Speaker 2: you about the man and not just the process. You
Speaker 2: said this morning, and you've said it again that Kevin
Speaker 2: Walsh is a qualified nominee with a deep understanding of
Speaker 2: monetary policy. For those familiar with Kevin Walsh in his
Speaker 2: time at the Federal Reserve back in the financial crisis,
Speaker 2: they have considered him to be on the more hawkish
Speaker 2: side of the spectrum on the FMC, and there is
Speaker 2: some debate this morning, Senator about what Kevin Walsh actually
Speaker 2: stands for. Given that we know the president wants lower
Speaker 2: interest rates, what's your understanding of what he stands for.
Speaker 1: Well, you know, I with Sir Powell, I haven't agreed
Speaker 1: with all of the opinions. I'm not an economist or
Speaker 1: his positions, and sometimes I may be more hawkers than
Speaker 1: share Powell. So coming in, I think Walsh is a
Speaker 1: good independent. He's got an extraordinary reputation in a community
Speaker 1: of economists and people focused on the FED. I don't
Speaker 1: think that he would want to destroy his reputation by
Speaker 1: being independent. You know, you could have hawkish members like
Speaker 1: Waller and others, and I'm fine with them on the
Speaker 1: board to stretch the thinking. But I don't believe he
Speaker 1: comes in is more or less going to do the
Speaker 1: bidding of the administration, which is critically important and incidentally,
Speaker 1: I should say it's critically important for the health and
Speaker 1: hygiene of the administration.
Speaker 3: Senator tell Us, does this give you any more confidence
Speaker 3: that actually the independence of the Federal Reserve will not
Speaker 3: be undermined, that this actually is going to be a
Speaker 3: proper process. Once some of the roadblocks you're talking about
Speaker 3: are going to be cleared.
Speaker 1: Yeah, I think so, Lisa. And look, this is this
Speaker 1: is actually democracy and institutional separation at its finest. We
Speaker 1: have a disagreement, and we have a mechanism in place
Speaker 1: for resolving this and moving on. I hope that no
Speaker 1: one in the administration takes personal offense to this. I'm
Speaker 1: doing my job, Senator.
Speaker 4: Do you have any understanding of the timeline?
Speaker 1: Well, you know, the investigations can go on forever. I mean,
Speaker 1: you could see one scenario where Chair Powell has two
Speaker 1: years left on his term even after he comes off
Speaker 1: the board. So I mean you could see this going
Speaker 1: on for two years or in my case, three hundred
Speaker 1: and thirty nine.
Speaker 5: Days, because three hundred and thirty nine days that's when
Speaker 5: you're going to be retiring. And I know, Lisa, as
Speaker 5: you have had any conversations, I want to ask you
Speaker 5: about those conversations. But have you, guys seen any indications
Speaker 5: from anyone that they do want to wrap up the
Speaker 5: DOJ investigation as soon as possible?
Speaker 1: Well, you know, I think, Andrew, I think that the
Speaker 1: fact that they're putting for this nominee knowing that it
Speaker 1: would be impossible to get him through with the current
Speaker 1: position that I've taken, it suggests to me that maybe
Speaker 1: they are trying to find a way to deal with this.
Speaker 1: It could be adjudicated expeditiously, or it could be just
Speaker 1: determining that they also agreed that there was no criminal
Speaker 1: intent and the chairs testimony and the banking committee that
Speaker 1: I participated in.
Speaker 2: Senator, just quickly, have you spoken to the White House?
Speaker 2: Have they reached out? You know?
Speaker 1: Like I said, I have ongoing discussions, so the President
Speaker 1: I probably communicate once or twice a week at least
Speaker 1: through texts. So I have ongoing discussions. I'm not going
Speaker 1: to talk about the content of them, Jonathan. Kind of
Speaker 1: like groundhog Day, I'm going to answer the same question
Speaker 1: every day the same way.
Speaker 4: Good movie I heard, Senator.
Speaker 2: We appreciate your time, Thanks for jumping on the cod
Speaker 2: Thank you, sir, Thank you very much. Senator Tom tillis
Speaker 2: there on his way to the gym. The Senator made
Speaker 2: me watch groundhog Day.