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

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Speaker 2: President Trump is hiring and a month's long search is

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Speaker 2: nearing an end. The job is Chair of the Federal Reserve,

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Speaker 2: and the job requirements.

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Speaker 3: Number one, you need to inspire confidence, confidence from markets

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Speaker 3: and investors, that you bring authority and cachet to the role.

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Speaker 2: Bloomberg's end. The current covers the FED, and.

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Speaker 3: Then of course you need to be well able to

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Speaker 3: navigate the political wins between the White House, Congress and

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Speaker 3: the Fed. Make sure that you're protecting the Fed from

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Speaker 3: ongoing political criticism. So winning over investor confidence, winning over

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Speaker 3: business confidence, winning over household confidence, and steering through the

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Speaker 3: political wins of today.

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Speaker 2: That last qualification wasn't top of mind when previous presidents

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Speaker 2: set out to fill this important position. But President Trump's

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Speaker 2: perspective on the role is different.

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Speaker 1: The number one thing that he's looking for is some

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Speaker 1: one who will be in favor of lower rates.

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Speaker 2: That's Amara Mokway, who also covers the FED for Bloomberg,

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Speaker 2: and she says that during President Trump's first term, when

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Speaker 2: he nominated Jerome Powell to be the sixteenth Chair of

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Speaker 2: the Federal Reserve, Trump deferred to his first Treasury Secretary

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Speaker 2: Steven Manuchin suggested Trump pick Powell.

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Speaker 1: I think he feels that he made a mistake with

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Speaker 1: Jerome Powell, and he does not want to repeat that

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Speaker 1: mistake this time.

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Speaker 2: A second round of interviews wrapped up on Tuesday of

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Speaker 2: this week, and according to Bloomberg's reporting, the front runner

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Speaker 2: is Kevin Hassett, President Trump's chief economic advisor, but Trump's

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Speaker 2: White House Press Secretary Caroline Levitt cautioned that nobody actually

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Speaker 2: knows what President Trump will do until he does it.

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Speaker 2: That's the layer of political complexity awaiting the next FED chief,

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Speaker 2: on top of the responsibilities of navigating complex economic times.

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Speaker 1: Right now, the economic outlook is very complicated for the FED.

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Speaker 1: We see that there is a faction that is in

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Speaker 1: favor of continuing rate cuts because they are concerned about

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Speaker 1: the labor market. And there's another faction that is very

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Speaker 1: concerned about inflation because inflation has been above the Fed's

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Speaker 1: two percent target for several years, and because there is

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Speaker 1: still the threat of tariffs out there. And then the

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Speaker 1: political backdrop is really really a challenge. Right the next year,

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Speaker 1: we'll have to navigate the reality that no matter what

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Speaker 1: the economy brings, it seems this president is going to

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Speaker 1: want to lower rate.

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Speaker 2: I'm David Gera and this is the big take from

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Speaker 2: Bloomberg News Today. On the show Who's Who on the

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Speaker 2: Trump administration shortlist for Federal Reserve Chair? We tick through

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Speaker 2: what the front runners have going for them, what they don't,

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Speaker 2: and we dig into how a new chair could change

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Speaker 2: the way the FED is run. For years, President Trump

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Speaker 2: has criticized Federal Reserve Chair Jerome Powell. He's threatened to

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Speaker 2: fire Powell and replace him. Now there's less than a

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Speaker 2: year left in Powell's tenures chair, and Trump's search for

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Speaker 2: his successor is almost over. I sat down with Bloomberg's

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Speaker 2: endocour in Amera Mokway, who have been reporting extensively on

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Speaker 2: the options President Trump is considering, and ask them about

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Speaker 2: the list. And there's this list of potential FED chairs.

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Speaker 2: Five names are on it. Treasury Secretary Scott Best announced

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Speaker 2: it publicly back in October, and I should say he's

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Speaker 2: overseeing this search for the president for the next FED chair.

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Speaker 2: And he's someone the President has said a few times

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Speaker 2: now was his pick for the job. Well, I like

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Speaker 2: to him, but he's not going to take the job.

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Speaker 4: He revesed you like Treasury better right, much better, sir.

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Speaker 2: He's not on the list so far as we know,

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Speaker 2: this is not a job that Scott Bessant wants.

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Speaker 3: Well publicly, the Treasure Sectuary has said he's got the

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Speaker 3: best job in the world already running the Treasury. He

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Speaker 3: doesn't want to take over the FED, despite the fact

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Speaker 3: that the President would clearly like him to think about it.

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Speaker 3: But you're right, David, he's not on the list right now.

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Speaker 3: We've had kind of a very public beauty prey for

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Speaker 3: this FED interview process with Scott Best interviewing. I think

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Speaker 3: it was around eleven people originally on the list outstand

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Speaker 3: to five. Those five are a mixture of existing FED

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Speaker 3: officials and so on the outside of our sphere, so

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Speaker 3: to speak. So we're expected to have shortening of that

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Speaker 3: list in two weeks ahead down to mind three. Maybe

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Speaker 3: that's what's Sexuary Best and has said publicly, and then

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Speaker 3: a decision perhaps by Christmas. That's what he's also said publicly.

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Speaker 2: So we have this group of five finalists, one woman,

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Speaker 2: four men. Two of them are named Kevin. I'll not

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Speaker 2: all of them have said they're in favor of rate

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Speaker 2: cuts right now, which is what President Trump wants. Ahead

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Speaker 2: of this interview, I looked at polymarket, where you can

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Speaker 2: bet on probabilities of all sorts of things, and the

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Speaker 2: long shot candidates, according to Better seem to be Michelle Bowman,

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Speaker 2: the current vice chair of the FED, and Rick Reader,

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Speaker 2: who oversees fixed income a black Rock. So let's start

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Speaker 2: with those apparently longer shot candidates, and then let me

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Speaker 2: ask you first about Rick Reader, who I think is

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Speaker 2: a familiar name to people who watch a lot of

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Speaker 2: Bloomberg television, who listened to Bloomberg Radio. He's somebody at

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Speaker 2: Blackrock who often comes on our air to talk about

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Speaker 2: what's happening in the market and the economy. What are

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Speaker 2: the pros and cons of his potential candidacy.

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Speaker 3: Rick Reader is certainly well known in flancial markets world,

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Speaker 3: a long time Wall Street veteran, as you mentioned, David

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Speaker 3: senior executive at black Rock, and his views on the

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Speaker 3: economy and flangal markets are well known over the years.

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Speaker 3: What he isn't though, is he's most certainly not in Washington,

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Speaker 3: DC insider, but neither has he necessarily been in the

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Speaker 3: public policy world per se. Now you can argue that

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Speaker 3: stacks up in his advantage in his favor. Perhaps that's

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Speaker 3: what President Trump wants, or he could argue that might

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Speaker 3: count against him just because he hasn't actually been in

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Speaker 3: the policy world and it will be quite adjustment. But

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Speaker 3: nonetheless he hasn't been explicit in terms of how he

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Speaker 3: would change up the FED. He has spoken about and

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Speaker 3: he believes interest rates should be lower, So.

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Speaker 4: I think it's quite consistent to bring the interest rate

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Speaker 4: down even though the economy is operating at a pretty

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Speaker 4: good level. Where we're going is to a lower level

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Speaker 4: of inflation, and I think we can bring it down.

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Speaker 3: He has spoken about the need to think about new

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Speaker 3: alternative sets of research. For example, He's given some hints

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Speaker 3: around that, giving respect for the institution and the penance

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Speaker 3: of the institution, so he might be able to straddle

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Speaker 3: all sides of this world here, about the macro policy

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Speaker 3: world and the Wall Street world, and also navigate the

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Speaker 3: political side. What we do know, though, is considered something

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Speaker 3: of an outsider in its race. But our colleagues here

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Speaker 3: have reported that reader impressed during his interview with Treasure

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Speaker 3: Secrety bestent Amara.

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Speaker 2: How about Michelle Bowen. Mickey Bowman, who was a FED governor,

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Speaker 2: was elevated to vice chair by President Trump. Has a

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Speaker 2: supervisory role now at the FED. What do we know

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Speaker 2: about the way in which the president is looking at

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Speaker 2: her and her potential candidacy.

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Speaker 1: I think Mickey Bowman is viewed as someone who is

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Speaker 1: in many ways aligned with the administration's goals on the

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Speaker 1: regulatory front. So she is the Fed's top bank official,

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Speaker 1: so she's overseeing supervision and regulation, and I think she

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Speaker 1: has in her few months in the job, done things

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Speaker 1: that are seen as aligned with what the administration wants

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Speaker 1: on regulation.

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Speaker 5: Some of our regulations have unduly restrained the activities that

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Speaker 5: banks can engage in incentivize them to limit those activities,

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Speaker 5: and pushing those functions outside of the banking system.

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Speaker 1: She's doing staff cuts of supervision and regulation, and so

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Speaker 1: if you're thinking about a person who might be willing

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Speaker 1: to shake the FED up in ways that the administration

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Speaker 1: might be looking for, Mickey Bowman is seen as someone

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Speaker 1: who would potentially be open to that. She also doesn't

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Speaker 1: have a traditional sort of monetary policy background. She came

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Speaker 1: from the banking world. Her family has been in banking

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Speaker 1: over many generations, and so she's kind of seen kind

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Speaker 1: of like reader as a Washington outsider, and so in

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Speaker 1: that way, she could be an appealing option for the administration.

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Speaker 2: And then there's the front runner and two other favorites.

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Speaker 1: We know that the President has talked about the two

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Speaker 1: Kevins in the past and talked about how he likes

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Speaker 1: both of them.

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Speaker 2: I say, Kevin and Kevin, both Kevins are very good.

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Speaker 1: And then there's also Chris Waller.

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Speaker 2: What can you tell us about him? You've profiled him recently,

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Speaker 2: kind of looked at his career trajectory. What would he

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Speaker 2: bring to the table.

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Speaker 1: So I think think he would bring two main things.

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Speaker 1: A deep understanding of the FED as an institution. Before

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Speaker 1: he was a Fed governor, he was the research director

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Speaker 1: at the Saint Louis FED for many years. So he

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Speaker 1: is someone who understands both the Fed's Board of Governors

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Speaker 1: here in Washington and the regional Fed banks throughout the country.

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Speaker 1: And in his job now on the Fed's Board, one

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Speaker 1: of the things he oversees are the operations of the

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Speaker 1: regional Fed banks. He's kind of the liaison between the

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Speaker 1: regional Fed banks and the Board, and so I think

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Speaker 1: he has a deep understanding of the institution. I think

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Speaker 1: he would also bring a little bit of comfort to

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Speaker 1: investors and the markets because Chris Waller, when he makes

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Speaker 1: calls for policy and the economy, he's viewed as someone

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Speaker 1: who bases those calls in credible analysis.

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Speaker 4: Right.

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Speaker 1: So, even back over the summer when he was the

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Speaker 1: first FED official to say we should be cutting rates again.

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Speaker 4: The headline numbers for the layor mark what we're seeing

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Speaker 4: are okay, But it's like when you get underneath and

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Speaker 4: start working at the data, the private sector is not

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Speaker 4: doing as well as everybody thinks it is.

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Speaker 1: There were a lot of economists who didn't agree with

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Speaker 1: his analysis of the labor market at the time, but

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Speaker 1: nobody really went out there and said, oh, he's only

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Speaker 1: doing this because he wants to be FED chair. Right.

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Speaker 1: People were like, Okay, Like I don't agree with him,

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Speaker 1: but I can see how he's looking at the numbers

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Speaker 1: and coming to this conclusion, and so I think he

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Speaker 1: would bring that presumption of credibility and a deep knowledge

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Speaker 1: of the institution to the job.

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Speaker 2: And a rounding out this list are the two Kevins.

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Speaker 2: Let's start with Kevin Warsh, who has been in this

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Speaker 2: position before. He was somebody who we know the President

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Speaker 2: was considering for the top job at the FED back

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Speaker 2: during his first term.

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Speaker 3: He came very close to getting the FED chair back

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Speaker 3: in twenty seventeen. Actually, he has previously served on the

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Speaker 3: FED board. He was the youngest ever governor when he

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Speaker 3: was appointed back in twenty h sixt He served in

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Speaker 3: twenty six to twenty eleven. He was on the board

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Speaker 3: during the financial crisis, and at that time he was

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Speaker 3: seen as playing a pivotal role in linking Wall Street

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Speaker 3: and the policy world because he had worked on Wall Street.

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Speaker 3: Now more recently, he has become very vocal in his

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Speaker 3: criticism of the FED. He has a term that he uses,

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Speaker 3: which is regime change. He wants change of personality, change

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Speaker 3: of thinking, change of how to do their business. He

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Speaker 3: has been critical of how they been managing their balance sheet,

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Speaker 3: which is basically how they buy and sell securities and

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Speaker 3: how that impacts the economy. And of course he's certainly

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Speaker 3: saying their scope obviously for much lower interest rates and

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Speaker 3: cheaper boring costs. As a result, he's pushing hard for

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Speaker 3: the role this time around, and he's seen as one

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Speaker 3: of the top contenders when it comes down to it.

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Speaker 2: And let's talk about the person the president's allies and

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Speaker 2: advisors see as the front runner. According to Bloomberg's latest reporting,

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Speaker 2: that's Kevin Hassett. Tell me about him and how we

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Speaker 2: should be thinking about his candidacy.

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Speaker 3: Well, Kevin hasse is central casting public policy wonk here

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Speaker 3: in motion in DC, at least on paper. He's previously

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Speaker 3: worked at the Federal Reserve, has god at PhD in economics.

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Speaker 3: He also was director of research at American Enterprise Institute,

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Speaker 3: so he's a well established economist around town. The issue

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Speaker 3: around Kevin Hasset is that he's also viewed as being

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Speaker 3: very politically aligned with President Trump, not just on the

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Speaker 3: economics front, but politically aligned with him. And the thinking

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Speaker 3: is is that if he went from the White House

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Speaker 3: to the Fed, well then he probably would be not

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Speaker 3: just implicitly but explicitly reinforcing the message in the President

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Speaker 3: Trump wants there. And again, like some of the other candidates,

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Speaker 3: Kevin Hasset has called for lower interest rates. He has

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Speaker 3: been critical of Chair Powell as well, and he wants

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Speaker 3: to see the Fed change how they do business. So

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Speaker 3: and established economist, not question but seen is very politically

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Speaker 3: aligned with President Trump.

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Speaker 2: So that's the slate of candidates, the five front runners,

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Speaker 2: But what could the winning pick mean for the future

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Speaker 2: of the FED and for the US economy more broadly.

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Speaker 2: That's after the break with the independence of the Federal

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Speaker 2: Reserve under threat. A key factor shaping the central Bank's

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Speaker 2: future is who leads it. I've been speaking with Bloomberg's amera,

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Speaker 2: a moke way and and a current. But how its

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Speaker 2: next leader will guide the organization and therefore the economy.

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Speaker 2: And how much power and influence does the FED chair have? Yes,

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Speaker 2: he is the most public phase of the FED, but

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Speaker 2: he's someone who chairs a committee of twelve voting members

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Speaker 2: who set interest rates.

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Speaker 3: I mean it's a critical role. The FED chair is

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Speaker 3: the number one spokesperson for the institution. By extension, is

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Speaker 3: a very important spokesperson on the economy. And remember is

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Speaker 3: meant to be an impartial spokesperson on the economy. So

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Speaker 3: the whitehase can say one thing, that's fine, but the

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Speaker 3: average voter would like to hear a referees point of

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Speaker 3: view as well, and that's where the FED is meant

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Speaker 3: to play its role in all of this. The FED Chair,

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Speaker 3: of course, also sets a critical role in terms of

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Speaker 3: setting the tone for policy. Does the economy need higher

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Speaker 3: boring costs? Does economy need lower boring costs? The FED

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Speaker 3: is meant to help steer that narrow and bring along

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Speaker 3: the whole FED Committee with the Chair in terms of

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Speaker 3: what they want to do, either cutting interest rates or

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Speaker 3: raising interest rates. It doesn't have to be all consensus

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Speaker 3: and it's not meant to be an authoritarian regime managing

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Speaker 3: all of these FED presidents and governors have their say

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Speaker 3: and have their voice, but neither should it be fragmented

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Speaker 3: and split in the way. We're sort of getting closer

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Speaker 3: to you right here right now. So the FED Chair

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Speaker 3: very important for steering, It very important for influence and

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Speaker 3: for being a figure of authority and respect when it

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Speaker 3: comes to commenting on the economy.

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Speaker 2: Ameron, let's talk about Federal reserve independence, which is the

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Speaker 2: ability for the FED to make decisions without political interference.

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Speaker 2: And we've been through this period over these last many months,

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Speaker 2: when the President has called for the FED to lower

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Speaker 2: interest rates, the President has threatened to fire the current

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Speaker 2: FED Chair to Roam Powell over decisions the FED has made.

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Speaker 2: When you look at this list, when you look at

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Speaker 2: these five names, what does it tell you about the

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Speaker 2: future of FED independence?

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Speaker 1: I think talking to Fed watchers and people who care

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Speaker 1: about the FED. He gets there to say that there

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Speaker 1: is a fair degree of concern about what some of

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Speaker 1: these candidates could mean for FED independence. For instance, Kevin Hasset,

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Speaker 1: he works in the White House right now and on

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Speaker 1: most FED issues this year, he has been completely aligned

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Speaker 1: with the President, and so that then raises questions about

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Speaker 1: the degree to which he potentially will be independent. There

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Speaker 1: are similar concerns about some of these other candidates, and

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Speaker 1: even Waller, who has looked at as a credible voice

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Speaker 1: on the economy, I think would be open to some

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Speaker 1: of the types of changes that the Trump administration has

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Speaker 1: made clear that it would want. Like we know, in

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Speaker 1: his current role as the governor kind of responsible for

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Speaker 1: the reserve banks that he has pushed to a degree

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Speaker 1: for cost cuts and staff cuts. And so it's not

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Speaker 1: like it would necessarily the case that Chris Waller would be,

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Speaker 1: you know, totally against shaking things up and doing things differently.

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Speaker 2: Emera, where are we in this vetting process and what

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Speaker 2: do we know of what comes next?

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Speaker 1: The thinking is that we could get a pick by

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Speaker 1: the end of this year or early next. Chair Jerom

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Speaker 1: Powell's term is up in May and so yeah, we're

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Speaker 1: just waiting to see who the final names that go

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Speaker 1: to the president are and then waiting for the pick.

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Speaker 1: But as we know with President Trump, you know, things

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Speaker 1: are things will be very unpredictable.

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Speaker 2: And the approval is ultimately up to the Senate. And

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Speaker 2: I'm curious, as you think about these five individuals, would

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Speaker 2: any of these cand's be an easier or tougher sell

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Speaker 2: to the Senate? How do you see that nomination process

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Speaker 2: playing out on Capitol Hill?

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Speaker 3: Whoever it is will certainly come on a scrutiny from

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Speaker 3: the Democratic side, no question about it, because they will

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Speaker 3: be perceived as being sympathetic to President Trump's worldview on

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Speaker 3: the economy. They'll want to ask questions around what are

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Speaker 3: you going to do in terms of protecting the Fed's independence,

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Speaker 3: what your links be with the White House, et cetera.

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Speaker 3: But also on the Republican side, we'll have to see

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Speaker 3: will there be any voices of concern there, Will they

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Speaker 3: too be worried about fedting independence? Or will they be

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Speaker 3: just willing to go night through a candidate that President

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Speaker 3: Trump picks.

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Speaker 2: And I started out by asking both if you about

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Speaker 2: sort of what the qualities are that make a good

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Speaker 2: FED Chair, and I think something we've seen come out

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Speaker 2: in j. Powell in recent months is the ability to

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Speaker 2: not answer some specific questions, and one has to do

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Speaker 2: with what happens next for him.

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Speaker 3: You know, I would just say.

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Speaker 2: I'll certainly serve to the end of my to the

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Speaker 2: end of my chare term, and that's really all all

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Speaker 2: I've decided and all I was thinking about. Any insight

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Speaker 2: we have into sort of how he's thinking about his

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Speaker 2: future at the FED, if he's open to or would

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Speaker 2: be willing to consider serving as a FED governor after

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Speaker 2: his tenure is as FED chair ends.

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Speaker 3: Yeah, it's probably a detail that maybe that brought up,

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Speaker 3: probably wouldn't pick up on, but his term as chair

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Speaker 3: will end in May, but mister Powell will remain on

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Speaker 3: the board as a governor for I think it's another

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Speaker 3: two years or so after that. That's important because if

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Speaker 3: Chair Powell said I'm going to retire altogether and leave

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Speaker 3: the FED, well, it would open up a vacancy on

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Speaker 3: the board. That will President Trump to appoint someone to

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Speaker 3: fill that seat, and obviously, in the current political environment,

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Speaker 3: the expectation would be somebody who again would be willing

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Speaker 3: to listen to the white hairs view in the economy

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Speaker 3: and probably lower interest rates and then be seen as

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Speaker 3: a threat to the Fed's independence. Of course, Chairpell might

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Speaker 3: choose to carry on and serve out his full term

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Speaker 3: and continue to engage in FED debate on the economy,

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Speaker 3: in which case he's blocking that seat and acting as

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Speaker 3: a pressure point against what President Trump is trying to

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Speaker 3: do in terms of change up the FED board.

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Speaker 2: Overall.

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Speaker 1: You know, the economy is in a strange place. The

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Speaker 1: Trump administration has implemented a lot of different economic policy changes,

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Speaker 1: from immigration to tariffs to regulation. There are all these

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Speaker 1: things happening, and the next FED chair is going to

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Speaker 1: have to navigate all of that and lead the institution

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Speaker 1: through all these changes and how they're impacting the economy.

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Speaker 1: And as we're seeing right now, how is having a

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Speaker 1: more difficult time getting consensus and the Committee as a

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Speaker 1: whole is having a difficult time figuring out what to do.

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Speaker 1: And so this next person is going to have to

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Speaker 1: lead the FED through this very uncertain time, and you

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Speaker 1: just hope that they have the right temperament and the

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Speaker 1: right wisdom to do that, because they are trying to

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Speaker 1: answer very difficult questions.

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Speaker 2: This is The Big Take from Bloomberg News. I'm David Gura.

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Speaker 2: Tomorrow is Thanksgiving in the US. Our team is off

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Speaker 2: for the holiday. We'll be back on Friday.