00:00 Speaker A
President Trump may name his next pick for Fed chair earlier than expected. Joining us now with a closer look at the top candidates, we've got Fed correspondent Jennifer Schonberger. Jennifer, what do we know?
00:13 Jennifer Schonberger
Good morning, Brad. Furious over the Fed's wait and see slow-walk approach to cutting interest rates, President Donald Trump is considering announcing a new Fed chair early to undermine current Fed chair Jay Powell, whose term doesn't end until next May. Long-time economic advisor to Trump, Steve Moore, told me this morning that the president is considering announcing a new Fed chair pick soon, that he sees it as a shot across the bow to Powell. Another person close to the administration said that we could see an announcement in late fall, maybe late September. The Wall Street Journal initially reported that the president could announce a new Fed chair this fall as early as this summer. But according to a White House official, no Federal Reserve chairman decisions are imminent, although the president has the right to change his mind. The president has many good options for the next Fed chairman, I'm told. Treasury Secretary Scott Bessette had previously said that the administration wouldn't start interviewing candidates until the fall, but Wednesday President Trump told reporters he is actively considering a replacement to Fed Chair Powell, but stopped short of offering specific names.
02:32 Donald Trump
I know within three or four people who I'm going to pick. I mean, he goes out pretty soon, fortunately, because I think he's terrible.
03:01 Jennifer Schonberger
Under consideration are said to be Treasury Secretary Scott Bessette, former Fed governor Kevin Warsh, National Economic Council Director Kevin Hassett, and David Malpass. Fed Governor Chris Waller's name has also been floated, but Steve Moore told me that the president is not happy that Fed Governor Waller did not vote in favor of cutting rates at the Fed's last policy meeting. I'm also hearing from someone else who's close to the administration that the president is souring on Kevin Warsh. And yet a third person told me that Scott Bessette is the president's top pick for the next Fed chair, but that the president is trying to determine who would replace Bessette as Treasury Secretary, and that it wouldn't be Commerce Secretary Howard Letnick, who had initially jockeyed for that position. Now, an early announcement could undermine Powell and the current Fed's announcements for the path of policy and could influence investors' expectations for the path of policy. Of course, it's ultimately the bond market that is going to determine the yields and the rates. Powell made it clear that politics does not enter the Fed's decision-making. He told Senate lawmakers yesterday during a hearing that the Fed really wants to do what's right for the economy and they just want to make sure that the president's tariffs don't lead to inflation.
05:36 Jerome Powell
That's our job. If we make a mistake here, people will pay a benefit, will pay the cost for a long time. And so, we're just approaching the question carefully. That's all we're doing.
06:09 Speaker A
So, Jennifer, sticking with the Federal Reserve, the central bank has released their plan to ease capital requirements on big Wall Street banks. What can you tell us there?
06:26 Jennifer Schonberger
Yeah, Brad, banks are elated over this. This is really seen as the first step to peeling back a lot of those regulations for banks that were put in place post-financial crisis under Dodd-Frank. And the new vice chair of supervision at the Federal Reserve, Mickey Bowman, sort of set the table for that on Monday during a speech when she said that she and the Federal Reserve are looking at making changes to other capital requirements. And yesterday, we heard from Fed chair Powell himself during that Senate Banking Committee hearing that the Fed is actively looking at changes to Basel 3, and the changes that were proposed yesterday to the enhanced supplemental leverage ratio is certainly the first step in that direction. We also know that the Fed is looking at changes to those stress tests.
07:57 Speaker A
Okay. Jennifer, thank you.
