Trump: Warsh Wants Rate Cuts, Gold Plunges, More Epstein Files Released, More

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What is the main topic discussed in this episode?

Unknown 0:00

The UK stands apart as a place to do business, not because of one advantage, but many working together. Over 10 trillion pounds in capital, four of the world's top universities, a 10-year industrial strategy in action, its stability with dynamism, global reach with local depth. It all adds up to greater growth. Find out more at business.gov.uk slash growth.

Amy Morris 0:28

News when you want it with Bloomberg News Now. I'm Amy Morris.

What does President Trump say about Kevin Warsh's interest in rate cuts?

Amy Morris 0:31

President Trump says his pick for Fed chair, Kevin Warsh, wants to cut interest rates, but that he won't pressure him to do it.

Unknown 0:38

I want to keep it nice and pure, but he certainly wants to cut rates. I've been watching him for a long time.

Amy Morris 0:43

Warsh, who served on the U.S. Central Bank's Board of Governors from 2006 to 2011, would succeed Jay Powell when his term ends in May. In April last year, Warsh addressed the International Monetary Fund, saying the Fed's, quote, current wounds are self-inflicted.

How has Neil Dutta criticized Warsh's performance during the 2008 financial crisis?

Unknown 0:58

Institutional drift has coincided with the Fed's failure to establish and achieve an essential part of its statutory remit, price stability. And the Fed's outsized role and underperformance have weakened the important and worthy case for monetary policy independence.

Amy Morris 1:17

Neil Dutta is head of economic research at Renaissance Macro and says Warsh's performance as a Fed governor during the 2008 global financial crisis should be disqualifying.

Neil Dutta 1:27

To be that concerned about inflation at a time when the unemployment rate was rising very rapidly, you know, kind of strange fragility.

Amy Morris 1:34

Renaissance Macro's Neil Dutta was a guest on Bloomberg Surveillance. Fed Governor Stephen Myron says he believes Warsh will be persuasive as Fed chair. Atlanta Fed President Rafael Bostic tells CNBC he doesn't have much experience with Warsh and that they'll all learn more as they work together.

Unknown 1:50

The Federal Reserve is designed to have a different time horizon for its policy thinking than other policymakers. That creates tension. That is going to inherently lead to people having different views about what is important and how things should be weighted.

Amy Morris 2:03

This week was Bostick's last as a policymaker. He will retire at the end of February. Republican Senator Tom Tillis says he will continue to oppose the confirmation of any Fed nominee until the DOJ's inquiry into current Fed Chair Jay Powell is resolved. He tells Bloomberg Surveillance that Kevin Warsh is qualified, but that won't change his stance.

Unknown 2:23

They're pursuing, on the basis of criminal intent, testimony in a banking committee hearing. that clearly had no criminal intent.

Amy Morris 2:33

Tillis says protecting the independence of the Federal Reserve from political interference or legal intimidation is, quote, non-negotiable. Trump says if Tillis doesn't lift the block, he'll wait him out. Tillis is not running for re-election. Fed Governor Christopher Waller, who was considered for the Fed chair position, is speaking out about why he dissented at this week's Fed meeting. The board voted to keep rates steady, but Waller says economic data signals more cuts are needed. Waller, for months, has pointed to warning signs in the employment outlook. Spot gold has now dropped 10%. It's the biggest drop for gold in decades.

What are the implications of the Justice Department releasing more Epstein files?

Amy Morris 3:08

We do check markets for you all day long here at Bloomberg. The S&P 500 down 7 tenths of a percent. NASDAQ down 1%. The Dow down 9 tenths of a percent. The 10-year Treasury yield at 4.24%. The two-year yield

What details are revealed about the contents of the Epstein files?

Amy Morris 3:21

At 3.53%, the Bloomberg Dollar Spot Index is about three-quarters of a percent higher. The Justice Department releasing millions more pages of documents in connection with the late disgraced financier Jeffrey Epstein and the government's latest move to comply with a new law ordering files be made public. Deputy Attorney General Todd Blanche says the latest trope of documents is being released today in response to legislation passed by Congress in November.

Unknown 3:49

The 2,000 videos and 180,000 images are not all videos and images taken by Mr. Epstein or someone around him. They include large quantities of commercial pornography and images that were seized from Epstein's devices.