Warsh Fed Nomination Prepped, Stocks And Bonds Drop, 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 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.
Nathan Hager 0:28
News when you want it with Bloomberg News Now. I'm Nathan Hager.
Karen Moscow 0:33
And I'm Karen Moscow.
Nathan Hager 0:35
Karen, we begin with President Donald Trump's choice to lead the Federal Reserve. The announcement is expected this morning. Bloomberg's John Tucker joins us with the very latest. What are we expecting, John?
John Tucker 0:46
Yeah, Kevin Warsh, the Trump administration's pick to be the next chairman of the Federal Reserve. Nathan, this is according to our sources. Without mentioning Warsh, the president last night said an announcement would come this morning.
Unknown 0:59
Just an outstanding person and a person that won't be too surprising to people.
John Tucker 1:06
The 55-year-old Warsh served on the Central Bank's Board of Governors from 2006 to 2011, and he's advised the president on economic policy. This would mark a comeback for Warsh, whom the president passed over for the top job back in 2017 when he selected Jerome Powell. Now, for the moment, investors see Warsh as less supportive of deep interest rate cuts. In the past, he's warned of inflation risks and delivered more recent calls for the Fed to reduce its balance sheet. And the confirmation at this point, and that's not going to be smooth sailing. One of the key senators, Tom Tillis, a North Carolina Republican who sits on the banking committee, has vowed to block any of President Trump's Fed nominees until the Justice Department resolves an investigation into the central bank renovation of the Washington headquarters in New York.
John Tucker 1:54
I'm John Tucker, Bloomberg Radio.
Nathan Hager 1:56
All right, John. Well, while we wait for the formal announcement, what's the market reaction this morning?
John Tucker 2:00
Yeah, it's pretty quick. Stocks lower. Treasury yields, for the most part, pushing higher. The dollar is higher and gold is sliding. This is because traders are dialing back bets on policy easing under Warsh. But you've got to remember, too, Nathan and Karen, Warsh has aligned himself with the president in recent months by arguing publicly for lowering interest rates. Karen and Nathan.
Karen Moscow 2:24
All right, John, thank you. We want to stay in Washington. President Trump has reached a tentative deal with Senate Democrats to avert a government shutdown over immigration raids that have sparked a nationwide outcry. The president is urging both parties to vote for the agreement, but House Speaker Mike Johnson says there might not be time before government funds run out tonight.

What is the significance of Kevin Warsh's nomination for the Federal Reserve?

Mike Johnson 2:42
It may not be possible. We have a rule of a 72-hour notice for a return, and I can try to truncate that, but I've got people literally spread around the world right now, and we have a snowstorm.
Karen Moscow 2:53
And along with those comments from House Speaker Mike Johnson, Republican Senator Lindsey Graham has placed a hold on the bill. The agreement would fund the Department of Homeland Security for two weeks to allow time to negotiate on Democrats' demands. They want DHS agents to wear body cameras, obtain warrants, take off masks, and no longer conduct broad immigration sweeps.
Nathan Hager 3:11
Well, Karen, White House borders are Tom Holman says broad sweeps will no longer be the strategy when it comes to immigration enforcement in Minneapolis.
Tom Holman 3:19
Target enforcement operations the way we've always done it. I think we've got to wait for a little bit, and we're going to make sure we do target enforcement operations. And look, I will say it again, you know, we are not surrendering our mission at all.
Nathan Hager 3:34
Sporters are Tom Holman spoke at a news conference heard live on Bloomberg Radio after President Trump put him in charge of the operation in a bid to de-escalate tensions. Democratic Governor Gavin Newsom of California is blasting the move.
Gavin Newsom 3:47
If Tom Holman, who was accused of a $50,000 bribe, where charges disappeared, speaking of disappearing, cash, FBI, is the adult in the room.

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