Why Earning More Isn’t Saving Some American Families From Poverty
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How an unexpected resignation offers President Trump an opportunity that could reshape the Fed. Plus, why many American working families are struggling to stay out of poverty.
You had this confluence of factors subsequent to us coming out of the pandemic, that being the end to these temporary assistance programs, coupled with inflation and rising housing costs that have created this storm of economic factors that are pushing people to the edge.
And a House committee subpoenas the Justice Department for records of its investigation into Jeffrey Epstein. It's Tuesday, August 5th. I'm Alex Osola for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. President Trump has ruled out tapping Treasury Secretary Scott Besant as chairman of the Federal Reserve. During an interview with CNBC, the president said that Besant wants to stay where he is, adding that he would take him off the shortlist of candidates to succeed Fed Chair Jerome Powell when his term ends next year. And though Trump said he didn't plan to make his decision about who will replace Powell anytime soon, he does have an unexpected opportunity, a vacancy to fill on the Fed's board after Adriana Kugler, a Biden appointee,
said last week she would resign from the central bank's board of governors this Friday. For more on this, I'm joined by WSJ chief economics correspondent Nick Timoros. So, Nick, we have this resignation coming. What does this mean, really?
Well, it's a surprise that Coogler is resigning, and it accelerates potentially this whole succession process. So Jay Powell's term as chair does not end until May. That's a long time from now. But because of the way the Fed is structured, this might be the only vacancy that Donald Trump will have to put his new Fed chair pick on the board between now and then, unless somebody else leaves.
And what are the advantages for President Trump to put his next Fed pick on the board now versus waiting?
Last year, before he was the Treasury Secretary, Scott Besson floated this idea of a shadow chair. The idea would be you could end the influence of Jay Powell prematurely because markets care not just about what the Fed's going to do at their next meeting. They care about what's going to happen over the next year or two. And so if you told everybody, this is the new chair, this is who it's going to be after Powell, pay attention to this person, you could undermine Powell, especially as you got closer to May.
How could Adriana Kugler’s resignation create a Fed appointment opportunity for President Trump?
Donald Trump went on CNBC and talked about this. He said he's considering four different people for the Fed chair. Two of them are well-known, Kevin Warsh, a former Fed governor, and Kevin Hassett, who's his economic advisor. He didn't name who the other two were. He also was asked about the Coogler vacancy, and he noted there's a possibility he could put his future chair pick into that seat. But he entertained a different idea, because this position, no matter who has it, The term ends on January 31st next year. So there's another idea now. Don't put the future chair on the board. Put someone else. Maybe it would be more of a firebrand, someone who would be very publicly critical. So you could have another battering ram.
critical of the Fed, antagonistic towards Jay Powell. And that may be what Trump wants, someone who will just light up the Fed in a way that he's been doing for the last several weeks.
What are the implications for the Fed then?
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