Bessent Names Fed Chair Finalists Ahead of Year End Decision

Bloomberg

Watch Bessent Names Fed Chair Finalists Ahead of Year End Decision - Bloomberg on Dailymotion

Transcript

00:00does this mean this is the list numbers haven't changed unlike the hurricane uh there the five

00:06names had been leaked before and so this is something that the markets have been absorbing

00:10for a couple of weeks so i don't think it's going to have a whole lot of impact on people's thinking

00:15at the moment until we get much closer uh messen said he's going to hold another round of interviews

00:21and that may lead to some further leaks about who he likes or doesn't like and he suggested that

00:26after thanksgiving he would send a couple of names to the president to choose from there's a lot of

00:33thought that the president already knows who he wants he's just not telling us so uh doesn't look

00:38like it'll take too long for him to settle on someone and the president said on air force one

00:42on his way to asia that he expected to make a decision in december so uh of the five the two

00:49kevins uh and uh chris waller mickey bowman and rick reader um one of those is likely the next

00:56either the most powerful person in the world or the second most powerful person in the world depending

01:01on who you're talking to i mike a lot to ask when it comes to these individuals and these names all

01:07familiar to us and to the bloomberg audience of course but in terms of policy are there big policy

01:12differences between them and the way they think about the role of the federal reserve there's uh

01:18probably less division um among them in terms of uh whether they fight inflation hard uh most of them

01:26are hawkish uh the biggest difference is in other ways that the fed operates there's a a couple of them

01:34uh including kevin warsh um and mickey bowman who've suggested we get rid of the system that they use

01:41now which is called the floor system go back to the corridor system which is where the fed intervenes

01:47on a daily basis to move the uh the the benchmark rate around like we used to have in uh until

01:54basically uh 2000 or early 2000s during the financial crisis when they changed to this new system

02:00which is what most of the world uses but there are people who would like to make that change which would

02:04be a massive change on wall street because the whole infrastructure has grown up around it and i can

02:09see a lot of people on repo desks going over my dead body you'll change it um but uh that and then

02:17there are there's disagreements among how um how broad the fed's power should be in terms of uh lending

02:24to financial institutions and in terms of doing things like qe uh going forward you know what's

02:31interesting is fed decisions obviously influenced a lot by the fed chair no doubt about it we've talked

02:37with you before about the voices that really count at the u.s central bank having said that it is a

02:42group so um i don't know are we silly to think okay there will be still discussions around the table

02:49and still a lot of fed governors that have been there for years oh sure that's exactly what you'll get at

02:56least for a number of years while most of the current cast is on board uh at the fed um you will

03:05maybe get somebody who wants to cut rates more quickly but they'll get pushback from from people

03:12and a lot of this is just depends on the diplomatic skills of the chair the whole thing with the chair

03:19is that they talk to everybody so they have a pretty good idea where everybody sits as they go into

03:24the room and the theory is you try to pull people towards the most acceptable decision and get as much

03:32consensus as you can there's always going to be sometimes sometimes some dissents but try to get

03:37as much people many people on board as you can so sometimes the chair comes in with a absolute vision

03:43of what needs to be done and sometimes they come in with a divided fed like we have now and the chair

03:48is going to kind of reflect back the the plurality or majority view and try to get people into one corner

03:55or another does the process typically play out like this are the names floated months ahead

04:01no this has been very unusual we've not had anything like it in my memory which goes back to

04:07when alan greenspan was selected uh and i know that what happened a couple of fed chair before that

04:14there's never been sort of a beauty contest like this uh there were some names leaked early in terms of

04:22who would uh replace ben bernanke bernanke came from the bush staff and as cea chair and he had already

04:29been on the fed so people were kind of expecting him but uh with janet yellen um she was chosen

04:36because she was sort of a very obvious candidate for a democratic president to appoint but then when

04:42it came time to donald trump he decided she was too short and jay powell looked like a central banker and

04:48so he said that's what the president has said okay to help determine his decision both of them were

04:55qualified uh but uh so we don't know for sure who who is the handsomest among this group and to be

05:02fair he's regret he has said he has regretted his decision to pick jay powell but sure i'm curious

05:07also mike about this idea of a shadow fed chair because there was talk about this a few months ago

05:12is doing this in public right now does it undermine the power of jay powell or will it if we get a pick

05:18or an announcement in the next few months well it could um it depends on when we get the announcement

05:24in part because they have to go through the confirmation process and generally anybody who

05:29is nominated for a senior job in the administration in any administration shuts up as soon as they're

05:35nominated because you don't want to make anybody mad up on capitol hill and not get voted uh for

05:40so uh they'd be quiet for a while and i suppose this is in theory for the seat that stephen myron

05:47uh holds now which would be a 14-year seat which is why they'd want to put the chair in that

05:52and so they'd want by the end of january if they can to get somebody confirmed so after that though

06:00then you know it's going to be up to the personality of the chair the the incoming chair whether they want

06:08you know it's going to publicly break with the actual chair

06:12you

06:13you

06:15you

06:17you

06:19you

06:21you

06:23you

06:25you

06:27you

06:29you

06:31you

06:33you

06:35you

Category

Transcript

Be the first to comment

Recommended