00:00We have some news this morning. As you know, Kevin Walsh has been nominated by the President
00:04of the United States to succeed Chairman Powell. Does it change anything for you, sir?
00:09No, it doesn't. I am pleased with the nominee. I think that by most accounts, he's well regarded,
00:16but we still have to clear the current matter. Look, they're pursuing on the basis of criminal
00:24intent testimony in a banking committee hearing that clearly had no criminal intent. So to me,
00:32you got some assistant U.S. attorney with a dream in the D.C. district that should really determine
00:40whether or not this frivolous prosecution is worth holding up a Fed board seat.
00:46Senator, we have some time between now and May for that investigation to go away and for the
00:50confirmation process to open up. Have you given thought to what would happen if we don't have
00:55that time? We get to May. This is still lingering and the chairman steps away. What happens to the
01:01top of the Federal Reserve? Well, I think that we all need to understand we still have a working
01:07quorum of members. Whether or not they have an acting chair is a decision that the president and
01:14assume the Treasury secretary and others can look at. But that's not my problem. We're here because
01:20of them. We're not here because of me. And so I think they should work expeditiously if they really
01:25do. I'm not an attorney. I watch a lot of crime shows, but it doesn't look like there was any
01:30criminal intent here. They have to determine whether or not it's worth grinding this out.
01:34Like I said, I didn't put us here. Some assistant U.S. attorney in a D.C. district decided to put us
01:42here and they've got to determine if they have a case that's worth pursuing. Senator Tillis,
01:46has anyone from the administration or the Department of Justice reached out to you
01:50about the process of how this could go down or giving you confidence that this will be dropped
01:56in time for the confirmation hearing to go forward? Well, Lisa, I never talk about my conversations
02:02with any members. People always ask me what goes on at lunch. I just don't have those conversations,
02:08but my public statements stand for themselves. Is closing the investigation enough, Senator,
02:12do you need other assurances that you think this administration is going to respect the Fed
02:17independence? Well, right now, I think you do that by making a judgment. Look, we've got two cases
02:24here, right? We've got the Cook case and we have the Powell case. Both of those, to me, are instances
02:29of trying to undermine the credibility of the Fed independence. And I'm staying focused on that one
02:38goal. I'm not really persuaded or even willing to entertain any discussions that take me off that
02:43goal. Okay. But you just mentioned the Lisa Cook case. Do you also need to see that wrapped up either
02:48by the, by the Supreme Court in order to move forward? Yeah, I do. I mean, because look, I mean,
02:54we're talking about what looks like a paperwork error or if there was, if there was a mistake long
03:02before she was confirmed for the board, it's like, my goodness, guys. I mean, I don't know,
03:08maybe Pulte or somebody thought that that was cued. I didn't. So just to be clear, it is not just the
03:14DOJ investigation to the Fed that you need wrapped up. You also need the Supreme Court case wrapped up.
03:20So that's two issues right now and blocks for you to move forward with Kevin Warsh.
03:25Yeah. Well, no, let me let me bifarcate these. One is moving forward with another that the case
03:34that will prevent me considering any board nominee is the Powell case. But I will not move forward.
03:42So for the for the Fed chair, which we know expires in in February. The other case we have,
03:49you know, the Myron term is about to expire because he was filling up, you know, basically six weeks or
03:57I'm sorry, six months. We've got the cook seat. Those are ones that are really going to be I'll
04:04take a look at the candidate. I'll take a look at how it would affect the board. Look, this is all,
04:09in my opinion, this is all about sending a signal to the markets and to the business community that
04:14Fed independence is critically important. And going after the chair, I think, took a stool out of the
04:24foundation of people's confidence or a leg out of the stool. In the case of Cook, I do believe that
04:30it's another example of a trend. And, you know, the Senate has to stand in the breach. We have to make
04:35sure that the Fed maintains its independence and we cannot reward any bad behavior that seems like
04:41it's surely motivated, not by the substance of the allegations, but by the interest in trying
04:47to undermine the Fed independence. Senator, what's your understanding as to whether the
04:50Federal Reserve is cooperating with that investigation? Some conflicting reports over
04:54the past few days. What's your read on the situation? I, you know, I'm not really sure,
04:59Jonathan. I, I, I'm going to leave that. That's a better question to ask the administration or the
05:04DOJ. What if we get the opportunity to speak to them? I'm sure we'll ask. I've got the opportunity to
05:08ask you about the man and not just the process. You said this morning, and you've said it again,
05:13that Kevin Walsh is a qualified nominee with a deep understanding of monetary policy. For those
05:18familiar with Kevin Walsh and his time at the Federal Reserve back in the financial crisis,
05:22they have considered him to be on the more hawkish side of the spectrum on the FOMC. And there is some
05:28debate this morning, Senator, about what Kevin Walsh actually stands for, given that we know the
05:32president wants lower interest rates. What's your understanding of what he stands for?
05:36Well, you know, I, with Chair Powell, I haven't agreed with all of his opinions. I'm not an
05:44economist or his positions. And sometimes I may be more hawkish than Chair Powell. So I, coming in,
05:52I think, I think Walsh is a good independent, he's got an extraordinary reputation and in a community
06:01of economists and, and people focused on the Fed. I don't think that he would want to destroy his
06:07reputation by being independent. You know, you could have hawkish members like Waller and others,
06:12and I'm fine with them on the board, to stretch the thinking. But I don't believe he comes in as
06:18more or less going to do the bidding of the administration, which is critically important.
06:21And incidentally, I should say it's critically important for the health and hygiene of the
06:25administration. Senator Tillis, does this give you any more confidence that actually the
06:29independence of the Federal Reserve will not be undermined, that this actually is going to be
06:34a proper process once some of the roadblocks you're talking about are going to be cleared?
06:40Yeah, I think so, Lisa. And look, this is, this is actually democracy and institutional separation
06:46at its finest. We have a disagreement and we have a mechanism in place for resolving this and moving on.
06:51I hope that no one in the administration takes personal offense to this. I'm doing my job.
06:56Yeah. Senator, do you have any understanding of the timeline?
07:01Well, you know, the investigations can go on forever. I mean, you could see one scenario where
07:07Chair Powell has two years left on his term, even after he comes off the board. So, I mean,
07:13you could see this going on for two years or, in my case, 339 days.
07:18Because 300, 339 days, that's when you're going to be retiring. And I know, Lisa, actually,
07:25I've had any conversations. I want to ask you about those conversations. But have you seen any
07:29indications from anyone that they do want to wrap up the DOJ investigation as soon as possible?
07:34Well, you know, I think, Andrew, I think that the fact that they're putting forward this nominee,
07:45knowing that it would be impossible to get him through with the current position that I've taken,
07:51it suggests to me that maybe they are trying to find a way to deal with this. It could be adjudicated
07:56expeditiously, or it could be just determining that they also agree that there was no criminal intent.
08:02And the Chair's testimony and the banking committee that I participated in.
08:05And, Senator, just quickly, have you spoken to the White House? Have they reached out?
08:10You know, like I said, I have ongoing discussions. The President and I probably communicate once or
08:16twice a week, at least through text. So, I have ongoing discussions. I'm not going to talk about
08:21the content of them, Jonathan. Kind of like Groundhog Day, I'm going to answer the same question
08:25every day the same way.
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