Balance of Power: Weekly Washington Policy Pulse – Fed Chair, Bank Leverage (Dec. 1, 2025)
Host: Bloomberg | Guest: Nathan Dean, Bloomberg Intelligence Senior Policy Analyst
Date: December 1, 2025

Episode Overview

This episode features Nathan Dean’s in-depth analysis of the week’s key policy catalysts coming out of Washington, D.C. The discussion touches on topics ranging from defense and financial regulation to healthcare, government appropriations, and upcoming political appointments. Dean also highlights notable legislative and regulatory events, providing actionable insights for financial, defense industry, and public policy professionals.

Main Discussion Points & Insights

1. National Defense Authorization Act (NDAA) - [01:02]

• Status & Importance: NDAA is a critical piece of legislation for the defense contracting industry. Language was expected December 1, but may be delayed as negotiators are still finalizing details.
• Policy Riders: Notably, proposals aiming to preempt state artificial intelligence laws have met bipartisan resistance.
• Notable Quote:

  “If you were to ask most of the defense individuals that are allied to the defense industry, they’d say, get this bill out of here. I don’t want to talk about it. Let’s just focus on defense. And I think that’s ultimately where it plays out.” (Nathan Dean, 01:56)

2. Enhanced Supplementary Leverage Ratio (ESLR) – Banking Deregulation – [03:04]

• Recent Developments: The Fed, FDIC, and OCC finalized changes to the leverage ratio, adjusting requirements and returning around $13 billion in capital to large banks (G-SIBs).

• Figures: New leverage ratio set at 3% plus a 50% surcharge tied to bank size (resulting in ~3.5–4.3% requirements).

• Deregulation Signal: This is characterized as the “first taste of deregulation.”

• Implementation: Effective April, with potential for early adoption.

• Upcoming Regulatory Hearings: Hearings scheduled with bank regulators, focusing on Basel III endgame proposals and potential G-SIB surcharge modifications.

  “This is the first change, first 'T' to deregulation. And so we’re certainly going to see more implementation of this.” (Nathan Dean, 04:07)

3. Basel III Endgame and G-SIB Surcharges – [04:53]

• What’s Next?: Regulators may increase Basel III capital requirements by 3–7%, potentially offset by lowering the G-SIB surcharge.

• Potential Impact: Combined changes could return up to $71 billion to large banks.

• Timeline: Most likely, proposals will be released in Q1 2026.

  “If the Feds were to come out and increase the Basel III endgame 3 to 7% and then decrease the G-SIB surcharge ... you’re looking at a $58 billion capital reduction for those G-SIB banks. So you tack on $13 billion from the ESLR ... you start talking about real money here that’s being returned to the banks.” (Nathan Dean, 06:08)

4. Fed Chair Nomination – [07:31]

• Trump’s Pick: President Trump has reportedly decided on a new Fed chair nominee, with Kevin Hassett (former National Economic Council Director) as the frontrunner.

• Process Timeline:

  • Announcement: Before year-end
  • Nomination for Board seat: February
  • Powell’s term ends: May, when Hassett would become Chair

• Confirmation Outlook: An easy path is expected (“fairly easy vote for the Senate Republicans”).

  “I don’t [see any issues for Hassett’s Senate confirmation]. … I certainly think he has the votes to get there in the Senate.” (Nathan Dean, 08:45)

5. ACA Subsidies & Healthcare Policy – [09:10]

• Context: Debate over extending ACA (Obamacare) subsidies continues. Congressional action has stalled, and the White House has withheld its plan due to political pressure.
• Outlook: Wait-and-see; only 12 legislative days left this session.
• Political Stakes: If premiums increase Jan. 1, Democrats worry about messaging in the 2026 cycle.

6. Government Appropriations & Shutdown Risks – [10:16]

• Deadline: Nine of 12 appropriation bills face a funding deadline January 31.

• Strategy: Senate considering a push to pass five major bills (incl. Defense, Labor), which would reduce shutdown risk.

• Current Pace: Slow progress, most action expected in January.

  “You get the bulk of discretionary spending, it takes a lot of the shutdown risk away if they were to do this.” (Nathan Dean, 11:01)

7. Tennessee Special Election – [11:37]

• Spotlight: Special election in a strong Republican district—a test for potential Democratic momentum after recent blue-wave results in Virginia and New Jersey.
• Expected Outcome: Republicans likely retain seat, but “how well the Democrat does” is of interest.

8. NASA Director Confirmation Hearing – [12:12]

• Nominee: Jared Isaacman, commercial astronaut, proponent for privatized space industry.
• Date: December 3
• Implications: A notable figure for those tracking commercial space developments (SpaceX, Blue Origin).

9. Venezuela Policy & Energy – [12:42]

• White House Meeting: President Trump scheduled to meet on Venezuela with key advisors (including Defense Sec. Pete Hegseth and Secretary of State Marco Rubio).
• Sector Impact: Of interest to energy market watchers, given U.S.-Venezuela relations.

10. Farm Aid Package – [13:00]

• Expected Move: $12–13 billion aid set for U.S. farmers, possibly announced this week.

• Industry Response: Considered a “band-aid”—greater focus among farmers is on trade opportunities.

• Further Aid?: Up to $50 billion possible between 2025 and 2026, per some Congressional estimates.

  “The farming industry wants trade, not aid.” (Nathan Dean, 13:30)

11. Supreme Court: IPA Tariffs Case – [13:15]

• Upcoming Ruling: Decision expected soon on President Trump’s “Liberation Day tariffs” — Supreme Court may rule them unlawful.
• Potential Fallout: Could spark “refund chaos” if tariffs are struck down. Analyst Holly Frome’s work on the subject is cited for deeper dives.

Notable Quotes & Memorable Moments

• “This is certainly the first taste of deregulation … we’re certainly going to see more implementation.” (Nathan Dean, banking regulation, 04:07)
• “I think everybody’s just now in a wait and see mode.” (Healthcare, 09:35)
• “If you ask the House Agricultural Committee … they could potentially see up to $50 billion in aid being passed between this year and next year for the US Farming industry.” (Farm aid, 13:27)
• “Her [Holly Frome’s] belief is that the Supreme Court is going to find those tariffs to be unlawful. And when that happens, you’re going to see a lot of red lines coming over the terminal … refund chaos.” (Nathan Dean, tariffs, 13:20)

Timestamps for Important Segments

• NDAA & Defense Policy: 01:02–03:04
• Bank Regulatory Changes (ESLR): 03:04–04:53
• Basel III, G-SIB Surcharges: 04:53–07:31
• Fed Chair Nomination: 07:31–09:10
• Healthcare/ACA Subsidies: 09:10–10:16
• Government Appropriations/Shutdown: 10:16–11:37
• Tennessee Special Election: 11:37–12:12
• NASA Confirmation Hearing: 12:12–12:42
• Venezuela Policy: 12:42–13:00
• Farm Aid Package: 13:00–13:27
• Supreme Court Tariffs Case: 13:15–13:37

Closing Remarks

Nathan Dean delivers a pragmatic, insider’s view of evolving policy dynamics in Washington with a focus on the regulatory climate, upcoming legislation, and appointments with broad market and sectoral impacts. The episode is a must-listen for professionals tracking U.S. policy shifts in finance, defense, health, agriculture, energy, and commercial space sectors.