Balance of Power: Weekly Washington Policy Pulse

Episode Date: February 2, 2026
Host: Joe Mathieu
Guest: Nathan Dean, Senior Policy Analyst, Bloomberg Intelligence

Episode Overview

This week’s Washington Policy Pulse, hosted by Bloomberg’s Joe Mathieu and featuring Bloomberg Intelligence’s Nathan Dean, delivers concise, insider analysis on pressing policy developments in D.C. Amid a partial government shutdown, Dean breaks down the dynamics behind the impasse, expectations for a resolution, insight into President Trump’s Federal Reserve Chair nomination, a key meeting on crypto regulation, and an outlook for upcoming Congressional hearings. The discussion is timely, candid, and focused on both political maneuvering and regulatory impacts as the U.S. edges further into an election year.

Key Discussion Points & Insights

1. Partial Government Shutdown – Status and Predictions

• Current State:
  • Partial shutdown is ongoing; many D.C. workers are not coming to the office, and local traffic is notably light (01:00).
  • The Senate has passed a funding bill for five of six remaining appropriations, leaving DHS on a two-week continuing resolution. The House now faces pressure to respond.
• Political Dynamics:
  • Bill passed the Senate with over 70 bipartisan votes, but the House feels sidelined since negotiations excluded them (02:30).
  • Republicans are divided; some want changes such as stricter voter ID requirements. Speaker Johnson faces immense challenges keeping the party in line, especially with a razor-thin majority after a recent special election (03:00).
  • “If Democrats are going to be insisting on changes to this deal, then I want to have changes to this deal.” – Nathan Dean (03:12)
• Outlook:
  • Most likely, the shutdown “is going to end this week, most likely tomorrow, if not Wednesday this afternoon.” (01:43)
  • Any deal will require bipartisan votes, as intra-party division makes a Republican-only passage unlikely.
  • Issues like ICE funding and broader DHS components (FEMA, Coast Guard, TSA) complicate negotiations, especially with 2026 being an election year.

2. Trump's Federal Reserve Pick: Kevin Warsh Nomination

• Nomination Background:
  • President Trump has named Kevin Warsh as nominee for Fed Chair, but Senate confirmation is complicated (06:07).
  • Senator Thom Tillis (R-NC) sits on the Senate Banking Committee and has pledged to block Warsh’s nomination until an investigation involving Jerome Powell is resolved (07:00).
• Procedural Hurdles:
  • A committee “discharge” to bypass Tillis’ block requires 60 Senate votes—a tall order in the current environment.
  • Changing Senate rules to allow passage with 50 votes would require party unity, but with Senators Tillis and Murkowski opposed, this is nearly impossible (08:20).
  • “Most likely … Kevin Warsh’s nomination is going to be blocked.” – Nathan Dean (09:19)
• Resolution Timeline:
  • Tillis is not seeking re-election but remains in the Senate until January 2027, making a delay of years possible.
  • If the Powell issue resolves, a confirmation hearing could move quickly, and Warsh likely would “get the votes, the issue is not there” (11:42). However, until Powell’s term ends or he’s replaced, Warsh won’t be confirmed.
• FOMC vs. Fed Chair Process:
  • Dean explains the distinction between the Federal Reserve Board Chair and Federal Open Market Committee (FOMC) Chair roles, highlighting the complexity of leadership succession (12:40).

3. Crypto Regulation: White House Meeting & Legislative Outlook

• Today’s White House Meeting:
  • Staffers—not President Trump—meet with banking and crypto industry reps to debate the “stablecoin yield” issue (13:08).
  • Senate Agriculture Committee passed a version of the “Clarity Act,” but it lacks bipartisan support and faces more significant opposition in the Senate Banking Committee.
  • The “Genius Act” currently prevents yield payments by both bank and nonbank stablecoin issuers; workaround proposals focus on rewarding activity instead of balances.
• Chances for Legislation:
  • Dean maintains “a 60% chance that a bill passes in the first half of this year,” given the risk that a Democratic takeover of the House would eliminate the window for favorable legislation (14:29).
  • “This is your best shot of getting a bill… you’re not going to have as much ability” if Democrats run the House in 2027.

4. Upcoming Congressional Hearings: What to Watch

• Treasury Secretary Testimony:
  • Scott Bessen, Treasury Secretary, will appear before House Financial Services (Feb 4) and Senate Banking Committee (Feb 5).
  • The House session is expected to be more revealing and wide-ranging due to the number of members and volume of questions (14:59).
• Key Issues:
  • Focus will be on Financial Stability Oversight Council, banking sector safety, Basel III endgame timeline, relief for regional banks, and “debanking.”
  • Bessen has shown a hands-on regulatory approach, and new details or policy guidance could emerge (15:04).
• “I’m going to be looking to see if he can give us any types of timing in terms of when the Fed and the OCC is going to be working on things... Is that going to come after the large bank relief?” – Nathan Dean (15:09)

Notable Quotes & Memorable Moments

• On the House GOP’s narrow majority challenge:

  “When you have one person, that is essentially going to be extremely difficult for Speaker Johnson to keep his party in line... bills like this require Democratic votes.”
  — Nathan Dean (03:22)

• On the likelihood of ending the shutdown:

  “I think ultimately the shutdown is going to end this week, most likely tomorrow, if not Wednesday this afternoon.”
  — Nathan Dean (01:43)

• On the Powell/Warsh confirmation scenario:

  “Trump made a statement on Air Force One over the weekend. He said, well, maybe we’ll just, you know, we’ll wait around until Senator Tillis is no longer here. That’s January of 2027...”
  — Nathan Dean (09:59)

• On the distinct processes for Fed Chair and FOMC leadership:

  “The FOMC is separate than the Federal Reserve Board... even though Kevin Warsh is being nominated... it’s a different process than the FOMC.”
  — Nathan Dean (12:42)

• On the game-theory behind crypto legislation:

  “No bill can be overturned if a Democratic SEC or CFTC comes in charge in 2028. And B, this is your best shot of getting a bill because... you’re not going to have as much ability to get a bill through the House Financial Services Committee if Maxine Waters is your chairwoman.”
  — Nathan Dean (14:47)

Timestamps for Key Segments

• [01:00] – Nathan Dean opens discussion on the partial government shutdown.
• [02:30] – Details and political implications of the Senate-passed appropriations bill.
• [06:07] – Discussion of Trump’s nomination of Kevin Warsh for Fed Chair.
• [07:00] – Obstacles posed by Senator Tillis; block on Warsh’s nomination.
• [09:59] – Trump floats delaying the nomination until Tillis leaves office in 2027.
• [12:40] – Explanation of FOMC vs. Federal Reserve Board Chair processes.
• [13:08] – Preview of White House meeting on stablecoin and crypto yield regulation.
• [14:29] – Analysis of the legislative window for passing a crypto bill.
• [14:59] – Upcoming Treasury Secretary hearings previewed.

Episode Tone & Style

Nathan Dean’s commentary is measured, analytical, and occasionally candid (“one big beautiful bill,” “I’m paraphrasing”), with a clear intent to inform listeners without partisan spin. The discussion stays practical, highlighting immediate policy outcomes and next moves for insiders and observers.

Further Information

• For a deep dive or questions on points discussed, Nathan Dean invites listeners to reach out directly (ndean10@bloomberg.net).
• Listeners are encouraged to follow up for synopses after key hearings and ongoing policy developments in D.C.

This episode is essential listening for policymakers, market watchers, and anyone who needs a pulse on Washington’s regulatory machinery at this critical juncture.