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- [00:00]
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- [01:02]
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- [01:30]
Sam Stein
Hey everybody, it's me, Sam Stein, managing edit the Bullork. I'm joined by Katherine Rampel and JBL for a fresh what the hell is this newscast on Sunday night. Feels like we can't go a weekend without something dramatic dropping in this case. We have news reports that the Justice Department is opening a criminal investigation into the Fed, the Federal Reserve, apparently, and I'm just going off of what we have from the reports. We don't really have much else. They're looking into testimony that Jay Powell, the chairman of the Fed, gave to Congress in which the allegation is that he may have lied about the renovation costs for the renovated Fed headquarters. Powell put out a remarkable video. Uncomfortable but remarkable. We're going to play it in one second, but quick reactions to the news before we play it. Catherine, I'm going to go with you first because you write and live in this world, write about and live in this world and You've talked to Jay Powell. Just how significant is this?
- [02:26]
Catherine Rampell
It's huge. Look, Donald Trump has been trying to politicize the Fed for years, including since he appointed Jay Powell himself to the chair of the Federal Reserve during his first term. And Powell is being punished not for whatever crime he's alleged to have been, have committed here, which is probably completely made up, but for the worst crime of not doing exactly what Trump wants. Trump does not recognize that the Federal Reserve is supposed to be politically independent, has been politically independent for decades, and relies on political independence to do its job, which is to maintain stable prices and maximum employment. Donald Trump thinks that it's his plaything and that the Federal Reserve should cut rates if he says cut rates. And Jay Powell did not do that, or did not, you know, shepherd the fellow members of the Fed to do that when Trump wanted him to. And so now he's being punished for it. But, like, it's bizarre. The timing on this is bizarre. Trump has been railing about Powell, you know, not doing his bidding for years now, again since his first term. And now Powell's on his way out. Like, his term as chair ends in a few months. Why bother doing this? It's not like this is going to pressure Powell to change course in terms of interest rates. If not, if anything will be the opposite. Yeah, but I just mean he's going to be gone anyway. Like, Trump gets to put his own guy in. This is just going to. I mean, I can't imagine what markets are going to look like tomorrow. They're going to go nuts, probably, but this is just going to, like, harden the resolve of anyone in Congress who might be willing to, like, stand up for Fed independence, which, like, maybe sounds like a fantasy, but they have 401ks too, and their constituents and their donors are not going to be happy if we have hyperinflation because Trump politicized the Fed.
- [04:24]
Sam Stein
All right, so why jbl? Why now?
- [04:27]
JBL
I mean, first of all, it is, I think, instructive that nobody, nobody has bothered to say, this isn't Donald Trump. Pam Bondi is the Attorney General, and she has total independence from the President. And so our law enforcement functions are like, that's all just broken. And we all assume that, of course, the Attorney General would never attempt to indict somebody that the President hasn't told her to do. Right. We, we've seen the DMs, right, that he posted his public things. I mean, why would he do it now? I mean, look, he invaded Venezuela to distract people from all the stuff about his friendship with the notorious pedophile ring leader Jeffrey Epste. And then he talked about invading Greenland to distract everybody from Venezuela. And then he had his masked secret police execute a mother in Minneapolis to distract them from the Greenland talk. And now he's attempting to jail the head of the central bank to distract them from that. I. I mean, this is just what he does. Right? It's.
- [05:28]
Sam Stein
I'll just say that that happened in nine days.
- [05:30]
JBL
That's nine days. Because this is. I mean, we've seen this for a decade. This is what he does. And it is 1.1batt. And we're recording this on Sunday evening. And I promise you by. By dusk tomorrow, there will be something else.
- [05:50]
Sam Stein
Yeah, yeah. No, I. I don't doubt is. It is a bit wild to see it happen in real time. I totally had the same reaction as you did, which is. It was no one even, you know, did a double take that the DOJ would do this. Right. It's like, oh, yeah, of course. And. And no one even really believes the pretext for the investigation. Everyone. Yeah, well, yeah, yeah.
- [06:12]
Catherine Rampell
Trump. Trump has had it out yet. Trump has had it out for Powell. For a while, you know, they've been, like, ginning up this fake allegation about misuse of funds or whatever for a renovation, because, of course, the only thing that Trump cares about is renovations, as we've learned. And, you know, I'm sure he's never had a cost overrun in his life when it comes to what type of marble you have to replace or whatever. Can.
- [06:39]
JBL
I'm sorry, we got to move on to, like, the actual substance of this.
- [06:43]
Sam Stein
Sure.
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JBL
But the idea that Donald Trump is attempting criminal prosecution, because the general idea is here that the scope of this renovation project got too big, Donald. And that Powell lied about it.
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Sam Stein
All right?
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JBL
Trump is the guy who said the East Wing won't be touched just a couple weeks before he demolished the entire east wing of the White House and who then fired his own architect.
- [07:12]
Sam Stein
Also, the cost has risen.
- [07:14]
JBL
Wouldn't make the bigger. Wouldn't make the whole room bigger. This is.
- [07:19]
Catherine Rampell
Yeah, I know. This is like a. Yes. This is a failure of imagination. Like, the only thing that Trump can come up with for, like, what this guy must have done wrong is something related to renovation. Yeah, exactly. Exactly.
- [07:30]
Sam Stein
And you're missing the funnier part, which is confession. And the cost of the east wing has, in his public utterances, has gone up. It was like, oh, it's going to be 200 million. It's 250 now. It's 300. And we might actually have to raise the, the West Wing, too, to match it. So it's like, you know, it is a confession. Let's move to the substance of it and let's, let's focus first with Powell and his response, which I, I referenced up top, sort of this, I don't want to say uncomfortable, but there was a little bit of awkwardness to it. He's not really, probably used to these types of settings, but it puts out this video and it is quite remarkable for what it says both about him and about everyone else who, prior to him, took a different route. I want to talk about that after we play the video now.
- [08:11]
Jay Powell
On Friday, the Department of justice served the Federal Reserve with grand jury subpoenas threatening a criminal indictment related to my testimony before the Senate Banking Committee last June. That testimony concerned, in part, a multi year project to renovate historic Federal Reserve office buildings. I have deep respect for the rule of law and for accountability in our democracy. No one, certainly not the chair of the Federal Reserve, is above the law. But this unprecedented action should be seen in the broader context of the administration's threats and ongoing pressure. This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress's oversight role. The Fed, through testimony and other public disclosures, made every effort to keep Congress informed about the renovation project. Those are pretexts. The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President. This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions, or whether instead monetary policy will be directed by political pressure or intimidation.
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Sam Stein
All right, so look, maybe, maybe he's like, I have four or five months left. I don't have anything to really lose here. Right? Like my tenure's going to end one way or another. And he feels a little bit liberated because of that. Maybe he just doesn't give a shit anymore. But I can't help but watch that video and think, man, you know, here's someone who understands that you can't really just acquiesce. You can't just go silently. You can't play by the traditional playbook, which in Washington would have been, we're the Fed. We don't talk, we don't engage. We don't fight back. We're not going to pick a war with the White House. And our colleague Ben Parker made the very Stupe comparison to Chris Wray, who basically took his ball and went home before he could get fired. Didn't even make Donald Trump fire him. And I appreciate Jay Powell for doing that. I mean, who knows where this goes? I, I, I can't imagine this is a fun predicament for him to be in. But God bless someone for just calling it like it is and saying, you know what? I'm not going to stand by and do the norms thing because we're not in a normal situation.
- [10:36]
Catherine Rampell
I mean, I think he is doing the norms thing in the sense that he is standing up for his institution, which is what we have expected. Federal Reserve presidents since Paul Volcker. He wants to go down as Paul Volcker and not Arthur Burns. Arthur Burns is a former Fed chair who notoriously acquiesced to pressure from Richard Nixon and LBJ to keep interest rates lower and as a result contributed to the stagflation that, you know, basically destroyed the US economy in the 1970s and destroyed Jimmy Carter's presidency, you know, or his reelection chances as well. Even though, you know, Jimmy Carter deserves credit ultimately for helping fix the problem by appointing Paul Volcker. Paul Volcker came in, did some really painful things, including jacking up interest rates to sort of win back the credibility of the Federal Reserve, that they really cared about inflation, that they were willing to do what it took to administer this really bitter pill to the US Economy in order to save the US Economy, to get inflation back under control. And it caused a painful recession and it again destroyed Jimmy Carter's chances of re election, but it got inflation under control. And ever since then, the Fed has been able to credibly say, we are not going to let prices spin out of control, price growth spin out of control. You can trust us. We are willing to do the unpopular thing. We are willing to do the politically inconvenient thing because we know it'll be better for the US Economy. Everyone wants to be Paul Volcker. They want to be the statesman who takes the tough stand because they know it's the right thing in the long run, even if it makes them the most hated person on earth.
- [12:28]
Sam Stein
I wish, I wish everyone wanted to be PA. I don't, I don't. And maybe, maybe a lot of people do. But I look at who's the guy who heads Paul Weiss, whatever the hell his name is.
- [12:39]
Catherine Rampell
I know you're talking about.
- [12:39]
Sam Stein
Yeah, I look at the, I look at the presidents of these universities that cut deals. I look at media moguls who have tons of money and just did not do something even remotely like this. To say this is extortion or this is, I don't know. Well, someone trying to bend me and break me. Yeah. So go ahead.
- [12:54]
JBL
Yeah, I mean that they're doing it for the insane.
- [12:57]
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- [13:57]
Commercial Announcer
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- [14:06]
Sam Stein
Persons and participation may vary. Prices may be higher in Hawaii, Alaska and California.
- [14:10]
JBL
And for delivery though, right? I mean, Chris Ray told himself, I'm, I'm not going to make trouble here because I have so much respect for, I don't want the FBI to get caught in the middle and I want to preserve the, the int the institution and I, I appreciate that. I think that's clearly a misunderstanding of the situation and a misunderstanding of what is actually in the best interest of the institution. But it's one thing to misunderstand that in the early January before Trump is sworn in, you know, it, it's another thing to, to be sitting in 2026 having seen what.
- [14:47]
Sam Stein
Right.
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JBL
What we've seen and do that. And that's why I, if I can just say though, because this is something I really want to get Catherine's view on here. So I, I, I am slightly obsessed with the question of what happens if we win somehow, like what, what happens if it's 2029 and we have whether it is Nikki Haley or Gavin Newsome, but we Have a normal liberal person, liberal not meaning, not illiberal, as President, United States. And I think that what Chairman Powell understands is that there's an enormous trap here, which is that if, if he, whether he is forced out or not, if he is persecuted here and then he's replaced by a political hack like Kevin Hassett, who I think is like the odds on favorite to wind up as the next chairman of the Federal Reserve. A guy.
- [15:41]
Catherine Rampell
Well, we'll see. We'll see.
- [15:42]
JBL
Well, we'll see. But I mean, he's certainly. Then you, you wind up in this trap where, well, can the next president remove Kevin Hassett or isn't that, you know what I'm saying, like you wind up in this vicious circle. So if you get a political hack in the job and you've broken down and turned the Fed into a partisan operation, then even the act of fixing it damages it. Right? And yeah, no, I mean, he's trying to avoid that. I mean, he's trying to really, you know, have a fight here. I think part of this is meant to stiffen the spines of Senate Republicans and try to get them to hold the line so that they don't wind up approving because they will have to confirm somebody who's a political hack coming after him. So I think that's part of what his calculus is here, is he's trying to, to get the Fed out of this future trap that Trump is laying for it.
- [16:33]
Catherine Rampell
Yeah, I think that's a very astute analysis. And I think Trump doesn't realize how, how much what he's doing right now is likely to backfire because what's going to happen here? Well, let me back up. I interviewed jay Powell like 10 days after the 2024 election. This had been scheduled long before that. It was a public event in Texas. And of course, Donald Trump had just won. There was a lot of fear that Trump might do something to try to lean on the Fed again. And I asked Powell a few different questions about, you know, he was clearly extremely uncomfortable talking about any possible tension with the President. That you can read that in his body language. You can see that in other times he's, he had been asked like, would you, you know, if can the President fire you? And he would just be like, no, and that's it. And he like, wouldn't elaborate. So this was a really awkward conversation in some ways. But I got to ask a lot of follow up questions, which was nice because usually in these press conferences you can't really do that in any event. So I Asked him some questions, like, why does Fed independence matter? Because I knew he wasn't going to, like, say anything to create beef with the President if he didn't need to, because he just wants to, like, stick to his knitting and do his job. He's. He's a statesman anyway. And so he talked a little bit about, like, why Senate independence matters. I asked, was there a time when the Fed was not seen as credibly independent and what happened? And he said, yes, when I was in College in the 1970s, which is the example I was just talking about when Arthur Burns let everything go to hell. And then he added, but you know what? Something to the effect of lawmakers in the Senate and the House know that, know that Fed independence is really important. And he basically said, they have my back. He didn't say it in exactly those words, but that was the gist of what he was saying. Like, none of this, you know, we shouldn't really worry about any of this because, like, the members of Congress will protect the institution. And in the year plus, since that interview, I have been wondering, was he correct about the fact that lawmakers would have his back the first Trump term? It was true that Republicans in the Senate, because the Senate has to confirm Fed members, they would not get through some of Trump's very worst picks, including, like, Stephen Moore, who was never formally nominated, but he was supposed to be nominated. Herman Cain, Judy Shelton, there were a bunch of really bad choices who would have politicized the Fed and Republicans found the spine then to not let them get through. But, like, a lot of those people have left. And it does seem like senators have, you know, the whole Republican Party has.
- [19:29]
JBL
Confirmed Robert F. Kennedy to lead hhs. They'll do anything.
- [19:34]
Catherine Rampell
Exactly. So there's a long wind up to saying, I have been really pessimistic about that. But now that Trump went out of his way, said, like, try to punish Jay Powell when Powell is on his way out. You know, Trump is, as you alluded to, Trump is about to name who he would like to succeed Jay Powell. And there's this big question about, like, is he gonna appoint Kevin Hassett, who's like a known sycophant? Is he going to appoint someone who might be a little bit more normal, who the markets trust and will be seen as more independent? This act is gonna have such, like, a huge, a huge reaction, like, Thom Tillis has come out.
- [20:16]
Sam Stein
Let me get to that. Let me get to that.
- [20:18]
JBL
First of all, let me pick up.
- [20:18]
Sam Stein
On what you're saying. Yeah, it's one of these classic Trump situations where the guy does step on rakes. Let's just be honest about it. Like, he's gonna, he's, he's not gonna make life easier for himself. If he had just been patient for three or four months, he might have had a much easier hand to play with the sycophant he wants to put in there than he does now. That's just a fact. Secondly, we do have a Trump comment about the situation. According to NBC News. He says, quote, I don't know anything about it, but he's certainly not very good at the Fed and he's not very good at the building. At building buildings. I believe Trump, he doesn't know anything about it. How could he? How could he not? All right, putting, putting that aside, Thom Tillis, which you referenced, I think this is a very valid point. So Tillis comes out there. Thom Tillis also retiring, we should note. He says, and this is just a tweet, we could put it up. If, if. Yeah, there it is. If there are any remaining doubt about whether advisors. There's so much tweet to unpack, whether advisors within the Trump administration are actively pushing to end the Independence and Federal Reserve now, I'm gonna get to that. There should now be none. It's now the independence and credibility of the Department of Justice that are in question. I will oppose the confirmation of any nominee for the Fed, including the upcoming Fed Chair vacancy, until this legal matter is fully resolved. Okay, to start with Advisors. Give me a break.
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JBL
Only Comrade Stalin knew what these terrible people around him were doing.
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Sam Stein
You don't have to do that, Tom. Tom, you don't have to do that. You're retiring. Tom, you don't have to play these games. Come on. And then also, it's not the independence and credibility of the Justice Department there in question just now. We're, we're only hitting that point during.
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Commercial Announcer
Question.
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JBL
There's a question there.
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Sam Stein
Question. All right, putting the ridiculous throat clearing aside, there is some significance to this statement. I'm not like a, a total student of the Senate, but my old colleague Burgess. Everett is. And Burgess over at Semaphore Notes, and I'm sure they have ways to get around this. So people can get in my mentions and say it's not a big deal, but the banking committee is 13 to 11 Republican. Phyllis, if he says no to these things, it's going to be 1212, which means you can't report a nominee out of the committee, which means that the Majority Leader, John Thune, will have to get it to the floor. He can do that by pulling the nominee straight to the floor. But according to Burgess, at least if you do that, it's a 60 vote threshold for confirmation, not a 50 vote threshold for confirmation. Again, I haven't had time to fact check this. Sue me, kill me, whatever. But I trust Burgess. And to the larger point, Catherine, there are going to be, and I'm going to dispute a little bit, there are going to be elements of pushback. And I just think back to our boy EJ Antoni, who was supposed to run BLS by now and never got a hearing because he was a clown. And clearly enough Republicans in the Senate said, no, we're not gonna, we're not gonna stomach that vote. So there is a possibility, jbl, that we get a little bit of, I don't know, possible resistance. I don't know.
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Catherine Rampell
I think they care more about screwing up the economy, but. Yeah, you care more about that.
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Sam Stein
Yeah, that matters.
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Catherine Rampell
No, I think, I think they do. I think they do. Yeah.
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JBL
I mean, I think a lot of that resistance is market dependent. And if there is like, you know, if the market opens down 500 points tomorrow morning, that would be bad and would concern people. But if it doesn't, if the market shrugs over this the way it has over a lot of the Trump stuff, maybe people think to themselves, well, what am I going to do? You know, like every Wall street is fine with it. And I have a real question about this. Can I have like 45 seconds here to put a theory to Catherine?
- [23:58]
Catherine Rampell
Sorry, I'm listening. But I'm also looking at the, at futures markets.
- [24:04]
JBL
So I have a theory about Trump in real estate and in his approach to interest rates. And all real estate people want interest rates low always. Right. They are not. They are a very distinct class of economic animal. And for them, ZIRP, 0 interest rate is always the best possible thing. And that's different from like finance guys. And so when you're in the world of finance, people, they understand the bond market, they understand sort of the importance of debt and credit markets and how all those things work. And so they are not universally in favor of low interest. They're much more concerned with sort of broader health of the market. So a real estate guy like Trump is always going to think the interest rates should be super low. Other people would think, well, that really depends on the other, the other signals you're getting about the economy. The tech guys, I think are more like real estate guys because for them access to capital is the most important thing. And when you're in zerb land the way we had been for what, 12 years, then it becomes very, very easy for you to get as much cash as you want for whatever cockamamie idea you have. I'm going to go to Mars. I'm going to build the fifth pet food website. I'm going to, you know, all the. We're going to, we're going to have a thing that delivers pizza slice line from, from Silicon Valley. And it is the tech companies which are currently propping up the market. And so if tech is basically okay with lower interest rates, uber alles, no matter what, whether or not it causes stagflation, because it's good for their little section of the world and they're able to prop up the market in the short term so they're not panicked about this, then maybe the market signal is a little muted. This is like my grand. I feel like the guy from Always Sunny in Philadelphia, like you know, pointing all the Pepe Silva by Silva here.
- [26:15]
Sam Stein
But do you have the red strips.
- [26:16]
JBL
Of crazy on a scale of 1 to 10, is that like a 14 of crazy?
- [26:23]
Catherine Rampell
I think you are basically right in your analysis of which industries want what in the sense that, yes, real estate guys want zero rates. If you are a company that is basically entirely dependent on future cash flow because you have no cash flow now, yes, you want very low interest rates. As an aside, I remember like when the Fed was debating whether to raise rates during COVID there was like a block in my neighborhood where I was like, none of these, none of these establishments should still exist. They only exist because like money costs zero. Like there was one place where you could like they would throw you ice cream as a baseball. And it was like it made no sense as a business anyway. There were a lot of businesses that made no sense for a while and they could subs. Yeah.
- [27:18]
JBL
When they're interested to zero, you get the Movie pass economy.
- [27:21]
Catherine Rampell
Right. So that like a lot of bad ideas can persist.
- [27:24]
JBL
Did you see that last week, Catherine?
- [27:26]
Catherine Rampell
I did not.
- [27:29]
JBL
You're trying to basically combine Movie Pass with poly markets. Great, there you go.
- [27:33]
Catherine Rampell
There you go. A lot of poorly thought out ideas can persist, but also a lot of ideas that like, you know, are long run bets. They, you know, which, which, yeah, which they are contingent on having very, very cheap capital. And you are right that the magnificent Seven, you know, these, these tech mega cap stocks are propping up the market, but there are a lot of other market participants out there who reasonably understand that this is like also very bad for the long run future of the economy. If we have hyperinflation as an example, I'm not saying we're going to get hyperinflation, but I am saying that other countries where they have had central banks that were politically independent and then took away their independence, where basically the money supply gets put under the control of politicians, they have had hyperinflation. Right. Like, you can look to. I mentioned the example of the stagflation here in the United states in the 1970s, but you can also look to, like, I don't know, Turkey, Argentina, free euro, Italy, Venezuela, all of these places where the central bank is not credibly independent and you have all sorts of problems that are bad for every industry, whether we're talking about.
- [28:51]
Sam Stein
Funny that you say that. Our friend Jason Furman has this tweet noting other countries where you've prosecuted or threatened prosecute central bankers. Many of what you just said, Argentina, Russia, Turkey, Venezuela and Zimbabwe, I think you had about four of those right there. So you.
- [29:08]
Catherine Rampell
Yeah, yeah. No, I mean, this is not an original thought to me. The idea that. That. The idea that central banks need to be independent or else you have very bad inflationary outcomes. There's like a whole ton of economic research that confirms this. So the idea that, like, multiple people might be making this point, not a coincidence. It's like this. I was just impressed by the common knowledge.
- [29:34]
JBL
Catherine, do you have a percentage decline in the S and P tomorrow that would make you feel like that is an unambiguous signal?
- [29:46]
Catherine Rampell
An unambiguous signal of what?
- [29:49]
Sam Stein
That the.
- [29:49]
JBL
That the. The. The markets are spooked by this and they do not like it. The markets are going, no, no, no.
- [29:56]
Catherine Rampell
No, don't do that. I don't know. Let me see. That's what I was saying. I was looking up. They're not down that much.
- [30:04]
Sam Stein
Yeah. So this is where I'm putting my money. They look at it.
- [30:07]
JBL
I wrote a column about this after, like, Liberation Day, I think it was, or something. Some crazy thing that Trump did on a. On a weekend.
- [30:14]
Sam Stein
This is.
- [30:15]
JBL
This is why I have PTSD over this. And I did a deep dive on, like, percentage declines in the S and P at moments of inflection. And so I was like, you know, well, if it's one and a half percent, that's one thing. If it's 3 to 5%, that's another, etc. Etc. And then, like, we got to the next day and it was like 1.2%. Market was fine. Nobody cared. It was like Stock markets don't care. They just, they're in.
- [30:42]
Sam Stein
Hold on, hold on. That's because there's, and this is my theory, is that there's always like this ability to rationalize that things are going to be okay. Right. And like, this is what happens when Trump goes after Lisa Cook and the case gets pushed and no one, she's not fired. It's like, well, you know, they won't actually do it and it's going to be in January and the SCOTUS will take it up and they won't actually do it. And you know, you have liberation day. Same thing. It's like, well, you know, the tariffs weren't that bad. And, and then you look at this.
- [31:08]
JBL
Put them on and.
- [31:09]
Sam Stein
Yeah, and then you look at the, and then you just read the New York Times article. And if you read the article, I mean, it's just so it's such thing gruel. I mean, if I were a rational person reading that arc, I'm like, oh, come on. Like, this is a joke. Right? Like, they're not going to indict this guy. They haven't been able to indict James Comey. They haven't been able to evidence for Adam Schiff yet. They can't even get to the point where they're introducing an indictment against Adam Schiff. I mean, this is just thin, thin gruel and.
- [31:38]
JBL
But in a way that helps Trump, doesn't it?
- [31:40]
Sam Stein
Yes, that's my point. Yeah, he gets, he gets the headline. The markets remain unrattled.
- [31:45]
JBL
I'm kind of an accelerationist.
- [31:48]
Catherine Rampell
Well, okay.
- [31:49]
Sam Stein
I mean, yes, a little bit. You want to accelerate the badness.
- [31:54]
JBL
Yes.
- [31:54]
Sam Stein
Get it over with. Rip the band aid.
- [31:57]
Catherine Rampell
Honestly, I've heard a number, I've heard a number of economists, like, almost rooting for some, like, if not a market crash, like some very strong signal to chase in the administration. They're not hoping, like, a lot of people get hurt. Obviously, they're not hoping for like.
- [32:13]
JBL
Yeah, I mean, I'm not recession, to be very clear.
- [32:17]
Catherine Rampell
Right, right, right. But the idea being that, like, they want that signal to spook the administration so that the administration tries to rein in the tyrant. Yes, exactly. And I wanted to mention a couple of things about, like, will lawmakers show spines? I think that they're more likely to oppose a bad pick for the Fed than they are a bad pick for HHS because there's money on the line. And for the very same reason, the Supreme Court has also been like, kind of tying itself into knots over this Lisa Cook case. As well as the Rebecca Slaughter case. So there are two different cases before the Supreme Court right now about whether the President can fire someone on an independent agency. One has to do with somebody who was a commissioner at the ftc, who was fired not for cause, but just because Trump said he didn't want this person. It was Rebecca Slaughter. And who was the other person? Alvaro Bedoria, maybe. Anyway, it doesn't matter. So in any event, he fired two people. They sued and said, you can't fire me. We are an independent agency. And then he tried to fire Lisa Cook, allegedly for cause, and they're both before the Supreme Court. And when the Slaughter case was heard, I don't know, like a month ago, maybe Kavanaugh even literally said aloud, like, is there a way that we can justify saying he can fire this person, but not the Fed? And in a previous footnote, there was also something saying when they said that, like, temporarily they could, you know, Trump could fire Rebecca Slaughter. You know, it was like the, you know, as it worked its way through the courts, it was like, but this doesn't apply to the Federal Reserve.
- [34:17]
Sam Stein
This definitely raises the stakes for the Cook decision, because if the Supreme Court says he can fire Cook, then he's just going to turn around and say, well, I have cost to firepower too, right?
- [34:24]
Catherine Rampell
Yeah, but I think that they're not going to. I think that they're.
- [34:28]
Sam Stein
I don't think they are either, but it does raise the stakes for SCOTUS here.
- [34:32]
Catherine Rampell
Yeah, but my point is that SCOTUS knows. Bad for markets, bad for economy. Let's backfill. Like, let's reverse engineer some principles.
- [34:43]
Sam Stein
You don't think. You don't think they're textualists. Come on.
- [34:48]
Catherine Rampell
That allow us to get to that conclusion.
- [34:50]
JBL
And so crazy talk, Clarence.
- [34:53]
Catherine Rampell
Look, I'm not a lawyer. I'm not a lawyer. Maybe there are some lofty principles that differentiate between these two different cases, but I think it's the same thing with. With senators. Yeah.
- [35:04]
JBL
Let me.
- [35:04]
Sam Stein
Let me just say, let's do the.
- [35:06]
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- [36:05]
Catherine Rampell
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- [36:19]
Sam Stein
We're gonna wrap up in about three minutes.
- [36:22]
JBL
I have more questions for Catherine.
- [36:23]
Sam Stein
Go, go, go, go.
- [36:24]
JBL
Quick, quick.
- [36:24]
Sam Stein
Yeah.
- [36:25]
JBL
So you. You sort of blanched when I said Kevin has it odds on favorite. Do you. If you were just sort of laying odds, would you pick him or the field? And who else is in the field? Because it's not him. Like, I mean, maybe it's somebody respectable, but maybe it's Dana White. I mean, I'm gonna tell you what.
- [36:46]
Catherine Rampell
Poly Market thinks right now. Okay, so right now it says Kevin Warch and Kevin Hasset. The two Kevins are basically about the same odds. They're both that are there. No, they're literally. It's the same odds since I started speaking at 41. 40. They're each at 41%. And then you have Christopher Waller, who's at 9%, and Rick Reeder, who's the dark horse, who's a black rock guy, who's at 3%, which.
- [37:12]
Sam Stein
Hold on. What's Baron Trump at? Just.
- [37:16]
Catherine Rampell
He does not. He does not.
- [37:19]
JBL
Jared.
- [37:20]
Catherine Rampell
Sorry.
- [37:20]
JBL
Jared Kushner, chairman of the Fed. Why not?
- [37:25]
Catherine Rampell
I'm, like, scrolling down. You can see that, you know, there's like, less than 1. No, no, I stand corrected. Barron Trump is on there.
- [37:33]
Sam Stein
Oh, my God.
- [37:36]
Catherine Rampell
He is at less than 1%. And there's been.
- [37:42]
Sam Stein
Totally joking. I did not.
- [37:43]
Catherine Rampell
No. Anyway, yeah, he's at less than 1%. He's a buy at 0.1 cents. If you think he's a. He's got good odds.
- [37:51]
Sam Stein
Make some real money there. All right, what are the other questions from Catherine for? Catherine?
- [37:54]
Catherine Rampell
Yeah.
- [37:56]
JBL
So you didn't answer my question before, which is that. And I didn't really ask it, but I am Curious. So if you do wind up with a thoroughly politicized chairman of the Fed and you wind up with a liberal as your next president, do you fire.
- [38:15]
Catherine Rampell
You are obsessed with this question.
- [38:17]
JBL
I am, because I think this is like the question about everything. Like it's a question about the FBI director. It's a great question about do you.
- [38:23]
Sam Stein
Keep the FBI director you can easily fire?
- [38:27]
JBL
I mean, you could. Well, you could, but we've all said it's bad.
- [38:32]
Sam Stein
Oh, yes, but he fired the FBI director, so he's already crossed that Rubicon.
- [38:38]
Commercial Announcer
Right.
- [38:38]
JBL
But what I'm saying is old people like us were like, hey, it's bad. You shouldn't fire the FBI.
- [38:44]
Sam Stein
It's a 10 year term. This is the question was posed to Catherine. So, Catherine.
- [38:50]
Catherine Rampell
Like, what do we do again?
- [38:51]
JBL
This is the question about all of the government. Like, this is just, you know, in the Fed chairman, just one little piece of it.
- [38:59]
Catherine Rampell
Well, the question, you know, like, will the Supreme Court let you. Is one other question about all of this. Right. Do you want to. I think it depends on how bad the person is. The Fed is an institution. Whether it's like the chair of the Fed doesn't actually set interest rate policy. He is, he or she is in charge of like fostering consensus among a bunch of the other people.
- [39:26]
JBL
Right.
- [39:28]
Catherine Rampell
So, you know, in the case of the Fed, I don't even know that you would need to try to force out that person because there are enough other people who will like, maybe behave themselves. There are all of the regional Fed presidents who the. Who Donald Trump cannot displace. They are appointed by completely separate bodies. And so, and they have recently all been reappointed. So I think they're going to stick up for the institution. There are other people who are on the Federal Reserve Board and they will cycle on and off, so you may not need to face this difficult choice. But if it's a really bad person, and then. And Trump has put in place a bunch of other really bad people in those Fed board positions. Yeah. I think the most important thing you can do for the credibility of that institution is put in place good people who are politically independent, who take their job seriously, who are boring technocrats, who all they care about is trying to get the answer right. They may not get the answer right all the time when it comes to, like, interest rates, but they are trying to get it right and they're not trying to do the bidding of a politician or a political party. The only way you can get any of that to happen is by Having the right people in the job who take their job seriously.
- [40:44]
JBL
Preach, sister.
- [40:48]
Sam Stein
Okay, well, let's just summarize quickly. We have an extraordinary announcement of an investigation, a criminal investigation into the Fed over what appears to be J Pal's testimony to Congress. We have Thom Tillis coming out saying he will not vote for another nominee to any Fed vacancy until this is resolved. We have the Supreme Court hearing, Lisa Cook coming at some point this month. We believe we have the corruption of both the DOJ and now the attempted corruption of the Fed as well. And we're all sort of waiting to see what the future markets look like. And then the market opening tomorrow morning. Okay, that was fun. A little bit scary. I'm tired of doing these on. On the weekend. Last weekend was maduro. Now we got this. It just never ends. Any closing thoughts from either of you guys?
- [41:41]
JBL
Yeah, you and I look like we just crawled out from under a highway overpass. Catherine is like. She's on her total profession.
- [41:49]
Sam Stein
She's on.
- [41:51]
Catherine Rampell
Do you know that I just did three hours of live TV on?
- [41:54]
JBL
I do. Because you're a professional. I'm just saying, like, you're amazing and like Sam, like hobos.
- [42:00]
Catherine Rampell
Well, but they did my. They did my hair and makeup is my point, so I didn't have to gussy myself up. They did it for me.
- [42:06]
Sam Stein
Well, I appreciate that, that you put in an extra hour for us. That's very kind.
- [42:09]
Catherine Rampell
No problem. No problem.
- [42:11]
Sam Stein
All right. Hey, guys, for those who are watching, we appreciate that as well. These are late nights. They are hard work, but they're fun work. We like doing it together with our community. I wouldn't call it part of the community yet. If you're not part of the community yet, join the community because we'd like to do this all together, get through these times together. So become a bulwark subscriber. It's easy to do. Substack, YouTube, whatever. Appreciate you guys. Thank you very much. JBL. Catherine, enjoy the rest of your weekend. Couple more hours left. Take care, guys.
- [42:41]
Catherine Rampell
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