The new Fed governor wants bigger rate cuts

Summary

Marketplace Morning Report

Episode: The new Fed governor wants bigger rate cuts
Date: September 23, 2025
Host: David Brancaccio

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Episode Overview

This episode gives a quick yet comprehensive update on key overnight business and economic news, focusing on calls for more aggressive interest rate cuts from the new Federal Reserve governor, a massive investment deal in the AI space, and drastic changes in U.S. skilled visa policies. The tone is conversational but analytical, packed with insight from experts and on-the-ground reporting, making the complexities of fiscal and tech policy accessible for listeners starting their day.

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Key Discussion Points & Insights

1. The New Federal Reserve Governor Pushes for Bigger Rate Cuts

[01:36–03:22]

• Main News: Stephen Myron, President Trump’s recently appointed close ally on the Fed Board, advocates loudly for more aggressive monetary easing.
  • Last week’s action: The Fed cut rates by 0.25%. Myron wanted a 0.5% cut.
  • His rationale: President Trump’s policies (particularly on immigration and deregulation) will reduce inflation pressure, allowing for deeper rate cuts.
• Myron’s Reasoning:
  • Immigration: Fewer immigrants, says Myron, will mean more available housing and lower rents.
    • Quote (Stephen Myron, 02:20): “I believe forecasters have underappreciated the significant impact of immigration policy on rent inflation.”
  • Deregulation: Will lower company costs.
  • Tariffs: Argues that the Fed worries disproportionally about inflation from tariffs.
    • Quote (Stephen Myron, 02:37): “The upshot is that monetary policy is well into restrictive territory, leaving short term interest rates roughly 2 percentage points too tight, risks unnecessary layoffs and higher unemployment.”
• Counterpoint:
  • Olu Sonola, Fitch Ratings economist, is skeptical:
    • There’s too much uncertainty on tariffs and immigration trends.
    • Most Fed officials have their own independent staff and analysis, which makes Myron’s influence unlikely—especially as his appointment is temporary until January 2026.
    • Memorable moment (Olu Sonola, paraphrased by Nancy Marshall Genzer, 03:11): “Their staff, you know, they go out there, they talk to people, they talk to businesses. My sense is that that carries a lot more weight.”
    • On Myron’s short tenure: It further limits his sway within the Fed.

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2. Blockbuster Nvidia–OpenAI Deal

[03:22–04:08]

• Headline: Nvidia to put $100 billion into OpenAI.
  • Why it matters: The deal is expected to turbocharge AI development and integrate Nvidia’s powerful chips with OpenAI’s software, creating an economic backbone for future digital economies.
  • Details (Aaron Delmore, BBC):
    • OpenAI is known for ChatGPT.
    • Nvidia’s specialized chips power language models like ChatGPT.
    • Nvidia will receive a stake in OpenAI as part of the deal.
    • Quote (Aaron Delmore, 03:41): “It’s a blockbuster deal, and it’s a credit to the demand for new AI technology like OpenAI’s ChatGPT.”

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3. Skilled Visa Fee Increase: Big Tech vs. Small Firms

[05:32–08:51]

• Summary: The Trump administration hikes skilled worker (H1B) visa fees to $100,000 per application. The policy aims to prioritize American workers.
  • Who pays?: Typically, the companies, not the applicants.
  • Industry Expert: Eric Gordon (University of Michigan Ross School of Business).
    • Big companies: Can easily absorb the cost or already have offshore offices where they can hire talent.
    • Small-to-mid companies: Lack such resources and flexibility. The policy could limit their ability to hire needed talent and hurt innovation.
    • Quote (Eric Gordon, 06:19): “Big companies that can afford $100,000 a lot more than the smaller companies can afford it will get a new advantage.”
  • Finding US-based talent?
    • Problem: There are not enough US graduates in STEM fields to meet demand, especially in sectors like microchips.
    • Quote (Eric Gordon, 08:05): “We do not have enough homegrown STEM students, especially at the graduate level...it’s something that we’ve been solving with a bandaid, the H1Bs.”
  • Implications for small business and innovation
    • Runs counter to political rhetoric supporting entrepreneurship and small businesses.
    • Quote (Eric Gordon, 08:38): “Every politician during an election year runs around telling audiences that small businesses are the backbone of America and that they support small businesses. Maybe not so much.”

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Notable Quotes & Memorable Moments

• Stephen Myron (Fed Governor) [02:20]:
  “I believe forecasters have underappreciated the significant impact of immigration policy on rent inflation.”
• Stephen Myron [02:37]:
  “The upshot is that monetary policy is well into restrictive territory, leaving short term interest rates roughly 2 percentage points too tight, risks unnecessary layoffs and higher unemployment.”
• Aaron Delmore (BBC) [03:41]:
  “It’s a blockbuster deal, and it’s a credit to the demand for new AI technology like OpenAI’s ChatGPT.”
• Eric Gordon (University of Michigan) [06:19]:
  “Big companies that can afford $100,000 a lot more than the smaller companies can afford it will get a new advantage.”
• Eric Gordon [08:05]:
  “We do not have enough homegrown STEM students, especially at the graduate level...it’s something that we’ve been solving with a bandaid, the H1Bs.”
• Eric Gordon [08:38]:
  “Every politician during an election year runs around telling audiences that small businesses are the backbone of America and that they support small businesses. Maybe not so much.”

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Timestamps for Key Segments

• Fed rate cut debate & Myron’s arguments — 01:36–03:22
• Nvidia–OpenAI deal — 03:22–04:08
• Visa policy changes and small business impact — 05:32–08:51

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Summary Takeaway

This episode offers sharp, timely insights into economic policymaking’s real-world impacts—especially when complex factors like immigration, technology, and global competition are at play. Listeners come away with a nuanced sense of the challenges facing both policymakers and business leaders in 2025.

Transcript

[Marketplace Host]

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[David Brancaccio]

We've now heard from one of the most powerful economic policymakers in the country, the newest member of the Federal Reserve Board of Governors, close ally of President Trump. Stephen Myron made his case for more and larger interest rate cuts in speech yesterday. Last week, the Fed lowered interest rates by a quarter of a percentage point. Myron wanted a bigger half point cut. Marketplace Nancy Marshall Genzer has more on his thinking.

[Nancy Marshall Genzer]

Stephen Myron says President Trump's policies are going to push prices down so the Fed doesn't have to worry that lowering interest rates will spark inflation. Speaking at the Economic Club of New York, Myron said, for example, with immigrants leaving the country, there will be more housing available and rents will fall.

[Stephen Myron]

I believe forecasters have underappreciated the significant impact of immigration policy on rent inflation.

[Nancy Marshall Genzer]

Myron also says deregulation will lower companies costs and there are, quote, unreasonable levels of concern at the Fed about the inflationary effects of President Trump's tariffs.

[Stephen Myron]

The upshot is that monetary policy is well into restrictive territory, leaving short term interest rates roughly 2 percentage points too tight, risks unnecessary layoffs and higher unemployment.

[Nancy Marshall Genzer]

But Fitch Ratings economist Olu Sinola doesn't buy Myron's arguments. He says there's still a lot of uncertainty around tariffs and the total number of immigrants leaving the country. And Sonola doesn't think Myron will be able to convince other Fed officials to follow his lead.

[Stephen Myron]

They have their own staff and their staff, you know, they go out there, they talk to people, they talk to businesses. My sense is that that carries a.

[Nancy Marshall Genzer]

Lot more weight, sonola says. It doesn't help that Myron is only supposed to be at the Fed temporarily through January. I'm Nancy Marshall Genser for Marketplace Artificial.

[David Brancaccio]

Intelligence hardware maker Nvidia plans to put $100 billion into software maker OpenAI. The boss there, Sam Altman, says the tie up will help build a vast pool of data that would form the basis of the economy of the future. The BBC's Aaron Delmore is in New York.

[Aaron Delmore]

It's a blockbuster deal, and it's a credit to the demand for new AI technology like OpenAI's ChatGPT. While OpenAI makes the artificial intelligence chatbot, Nvidia makes the high powered chips that enable its use. Nvidia makes specialized processors or chips that are used for large language models like ChatGPT, and that's what lets the technology process data and execute tasks. So a deal like this brings the two technology giants closer together. Nvidia reportedly is receiving a stake in OpenAI as part of the deal.

[Stephen Myron]

Foreign.

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[David Brancaccio]

We continue to follow the Trump administration's abrupt change in skilled visa policy. New H1B visas, often for engineers and people from other specialized fields, now cost $100,000. The White House says it's to push companies to hire Americans first. Note that it's typically companies that'll pay the 100k easier for deep pocketed established firms and harder for smaller startups. Eric Gordon has been thinking about this. He's a professor at the University of Michigan's Ross School of Business. Hey, Eric.

[Eric Gordon]

Hello, David.

[David Brancaccio]

You've been thinking about how the new rule on the skilled visas percolates into industry. People should understand it's not necessarily an applicant somewhere in the world paying the six figure new fee. It would often be what you think. The companies.

[Eric Gordon]

Yeah, the companies put up the money. And big companies that can afford $100,000 a lot more than the smaller companies can afford it will get a new advantage.

[David Brancaccio]

So you've been doing the math here in your head. And if you're giant, this extra fee may not be welcome. But you can easily digest it, you.

[Eric Gordon]

Can easily pay it. And if you're one of the big tech companies, you have an other out. You probably have offices outside the US where you can hire workers instead of bringing them to the U.S. small companies don't have offices outside the U.S. they don't have offices in India or Canada. They have to import people if they can't find US workers with the right skills.

[David Brancaccio]

So I'm hearing from you here a concern that this tilts the playing field in favor of the incumbents. The big getting a new advantage.

[Eric Gordon]

I talked to a couple of people at smaller mid sized companies, the kind of companies that are funded by venture capital, and they're very worried. They don't have $100,000 per worker and they don't have an office in Bangalore.

[David Brancaccio]

All right, so hire some US based workers with nice shiny engineering degrees to do the work.

[Eric Gordon]

That's what you're supposed to do. You're supposed to do that instead of using H1BS. Unless you can't find those workers. And in a lot of engineering and tech fields, you really can't find enough of those workers here.

[David Brancaccio]

I mean, I've seen the statistics. I mean, there is a mismatch between the number of people coming out of STEM programs and what US industry needs. For instance, I saw the figures for the microchip industry.

[Eric Gordon]

Yeah, it's really tough. We do not have enough homegrown STEM students, especially at the graduate level. And it's something that we've been solving with a bandaid, the H1BS. But maybe we need to rethink a few other things so that we produce.

[David Brancaccio]

More folks here we talk about being a country that embraces entrepreneurship. We talk about being a country that wants to look out for smaller businesses. But you see a policy here that seems to be cutting in a different direction.

[Eric Gordon]

Every politician during an election year runs around telling audiences that small businesses are the backbone of America and that they support small businesses. Maybe not so much.

[David Brancaccio]

Eric Gordon teaches at the University of Michigan's Ross School of Business. He's also an attorney who teaches in the law school. Eric, thank you very much.

[Eric Gordon]

My pleasure, David.

[David Brancaccio]

Our producers are Tamar Fagan, Ariana Rosas, and Erica Soderstrom. Our senior producer is Alex Schroeder. Our supervising senior producer is Meredith Garrettson. Morby. You're listening to the Marketplace Morning report from APM American Public Media.

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