Trump Shakes Up Expectations on Who Will Be the Next Fed Chair

Summary

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WSJ What’s News – “Trump Shakes Up Expectations on Who Will Be the Next Fed Chair”

Date: January 16, 2026
Host: Alex Osila
Featured Guest: Nick Timiraos (WSJ Chief Economics Correspondent)

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Overview:

This episode delves into President Trump’s surprising signals regarding his decision on the next Federal Reserve chair, shifting market expectations and stirring political intrigue. The show also covers updates on economic policy proposals, geopolitical developments, and investigates the affordability of nutritious dinners in light of recent government claims.

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Presidential Drama: The Contest for Fed Chair

Setting the Stage

• The top story is the unfolding search for the next Federal Reserve chair, a decision President Trump is treating with dramatic flair.
• The battle has been dubbed the “two Kevins” contest—between Kevin Hassett and Kevin Warsh—both of whom are influential economic figures.
• Trump publicly muses about keeping Kevin Hassett in his current job, fueling speculation that Kevin Warsh is now the front-runner.

Notable Quote

• President Trump, at a White House event (01:23):
  “You were fantastic on television today. I actually want to keep you where you are if you want to know the truth. Kevin Hassett is so good. I’m saying, wait a minute. If I move them, these Fed guys, certainly the one we have now, they don’t talk much. I would lose you. It’s a serious concern to me.”

The Fed Chair Race: Reality TV Style

• Nick Timiraos frames the search as an ongoing reality TV saga:
  (02:01) “Think about this as a reality TV show like The Apprentice – Fed Edition. … Trump always keeps us guessing, and this is no different.”
• As of today, Kevin Hassett’s frontrunner status is in doubt, likely leaving Kevin Warsh in “pole position.”
• Trump’s unpredictability makes the outcome highly uncertain.

Other Contenders

• Fed Governor Christopher Waller and BlackRock’s Rick Rieder are still technically in the running, as Trump is known to change his mind spontaneously.
• Decision timing has slipped; an announcement is expected within weeks as Fed Chair Jerome Powell’s term ends in May.

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Political and Market Dynamics

Influence of DOJ Probe and Senate Scrutiny

• Hassett’s close relationship with Trump was initially seen as an advantage, but the DOJ probe into outgoing Fed Chair Powell has heightened sensitivities.
• There’s increased Senate focus on the next chair’s independence—a potential problem for candidates too closely tied to the president.
  Nick Timiraos (03:38):
  “The probe creates a problem, which is nobody likes this on Capitol Hill. They think it underscores the idea that Donald Trump is going to compromise the independence of the Fed.”

Possible Policy Shifts

• Both Kevins (Hassett and Warsh) would likely cut rates in 2026, echoing Trump’s public preferences, but the longer-term direction (2027–28) remains unclear.
  Nick Timiraos (04:34):
  “Most analysts … think that at least in 2026, both men would try to secure a couple more interest rate cuts, since that’s what Donald Trump has made so clear that he wants.”

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Other Major Headlines

Economic Policy—New Housing Plan

• Trump to propose a plan to let Americans use 401(k) funds for down payments on homes, according to Kevin Hassett.
• Details remain unclear as current withdrawal rules differ between retirement account types.
  (05:11)

Geopolitics—Greenland and Tariffs

• Trump threatens tariffs on nations that don’t support his efforts to control Greenland, framing the island as vital to U.S. security.
  President Trump (05:53):
  “I may put a tariff on countries if they don’t go along with Greenland because we need Greenland for national security, so I may do that.”
• European nations respond by sending troops to Greenland, raising tensions.

US-Iran Relations

• U.S. imposes new sanctions on Iranian officials over protest crackdowns; death toll above 2,600 per human rights groups.

US-Venezuela Relations

• CIA Director visits Caracas for first time since Maduro’s ouster, signaling interest in “economic collaboration” while Venezuela’s leadership maintains ties with U.S. adversaries.

Immigration Enforcement Controversy

• Oglala Sioux tribe leaders claim federal agents arrested Native Americans in Minneapolis amid a broader enforcement push; Homeland Security can’t verify.

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Market News & Business Updates

• Treasury yields rise on Trump’s Hassett comments; stocks largely unchanged.
• OpenAI will test ads in ChatGPT, but promises they won’t appear during sensitive topics or affect user privacy and content integrity.
• SCOTUS to review Bayer’s Roundup litigation.
• Mitsubishi acquires U.S. shale gas business for $5.2 billion.

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Fact Check: Can Dinner Really Cost $3?

• Agriculture Secretary Brooke Rollins contends a healthy meal is achievable for $3.
• WSJ reporters Jared Mitovich and Rachel Wolfe put this claim to the test in Boston.

The Experiment

• Pursued USDA dietary guidelines: chicken breast, flour tortillas (couldn’t find corn), broccoli, and cheddar cheese as “one other thing.”
• Spent $26 total, but by portioning, reached a $2.91 meal.
• The meal met nutritional standards, but not expectations for satiety or taste.

Interview Highlights

• Jared Mitovich (10:53): “My one other thing was Vermont cheddar cheese… The ingredients that I purchased to put this $3 meal together ended up totaling me $26. Portioning it out to follow the secretary’s guidance did get us to a total of $2.91. I wouldn’t say it was the most filling meal. I wouldn’t say it was maybe the most flavorful.”
• On practicality:
  “It’s not always realistic if you’re time limited, limited by your geography, how close you are to a store… While [the USDA is] promoting more protein or healthier food, they’re staying cognizant of the fact that they need to make that food more accessible to lower income households in particular.” (11:35)

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Timestamps for Key Segments

• 0:23-1:37 – Trump floats keeping Hassett at NEC; hints about Fed chair race
• 2:01-5:02 – Nick Timiraos analyzes Fed chair drama, Senate’s skepticism, policy implications
• 5:11 – Trump’s retirement fund proposal for housing
• 5:53-6:14 – Trump threatens tariffs over Greenland; European troop response
• 7:40 – Transition to economic news (ads, markets, Supreme Court)
• 10:25-12:07 – $3 dinner experiment with WSJ reporter Jared Mitovich

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Memorable Moments and Quotes

• Nick Timiraos (02:01): “Think about this as a reality TV show like The Apprentice – Fed Edition.”
• President Trump (05:53): “I may put a tariff on countries if they don’t go along with Greenland because we need Greenland for national security…”
• Jared Mitovich (10:53): “I wouldn’t say it was the most filling meal. I wouldn’t say it was maybe the most flavorful. But that wasn’t really our goal.”

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Summary

This episode captures the drama and unpredictability surrounding President Trump’s choice for the next Fed chair, discusses the political and market ramifications, covers key White House policy moves (from housing to Greenland), and critically examines the plausibility of the Administration’s claim about affordable, nutritious meals. Engaging interviews and sharp analysis make this a must-listen for anyone following U.S. economic and political developments as we move into 2026.

Transcript

[A]

AI is here and Chevron is working to power it. We're aiming to develop multi gigawatt power plants near data centers. AI gets the power it needs, communities get the jobs and the grid stays strong. President Trump signals that one candidate for the next Fed chair may be out of the running.

[B]

Think about this as a reality TV show like the Apprentice. Fed Edition. And so today is just another episode in this drama of who Donald Trump is going to pick for probably the most important personnel job for the rest of his term.

[A]

Plus, ads are coming to chat GPT as OpenAI looks for fresh revenue. And Agriculture Secretary Brooke Rollins says you can have a good dinner for $3. Our reporters check that out. It's Friday, January 16th. I'm Alex Osila for the Wall Street Journal. This is the PM edition of what's news, the top headlines and business stories that move the world Today, the contest for the next chair of the Federal Reserve. What you may recall as the battle between the two Kevins is far from over. Today, President Trump signaled that he may want to keep National Economic Council Director Kevin Hassett in his current job. Speaking at a health care event at the White House today, Trump addressed Hassett, who was seated in the front row.

[C]

Were fantastic on television today. I actually want to keep you where you are if you want to know the truth. Kevin Hassett is so good. I'm saying, wait a minute. If I move them, these Fed guys, certainly the one we have now, they don't talk much. I would lose you. It's a serious concern to me.

[A]

Fed Chair Jerome Powell's term is up in May. For more on where the contest to succeed him stands, I'm joined now by WSJ chief economics correspondent Nick Timoros. So, Nick, at certain points towards the end of last year, Hassett seemed like maybe the front runner. Today we hear from Trump, maybe that's not true anymore. Where does the other Kevin in the running, former Fed Governor Kevin Warsh. And how up in the air is this decision?

[B]

Well, think about this as a reality TV show like the Apprentice Fed Edition. And so today is just another episode in this drama of who Donald Trump is going to pick for probably the most important personnel job for the rest of his term. He's been saying he likes the two Kevins, but today he indicated that he thought maybe Kevin Hassett should stay in the White House. And so that naturally would lead everybody to think that it's now the other Kevin, Kevin Warsh, who was a fed governor 15 years ago in the poll position. But just as six weeks ago everybody thought this was a done deal for Kevin Hassett. It's Donald Trump. Things can change. Trump always keeps us guessing, and this is no different.

[A]

Are the other candidates still serious contenders? There was Fed Governor Christopher Waller and BlackRock executive Rick Reeder.

[B]

Look, if you've interviewed with Donald Trump for a job and he hasn't picked anybody for the job, even if you're not the frontrunner, you still have a chance because he could change his mind again. So initially, they had suggested this would be an October, November decision. Most recently, the timing has shifted to the next few weeks. Jay Powell, the current Fed chair, his seat runs until May 15th. You would probably want to do it two or three months ahead of that so that the Senate can have plenty of time to do the confirmation.

[A]

You write that the criminal investigation into Powell has thrown a twist into this search for his replacement. What are the issues that have come up on Capitol Hill?

[B]

So there are a lot of people who today, analysts want to connect the backlash to the probe by the DOJ and to the Fed to Hassett falling out of favor. And the reason for that is pretty simple. Kevin Hassett had been seen as the frontrunner because of his closeness to Trump, that Trump wants someone who's loyal. But the probe creates a problem, which is nobody likes this on Capitol Hill. They think it underscores the idea that Donald Trump is going to compromise the independence of the Fed. And so now there's much more attention being placed by the Senate that's gonna have to confirm the next Fed chair on who this person might be. And so the thinking there would be, maybe it'll be easier to get somebody confirmed if they have a little bit more distance and can hold up the idea that they'll be independent.

[A]

And how does this jostling over who the Fed chair may be affect perceptions of interest rate decisions?

[B]

Well, it doesn't really change too much with either of the two Kevins. Maybe people think Kevin Hassett would be a little bit more likely than Kevin Warsh to push for rate cuts. But most analysts who are watching this think that at least in 2026, both men would try to secure a couple more interest rate cuts, since that's what Donald Trump has made so clear that he wants. The question really then would be about, well, what happens in 2027 and 2028.

[A]

That was WSJ chief economics correspondent Nick Timoros. Thanks, Nick.

[B]

Thanks for.

[A]

In other news from the White House today, President Trump will issue a plan next week for letting Americans tap their 401k retirement accounts for a down payment on a home. That's according to Kevin Hassett, who we were just talking about, who was speaking on Fox Business today. It's the latest affordability proposal floated by the White House. Right now, first time homebuyers who were under age 59 and a half can take up to $10,000 out of their IRAs without a penalty, though there are different rules for other retirement accounts. It's not clear how Trump's new plan would be different from existing options. Turning to foreign affairs, President Trump threatened to impose tariffs on countries that oppose his efforts to take control of Greenland. He discussed it during that same health care event at the White House this morning.

[C]

I may put a tariff on countries if they don't go along with Greenland because we need Greenland for national security, so I may do that.

[A]

Trump said that owning Greenland is vital for America's national security. And the White House hasn't ruled out using force to take the Danish territory. Several European countries have sent small numbers of troops to Greenland this week as part of an effort to deter U.S. interest in the island. And with a decision on military action apparently on pause, the US has turned to economic pressure on Iran. It placed new sanctions on officials it said were responsible for the crackdown on nationwide protests. Human rights groups estimate that the death toll has risen past 2,600 people. The director of the CIA traveled to Caracas yesterday to meet with Acting President Delsey Rodriguez. It's the first known visit by a senior US Official to Venezuela since the ouster of Nicolas Maduro earlier this month. According to a US Official, CIA Director John Ratcliffe told Rodriguez that the Trump administration wants to strengthen its working relationship with the government and discussed potential opportunities for economic collaboration. Rodriguez has cooperated with the Trump administration's demands, but she's kept up the nationalist rhetoric at home. In a speech yesterday, she said Venezuela would continue to do business with U.S. adversaries. And leaders of the Oglala Sioux tribe say that federal agents have arrested several Native American men, all of whom are US Citizens amid the immigration enforcement surge in Minneapolis. A Homeland Security spokesperson said the agency has not been able to verify the claim. Coming up, a piece of chicken, some broccoli, a tortilla, and one other thing for $3. Our reporter did it. That's after the break.

[D]

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[A]

Treasury yields climbed after Trump's comments about Hassett, but stocks were little changed and major US Indexes ended the day slightly lower. The Dow had the biggest drop, falling 0.2%. OpenAI plans to start testing ads in ChatGPT, a big shift in its business strategy as it tries to grow revenue. OpenAI says the ads won't influence what ChatGPT says, and that there won't be ads when the chatbot's dealing with sensitive topics like mental health and politics. The company also says user conversations won't be sold to advertisers. News Corp. The Journal's owner, has a content licensing partnership with OpenAI. Today, the U.S. supreme Court said it would take up an appeal from Bayer about litigation over Roundup, the most widely used weed killer in the world. The company's argued that consumers shouldn't be able to sue it for failing to warn about cancer risks because US Federal regulators have determined that Roundup's main chemical ingredient doesn't require a cancer warning. If Bayer wins, it could help lead to the dismissal of thousands of cases against the company. Litigation that has cost it billions of dollars. And Mitsubishi has agreed to acquire a U.S. shale gas business for $5.2 billion in the Japanese company's biggest deal ever. Mitsubishi's CEO said owning U.S. assets was important for Japan's energy security, as supply has been unstable because of geopolitical events in Venezuela, Iran and Ukraine. And finally, how much does a nutritious dinner cost? According to Agriculture Secretary Brooke Rawlins, it should only be a few bucks. Earlier this week, Rollins said on the News Nation TV network that Americans could actually save money while eating according to the government's new dietary guidelines that emphasize protein. We've run over a thousand simulations. It can cost around $3ameal for a piece of chicken, a piece of broccoli, you know, corn tortilla and one other thing. Two intrepid Journal reporters put this claim to the test and found it was possible to make a $3 dinner, if not necessarily all that delicious. WSJ reporter Jared Mitovich is joining me now from Boston. So, Jared, how did you and your colleague Rachel Wolf go about starting to address this question?

[E]

Yeah, so the first thing we did was think about what is the Agriculture secretary telling us to purchase. We also wanted to make sure we were consulting the Agriculture Department's dietary guidance. Rachel and I decided to hit the two grocery stores we could find closest by. We both tried to find boneless chicken breasts for as cheap as we could. I got Purdue. We both found flour tortillas. We couldn't find corn in either of our stores. And then we found broccoli.

[A]

And what was your one other thing?

[E]

My one other thing was Vermont cheddar cheese tried to stick with New England flavors. The department does advise us to have dairy with our meal. We were trying to make sure we hit all the groups right, vegetables, protein, dairy and grains. So the ingredients that I purchased to put this $3 meal together ended up totaling me $26. Portioning it out to follow the secretary's guidance did get us to a total of $2.91. I wouldn't say it was the most filling meal. I wouldn't say it was maybe the most flavorful. But that wasn't really our goal. It was trying to see what is the meal that the secretary and the new guidance are advising. What does that actually look like and taste like?

[A]

So is this something you're going to do on the regular now?

[E]

Well, I do have some leftovers, so I'm probably going to keep parceling it out and seeing if I can really live the full Brooke Rollins $3 meal lifestyle. But no, I think it's definitely interesting to make sure these claims checked. It was an interesting experiment, but as possible as it is, it's not always realistic. If you're time limited, limited by your geography, how close you are to a storm. And that's something that the secretary mentioned too, that while they're promoting more protein or healthier food, they're staying cognizant of the fact that they need to make that food more accessible to lower income households in particular.

[A]

That was WSJ reporter Jared Mitovich. Thanks, Jared.

[E]

Thank you.

[A]

And that's what's news for this week. Tomorrow you can look out for our weekly markets wrap up, what's news in markets. Then on Sunday, we'll be discussing how China's approach to AI technology is threatening Silicon Valley. That's in what's New Sunday. We're off Monday for Martin Luther King Jr. Day. And we'll be back with our regular show on Tuesday morning. Today's show is produced by Pierre Bienname with supervising producer Tali Arbel. Michael Lavall wrote our theme music. Jessica Fenton is our technical manager. Aisha El Muslib is our development producer. Chris Zinsley is our deputy editor, and Falana Patterson is the Wall Street Journal's head of news audio. I'm Alex Osola. Thanks for listening.