Trump Weighs Naming Next Fed Chair Early to Undermine Powell

Summary

WSJ What's News: Trump Weighs Naming Next Fed Chair Early to Undermine Powell Release Date: June 26, 2025

The latest episode of WSJ's "What's News" delves into a spectrum of pressing issues affecting global markets, politics, and public health. Hosted by Luke Vargas, the episode delivers in-depth analysis on President Donald Trump's potential early nomination of a successor to Federal Reserve Chair Jerome Powell, the implications of shifting pharmaceutical trade dynamics with Ireland, and significant movements in the technology sector, particularly concerning Nvidia's expansion into cloud computing. Additionally, the podcast touches upon changes in vaccine advisory practices in the United States and recent developments in the energy sector.

---

1. Trump’s Potential Early Nomination of Fed Chair Jerome Powell

Strategic Undermining of Powell (00:59)

The episode opens with a Wall Street Journal exclusive about President Donald Trump's consideration of an early nomination for the next Federal Reserve Chair, a strategic move aimed at undermining current chair Jerome Powell. Finance Editor Alex Frankos explains that Powell has faced mounting pressure due to the Federal Reserve's cautious approach to cutting interest rates.

Alex Frankos (01:32): "Powell has come under increasing pressure over the central bank's take-it-slow approach to cutting interest rates."

Presidential Pressure and Market Implications (01:34)

Trump is pushing Powell and the Fed Board to implement rate cuts sooner than planned, arguing that the economy can handle higher rates and inflation remains too high. This contention has led to Trump publicly criticizing Powell, thereby intensifying the call for immediate monetary policy adjustments.

Unknown Speaker (01:36): "Trump has been railing against him and calling him names and really putting pressure on the Fed to cut rates sooner."

Potential Candidates and Market Uncertainty (02:03)

Several names are being considered for the position, including former Fed Governor Kevin Warsh, National Economic Council Director Kevin Hassett, and Treasury Secretary Scott Besant. Chelsea Delaney highlights that naming a successor nearly a year before Powell's term ends is unprecedented and could lead to market unpredictability.

Chelsea Delaney (02:05): "Naming someone 10 or 11 months before the end of Powell's term, which is next May, would create this kind of backseat driver effect."

This early nomination can signal potential policy shifts to the markets, possibly leading to abrupt changes in fiscal strategies and making the economic landscape more volatile.

---

2. Pharmaceutical Trade Dynamics: Ireland’s Economic Influence and U.S. Tariffs

Ireland’s Dominance in Pharma Exports (05:42)

Chelsea Delaney reports on the significant surge in U.S. imports of pharmaceutical ingredients from Ireland, particularly those used in obesity and diabetes drugs like Mountjaro and Wegovy. This influx has contributed substantially to the U.S. trade deficit and has caught President Trump's attention regarding potential tariff implementations.

Alex Frankos (06:23): "Ireland has sent about $36 billion worth of those drugs to the US this year. All of that has flown on planes, and almost all of that has gone to Indiana, where Eli Lilly is based."

Economic Growth and Vulnerability (07:08)

Ireland's economy experienced nearly 10% growth in the first quarter, largely driven by its role as a production hub for major U.S. pharmaceutical and tech companies. However, this growth makes Ireland's economy vulnerable to U.S. tariffs, as Trump aims to repatriate manufacturing and reduce dependence on foreign production.

Alex Frankos (07:18): "Ireland's economy grew almost 10% in the first quarter... It has this very special role in the global operations of a lot of US Companies."

Tariff Implications and Industry Response (08:16)

The White House is contemplating tariffs on pharmaceutical products and their ingredients after a Section 232 investigation. Companies like Eli Lilly and Merck are considering rebalancing their production strategies in response to potential tariffs, which could undermine the cost advantages currently enjoyed by manufacturing in Ireland.

Alex Frankos (08:19): "This could definitely undercut the logic of that [offshore production]."

While these companies have deep-rooted operations in Ireland, the looming tariffs pose a significant threat to their cost structures and long-term strategies.

---

3. Vaccine Advisory Reforms in the U.S.

New Vaccine Panel Formation (02:44)

The podcast shifts to public health, highlighting the establishment of a new vaccine advisory committee under Health Secretary Robert F. Kennedy Jr. This panel is tasked with reexamining vaccine recommendations for children and teenagers, focusing on hepatitis B and MMR (measles, mumps, and rubella) vaccines.

Dr. Martin Kulldorf (04:15): "Secretary Kennedy has given this committee a clear mandate to use evidence-based medicine when making vaccine recommendations."

Addressing Vaccine Hesitancy (04:43)

Dr. Kulldorf emphasizes the importance of nuanced vaccine evaluations, moving away from polarized views that consider vaccines as entirely safe or dangerous. The panel aims to provide balanced, evidence-based recommendations to foster public trust and informed decision-making.

Dr. Martin Kulldorf (04:15): "Vaccines are not all good or bad. If you think that all vaccines are safe and effective and want them all, or if you think that all vaccines are dangerous and don't want any of them, then you don't have much use for us."

The panel is set to review concerns such as preservatives allegedly linked to autism, reflecting ongoing debates between public health officials and anti-vaccine activists.

---

4. Technology Sector Developments: Nvidia’s Expansion into Cloud Computing

Nvidia’s Market Surge and Strategic Moves (11:23)

Asa Fitch reports on Nvidia's remarkable growth, with its shares reaching a record high and surpassing Microsoft as the largest company by market capitalization. Nvidia is leveraging its dominance in AI chip production to expand into cloud computing, challenging established giants like Amazon, Microsoft, and Google.

Asa Fitch (11:23): "For Nvidia, it's a fertile area for them to grow into. They launched a cloud computing business a couple of years ago called DGX Cloud."

Competitive Landscape and Future Prospects (11:57)

Nvidia is staking its claim in cloud services by investing in AI-specialized companies such as Corowe and Lambda. This strategic positioning threatens the profitability of existing cloud leaders, who may face increased competition and potentially reduced margins.

Asa Fitch (11:57): "Nvidia is starting to ruffle feathers with Microsoft and fellow tech giants Amazon and Google by moving into cloud computing."

Nvidia's aggressive expansion into cloud computing not only diversifies its revenue streams but also positions the company as a formidable competitor in an industry characterized by high profit margins and established player dominance.

---

5. Energy Sector Update: Shell and BP Takeover Talks Denied

Shell Denies Takeover Talks with BP (09:38)

In the energy sector, Shell has publicly denied involvement in takeover negotiations with its UK rival, BP. This statement follows a Wall Street Journal report suggesting that Shell was in early-stage discussions to possibly acquire BP. Shell clarified that it's now bound by UK takeover regulations, restricting any potential offer for BP unless mutually agreed upon by both companies' boards.

---

6. Aerospace Dynamics: Jeff Bezos and Elon Musk’s Space Ventures

Blue Origin’s Strategic Discussions with the White House (09:38)

The episode also explores the evolving dynamics between aerospace magnates Jeff Bezos and Elon Musk. Blue Origin, founded by Bezos, has engaged in discussions with President Trump and his administration, seeking increased government contracts. This move comes amid Musk's SpaceX facing potential setbacks, including the rescinding of a NASA nomination and possible cancellation of government contracts as Trump considers cost-saving measures.

Luke Vargas (10:08): "We are exclusively reporting that the founder of space company Blue Origin has spoken to Trump at least twice this month."

These developments suggest a potential shift in the competitive landscape of the space industry, with Blue Origin positioning itself to capitalize on any changes resulting from Musk's strained relationship with the current administration.

---

7. Market Implications and Future Outlook

The episode concludes by underscoring the interconnectedness of these diverse sectors and their collective impact on global markets. From monetary policy shifts and international trade tensions to technological advancements and public health reforms, each topic presents significant implications for investors, policymakers, and the broader economy.

Closing Remarks

Produced by Daniel Bach and Kate Bullivant, with supervising producer Sandra Kilhoff, Luke Vargas wraps up the episode by reiterating the importance of staying informed on these critical developments. The comprehensive coverage ensures listeners are well-equipped to navigate the complexities of today's rapidly changing news landscape.

---

Notable Quotes:

• Alex Frankos (01:32): "Powell has come under increasing pressure over the central bank's take-it-slow approach to cutting interest rates."
• Chelsea Delaney (02:05): "Naming someone 10 or 11 months before the end of Powell's term, which is next May, would create this kind of backseat driver effect."
• Dr. Martin Kulldorf (04:15): "Vaccines are not all good or bad. If you think that all vaccines are safe and effective and want them all, or if you think that all vaccines are dangerous and don't want any of them, then you don't have much use for us."
• Asa Fitch (11:23): "For Nvidia, it's a fertile area for them to grow into. They launched a cloud computing business a couple of years ago called DGX Cloud."

Timestamp Highlights:

• 00:59: Introduction to Trump’s early Fed Chair nomination.
• 05:42: Detailed analysis of Ireland’s pharmaceutical exports and potential U.S. tariffs.
• 11:23: Nvidia’s expansion into cloud computing and its market impact.

---

This comprehensive summary encapsulates the multifaceted discussions of the WSJ "What's News" podcast, providing listeners with a clear and detailed overview of the episode's key points and insights.

Transcript

[Reba McEntire]

Isn't home where we all want to be? Reba here for realtor.com the Pro's number one most trusted app. Finding a home is like dating. You're searching for the one with over 500,000 new listings every month. You can find the one today, download the realtor.com app cause you're nearly home. Make it real with realtor.com Pro's number.

[Unknown]

One most trusted app based on August 2024 proprietary survey. Over 500,000 new listings every month based on average new for sale and rental listings. February 2024 through January 2025.

[Luke Vargas]

The dollar sags on news that President Trump could name his pick to replace Fed Chair Jerome Powell almost a year before his term ends. Plus, a new vaccine panel starts reexamining shot advice for kids. And Ireland's pharma dominance puts it in Trump's tariff crosshairs.

[Alex Frankos]

The reason they've been making these drugs ingredients in Ireland is because it's been cheap to do so. This could definitely undercut the logic of that.

[Luke Vargas]

It's Thursday, June 26th. I'm Luke Varg for the Wall Street Journal, and here is the AM Edition of what's news, the top headlines and business stories moving your world today. We begin with a Journal exclusive this morning as we have learned that Donald Trump is considering naming the next Fed chair early in a bid to undermine current chair Jerome Powell. Finance editor Alex Frankos told me that Powell has come under increasing pressure over the central bank's take it slow approach to cutting interest rates.

[Unknown]

Basically, Trump wants Powell and the Fed.

[Luke Vargas]

Board to cut rates and wants them.

[Unknown]

To do it now. And Powell's basically saying that's not the right thing to do. Inflation's still too high. The economy is still strong enough to withstand the higher rates. So Trump has been railing against him and calling him names and really putting pressure on the Fed to cut rates sooner.

[Luke Vargas]

Alex, According to our reporting, some of the names being considered here are former Fed Governor Kevin Warsh, National Economic Council Director Kevin Hassett, even the treasury secretary Scott Besant.

[Chelsea Delaney]

There are a other names as well.

[Luke Vargas]

All of this 11 months before Powell's term is set to end.

[Chelsea Delaney]

What impact could that have on markets?

[Unknown]

Usually the president will name their Fed pick three or four months before the end of the term. Naming someone 10 or 11 months before the end of Powell's term, which is next May, would create this kind of backseat driver effect where you have the person who's going to be in charge of policy coming and that person can signal to the markets what they intend to do. If they're cutting rates or not cutting rates, the new person might just reverse course. And so the market is going to have to think there's not going to be a lot of predictability here. The change could be abrupt and then you could have this big overlap and makes a lame duck even lamer.

[Luke Vargas]

That was Finance editor Alex Frankos. The head of the UN's Atomic Energy Agency, says that US and Israeli strikes against Iran's three main nuclear sites caused enormous damage and that any centrifuges installed at the underground Fordow site at the time of the attack are no longer operational. A day after Iran's parliament passed a law ending cooperation with the International Atomic Energy Agency, its chief, Rafael Grossi, expressed concern that Iran's refusal to work with it could unleash a new crisis, saying he had yet to hear back from Iran's foreign minister about whether it could resume inspections within the country. Meanwhile, back in the U.S. defense Secretary Pete Hegseth will hold a rare news conference at the Pentagon this morning to address reports that an intel assessment found that US Strikes on Iran had mere delayed the country's nuclear ambitions by a few months. And a panel of vaccine advisers selected by Health Secretary Robert F. Kennedy Jr. Is planning to reexamine which vaccines are given to kids and teens and the schedule of shots. Speaking at the first meeting of the Advisory Committee on Immunization Practices since Kennedy dismissed all 17 of its previous members, new chairman Dr. Martin Kulldorf said that the group might look at vaccines for hepatitis B and for measles, mumps and rubella, or mmr, and he praised the panel's new direction.

[Dr. Martin Kulldorf]

Secretary Kennedy has given this committee a clear mandate to use evidence based medicine when making vaccine recommendations, and that is what we will do. Vaccines are not all good or bad. If you think that all vaccines are safe and effective and want them all, or if you think that all vaccines are dangerous and don't want any of them, then you don't have much use for us.

[Luke Vargas]

Today, the panel is set to hear a presentation on a preservative that anti vaccine activists often blame for autism. From a nurse practitioner who works at the anti vaccine nonprofit previously helmed by Kennedy. Coming up with the end of Trump's 90 day tariff pause looming, economic partners like the EU are still working on a trade deal. But one country's surging trade deficit with the US could complicate matters. We've got that story and more after the break.

[Pete Hegseth]

This message comes from Viking, committed to exploring the world in comfort. Journey through the heart of Europe on an elegant Viking longship with thoughtful service, destination focused dining and cultural enrichment on board and on shore. And every Viking voyage is all inclusive with no children and no casinos. Discover more at Viking.

[Luke Vargas]

A surge of U.S. imports weighing no more than a handful of cars is having a massive impact on the US Trade deficit. We're not talking here about semiconductors, though that would be a good guess. Rather, ingredients for weight loss drugs from Ireland, tens of billions of dollars of which have been flown into the US this year in a trend that has put the country on President Trump's radar and could make it the target of coming tariffs. Reporter Chelsea Delaney this story. Chelsea, we're going to talk tariffs. We're going to talk trade policy in just a minute. But first, let's just talk about the details in your latest reporting about this pharmaceutical trade. It's pretty vivid stuff. Take us into it.

[Alex Frankos]

Yeah, so there's been this global rush to get products to the US before tariffs, but Ireland really stands out. It's sent more to the US this year for almost the entirety of 2024. And that really comes down to one single category. And that category is a type of horm hormones that go into obesity and diabetes drugs like Mountjaro and Zepbound. And so what we know is that Ireland has sent about $36 billion worth of those drugs to the US this year. All of that has flown on planes. And even more interestingly, almost all of that has gone to one single state, Indiana, which is where Eli Lilly, the company that makes Mountjaro and Zepbound, is based on.

[Luke Vargas]

And Chelsea. It's powering a huge share of Ireland's.

[Chelsea Delaney]

Trade, its overall economic growth.

[Luke Vargas]

Give us some statistics there.

[Chelsea Delaney]

But also, just why is this happening.

[Luke Vargas]

In Ireland in the first place?

[Alex Frankos]

Yeah, it's driven some kind of crazy economic swings this year. Ireland's economy grew almost 10% in the first quarter compared to the end of 2024. You don't see numbers like that every day. It's boosted industrial production. So Ireland has really been benefiting a lot from this. And that has a lot to do with the role Ireland has. It has this very special role in the global operations of a lot of US Companies. It's a huge production hub for a lot of pharmaceutical companies. It's where Botox is made. It's where Merck's cancer drug Keytruda, the best selling drug in the world, is made. And it's because Ireland has generally pretty favorable tax policies in comparison to the U.S. so you get a lot of U.S. companies also, tech companies have set up their big operations overseas there. And so for Ireland, this is brought in a lot of money. It's benefited their economy, but it also has made them extremely vulnerable to Trump's tariffs and his efforts to bring home U.S. companies.

[Luke Vargas]

Yeah.

[Chelsea Delaney]

Tell us about the options that the.

[Luke Vargas]

White House is weighing here.

[Alex Frankos]

So Trump has said that he wants to put tariffs on the pharmaceutical industry. He said those are likely to come very soon. That's going to come after what's called a Section 232 investigation that's going on right now. It's expected to result in tariffs both on pharmaceutical products that are being imported and ingredients like this hormone that goes into the obesity drugs. And so a lot of these pharmaceutical companies like Lilly Johnson and Johnson Merck have already said they're going to reassure. Some production tariffs likely will give them more reason to do that. The reason they've been making these drugs ingredients in Ireland is because it's been cheap to do so. This could definitely undercut the logic of that.

[Chelsea Delaney]

Got it. I'm mixing metaphors and expressions here, but it's sort of maybe from the Irish perspective, like make hay or make pharmaceuticals while the sun is shining. But it sounds like this industry may, I don't know, heading overseas pretty soon.

[Alex Frankos]

A lot of these companies have been in Ireland for decades. They've spent billions of dollars building out these operations. They're likely not going to uproot themselves overnight. But the fact that Ireland's trade deficit with the US has just exploded in part because of these obesity drugs, it does put this very unwelcome spotlight on Ireland right now.

[Chelsea Delaney]

Reporter Chelsea Delaney, thank you so much.

[Luke Vargas]

As always for the update.

[Dr. Martin Kulldorf]

Thank you.

[Luke Vargas]

Oil giant Shell is denying that it's in takeover talks with UK Rival bp. This morning's statement comes after a Journal report Wednesday that Shell was holding early stage talks to acquire bp. Shell also said that it's now bound by UK takeover rules, meaning it can't make an offer for its peer in the next six months unless it does so with the agreement of BP's board if a rival suitor emerges or if there's a mater circumstances. A BP spokesman declined to comment. Could Elon Musk's recent split with President Trump create a business opportunity for Jeff Bezos? We are exclusively reporting that the founder of space company Blue Origin has spoken to Trump at least twice this month, according to people familiar with the matter. And that in at least some of the conversations with the president and his staff, Bezos and other company executives appealed for more government contracts. Blue Origin has Long trailed Musk's SpaceX as NASA's dominant contractor, but there are signs that dynamic could be disrupted. In May, Trump rescinded his nomination for a Musk backed nominee for the head of NASA, and earlier this month mused about canceling Musk's government contracts as a cost saving move. The White House and Blue Origin declined to comment, While Musk and SpaceX didn't immediately respond to requests for comment. And finally, shares of Nvidia closed trading yesterday at a record high, with the chip maker also reclaiming the title from Microsoft of largest company by market size, as the Journal's Asa Fitch reports. That comes as Nvidia is starting to ruffle feathers with Microsoft and fellow tech giants Amazon and Google by moving into cloud computing.

[Asa Fitch]

It's an area where profit margins are usually quite large and the big dominant players are making a lot of money. So for Nvidia, it's a fertile area for them to grow into. They launched a cloud computing business a couple of years ago called DGX Cloud. That business is still relatively small in the grand scheme of things, but it's growing. Nvidia has also invested in new cloud companies that specialize in artificial intelligence computing, the likes of Corowe, which is now listed on the Nasdaq, and another company called Lambda.

[Luke Vargas]

While new cloud competition would be worrying for Amazon given its high margins, and for Microsoft and Google, given there are already macro concerns about IT spending trends, Nvidia is also on the defensive after being the benefit beneficiary of deals with cloud companies that see most of them rent its AI chips, helping Nvidia secure an estimated 80% market share in that business. All of the cloud giants are developing their own custom AI chips. You come for us, we'll come for you. And that's it for what's news for this Thursday morning. Today's show was produced by Daniel Bach and Kate Bullivant. Our supervising producer is Sandra Kilhoff and I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show. Until then, thanks for listening.

[Reba McEntire]

Isn't home where we all want to be? Reba here for realtor.com, the Pro's number one most trusted app, Finding a home is like dating. You're searching for the one. With over 500,000 new listings every month. You can find the one today, download the realtor.com app cause you're nearly home. Make it real with realtor.

[Unknown]

Com pros number one most trusted app based on August 2024 proprietary survey over 500,000 new listings every month based on average new for sale and rental listings February 2024 through January 2025.