Trump Expected to Nominate Kevin Warsh as Fed Chair

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Luke Vargas (0:33)

President Trump prepares to tap Kevin Warsh as his pick for Fed chair. Plus, the White House and Democrats close in on a deal to avoid a government shutdown, and Apple shares tread water as investors look past a bumper earnings beat to a looming chip shortage.

Rolf Winkler (0:49)

That tells you something about people potentially concerned with these cost pressures that may be coming down the line for the components that go into the iPhone that could hit Apple's margins.

Luke Vargas (1:00)

It's Friday, January 30th. I'm Luke Vargas 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. The pick is in. President Trump is expected to nominate Kevin Warsh to lead the Federal Reserve today, ending months of deliberations that had seen a number of candidates effectively auditioning for the job. So what would a Warsh-led Fed look like? Here's Journal Finance Editor Alex Frangos.

Alex Frangos (1:32)

Warsh is very much the candidate that Wall Street and Markets probably are most comfortable with. He's a former Fed governor. He has deep ties on Wall Street. But in recent years, he's become more of a Trumpian economic thinker. He's been very pro-rate cut during this process, something that will have been pleasing to Trump's ears. But the question is, which Kevin Warsh will show up at the Fed? Is it going to be the old Kevin Warsh, who was someone who wasn't afraid to go against the Fed consensus, or the one who more recently sings the same tune as Trump, in terms of pro-tariffs and wanting rate cuts, even while others think there's still inflationary pressure in the economy, and therefore you shouldn't. So I think Trump has to worry a little bit that he puts the guy in and then he goes against him. And that's been his big reservation. But clearly he got comfortable with Warsh, and that's the way it's going.

Luke Vargas (2:18)

The White House and Warsh didn't immediately respond to requests for comment. Jerome Powell's term as current Fed chair ends in May.

We are exclusively reporting that OpenAI is targeting Q4 for its blockbuster IPO. Journal Venture Capital reporter Berber Jin says that marks an acceleration of the company's original listing plans as rival Anthropic also eyes a potential IPO by year's end.

Berber Jin (2:47)

OpenAI's calculus is that whoever goes out first will definitely benefit from a lot of the attention that will come from being the first generative AI company to be a public company, and will be able to access a lot of the public money that is basically just waiting to be put into this new wave of Gen.AI companies. You have to remember that these businesses lose a lot of money. It costs a lot to build next generation models and to also power chat bots like ChatGPT and Claude. And there's going to be a limit to how much these companies can keep raising in the private market.

Luke Vargas (3:26)

Anthropic expects to break even for the first time in 2028, according to projections shared with investors last year, two years earlier than OpenAI. News Corp, owner of the Wall Street Journal, has a content licensing partnership with OpenAI. Apple posted record quarterly sales yesterday after the market closed, with iPhone revenue jumping 23% from a year earlier to more than $85 billion. That beats Wall Street expectations, but as tech reporter Rolf Winkler told me, it didn't generate much of a pop for Apple's shares in off-hours trading.

Rolf Winkler (4:01)

What's a company got to do to impress investors is one thing you wonder about this earnings. The stock is flat on this report, which was gargantuan. As the CFO put it to me, the company increased its revenue this quarter versus the year ago by $20 billion. People are upgrading to this new iPhone 17 in crazy numbers. For all the hand-wringing about Apple is behind in AI and they don't have this, they don't have that, what this quarter just proved is doesn't matter. People keep buying iPhones. No one's going to buy an Android device because it's got some killer AI feature that is must have and yet the stock's not reacting.