Warsh Considers Fewer Fed Meetings; Anthropic AI Models Hack Three Organizations

**SPEAKER_1** (0:02)
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This is Bloomberg Businessweek Daily, reporting from the magazine that helps global leaders stay ahead, with insight on the people, companies, and trends shaping today's complex economy, plus global business, finance, and tech news as it happens. The Bloomberg Businessweek Daily podcast with Carol Massar and Tim Stenovec on Bloomberg Radio.

**Tim Stenovec** (0:32)
Coming from the New York Times, the Federal Reserve, or rather, Kevin Warsh is considering reducing the number of regularly scheduled meetings at which the Fed sets interest rates. This from the New York Times. I want to bring in Kate Davidson, Managing Editor of US Economic Policy. She joins us from Washington, DC. Kate, this would be a very significant shift for the Federal Reserve.

**Kate Davidson** (0:53)
Yeah, this would be, as the Times says, a seismic change. It would certainly be the biggest change that Kevin Warsh has contemplated or undertaken. We've seen some, what seemed at the time, big changes, shortening quite a bit the Fed's post-meeting policy statement. And he has suggested that he could reduce the number of press conferences that he delivers after Fed decisions. But reducing the number of meetings would be a very large break with precedent and I think certainly would rattle, could potentially rattle markets and leave them, I suppose, guessing more about what the Fed is is going to do next, which we saw this week. They don't really like not knowing where the Fed is heading.

**Carol Massar** (1:32)
Yeah. I mean, is this a result of the meeting not going so well?
Or at least the interpretation? I mean, the timing is kind of interesting here, Kate.

**Kate Davidson** (1:43)
I mean, I really couldn't speculate. We obviously are asking all of our sources to help us confirm this. According to the report, Kevin Warsh brought it up at the meeting this week, and they reported he suggested this could be a decision that's made before their next gathering in September. That would be surprising, a decision that consequential to be made that quickly. In other areas when Warsh was asked or has been asked about potential changes, he's kind of signaled that he's going to leave a lot of the discussion on these bigger questions up to the five task forces that he's assembled to look at different areas of how the Fed conducts policy.
So, I don't know, but it would be, it would certainly seem to be a very quick decision if it was made before the next Fed meeting.

**Tim Stenovec** (2:28)
Kate, would it make the Fed less nimble to react quickly? Because they can just do emergency rate moves. We've seen that in recent history. They don't have to meet to do this.

**Kate Davidson** (2:38)
That's true. Yeah. I mean, I think they would probably argue that it doesn't anytime they need to respond to changes in the economy in between their meetings, they can hold emergency meetings and they've done that.

**Carol Massar** (2:50)
That's a really good point. I mean, I do remember when we used to get surprise moves. I think about that and it sounded like, like, oh, remember the days.

**Tim Stenovec** (2:55)
But it wasn't even that long ago. During COVID, we got it.

**Carol Massar** (2:58)
That's true. But I mean, like, and it really would have an impact on the markets, right? And I do feel like, I mean, I wonder what's next. Does he limit the Fed members from speaking? Because they speak a lot. Like, if you want to limit communication, or is that a useful tool in kind of getting some of the message out or differing points of views?

**Kate Davidson** (3:18)
Sure. The communications piece of it, there has been a really big question. We talked to a lot of people because Warsh, of course, had made these comments and floated these ideas even before he was confirmed as the chairman. And most people seem to agree or believe that you can't really restrict other policymakers from getting out there and speaking. So I think that we expect that they will continue to. Now, it seems like there's been a little bit of... It's been a little bit quiet lately. That does tend to happen in the summertime. So it's a little early to tell whether there has been any kind of influence. I mean, there could be a little bit of a grace period or deferring a bit for some of them to the new chairman. But I don't think... We would be very surprised if we saw a big change in, as you say, maybe the number of public remarks from other officials.

**Carol Massar** (4:02)
Things change. Things change.

**Tim Stenovec** (4:04)