We Need to Talk About Kevin (Warsh)

**Felix Salmon** (0:05)
Hello, and welcome to Slate Money, your guide to the business and finance news of the week. I'm Felix Salmon of Bloomberg with Elizabeth Spiers of the New York Times.

**Elizabeth Spiers** (0:16)
Hello.

**Felix Salmon** (0:16)
With Emily Peck of Axios.

**Emily Peck** (0:18)
Hello, hello.

**Felix Salmon** (0:19)
And we are going to talk about Kevin. It's gonna happen, people. We're gonna talk about Kevin Warsh, who is the incoming chair of the Federal Reserve and how he is going to fare in his new job. We are going to talk about China, where Donald Trump just spent a few days piling around with President Xi and whether that is going to amount to anything, and especially whether that might even help put an end to the Iran War. We are going to talk about semiconductors and why they are all of the new hotness right now. We have a Slate Plus segment on subscriptions, which you can only listen to if you have bought a subscription to Slate Plus. Whoa, it's recursive. It's all coming up on Slate Money.
Okay, so the Senate confirmed Kevin Warsh as the new Fed chair, to no one's surprise. It was held up a little bit until Janine Pirro dropped her case against the Fed, but she's like, I can reopen it at any time. So Jay Powell was like, yeah, in that case, I'm just gonna stick around. So now we're gonna have a pretty unprecedented situation where the replacement Fed chair is going to be in these meetings with Jay Powell, his predecessor. And Powell has all of the years of gravitas and experience and respect and all the rest of it. And Kevin Warsh, not so much. He's coming in brand new, fresh. He's been in zero FOMC meetings in his entire life. So Emily, as the expert here on sort of workplace dynamics, is this gonna be a little bit awkward?

**Emily Peck** (1:59)
I feel like it's almost the least of Kevin's problems. And I was thinking, this is how it works in corporate America now, right? We just talked about Tim Apple, or I guess Tim Cook is his real name, but.

**Felix Salmon** (2:10)
I was thinking that this is the executive chairman role, only even more hands on.

**Emily Peck** (2:15)
And it can be really awkward if you remember what happened at Disney when Bob Iger stopped being the CEO for a minute and was on the board and then just like couldn't stop meddling and actually engineered the ouster of his handpicked successor. So I mean, it can get awkward. I do feel with the Federal Reserve. Yeah, like I said, Kevin has a lot of other problems, but I know the president is not happy about Jerome Powell staying on the board. But I think the board has already signaled that Kevin Warsh is going to have problems irrespective of Jerome Powell and its last vote. There was like an unprecedented number of dissents, making it clear that these people do not want to cut rates. And that is what Warsh has basically been chosen for and what the president wants him to do. So like that tension is already there absent even the Powell thing.

**Elizabeth Spiers** (3:03)
I think Powell's saying on may counterintuitively be good for Warsh because it gives him escape goat when he can't get rates lowered. You can just point to Powell and wind to Trump that Powell is still there and therefore a problem.

**Emily Peck** (3:14)
And Powell gives more credibility to the Federal Reserve by staying there. And that's good for markets more broadly.

**Felix Salmon** (3:21)
Warsh has said that he wants more fights at the FOMC. I think he has to say this because he's going to get them whether he wants them or not. But I do get the vibe from him that for the first time ever in the history of Fed chair press conferences, which are relatively new phenomenon, I think we're going to get the Fed chair coming out and actually directly attacking fellow FOMC voters and members and saying, I wanted to cut rates and they said no, and so that's why they're not cut.

**Elizabeth Spiers** (3:51)
I think Marin would do that. Warsh may be a little more restraint than that.

**Felix Salmon** (3:54)
I think that Warsh is going to treat the FOMC press conferences as though they have an audience of one, which is how all Trump appointees treat all press conferences basically, which is just like, I know there's only one person I'm speaking to here and I want him to know that I'm loyal and I'm doing what he wants.

**Elizabeth Spiers** (4:12)
If the markets respond badly to that though, what do you think he does?