Warren on Kevin Warsh as Trump's Pick for Fed Chair

Joining us now is Democrat from Massachusetts, Senator Elizabeth Warren, along with our very own Emily Wilkins. Welcome to both of you, Emily. Kelly, thank you so much. And Senator Warren, thank you for joining us. Of course, you are the top Democrat right now on the Banking Committee. Talk to me a little bit about some of the conversations you're having with Republicans. Do any of them agree with Senator Tillis that the worst nomination cannot advance until the investigation is over? Every Republican I have spoken with on the Banking Committee admits that Fed independence is crucial. And it's crucial for our economy. It's crucial for American families. If you have a Federal Reserve that is making decisions not based on the economy, but based on politics, then over the long arc that destroys jobs, that drives up prices, that creates chaos, that reduces America's role in the world economy. So everybody understands Fed independence, except Donald Trump doesn't want Fed independence. Donald Trump wants it all Donald Trump's way. So what Tillis has said now, Senator Tillis has said is, look, until you at least stop this bogus attack trying to get rid of Jerome Powell, and I would add the bogus attack trying to get rid of Fed Governor Lisa Cook, we can't even talk about who the next Fed chair should be. Donald Trump has just got to back up on his ideas of taking over the Fed. So at this point, no other Republicans at least saying that they will follow Tillis in that, but you're hearing a lot of concerns about Fed independence. Is there really anything that Walsh can say or do at this point to alleviate some of those concerns? The problem is right now what Walsh has already said and done. Take a look at Walsh's history. He's already been a Fed governor, so you've actually seen him in the secondary role in this. Remember back during the financial crash in 2008? Kevin Walsh was an inflation hawk. That meant he wanted to keep those interest rates high. And even after the crash in 2008 and millions of people are being put out of work, and that's usually the moment when the Fed says, get those interest rates down. Kevin Walsh was the guy out there saying, keep those interest rates high. He's been that way since then, over and over and over, demanding higher interest rates, demanding higher interest rates, right up until this year when Donald Trump gets elected president. Donald Trump makes clear this past spring and summer he only wants a Fed chair who's going to lower interest rates. And suddenly, Kevin is a convert. He wants to see those interest rates come down. And then he goes on Fox News, and after Donald Trump has said, in fact, prices are lower than ever, Kevin Walsh just repeats that, knowing that that's not what the data say. So he has made it pretty clear that if Donald Trump wants a sock puppet, that's what he's willing to be. Senator Warren, it's Kelly here back in the studio. So I just want to clarify, is your issue that you think he doesn't have good judgment on the economy and interest rate policy? My issue is he doesn't have independent judgment. He's coming in saying, he's already said. Remember all those things I used to say, all those things I used to believe year after year after year? Don't believe those anymore. If Donald Trump wants somebody to say prices are really low, even when prices are high, Donald Trump wants someone to say interest rates should go down. Even though I'm the guy who said interest rates should stay up, he's willing to say it to get the job. And that's a real problem. And yet the irony is the markets are reacting as if it's going to be the old Kevin Walsh, the one who's not just telling the president, you know, silver is down 35% today. Maybe. Let's remember one other thing, though, about Kevin Walsh and what we saw in 2008. He was the guy who helped lead the bailout of AIG, got money on the table for Bear Stearns, the guy who helped out his old employer, Morgan Stanley, in other words, and continues to work for those folks, has a father-in-law in the biz. In other words, he's a guy who consistently has delivered for the big boys on Wall Street. Wall Street may think that sounds pretty good. Maybe, you know, even though right now they're kind of concerned about the opposite, but I want to ask you about something different, which I think I know what you're going to say here, but I never know until you ask. It appears that maybe one of the first things that would happen with a Warsh Fed is bank deregulation. Again, if Powell, it depends a lot on the personnel. If they loosen the supplemental leverage ratio, maybe banks don't have to hold capital, they could buy more treasuries, that might bring down long-term interest rates. Would you support something like that in order to kind of bring, use some other kind of way to bring down long-term interest rates? Because it seems like right now there's no way to get them down. So let me just reframe your question a little bit. At a time when everybody who follows the markets understands that the amount of money that's pouring in on private lending that the Fed and the other economists can't get a good handle on what's happening out there, at a time when AI is loading up on debt at levels that are just literally breathtaking, at a time when crypto is making its way into our banking system, or let me just repeat that, at a time when risk is going up, risk is going up, risk is going up, do I think that deregulation is a good idea? No, I don't. Risk is building up in the economy. And I think the efforts, this is once again, short-term, banks are going to love it. Wall Street will love it very short-term. And then when it all comes crashing down, they will turn around to American families and say, sorry, once again, you're going to have to bail us out. AI has already floated that. We already have how many too-big-to-fail banks. And crypto would love to be too-big-to-fail. That's the sort of thing that is an economy that just keeps taking money out of people's pockets. And that's why the theme of the first year of Trump's presidency has basically been, great if you're already a billionaire, and really sucks for American families. Senator, I just want to also talk about just the math of getting Walsh confirmed. Obviously, if Tillis remains a no, he can block it on the banking committee. But once that's there, Republicans do seem to have the votes to move any nominee through over Democratic opposition. So what's the playbook here for Democrats? Look, it's the same playbook as it has been for an entire year of the Trump presidency. And that is to say to Republicans, grow a spine, do what you know is right. You know the problems that you are building into our economy. You know the problems we've got with ICE right now. You know the problems of invading Greenland. You know these problems. Just speak up. That's all we're asking for. Put some curbs in place. We have the power here in the United States Senate to stop the craziness around tariffs that are up and down and sideways. We have the power to tell ICE to do crazy things like follow the Constitution. We have the power just to enforce the law. And so far, Republicans have said their first goal, their last goal, and every goal in between for Republicans in the United States Senate has been to do whatever Donald Trump wants them to do. Well, I did want to touch on the ICE piece that you brought up. We are obviously less than 12 hours from the beginning of a potential federal shutdown. We still don't have a sense on when the Senate is going to vote on the agreement that they've put forward. But taking a step beyond that, you then have two weeks to come together with some of these potential reforms on ICE. Leader Schumer laid out a number of them yesterday. Some of your Republican colleagues are saying things like no masks, go a little bit too far. But they seem open for things such as wearing body cameras or allowing state and federal, requiring that federal investigators have to work with states and localities. From the conversations you've had with your Republican colleagues, how likely do you think it is that there can be an agreement breached in the next two weeks? So mostly what Democrats are asking for is just make the ICE agents comply with the same kind of rules and regulations as every other law enforcement officer in America. You know, if our police in Boston and Springfield, Massachusetts, if police in Albuquerque, New Mexico have to be able to show their faces, everybody knows what their names are. If there's an officer involved shooting, you have an independent investigation and cooperation among all agencies involved. I mean, that's just straightforward stuff. Oh, yeah. And the one about you don't get to kick down people's front doors without having a warrant, a judicial warrant. It's saying make the same rules apply to ICE. ICE is not some special secret police that gets to rove around the country and claim that they own the streets and they get to push down citizens and shoot them in cold blood out in the street. We're just trying to get some constraints over ICE. Now, if the question is, are those constraints reasonable? I think nearly all the Republicans agree. But once again, will Donald Trump let them do that? And we'll be following that very closely. Senator Warren, thank you so much for your time today.