Trump Names Miran to Fill Seat on Federal Reserve Board

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1:55Michigan, pure opportunity. Seize your opportunity at michiganbusiness.org. Bloomberg Audio Studios, podcasts, radio, news. This is Bloomberg Business Week 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 Business Week Daily Podcast with Carol Masser and Tim Stenevek on Bloomberg Radio. The headlines that cross, there's been a lot coming when it comes to the Fed as of late. White House officials are preparing for President Trump to nominate Council of Economic Advisers Chairman Stephen Myron to serve as a Fed governor.

2:45This is according to a person familiar with the search. which you might recall that the president did say yesterday he would likely nominate a temporary governor to fill the seat rather than a successor in waiting for Fed Chair Jay Powell. That seat to be filled is from Fed Governor Adriana Kugler, who plans to leave that spot on Friday. All right, running into the studio because the Fed headlines continues, our own Michael McKee, who covers the Fed in international policy and the international economy. Are we surprised with this? uh no i'm surprised about he being chosen not necessarily uh first of all he's a top epic economic advisor to donald trump so he's there in the mix yeah and uh the president has said he wants a temporary replacement there so it does make some sense because he's been recently confirmed He was confirmed in March as CEA chair by the Senate.

3:42So he's got his paperwork in. There's not going to be anything he needs to add to it. And he's probably done all the financial divestitures he would need to do. The background check is done, basically. The background check is done. They've looked at his TikTok and everything else. And so they could move fairly quickly. Now, the question is, what's the Senate calendar like? the senate doesn't come back till september 2nd the next fed meeting is september 17th there are 10 legislative days in there that they could move on this and they need to get the paperwork in from the president they need to go through the hearing process which they could rocket through but then they need to take it to the floor and the senate is going to be busy with a lot of other things including the fact that there might be a government shutdown because there's no budget at this point.

4:34So it's a long shot maybe to get him in by September 17th. But the thing to keep in mind is the way Fed officials have been talking the last 48 hours, it may not matter because right now, given the economic data, they're sort of teeing up. September 17th, because that's the next FOMC meeting. They're teeing up a rate cut then, I think, already. If the data continue the way it's going now with a relatively weak August payrolls report. And we get CPI, PPI next week. And then at the end of the month, the PCE. And if those show inflation rising a bit, but not too much, then you'd have probably have a rate cut in train.

5:15So we're talking about Myron here and how much impact could really happen here, given the fact that Kugler's term was set to expire at the end of January, 2026. Yeah. Part of this is going to be how the president presents this. If Myron is going to be a long-term member of the Fed, then people will pay a lot more attention. If he's just holding a seat for four months and the president's going to appoint somebody else, then there's no reason to pay any attention to him because the Fed's going to be doing what the president wants anyway, probably. And so he's not going to add anything to the debate.

5:48But he has been a Fed critic. He thinks that they have been too slow. He is also, remember, the author of the Mar-a-Lago accord idea that would see the U.S. try to weaken its dollar and get people to give up their treasuries, foreign countries to give up their treasuries. Remember when we talked about that, we couldn't stop talking about it? Yeah. So there's a lot there that the markets could focus on if they wanted to. And as I say, it would depend on how long he's going to be on the Fed, what kind of influence he would have. If he's done by January and the Fed's cutting rates, it's just done.

6:30President Trump posting on social, it is my great honor to announce that I've chosen Dr. Stephen Myron, current chair of the Council of Economic Advisors, to serve in the just vacated seat on the Federal Reserve Board until January 31st, 2026. In the meantime, we will continue to search for a permanent replacement. Stephen has a PhD in economics from Harvard University and serve a distinction in my first administration. He has been with me from the beginning of my second term and his expertise in the world of economics is unparalleled. He will do an outstanding job. Congratulations, Stephen. Well, there's your answer.

7:03Well, there's your answer. Yeah, we don't have to make it speculation anymore. It's not an if. Now, the important thing to remember is you can't do a recess appointment to the Fed. So he does have to be confirmed. They do will have to go through the process. He will have to resign as the CEA chair. And if he doesn't stay out at the Fed and they want him to go back, then he's got to be reconfirmed. So it's a bit of a pain in the butt for him to go back to the CEA because the Federal Reserve Act requires that a member of the Fed board have no other job. So this isn't going to be like a Sean Duffy or a Marco Rubio thing where the president just gives him job after job because he hasn't got somebody else to fill them.

7:45So we shouldn't make the assumption that he'll go back to that. I would think not. I mean, I wouldn't want to take a job for four months. And I don't I my guess is that the pay level is about the same. But, you know, go to go through the Senate confirmation process for four months, If that, if you got four months and then to have to go back and do it for the CEA again. See, if the president decides to nominate him for another 14 year term, they could put him through both times at pretty much at the same time. OK. Or, you know, he wouldn't have to really do much to get the second the second confirmation.

8:31They just do that in the background. I mean, does this bring a certain layer of certainty here? I'm looking at markets that are pairing just a touch here. But I mean, of course, we still have the idea of who's going to be Fed chair potentially. Yes. But the story that we reported today, and again, this is Solea Mosin's scoops, that Chris Waller would be selected. It fits in the sense that you don't know whether Powell's going to leave the board. Now, choosing Waller might help Powell leave the board because he would feel better about the way the Fed was going to go afterwards. But he's already on the board, so you don't have to have an open seat.

9:11You can leave Myron in there and then you can promote Waller and it all just works together. So it does it does make sense. Just real quickly, does this make Jackson Hole all a lot more interesting? Just quickly, which is coming up at the end of the month. Yeah, it's going to make it more interesting, but it also may mean that Jay Powell doesn't want to say a whole lot. Right. Because there's all these balls in the air, but if the Fed's made it clear they're going to, if everybody else speaking on the Fed makes it clear they're going to cut rates, then he doesn't have to prep the markets or anything.

9:43You know you can't go home because the Fed headlines just keep coming. No, I've moved under my desk. As Ariel said, like George Costanza on Seinfeld. There's probably some blankets. It's a, I don't know, a huggy or what is it called? A snuggie? A snuggie, yeah. You're almost there. They're used to here, I know, whatever they're called. All right, Mike McKee, thank you so much. What if data didn't sit still? What if intelligence moved with us? Not buried in reports, but activated in real time. Where lives are being shaped. Where decisions are being made. It all starts with a question. Where is the potential?

10:20Cotality turns data into clarity. Intelligence into insight. Insight into action. Because when intelligence moves, we all move forward. Kotality. Intelligence beyond bounds. This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT Work. I'm Carol Masser. DoorDash, the largest food delivery company in the U.S., is building its own delivery drones and has gained the necessary FAA approvals to operate them commercially. the latest in its effort to delegate more orders to robots as a way of cutting delivery times. Bloomberg's Natalie Lung reports the company says it has been conducting pilot programs with various restaurants, some of which have seen their order volume grow during the test period.

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13:01First up, late yesterday, President Trump mentioned amping up tariffs on the space. We'll be putting a terraform of approximately 100 percent on chips and semiconductors. But if you're building in the United States of America, there's no charge, even though you're building and you're not producing yet in terms of the big numbers of jobs and all of the things that you're building. If you're building, there will be no charge. All right. That, of course, was President Trump yesterday. And then this morning, the president called on the chief executive officer of Intel, Lip Bhutan, to resign because of what he called conflicts of interest, adding to the challenges for a company that is supposed to anchor restoration of the U.S.

13:44semiconductor industry. Here's what the president put out. He said the CEO of Intel is highly conflicted and must resign immediately. He was doing this, of course, on Truth Social earlier today. He went on to say there is no other solution to this problem. Thank you for your attention to this problem. Now, this comes after Republican Senator Tom Cotton asked the chairman of Intel's board this week to answer questions about Intel CEO ties to China specifically, including investments in the country's semiconductor companies and others with connections to the country's military. As we mentioned, there's a fair amount of stuff going on.

14:19So let's get to it. A look at the Intel CEO. We wanted to talk to someone who has followed this company for a long time, knows the current challenges and knows the executives certainly in the space. with us is Bloomberg News, U.S. Semiconductor Networking reporter, Ian King. He's out there in our San Francisco studio. First of all, Ian, thank you so much. You know this company so well, you know what they're facing, you understand the executives who are there. I mean, Intel, we know, is a critical piece of Washington's efforts to rebuild the domestic semiconductor industry. I want to start with you, first of all, and we ask you this a lot.

14:55I mean, Intel, even with its struggles, is still a very important company, certainly to the United States? Yeah, absolutely. If you want this country to be domestically capable of producing technology that leads this industry, the vehicle has to be Intel. There's no other company that's even close. Yes, they are not what they were. Yes, they have stumbled. But they're still the best if you believe in the necessity of advanced semiconductor manufacturing in this country. So how are you perceiving this new added pressure here? I mean, has a CEO had enough time here to really turn around and really show a turnaround story here?

15:38Yeah, I mean, I think what you have to do is look at what has changed. I think that you've gone to the heart of the matter there. He's only been in the job four months. Two years ago, So the House Committee on China asked him questions about his history of investments in China. So none of this kind of association with China is new. That's just not new at all. What is new is that Intel recently during earnings cast doubts on whether it'll build the plants in Ohio that everybody's looking at as a cornerstone of chip manufacturing in the U.S., that it'll be very measured in its introduction of new chip technology.

16:19That has obviously created an undermining of this story of bringing back chip manufacturing to the US and sort of making the US great again in that particular area. So clearly that has caught the attention of politicians and clearly they're not happy with the direction that that's going in. And obviously we're now seeing some kind of a backlash and that's focusing on the CEO of Intel. Well, and I think it's kind of interesting, Ian, that this comes one day after we saw Apple CEO Tim Cook in the Oval Office with the president talking about investments in the U.S. And seemingly, at least some are weighing in on this and saying this is a way of getting some of the heat off of Apple, right?

16:59Is this potentially about the Intel CEO kind of not kissing the ring here? Yeah, I mean, we've seen Jensen Wang from NVIDIA. We've seen Lisa Su from AMD and pretty much all of the chip CEOs at some point making an appearance in the White House or at various events where the President or senior administration officials have been. So that's clearly been a policy that has blossomed, shall we say, in the chip industry. We have not seen Lip Bhutan make any appearances at any of these types of events. But to be fair to him, he's only just got the job and he's apparently taking 20 odd meetings a day trying to figure out what the heck is wrong with Intel and how to fix it.

17:41So, you pick your poison here in terms of what he should be doing. Right. And as investors, you probably want him focusing on doing what he needs to do at the company. The stock, though, we should point out is down about 3.7 % today and down just shy of 2 % year to date here. If the president, though, is coming at you hard, Ian, what does that do to your turnaround efforts? Does it kind of spread you a little bit? I mean, that's what we need to know. well, we haven't seen a response to this latest message from the president from Intel yet. We've been trying hard to get one and we haven't seen one appear anywhere else.

18:16So you have to believe that that means that they are thinking very carefully and in a very measured way about how they respond to this. We've seen conjecture, well, is this the end for Lit Bhutan? What does this mean for Intel's turnaround? All out there and clearly more uncertainty is not what Intel needs right now. We need signs that they're moving forward. And this clearly does not help. So earlier on, we actually had Republican Senator Tom Cotton saying, adding pressure, saying the chairman of Intel's board earlier this week, he was asking questions about TAN's ties to China. And of course, we know that the U.S.

18:51is really focused on those national security concerns. Of course, Intel did say that they are committed to national security. But can you just speak to what some of those barriers are and what some of those headwinds, essentially? What are the flags that a lot of this industry is dealing with as it pertains to national security here? Yeah, I mean, semiconductors have become the absolute central tool that the U.S. is using in its increasing geopolitical rivalry with China. Semiconductors are considered, because they are, absolutely essential to technology that you would use to develop either economic strength or military strength.

19:26And that has only increased in focus with the emergence of AI as a viable tool for any number of different uses, including military. So depriving China of advanced semiconductors or the ability to develop them themselves has become a number one priority or very close to the top priority for this administration, for the previous one. So anything that talks to that is very much a political hot potato. and, you know, will come acutely into focus and be used by politicians depending upon what it is they want to achieve. Yeah, and a hot potato and sometimes conflicting signals is what some might say in terms of protecting this industry here in the U.S.

20:07and also putting some pressure. Ian, thank you so much. Busy day for you and so glad we could get some time with him. Ian King, he's Bloomberg News U.S. Semiconductor and networking reporter.

20:25with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say, Alexa, play Bloomberg 1130. All right, well, this week, GM General Motors signed a deal with Texas-based Novian Magnetics to secure rare earth magnets for its full-size pickup trucks and SUVs. So this is the third domestic supply contract the automaker has signed related to the critical trade dominated by China. You might recall last month, Apple struck a$500 million deal to buy rare earth minerals from MP Materials. That's the U.S. producer that secured backing from the Pentagon, that company, by the way, reporting after the close.

21:01We're talking about rare earths a lot and with good reason, especially considering the world's dependence on China for rare earth permanent magnets. And we know that this has been certainly part of the trade conflict between the U.S. and China. So let's get to it. A great roundtable with us. Back with us is Dr. Grace Lynn Baskarin. She's director of the Critical Mineral Security Program at the Center for Strategic and International Studies. She's out there in our D.C. News Bureau. Also here in studio is Bloomberg News Economic Statecraft reporter Joe Doe, who understands and is constantly explaining this space to us here at Bloomberg.

21:33He's right here in our studio joining Nora and myself. Hello, everybody. Dr. Baskarin, great to have you here again. You know, remind the world just why this is so important. Who really has them? What the U.S. wants? And is the U.S. making the right moves to expand their presence when it comes to rare earths? Thanks, Carol. It's great to be back. So the first and foremost is in April this year, China rolled out restrictions on heavy rare earths. And what this did is it put a chokehold on the industry because all of a sudden we had a supply chain disruption. And the automotive industry was particularly hard hit.

22:10Within eight weeks, we saw that Ford actually had to pause production of its Explorer model owing to these supply shortages. What the U.S. did in response was a full-out effort to warp speed access to these rare earths and these magnets. Most recently, we saw the Department of Defense make a$400 million investment in MP materials, essentially putting the U.S. government as the biggest shareholder to accelerate production both of the rare earths and the permanent magnets. Yeah, we've talked about that, which was kind of got all of us like, wait a minute, is this now a state-owned entity? Joe, come on in on this.

22:44Yeah, I mean, this investment that we've talked about now for a few weeks, right, was a signal to the market. I think that was kind of the main thing. It was a signal to the market from the Trump administration, from the Defense Department, that the United States was serious about a mine-to-magnet supply chain. They were also signaling the real concern that the United States has over the fact that China has put in these export controls, as Grayson points out. We'd seen rare earths export controls starting back in 2023. The difference maker here was the magnets. And that's why companies like GM came out and publicly said the magnets are a problem.

23:26We're short and we're having to stop production. So we now have a situation where MP Materials has been given a$400 million investment equity investment by the DoD. We'll loan financing to become a magnet producer. This is a minor. So problem solved? and problem i'm just being silly right exactly uh problem right right and and actually your that sarcasm is is very much the conversation i have heard constantly now for the past few weeks in the market which is in anything in manufacturing manufacturing is hard because just because you say you're going to build a plant doesn't mean the plant will just come together and work straight out of the gates and i think there are questions among many in the market of this mining company can they figure out how to produce so many magnets at scale in the time needed?

24:13So, listen, you brought us Gracelyn. You ask her something. So, my question is, I mean, Gracelyn, you're sitting here now weeks later after this announcement. What do you think? We're giving all the right signals in from both the supply and the demand side intervention. You know, a lot of what this MP Materials deal with Department of Defense was, was it was supply side. It was saying we need more rare earths and we need permanent magnets. What this new big announcement from General Motors is really telling us is they're also giving the demand signal by agreeing to offtake. Joe, we've talked about this before, but one of the difficulties is the price environment.

24:48Prices are generally pretty low. By stimulating demand and showing that there is an offtaker, what we're really saying is that we are meeting a market need. And that's a really positive signal. General Motors as a whole has had first mover advantage on a number of deals related to this. We saw them with the MP Materials deal. Now we see it with the Novion deal for the magnet. So really it's showing that it is a full mine to magnet effort if we want to reduce our reliance on China. Do you think now that we're showing there's commercial market for this commercial demand, as you're saying, are we now in a show me moment?

25:24Prove it that you can actually deliver these magnets. Absolutely. We've already seen that Novion is already making their first magnets and they were delivered last month, which is a really great first step. Now what we need to make sure that they can do, along with some of these other magnet efforts like MP Materials, second production facility, is to make sure that we can ramp up at a level that is quick enough. Because we know that whatever trade agreement is reached with China is still transitory and time bound and we could have future disruption. So we now need to make sure that we can ramp up fast enough.