Senators grill Kevin Warsh in Fed chair hearing

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0:17Good morning from the Financial Times. Today is Wednesday, April 22nd, and this is your FT News Briefing. The U.S.-Iran ceasefire lives to see another day, and American senators grilled the man who could be the next Federal Reserve chair. Plus, what are some lessons that we can learn from the history of finance? A new podcast from the FT explores the ideas that shape today's institutions. I'm Mark Filippino, and here's the news you need to start your day.

0:59U.S. President Donald Trump extended the ceasefire with Iran. It otherwise would have expired tonight. He said on social media yesterday that the truce will remain in place until negotiations between the two countries conclude. Now, this is a bit of a change of pace. Trump said repeatedly that he did not want to extend the ceasefire. But prospects of a second round of negotiations look bleak. Iranian officials said yesterday they won't attend talks in Pakistan and they think further talks would be, quote, a waste of time. That's according to Iran's semi-official Tasnim news agency. Iran's foreign minister blames the stalled talks on, quote, unacceptable actions from the U.S.

1:37He called the American naval blockade of all Iranian ports a, quote, act of war and a ceasefire violation. Trump said the U.S. will continue its blockade while the ceasefire is in place.

1:55This is as consequential a moment for the U.S. economy and frankly for the institution as at any point since the late 1970s. That's Kevin Warsh, President Donald Trump's nominee to chair the Federal Reserve. He appeared for his confirmation hearing yesterday. And senators grilled the former Fed governor on topics ranging from his independence from Trump to his personal wealth. Here to discuss how that hearing went is the FT's U.S. economics editor, Claire Jones. Hi, Claire. Hello, Mark. So what were the top lines from this confirmation hearing? Well, as one would expect, given the current environment and all of Donald Trump's calls for the Fed to cut rates and threats to fire current Fed Chair Jay Powell and his colleagues, the hearing was very much focused on whether or not Kevin Walsh can ensure the U.S.

2:46Federal Reserve, the most important central bank in the world, can remain independent from the White House. Walsh was pretty adamant that it could and also claimed that the president had never asked him to cut interest rates. So the president has never sat you down, looked you in the eye and said, here's the deal, Scooter, I'm going to appoint you, but you got to agree to lower interest rates. That didn't happen or did happen. The president never once asked me to commit to any particular interest rate decision, period. And nor would I ever agree to do so if he had. But he never did. Now, Claire, as I alluded to earlier, there were some questions about Warsh's personal wealth.

3:33Tell me what happened there. So Warsh is a very rich man. And we know from his financial disclosures that all Senate-nominated officials have to submit that he has assets worth at least$130 million. The big questions were exactly what are some of those assets? A lot of what he holds is confidential. Elizabeth Warren, the most senior Democrat on the banking committee, didn't seem to like that very much. There were also questions from her and others as to when Walsh planned to divest of some of his assets and what he planned to do with the proceeds. Right. And this is probably a good place to mention that Walsh has said he had, quote, come to a full agreement with the Office of Government Ethics on divesting the assets to meet government rules and that he was likely to invest those proceeds in cash and treasury bonds.

4:31So, Clara, a little earlier, we heard that Warsh thinks this is a consequential moment for the U.S. economy. Hard to argue with that. What is Warsh's approach to the moment that we're in? Did he say? On the detail, we didn't get that much information yesterday on what he tends to do about the rise in inflation we've seen due to the rise in energy prices that's resulted from the Iran war. What we do know is that he's very, very interested indeed on what impacts the AI-induced boom that we're seeing right now will have on the U.S. economy. Most Fed officials think that it's going to increase demand in the short run and that would increase inflation.

5:18Walsh played down that and that suggests he thinks that AI is going to make room for the Fed to cut interest rates. What is next for Warsh in this nomination process? Are there more hurdles for him to jump? There are a lot more hurdles. Chief among them is the administration's criminal probe into Jay Powell. Tom Tillis, who's one of the Republican senators on the banking committee, has said he won't allow Warsh to move forward to the Senate floor until the probe against Powell is dropped. There's no signs from the White House or from the Department of Justice that that's going to happen anytime soon.

6:01Having said that, once the probe does go away, you know, his hearing was very confident. He's clearly got a lot of relevant experience. And the sense you get is that eventually he is going to get a majority in the Senate and he is going to be confirmed as the next Fed chair. But there's still a way to go. That's the FT's U.S. economics editor, Claire Jones. Thanks, Claire. Thanks, Mark.

6:30You ever hear that saying about people who can't remember the past are condemned to repeat it? Well, a new podcast from the FT is here to help us all beef up on our financial history. It's called The Story of Money. And the first episode is out today. I'm joined now by Story of Money co-host Robin Wigglesworth to hear more about it. Hi, Robin. Hi, Mark. How are you? I'm doing well. So you're co-hosting this with our colleague, Gillian Tett. Why do you think now is the time to be doing a show about financial history? Well, now isn't as good as yesterday, but it's better than tomorrow that way. But like, I mean, things are always a little bit crazy in finance and the world.

7:09And we humans are very good at forgetting the past. And sometimes we have to forget it. But there are things we can learn, right? There are things that are relevant that happened sometimes even thousands of years ago. that actually we can learn from today. So I'm pretty excited about, you know, finally bringing this out to life. Well, you said there are things from thousands of years ago that can be applied to today. What's an example of that? Well, let's say ancient Mesopotamia, they had a debt problem as well. And occasionally the way they solved it was to have debt jubilees. Typically when a new ruler like Hammurabi came to power, they'd just say, well, all debts are now cancelled.

7:47And it sucked for the lenders, but it was great for everybody else. and it kind of helped reset the economy. It was a bit like switching your computer off and on again. And, you know, I don't think maybe we should have a debt jubilee in the modern economy. That would be potentially quite disastrous. But I do think it's pretty cool that people thought in unorthodox ways to solve some of these issues that we still confront today. That is really cool. Are there other themes that keep popping up that you've noticed as you've put together the show? A classic one is, you know, what is money? I mean, we call the show The Story of Money, and it's a red thread that goes through quite a lot of episodes, and I think probably quite a few episodes that are going to happen in the coming year, is what exactly is money?

8:33Because it's really far more fungible and complicated than you might think. So, for example, in 19th century America, you know, for a long period, the U.S. didn't have a central bank. state-sharted banks could kind of print whatever money they wanted. And quite a lot of those banks were pretty dodgy. And at the same time, this was like an incredible fertile environment for money forgers. So essentially, large parts of the economy ran on dodgy money or even fake money. And the crazy thing is that people didn't really care, because they needed something to kind of be pretend money, at least. And this worked.

9:10And, you know, the relevance today is to do with stable coins and crypto. They're also things that people have kind of made up out of air and that we kind of think has money or some sort of value. And it's a collective illusion because it's useful or profitable. But at some point, sometimes the music stops. Robin, what's the one thing that you hope listeners are going to get out of the show? Well, really, that financial history is really cool and interesting. And look, I have a hard time convincing my kids of this, but it's genuinely true. I mean, I love this stuff. It is so riveting and interesting and fun, even if it wasn't relevant for today.

9:48But it is like that quote you said, to understand where we're going, you have to understand where we came from. There's so many things today in the world that, look, I'm not going to say are great, but at least makes more sense if you understand where they came from. And that's true for financial history as well. Maybe your kids will be more inspired to learn about it now that you host this podcast. I hope so. I hope so. That's the FT's Robin Wigglesworth. He hosts the new podcast, The Story of Money, with our colleague Jillian Tett. The first episode is out today, and you can hear new episodes every Wednesday.

10:20We'll put a link to subscribe in the show notes, and we'll have a trailer that you can listen to after this episode of The Briefing. Thanks, Robin. Thanks for having me on.

10:34Before we go, more and more Americans want to call Ireland home. The number of people in the U.S. seeking Irish citizenship through Ancestry jumped 63 % last year. These are applicants to Ireland's Foreign Birth Register. Lawyers said the Trump administration's harsh stance on immigration and transgender rights is pushing people to consider having a backup plan. Around 32 million Americans claim some sort of Irish heritage, according to the U.S. Census Bureau, but it's not clear how many of those actually qualify for citizenship. You can read more on all these stories for free when you click the links in our show notes.

11:11This has been your daily FT News Briefing. Check back tomorrow for the latest business news.

11:27So they say that money runs the world. But the story of money itself? Well, that's where things get really interesting. From wildcat banks on the American frontier. It was about as difficult to become a banker as it was to become a bricklayer. Many people viewed them as con men. To ancient rulers wiping out debts thousands of years ago. When a king came to the throne, and Hammurabi did this himself, one of the very first things he did was to cancel everyone's debts. Lenders really did, you know, break the tablets on which the loans were recorded. People were free. History, but especially financial history, has an uncanny way of repeating itself.

12:02How, you might ask? Well, we've got a brand new podcast that explains exactly how. The story of money from the Financial Times. Hosted by me, Gillian Tett. And me, Robin Wigglesworth. Each week, we go back in time to understand what the forces are that really shaped the financial world we live in today. Because whether it's artificial intelligence bubbles or the next big market crash, chances are it's all happened before. And if you don't understand the past, Well, you just might lose money in the future. So follow the story of money from the Financial Times, launching April the 22nd, new episodes every week, wherever you get your podcasts.

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