# Fed Leadership Shift and Market Volatility

**Podcast:** Marketplace
**Published:** 2026-01-31

## Transcript

Mega Küchen Action.
Yes, we've got Trump's pick for the new Fed chair, but there was also a Fed meeting this week.
And who really pays the cost of a snow day?
From American Public Media, this is Marketplace.
In Washington, I'm Kimberly Adams in for Kai Risdall.
It's Friday, January 30th.
Good to have you along.
As you've probably heard by now, this morning President Trump announced plans to nominate Kevin Walsh as the next chair of the Federal Reserve.
As a reminder, Chair Jerome Powell's term as chair is up in May, although he could choose to stay on the board until the end of 2028.
Walsh isn't new to the Fed.
He served on its board of governors during the Great Recession and even had his hat in the ring for the job of chair back in 2017 when President Trump last nominated a chair to lead the central bank.
So to talk us through what his selection means now, we've got Rachel Siegel at the Washington Post and Catherine Rampel at MS Now and the Bulwark.
Hey you two.
Hi Kevin.
Kevin Walsh is a name that the Fed world has known before.
As you said, he was a Fed governor 20 years ago.
He's very well known within Wall Street.
He's known within Trump circles.
And he's also known as one of the people who's been under really serious consideration for Powell's successor.
We also know that he's been a critic of the Fed in the past, including some of the things that he says has made the central bank more political than it needs to be, things that the central bank has done to miss the mark on inflation.
But now we're looking at him in the context of being the next Fed chair and one, you know, presumably taking over that job if he's confirmed at a moment where he's really going to be tested about the ability to be independent, keep politics out of monetary policy, and do so in a way that will exist in the same universe as the policies that are coming out from the White House.
Catherine, talk a little bit more about some of those criticisms that Warsh has made over the year about the Fed.
What exactly is his argument?
So I would say that early on, when he was on the Fed uh as a governor, as Rachel mentions, he was quite hawkish.
And he thought that the Fed was too blasé about inflation.
Um that it was going to be a too big of a risk.
Now, mind you, this was during the financial crisis or its immediate aftermath, and um inflation did not rear its ugly head.
In fact, there were much more serious concerns about deflation at the time.
So he was somewhat out of step, but he was known as an inflation hawk.
Now he has been uh relatively critical of the Fed for keeping rates too high and essentially being too concerned about inflation.
So he will have to square some of that evolution publicly, and I'm sure that will come up in confirmation hearings.
He's also been extremely critical of the Federal Reserve's quantitative easing.
Um that he's been consistent on.
That's you know, building up the Fed's balance sheet, buying lots of um of uh asset backed securities and things like that.
Uh so that he's been consistent on, and he's he's um he's also you know he he's changed his tune somewhat, shall we say, on the mission of the Fed.
And he has complained in the past that there's been too much mission creep in what the Fed is responsible for.
More recently, I would say that he has um tweaked his message uh to put it mildly, to suggest that the Fed should be more cooperative in many ways uh in in terms of supporting the fiscal policy.
Rachel, I want to follow up on that point that Catherine was making about his criticisms of the Fed's balance sheet, would really gets to the role of the Federal Reserve in the U.S.
economy.
Where does he stand on that and how does that align with the president who nominated him?
Sure.
So in the past, he, as Catherine was talking about, he criticized the Fed for its ownership of trillions of dollars in mortgage backed securities, many of which, you know, built up after the Great Recession and during the pandemic.
And he has made the argument that this big bond buying spree, you know, basically enabled Congress to ramp up spending without worrying about higher borrowing costs.
And I think that there are a couple of threads there that, you know, have connections to government spending, to what the, you know, Fed's role is when it comes to monetary versus fiscal policy.
And these are a lot of the themes that we hear Trump economic officials talking about too, right?
Now, those two types of leaders have very different roles, and there are lots of reasons why monetary policy and fiscal policy come out of different shops, which which maybe we'll talk about now.
But I think, like with any Fed candidate, it will.
As I think Rachel mentioned before, excuse me, Warsh has been around for a long time.
He has relationships on the hill.
He has passed through a confirmation hearing before, albeit with, you know, different people, of course, or many different lawmakers sitting in the seats that would be um uh there to confirm him or judge him.
Uh so I I generally don't think he, as a candidate per se, will have a lot of problems.
The one thing that may complicate uh his path to the Fed chairmanship is the fact that there is still this ongoing investigation, criminal investigation of Jerome Powell, the current uh Fed chair, which, you know, has as far as I can see is is purely political, um, but listeners can judge for themselves.
And Senator Tom Tillis, who's a retiring senator, he's a Republican from North Carolina, he sits on the committee that handles Fed nominations, has said that he will oppose any Fed confirmation, including that of the chair, um, who he seems, you know, he seems to like Warsh, but he has said uh that he will oppose any nomination, any confirmation all the same, unless and until this Powell investigation is uh is dropped and uh closed with some transparency.
That basically this should not be hanging over the process going forward.
This is political, this this um investigation of Powell compromises the political independence of the institution of the Federal Reserve itself.
So that's not specific to Walsh, I should be clear, but it may be something that complicates his path uh to a confirmation.
All right, Catherine Rampel of MSN Now and the Bulwark.
Thanks so much.
We also had Rachel Siegel earlier at the Washington Post.
Appreciate you.
Thanks, Campberly.
Have a great weekend.
Wall Street today, markets ended the last trading day of the month down, and even if traders seem to be somewhat positive about Trump's Fed pick, we'll have the details when we do the numbers.
In fact, it's not really a time when big oil is looking to pour big money into new oil production at all.
Marketplace's Elizabeth Troval has more on the investment environment for the major oil companies and how that factors into what's next for Venezuela.
For now, President Trump's goal of $100 billion in investment in rebuilding Venezuela's oil industry is not amounting to much more than a pipe dream.
Tom Sang is with Texas Christian University.
We're in a low price environment.
Some of the roadblocks to big investments there aren't Venezuela-specific.
Sang says since oil prices went negative during the pandemic, energy companies shifted gears towards discipline.
No more drill baby drill.
Get into debt by just continually drilling and drilling.
Instead, focus on free cash flows, which allowed companies to pay down debt, to pay dividends consistently.
So you've got more corporate discipline, low oil prices, an oversupplied oil market and uncertainty around demand.
Not exactly the makings of a let's take on a big investment risk moment.
Thomas Lyles is with Rice at Energy.
So investing in places where there's already massive operations, like in West Texas or Guyana.
As for the outlook in Venezuela specifically, a lot needs to happen to make that country investable in a big way, says Andy O'Connor with Morningstar DPRS.
In Venezuela, the challenge is developing abundant resources, not finding them.
This requires a higher oil price.
And then additionally, most potential investors will need a significant change in the country's legal and commercial frameworks before they consider investing.
The University of Houston's Ed Hurz puts it a different way.
Until they see a Trump hotel on the beach in Caracas, no oil company is going down to Venezuela with billions of dollars.
Even Chevron, which is already operating in Venezuela, is cautious.
While it may increase its Venezuelan production in the near term with modest investments, there's still a ceiling on major growth for now.
I'm Elizabeth Troval for Marketplace.
And congressional Democrats aren't the only ones trying to protest the ongoing immigration crackdowns across the country, especially the ones happening in Minnesota.
A coalition of activists from across the country have called for a national shutdown today to protest ice, asking people to boycott school, work, shopping.
Marketplace's Carla Javier talked to small business owners who support the shutdown in principle to understand how they decided whether to spend today closed or open.
In New York City, Fanny Gerson of FanFen Donuts and the restaurant Mijo says the vast majority of her employees are immigrants.
And so today, like many businesses around the country, she faced a choice.
We can either stay open, business as usual, or we could stay open and give a portion or the entire sales to an organization that we all agree upon, or we close.
She asked her employees what they wanted, and everyone chose to shut down.
I don't know if we can really afford to, but this is just a bigger and what was most important to us, uh, even though we don't know exactly like the financial hit.
In Wisconsin, TJ Samanch, owner of Wonder State Coffee, says it's important to him to keep showing solidarity with the movement, even if there's a financial cost.
Between lost sales and paying our staff, uh, you know, it's probably less than $10,000, but it's in that ballpark.
But not everyone can do that.
Caroline Glover of the restaurant Annette and the Traveling Mercies Bar in Aurora, Colorado says this is a tough time of year.
For us, closing down on a Friday night at the end of the slowest month of the year just was not a business decision that we could do.
You know, we couldn't support our staff financially if we did that.
She says most employees told her, they want to work because they have rent to make um at the end of the month.
So she decided on a middle ground.
They're open and donating 10% of sales all weekend to refugee and immigrant rights organizations.
In the Twin Cities, hundreds of businesses shut their doors last Friday, including St.
Paul's store, the Yarnery.
But co-owner Scott Roar says he's not shutting down today.
In part because we are donating proceeds from various projects, not just today, but uh throughout the weeks.
He says he and the business are in this for the long term.
So he's planning for what other actions or closures might look like in the future.
I'm Carla Javier for Marketplace.
I don't want to spend that money, though.
Especially in this economy.
But first, the numbers.
Gold and silver were on a tear all month until they tanked today.
Investors who fled to them as safe havens in uncertainty seemed a bit less uncertain after the president named his choice for Fed share.
Silver sank more than 25%, gold fell about 9%.
Bonds also fell, the yield on the 10-year T-note rose to 4.24%, and you're listening to Marketplace.
Technique beweged.
Design does begeistert.
Endecke beide voll electric modelle up 17th January by uns.
Kia.
Movement that inspires.
This is Marketplace.
I'm Kimberly Adams.
Parts of the eastern US are forecast to get more snow this weekend.
This comes after much of the country was hit by heavy snow and ice last weekend.
That storm brought power outages, cancelled flights, and school closures.
In some places, power is still out, roads are still treacherous, and schools are still closed.
Working parents, however, don't get a snow day.
They get a day where they're working two jobs, and there are all sorts of costs to that.
Marketplace's Stephanie Hughes shares her first-hand experience.
This week I've been referring to my seven-year-old, William, as my assistant.
You know how to find those letters so fast.
Yes, I'm gonna go taper.
Baltimore, where I live, was hit by about a foot of snow.
Public schools have been closed all week.
My husband and I split up child care and try to do our jobs with the kids around.
But even when you hide yourself away in the house, your children will find you.
Let me send this one message and then what?
And then I'm gonna come downstairs and talk to you and daddy, okay?
For working parents, no days become this jumble of work and parenting where you feel like you do nothing well.
And I'm one of the lucky ones.
I can work from home.
I heard from lots of parents in the region who are exhausted.
It's been a bad week, I would say.
It's been a comically bad week.
Matthew Johnson manages a team of developers for a tech company.
He lives in Washington, DC with his wife, who works in data visualization.
They have three kids.
This week they had to take turns working and caring for their children, which meant taking paid time off.
We're just burning through PTO while at the same time putting in hours to work to just try to like keep not even the ship running, but just making sure like the ship doesn't sink.
They're still paying for child care, even though they weren't able to access it much of the week.
Johnson says it's taken an emotional toll, too.
I love my kids, but it is such a constantness that like it burns through my patients and kind of by like another layer.
Some parents have to oversee virtual schooling as well.
I monitored Will as he logged on to his first ever online meeting.
And I'll show you how to unmute and mute yourself.
What's me?
Mute means that no one can hear you.
That no one can hear me.
In search of quiet, some parents are paying high schoolers to watch their kids for a few hours.
Others are calling in favors.
Like, I'll buy Dunkin' Donuts.
Brittany Cruteau also lives in Baltimore.
Her five-year-old Maxine is in kindergarten.
Cruteau needed to attend a big meeting without any distractions.
Her husband's been out of town, so she dropped off her daughter at a friend's house.
But you also don't want to overuse those things, right?
Cruteau doesn't have family nearby.
That's shaped how she prepares for these kinds of situations, including the decision to only have one kid.
Um that this is what we would be in for for the snow days, for spring break, for summer, right?
Like, so we just have to be proactive and plan.
Come here, you wanna come say hi?
Hi.
Cruto loves her job in special education, but she says parenting is her first priority.
Because we are replaceable, and I'm not replaceable at home.
There is new research that moms bear the brunt of interruptions on snow days.
A working paper by academics at the University of Nebraska Lincoln finds that if a place gets a lot of snow in a month, working moms miss, on average, about two days of work.
Researchers also believe that moms may self-sort into more flexible jobs, even if they pay less.
While snow days cost parents, they're also an opportunity for small businesses.
In Baltimore, a dance and art studio called Dance on the Square held a pop-up Flurry Camp this week for three to ten year olds.
Whoa.
Whoa.
The studio's owner, Kate Drake, decided to offer camp as soon as school was canceled.
So I um actually made the choice to sleep here so that I could open.
Aftercare, which goes until 5 30, is another $25.
We filled yesterday for today in six minutes, um, 50 spots, and then we had an uh wait list of 49 people for today.
At my house, we also spent some money on a day camp that wasn't sold out.
And it has been nice for Will to see more of what I do.
He's even come up with a new jingle for the show.
It's a train it's a blanket marketplace.
In Baltimore, I'm Stephanie Hughes, reporter and parent for Marketplace.
Meanwhile, for those who've been participating, tomorrow is the last day of dry January, where people hold off on drinking alcohol for the month.
Many of those folks turn to non-alcoholic beverages to have something to imbibe during the dry spell, including mocktails, non-alcoholic or alcohol-removed beers and wines.
These kind of drinks have grown in popularity over the last few years as more Americans decide to cut back on the booze.
According to a Gallup poll from last summer, U.S.
drinking rates hit a record low of 54%.
And that number is even lower for young adults, which is welcome news if you're in the business of NA.
That's the setup for today's installment of our series, My Economy.
My name is Amber Suzanne Pennington.
I am the co-owner of Free Spirited with my husband, Arleo DeGuzman, and we are at Free Spirited in Alhambra, California.
So coming in through the Red Gate, uh, you're not gonna find a handle on the door, which confuses a lot of people.
We actually have had people knock before, but there's a sticker that says activate switch to operating.
So you press the button, and we made this handicap accessible so anyone could come in and enjoy and not feel left out.
We are a Sobercraft cocktail lounge and allergen-friendly scratch kitchen.
We opened in January uh 2024.
The inspiration came when we were working at a bar together and a bunch of sober cocktails or mocktails were being ordered, and I was like, oh my god, there's an actual demographic for this.
It's not just me.
So with my history of losing people to addiction, being hit by a drunk driver, and my husband going through alcoholism, I'm like, all right, dang it, we're doing this.
This this is something that we can do, and we're gonna be a place for someone.
Winter, as well as um January all the way through spring is our busy time, summer is our slow time.
Coming into our first year, I I was pregnant and my son was due in April.
Um, so we were gone during the entire time that it would have been busy for us.
And when we came back from parental leave, it was kind of like starting all over again.
But recently, uh it's been really, really busy.
As a person who doesn't drink alcohol, I hated going out and seeing things that were like $14 or $16, and I'm like, holy crap.
I I want a nice drink, I want a fancy drink, I don't want to spend that money though.
And that was kind of thing that we went back and forth a lot on.
Our initial prices were $16, but that included tax and tip.
Um, and our prices now still include tax and tip, but they're $8.
Give me the quarantine heart, please.
So I love this one.
This is the one that started it all.
It has a nice creaminess to start, and then I really like acidic, and it has that acidic qualities that you feel in the uh back of your mouth.
And it's uh, it's so good.
Lemons, limes, our black garlic, which is a specialty product, those things have gotten a lot more expensive to keep costs low.
We don't buy random juices, uh like I don't know, orange juice, lemon juice, that sort of thing.
We f we buy bought a machine and we juice our own stuff.
We make our own syrups.
We don't have that extra cost because of the pre-made products since we do everything in-house.
Right now it's Arleo and myself who are working.
Uh, and it it's worked so far, but since we're getting busier, we are starting to hire more people.
Uh, about three people is what we're hiring right now.
Uh, we posted the job posting on our Instagram because we really want people, we don't want just random people.
We want people who know what we're about, who believe in what we're about, and also embody that themselves.
We're excited to bring in people we trust.
Amber Susan Pennington, owner of Free Spirited with her husband Arleo deGuzman in Alhambra, California.
We can't do the series without you.
Write to us about what's happening in your economy at marketplace.org/slash my economy.
This final note on the way out today.
With so much other economic news on this Friday, we didn't get to an important data release from this morning.
The producer price index, a measure of how much businesses are paying for goods and services, was up half a percent in December.
More than analysts were anticipating.
And yes, these are December numbers, not January.
We're still dealing with shutdown delayed data.
Anyway, it was the biggest increase in five months and caused mostly by an increase in the cost of services, especially trade-related services.
See footnote tariffs.
Economists like to keep an eye on PPI because inflation tends to show up in the prices companies pay before they eventually pass it on to consumers.
Marketplace's executive producer is Nancy Fargali.
Joanne Griffith is the Chief Content Officer, and Neil Scarborough is the vice president and general manager.
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