Trump’s Kevin Warsh choice leaves Trump one seat short of a majority
Tuesday’s election results gave Democrats the power to block any allies President Trump might seek to install on the Federal Reserve’s board, Nick Timiraos reported in The Wall Street Journal. Timiraos characterized the outcome as “the strongest check yet” on President Trump’s bid to control the Federal Reserve. In the same report, Timiraos wrote: “That leaves Trump with the chairman of his choosing, Kevin Warsh, but one seat short of a majority and diminished prospects of getting it.”
Timiraos also wrote: “His White House has mounted the most direct challenge to the Fed’s independence in decades, including an unprecedented attempt to fire a sitting governor.”
Timiraos described the checks on that pressure as “piecemeal.” He listed a retiring Republican senator’s blockade of Federal Reserve nominees, Jerome Powell’s decision to stay on the board after stepping down as chair and court rulings keeping Federal Reserve governor Lisa Cook in her seat for now.
Timiraos said a Democratic Senate would provide a “broader institutional buffer” by covering every nomination to the Federal Reserve’s seven-member board of governors for the rest of Trump’s term.
Mark Spindel, an investment manager and co-author of a book on the Federal Reserve’s relationship with Congress, said Trump’s ability to remake the central bank’s relationship with the White House as he might have hoped had “clearly died Tuesday.”
At the WSJ Tech event in California last week, venture capitalist Vinod Khosla spoke about the midterm elections and President Trump. Khosla said, “I think the level of trust that has been lost is probably the biggest and longest-lasting damage Trump will have done and hopefully the next two years will show we constrain him somewhat from random decisions.”
The newsletter also included a separate Nvidia report. The Wall Street Journal’s Robbie Whelan, Amrith Ramkumar and Joseph De Avila wrote that Nvidia’s board said Sunday it was launching an investigation into reports that CEO Jensen Huang had an affair with tech executive Alice Huang, who was suspected of working with Chinese intelligence.
U.S. officials last year concluded that Chinese citizen Alice Huang, then a top executive at Megaspeed International, was sharing information with the Chinese government while working with Nvidia to build data centers in Asia, the Journal earlier reported. Alice Huang, who also goes by Huang Le, was not related to Jensen Huang. Jensen Huang apologized to his family and staff Sunday for being unfaithful to his wife.
Nvidia’s board said it had no reason to believe either the company’s secrets or national security were compromised and expressed confidence in the CEO’s leadership. A committee of independent directors, helped by outside counsel, would oversee the inquiry. The board said the “inquiry will examine all available information.” Shares in Nvidia lost more than 5% in premarket trading after the board said it would launch the investigation.
The newsletter’s calendar listed earnings for Constellation Energy, Ferguson Enterprises, KKR, NRG Energy, Occidental Petroleum, Rocket Lab and Skydance, followed by Alcon, CoreWeave and On Holding.
Other earnings entries named Corteva, Franco-Nevada and Vylor, along with Applied Materials, Brookfield, Cerebras Systems and Cisco Systems.
Scheduled releases included the National Federation of Independent Business’s Small Business Optimism Index for October, the Bureau of Labor Statistics’ consumer price index for October, the National Association of Realtors’ report on existing-home sales for October and the Bureau of Labor Statistics’ producer price index for October.
The calendar also said fixed-income markets would be closed Thursday in observance of Veterans Day.