The Wall Street Journal White House Economic Policy Reporter Brian Schwartz joins ‘The Exchange’ to discuss the race to be the next Fed Chair and more.

Washington

The selection process for the next Federal Reserve chair is focusing on two main candidates: Kevin Hassett, a current economic advisor to former President Trump, and Kevin Warsh, a former Fed governor. Recent reporting indicates that Hassett has gained momentum, partly due to his close proximity to the president and his perceived willingness to align with the administration's preference for interest rate cuts.

Warsh, previously considered a frontrunner, is seen as less likely to consistently support aggressive rate reductions and is viewed as more independent. The final decision will require Senate confirmation, and both Republican and Democratic lawmakers are expected to scrutinize the nominee's loyalty to the Federal Reserve's mandate versus presidential influence. Markets are monitoring the process, aware that the next chair's approach could shape future monetary policy.

The race to be the next Fed Chair: Here's what you need to know

Welcome back. The battle is heating up for which of the Kevins may become the next Fed chair. The Wall Street Journal reporting that former Fed Governor Kevin Morsh and current Trump economic advisor Kevin Hassett have been duking it out in what they say is a very apprentice-esque competition to take over for Powell next year. And while one Kevin is regarded as a serious contender, the other is facing some criticism. For more, we're joined by Brian Schwartz, White House economic policy reporter. Pains me to say this at the Wall Street Journal, Brian. No, seriously, it's great to see you again. Welcome back. Welcome on. Yeah, it's great to be back, Kelly. Thanks for having me. And it's a great story. I love seeing your bylines all the time. So is it really down to Kevin versus Kevin? Well, I mean, as of today, those are the, they are definitely in the top tier. I mean, you're looking at somebody like Kevin Hassett, though, who's been surging to the top of the list over the last few weeks. And I keep in mind, me and my colleague at the Wall Street Journal have been working on this for a couple of weeks. And, you know, the consistent theme that we heard from sources is that Hassett, the National Economic Council director for the president, is just, you know, surging in preference over Kevin Warsh, which I thought was pretty interesting. And why is that? Because for months, it seemed like that Warsh was the person in the driver's seat. And now it looks like Kevin Hassett may be the person to beat for this, for this job whenever Powell leaves. I never understood the Warsh chatter because he's been so hawkish for so many years, which is fine. I mean, you know, as you detail, I mean, he has sounded a bit more dovish lately talking a little bit about what the Fed could do to lower rates in conjunction with kind of the Treasury and the balance sheet. But yeah, I don't know. I'm not getting a huge signal from him that he's willing to jump on board with, you know, immediate rate cuts and that kind of thing. Well, that's right. And we've done reporting on this before about him in that sense in particular, where he's been pretty clear that he's not going to be as loyal to the president, at least from his remarks that we've seen, as maybe the president wants. And I think that's very, very critical here in terms of what the president is looking for for his next Fed chair. I understand the impendence of the Fed very well, but the president really kind of shrugs that off, it seems like, from his public remarks and is looking more at someone, as he has said, to just cut rates. And I'm not entirely sure, to your point, that Kevin Warsh is going to be that person just to raise his hand all the time and to say to the president or somebody close to the president, OK, we as a Fed are going to move to cut rates. It's, of course, very complicated to do that. And maybe Kevin Hassett will. And the other thing that Kevin Hassett has that Warsh does not is proximity to the president. That, for Trump, is really, really key. He gets to see Hassett all the time. Warsh is usually based in New York. I think he's got a place in Florida. But either way, you know, Trump is now pretty much always in Washington and often just on the weekends going to bed in Minster, New Jersey. So that's that's kind of geographically how Hassett seems to have a preference here. And Hassett, while we think of him now as more of a policy guy, is a Ph.D. economist, you know, worked at the Fed in the 90s. I understand it. I'm curious more about kind of how the market would take all of this if it views Hassett as too close to the president or at least in some ways the market and Hassett would be aligned with a couple of rate cuts. But if they started to think he's just going to run dovish policy to please the president that could harm the economy in the long run, you're going to end up with long rates backing up mortgage rates, backing up inflation, all the bad stuff. Right. So right now, I think it's a little hard to tell from the market signals, but that would seem to be the place to watch. I think so. And I also think it's something to watch out for if the president truly does somehow move to fire Powell early. Of course, that would be kind of thunderstruck to the markets. But I also think, to be fair, you know, investors would look at Hassett, maybe not as favorably as Warrick because of that question to your point on loyalty and maybe too much loyalty to the president and all that jazz. But, you know, I think also investors would know that at the time of if this all plays out, if Powell moves on peacefully later in the year, 2026, whatever, and Hassett's picked, I think there are going to be guardrails around him just being able to cut rates. I mean, there's a board. They got to go through all the machinations to get to the point of cutting rates, as we know. So I think based on how the makeup of the board goes, it's really the question as to how the market will react to that news. They have to get confirmed, right, by what's the how many people it's a committee in the Senate that would have to confirm them. So they would presumably need both GOP and Democratic support or just Republican support. The way it's laid out now, it probably would if it's straight party line, he probably would just need the straight Republican support. Got it. But as we know, you know, the things in Congress are never that easy or ever that straightforward here in Washington when we're talking about getting things through Congress. So I think for whoever the president picks, once we get to that point of the nomination process, you know, Republicans and Democrats are going to be pressing that nominee to ask where do their loyalties land? Is it to being fair around decisions on the Federal Reserve or is it instead to the president who has said out loud that he wants his Fed chair to cut rates? Right. And again, we're showing the tenure 435 as we've just had auction top of the hour that went smoothly. And that's been, again, a source of angst, but one that the market is now coming to terms with in the wake of the bill. And now this Fed race and all the rest of it. Brian, it's good to see you again. Thanks for joining us. Great. Thank you, Brian Schwartz.

Linda Yaccarino is stepping down as CEO of X after two years leading Elon Musk's social media company. Yaccarino's departure comes one day after the company's Grok chatbot began pushing antisemitic tropes in responses to users.

San Francisco

Yaccarino steps down as CEO of Elon Musk's X

Parts of Ukraine were on fire overnight after Russia launched its largest drone attack on Ukraine since the war unfolded more than three years ago. Just hours earlier, President Trump directly called out Vladimir Putin for stalled peace talks. Weijia Jiang reports.

Moscow

Ukraine Invasion

Trump calls out Putin for stalled peace talks

The Trump administration branded the event as one of the steps it is taking to reshape its relationship with the African continent.

Five African leaders have lunch with Trump

The search continues in central Texas for the more than 160 people still missing from the deadly floods that hit over the Fourth of July. CBS News reporter Karen Hua has more.

Kerr County

Recovery operations ongoing in Texas as more than 160 still missing

U.S. President Donald Trump announced on social media that he issued tariff letters to Algeria, Brunei, Iraq, Libya, Moldova and the Philippines.

Global Tariffs

Trump sends tariff letters to six more countries

Video released by the Houthi media center shows the bulk carrier ‘Magic Seas’ being attacked and later sinking in the Iran-backed rebel group’s first attack this year on a commercial shipping vessel in the Red Sea.

Sana'a

Middle East Conflict

Houthi rebels claim responsibility for attack on ship in Red Sea

The European Court of Human Rights in Strasbourg ruled Russia violated international law in Ukraine and was responsible for the downing of Malaysia Airlines Flight MH17.

Top European court rules Russia violated international law in Ukraine

The death toll from the July Fourth flash flood that ravaged a swath of central Texas Hill Country rose on Tuesday to at least 109, many of them children, as search teams pressed on through mounds of mud-encrusted debris looking for scores of people still missing.

Texas flood death toll hits triple digits, tally of missing tops 180

U.S. President Donald Trump pushed back during his Cabinet meeting about a question regarding Jeffrey Epstein. The DOJ claims Epstein had no list of clients, which is drawing criticism from some of the president's supporters.

Trump questioned over report saying Epstein didn't have client list

The copper industry is facing new uncertainty after U.S. President Donald Trump said he will impose 50 per cent tariffs on all copper imports. More than half of all Canadian copper exports go to the U.S.

Ontario

Trump threatens 50% tariff on copper imports

CNN’s Josh Cambell reports on questions over a lack of flood warning signals and lagging investment in river gauges in Kerr County after deadly floods killed over 100 people in Central Texas.

Officials face questions over preparedness for Texas floods

Hundreds of firefighters battled a fast-moving wildfire that reached the outskirts of the southern French city of Marseille on Tuesday, forcing people to stay indoors and the nearby airport to close.

Marseille

France wildfire shuts down Marseille airport

Liverpool's Portuguese forward Diogo Jota was probably speeding when the Lamborghini car he was driving crashed in northwestern Spain, killing him and his brother, police said in a preliminary report.

Cernadilla

Liverpool's Jota likely speeding when car crashed, police say

French President Emmanuel Macron arrived in Britain on Tuesday for a state visit mixing royal pageantry with thorny political talks about stopping migrants from crossing the English Channel in small boats.

London

UK royals welcome France's Macron for state visit

U.S. President Donald Trump said the U.S. will send more weapons to Ukraine as Russian attacks intensified in recent weeks. The decision comes after the U.S. halted certain shipments last week.

Trump says U.S. will send more weapons to Ukraine

Brazil hosted the second and final day of the 17th BRICS Summit in Rio de Janeiro on Monday.

Rio de Janeiro

BRICS summit ends on health issues, role of global south countries

U.S. President Donald Trump, hosting Israeli Prime Minister Benjamin Netanyahu at the White House, said the United States had scheduled talks with Iran and indicated progress on a controversial effort to relocate Palestinians out of Gaza.

Netanyahu meets Trump as Israel, Hamas discuss ceasefire

Search teams continue to look for survivors after catastrophic flash floods overwhelmed parts of the US state of Texas. About 100 people have been killed and dozens more are missing. Officials say the National Weather Service didn't provide enough warning of the heavy rain.

Texas

Rising Texas death toll fuels anger over 'inadequate warning'

Leaders of BRICS have warned of the dangers of tariffs - saying they don't want a confrontation with US President Donald Trump. The group of emerging nations made the comments at their summit in Brazil. They also discussed Gaza and tensions in the Middle East.

BRICS summit rejects U.S. tariff threats, tackles trade and Gaza

Video captured by a BBC News crew shows French police slashing a boat filled with migrants trying to cross into the U.K. The crackdown comes ahead of a summit this week between the French president and British prime minister.

French police slashing migrants’ boat in crackdown

President Donald Trump's Justice Department and FBI released a memo concluding that there is no evidence Jeffrey Epstein had a "client list." The FBI confirmed that more than 1,000 victims were harmed by Epstein.

FBI: Epstein investigation turned up no 'incriminating client list'

The death toll from the devastating floods in Texas has risen to at least 90 as rescue workers continue to search for dozens of missing people. At least 27 campers and counselors at Camp Mystic in central Texas died in the floods.

Kerrville

At least 90 people killed in Texas floods

A shooter is dead after opening fire at a U.S. Border Patrol building in McAllen, Texas, a Department of Homeland Security spokesperson said. CBS News' Shanelle Kaul has the latest updates.

McAllen

Shooter killed after opening fire at U.S. Border Patrol building

Israel’s military launched airstrikes early on Monday targeting ports and facilities held by Yemen’s Houthi rebels. The strikes followed a suspected Houthi attack on a ship in the Red Sea.

Israel strikes Yemen ports held by Houthi rebels

Israeli Prime Minister Benjamin Netanyahu is set to meet with U.S. President Trump at the White House on Monday. The two leaders are expected to discuss the ongoing conflict in Gaza and a potential ceasefire with Hamas.

Netanyahu set to meet Trump at White House amid ceasefire optimism

U.S. President Donald Trump's 90-day pause on global tariffs announced in April is nearing its expiration, and the White House warned that steeper tariffs could roll out at the beginning of August.

White House warns higher tariffs could roll out August 1

Erin Patterson, the Australian woman accused of killing three relatives with a meal of death cap mushrooms baked in a Beef Wellington lunch, has been found guilty of three counts of murder and the attempted murder of the lone survivor.

Morwell

Australian woman found guilty in ‘mushroom murder’ trial

Camp Mystic, an all-girls summer camp along the Guadalupe River, has confirmed that at least 27 campers and counselors died in the devastating floods that hit the Texas camp.

Hunt

Camp Mystic confirms 27 campers, counselors killed in floods

President Donald Trump called Elon Musk's plans to form a new political party "ridiculous," launching new barbs at the tech billionaire.

Trump criticizes Musk's new 'America Party' as feud grows

Rescuers are searching for more than 40 people still missing, after flooding in the US state of Texas. The death toll has risen to at least 82, including 28 children - many of them from a summer camp. President Donald Trump has declared the area a disaster zone.