MAJOR GARRETT:
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Massachusetts Democratic Senator Elizabeth Warren joins me now. Senator, it's great to have you with us. I want to, for the benefit of my audience, lay down a bit of a track record as we talk about Jerome Powell because when he was nominated the first time, you were the only member of the Senate Banking Committee to oppose his nomination. When he was renominated, you were the only member of the Senate Banking Committee again to oppose his nomination. So your record on Jay Powell is clear. Differentiate from my audience what that is and the threat or danger of President Trump issuing veiled and not-so-veiled threats to fire Jay Powell. Well, as you've rightly pointed out, I certainly have policy differences with Jay Powell, but I also believe in the independence of the Fed. There's a reason that the president has a whole cabinet, people who serve at his pleasure, people he can hire and fire. But when it comes to the question of the Fed and the other banking regulators, we've really tried to fence them off and the Fed to try to keep them out of politics so that they are doing monetary policy, so they're doing big-bank supervision without getting tangled in the politics of what a president of the United States wants. So when Donald Trump says that he is going to fire the chairman of the Federal Reserve-- which he has said many times over the past few months-- the markets respond pretty badly to that because they say that takes away the independence of the Fed, and that's something that will cost all of us. So I have a lot of policy disagreements with Jerome Powell, but he's independent, and he gets to make those policy decisions on his own. His job is not at risk. Speaking of the markets, Senator Warren, they seem to be telling themselves, oh, Trump's just blowing off steam. There's nothing really dangerous here. I hear the same thing you do, but I'm worried about this at two levels. Yeah, he's just blowing off steam until the time he's not and actually does it. But the second is doing this kind of chaos around the Fed is not free. It costs us. Everybody around the world has to make the decision, do I buy US bonds or not? And we saw what happened a couple of months ago when Donald Trump said he was going to fire the chairman of the Fed, and all of a sudden, the bond market-- the market that says, yes, I believe; when there's trouble, always run to the United States and buy those bonds because the United States is a dependable financial partner. People around the world said, uh uh, not really. So I think that what Donald Trump is doing is costly right now to our financial system. Day by day, every time he pulls this nonsense, he just sets a little more of America's credibility on fire. Therefore, from your vantage point, if I hear you correctly, Senator Warren, whatever the Fed next does, up or down, will be viewed, at least in part, through the political prism already established by the president of the United States? Yep, that is part of the problem now. Look, I'll say it again. I have stayed after Jerome Powell relentlessly to lower interest rates but have tried to persuade him why I thought it was appropriate to lower interest rates. And now we're in a place where Jerome Powell said last month that back in February he would have lowered interest rates but for the fact that Donald Trump was creating all this chaos on tariffs, and that made the Fed back off because they said, you're creating this financial uncertainty, and we want to have more flexibility here. And just pause for a minute because what that means is that every family in America that has a credit card or a car loan or other kinds of short-term credit has paid more money over the last six months because one man, Donald Trump, created enough chaos that the Fed kept interest rates high. And now what Donald Trump wants to do is put the chairman of the Fed in a political box so that no matter which way he turns, people across the country, investors around the world say, whoa. Do we have an independent Fed or not, or is this just one more arm of Donald Trump's chaos? And we pay a price for that. More broadly, Senator Warren, evaluate the current state of the Trump economy. The White House says over and over, we're raising about $21 to $22 billion a month in tariff revenue. Inflation is tamed. Job creation is stable. In the president's words, the economy is hotter than ever. So I'll put it this way. The top-line numbers look pretty good. Inflation looks like it's fairly stable. Unemployment looks like it's kind of holding steady. And the stock market, shoot, has hit record highs. So the top-line numbers look good. That is not the lived experience of tens of millions of people across this country. And so when you start to dig the numbers apart, what you start to see is that families are dealing with flat wages and with rising debt loads and with rising defaults on credit-card debts and on car loans. Families themselves are telling us, through the consumer confidence surveys, that they are very worried about their own economic futures. So that's the first part of the disconnect. But then you throw into that that Donald Trump has created all of this chaos around tariffs, and the consequence of that has been that nobody wants to invest under those circumstances. Everybody puts on pause. Nobody's going to start a factory. Nobody's going to train a bunch of employees, buy a lot of expensive equipment if they don't know what the tariff situation is, what it's going to cost to import raw materials, whether or not they're going to get hit on tariffs, on exports, reciprocal tariffs. So you've got the chaos around the tariffs. The second thing that you've got going is that the Republicans and Donald Trump have just passed a tax-and-spend bill that is going to shoot the national debt through the roof, and they're not doing it to do things like to build roads and bridges that will increase productivity. They're not doing it to invest in child care so more mamas and daddies can go back to work. Nope, they're doing it to give tax cuts to billionaires and billionaire corporations. And they recognize it's a problem. They use the same argument they've used since Ronald Reagan. They say, oh, that's OK. It'll spur growth, pay for itself. Every independent economic analysis says no, it won't. Never has. Won't do it this time. But then there's a third economic grenade rolling in, and that is that they are rapidly cutting the oversight of all of the financial agencies that they exercise over our economy. They're trying to get rid of the CFPB. They're trying to get rid of the Accounting Oversight. They're trying to roll back the regulations, and that deregulation, inviting more companies to come in and cheat American consumers, inviting them to come in and trick small businesses, ultimately that puts more risk into our economy. And then just throw in what's happening right now with crypto, one more opportunity to load up risk into the economy. So I see this economy very much like I did when I was ringing the alarm bell before the 2008 crash, and that is there's a lot of risk building up in this. And if Donald Trump doesn't change direction, he's going to blow this economy up. It's a conversation I want to have with you more when we have more time. Senator Elizabeth Warren, please come to the studio. We'll have a broader conversation about all that, but thanks for your time. I appreciate it very much. You bet.
