News: The Squawk Box Treasury sweepstakes

Wednesday, November 13, 2024

The Squawk Box Treasury sweepstakes

Nov 13, 2024

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QUICK FIX

Want to know what economic policy in Trump 2.0 could look like on TV? Tune in to CNBC on weekday mornings.

Call it the Squawk Box sweepstakes. Trump allies who are competing for prominent economic roles in his new administration have taken to the morning show anchored by Joe Kernen, Becky Quick and Andrew Ross Sorkin to showcase their media skills to an audience that includes the president-elect. Trump is a viewer — he recently heaped praise on Kernen over an exchange with erstwhile adviser Anthony Scaramucci — and he drew from CNBC’s talent pool during his first administration with his selection of Larry Kudlow for director of the National Economic Council.

Big names who’ve been vying for Treasury and other key economic or regulatory positions have been cycling through the show over the last week as Trump’s transition team makes quick work of filling out the administration.

The upside for job contenders to make the media rounds is obvious. Trump is a former reality television star. He loves TV. He once planned to build a housing development called “Television City.” As POLITICO reported last week, he has used his surrogates’ television appearances to gauge where they might fit in his administration. This has been his M.O. for years. (A gem from the late Ben White: “During the call [offering Kudlow the job], Trump said he was seeing Kudlow’s photo on television and told him: “You’re looking handsome, Larry.”)

The question is why airtime on this particular program is valuable to Trump’s potential economic advisers. It’s not a hostile environment, per se, but it is a place where they won’t be able to rattle off their talking points and walk away. It’s not just a question of visibility – but viability. If they’re going to speak for Trump, they’ll have to defend his views and policies and how they could affect economies and markets. And these appearances are as likely to catch the eyes of DC policy wonks — or econ reporters — as they are the incoming president.

“What's cool about Squawk is they come on, they come to play and they come ready to debate,” one show insider told MM.

There’s speculation that a Treasury pick could be imminent — your host and Gavin Bade have more reporting on that in Tuesday afternoon’s West Wing Playbook — so it’s instructive to consider how the administration’s many aspirants are making their case to a Wall Street audience.

— Scott Bessent , a hedge fund founder and former George Soros protege who’s now one of Trump’s closest advisers, explained that the post-election spike in 10-year yields — which has been widely viewed as anticipation for greater inflation during a second Trump term — was actually “a healthy move geared toward impetus.” Deregulation and lower energy prices are disinflationary, he said, adding that he would recommend tariff adjustments be “layered in gradually” to spread out any impact on prices. (He doubled down on that message during a follow-up appearance on Steve Bannon’s War Room).

— Former SEC Chair Jay Clayton — a regular on the program— used a recent appearance to bemoan how ethics rules can be “preclusive” for getting qualified markets professionals into positions at regulatory agencies.

— Hedge fund billionaire John Paulson — who formally took himself out of the running for Treasury on Tuesday — explained why he thought any inflation from Trump’s tariff policies would be offset by greater energy production and any deficit reduction that would accompany Elon Musk’s cost-cutting regimen.

— Makan Delrahim, a partner at Latham & Watkins and former assistant attorney general at the DOJ’s antitrust division under Trump, appeared earlier this week to explain how the president’s regulatory regime will smooth reviews of new mergers. (Semafor reported that same day that he’s been in the mix to lead the Federal Trade Commission).

Who’d I miss? More importantly, who should they be booking as Trump rounds out his team?

IT’S WEDNESDAY — Do you want a job in the Trump administration? Let’s talk about it in Morning Money. In the meantime, send suggestions and tips to ssutton@politico.com and @ssutton.

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Driving the Day

Senate and House Republicans hold leadership elections … Clayton speaks at the Institute on Securities Regulation in New York at 9:10 a.m….Trump and President Joe Biden meet in the Oval Office at 11 a.m….

Where it stands — The FT reports that Bessent and the co-chair of Trump’s transition team, Cantor Fitzgerald CEO Howard Lutnick, are now in the lead for the top job at Treasury after Paulson’s exit.

They’re going to study it — Elon Musk and Trump acolyte Vivek Ramaswamy have been tapped to lead the “Department of Government Efficiency” to investigate ways to shrink the federal government, Kierra Frazier reports. The new entity – whose acronym DOGE is a reference to cryptocurrency — is to conclude its work by July 4, 2026. Details of the department — such as the size of its staff, if any, and the scope of its mission — were not yet available.

From Kierra Frazier: “The world’s richest person has a new job. Elon Musk will lead a newly created “Department of Government Efficiency” that will spearhead efforts to shrink the federal government, President-elect Donald Trump announced Tuesday.”

What Wall Street’s reading Pt. II — Gavin reports that Trump trade adviser Robert Lighthizer — who is also still in the running for Treasury as of this writing — is laying the groundwork to convince lawmakers and the public that their plans for dramatically higher tariffs will stimulate the economy. Trump’s calls for universal tariffs have set off alarm bells in economic policy circles. But in a document obtained by POLITICO, Lighthizer and his allies plan to justify the policy by attacking the ability of economic models to accurately predict changes to the economy as a result of tariffs.

— The WSJ’s Brian Schwartz reports that Trump has told allies that he’d like to appoint him as his trade czar, “which would likely give Lighthizer sweeping oversight on trade policy across the administration.”

What Jerome Powell is reading — Sen. Kevin Cramer (R-S.D.), who holds a seat on Senate Banking, suggested to reporters on Tuesday that he wouldn’t stand in the way if Trump attempts to fire Federal Reserve Chair Jerome Powell. “I’ve defended Jay Powell enough times to be worn out. … He’s become indefensible, undefendable,” said Cramer, per our Victoria Guida and Jasper Goodman. He added that he doesn’t think Powell has been “very independent.”

A message from America’s Credit Unions and the Independent Community Bankers of America:

CREDIT UNIONS & COMMUNITY BANKS IN All 50 STATES OPPOSE THE DURBIN-MARSHALL CREDIT CARD BILL: America’s approximately 9,000 credit unions and community banks are united in opposition to the Durbin-Marshall Credit Card Bill because credit card routing mandates harm local financial institutions and the communities they serve. Durbin-Marshall jeopardizes access to credit for 140 million credit union and community bank customers. Congress can expect to hear from all 140 million of us this fall.

On the Hill

Senate Banking takes shape — Virginia Sen. Mark Warner on Tuesday confirmed that he intends to retain his role as the top Democrat on Senate Intelligence, clearing the way for Massachusetts Sen. Elizabeth Warren to lead the Democrats on Senate Banking. Warren said she is "ready to take over the tools available on the Banking Committee" as its ranking member,Eleanor Mueller reports.

“In the aftermath of the 2024 election, it’s powerfully important for Democratic leadership to show that we can make life more affordable for working people and to act with urgency to rebuild our middle class,” Warren said in a statement. “This new role means a better chance to advance solutions like building more housing to lower prices and protecting consumers from private equity greed and special interest scams.”

First in MM: Hill calls on regulators to halt rulemaking — Rep. French Hill (R-Ark.), who is running to become the top Republican on the House Financial Services Committee, is calling on federal financial regulators to halt all ongoing rulemaking during the lame-duck period before Donald Trump returns to the White House, Jasper reports.

In a letter to regulators shared with MM, Hill wrote that "Americans have expressed their widespread discontent over the outgoing administration’s excessive regulatory overreach throughout the past four years."

"It is in the interest of all Americans that this agenda be halted immediately in order to restore the balance between the government and the people it serves," he wrote.

The letter comes as Trump looms over the race to replace Rep. Patrick McHenry (R-N.C.) as the leader of the Financial Services panel. He is influencing other leadership races across Capitol Hill and the next Financial Services chair may be tasked with reconciling committee Republicans' historically business-friendly approach with the incoming administration's more populist ethos.

Clock’s ticking — Senate Banking Chair Sherrod Brown is unsure if the committee will be able to vote on Biden's nominees to chair the FDIC and join other agencies by the end of the year, Eleanor reports.

“I don't know,” the Ohio Democrat told reporters. “I have to talk to [Senate Majority Leader Chuck] Schumer and figure out — I mean, I want to do it, I want to do it. ... I just know there's a window, and I want to be in it — but I don't know yet.”

A message from America’s Credit Unions and the Independent Community Bankers of America:

TRANSITION 2025

Speaking of why TV matters… — Trump announced that Fox News host Pete Hegseth is his pick to lead the Pentagon, Jack Detsch and Joe Gould report. It’s a surprise move that will put the Army vet in charge of efforts to clear out diversity and inclusion policies at the Defense Department.

White House counsel — Josh Gerstein reports that Trump will install William McGinley, a Republican campaign lawyer and former Trump White House adviser, as the White House counsel in the next administration.

CIA — Trump plans to nominate John Ratcliffe to serve as director of the CIA, John Sakellariadis reports. The former four-term Republican member of Congress served in Trump’s first term as director of national intelligence.

Homeland Security — Trump has selected South Dakota Gov. Kristi Noem to lead the Department of Homeland Security.

Foreign policy takes shape — The president-elect has named real estate mogul Steve Witkoff to serve as special envoy to the Middle East, Eric Bazail-Eimil reports. A longtime friend of the president, Witkoff is also the co-chair of Trump's inauguration with GOP donor and former senator Kelly Loeffler of Georgia.

The lame duck session could reshape major policies before year's end. Get Inside Congress delivered daily to follow the final sprint of dealmaking on defense funding, AI regulation and disaster aid. Subscribe now.

In the markets

Start your engines — With the election in the rearview, mergers and acquisitions are about to accelerate, Citi CEO Jane Fraser told Bloomberg TV. “There’s a lot of pent-up demand,” she said. “But at the same time, I see particularly in the States which is the majority of the M&A activity at the moment — and it’s likely to be that way — it is game on and the clients are on the front foot.”

A message from America’s Credit Unions and the Independent Community Bankers of America:

CREDIT UNIONS & COMMUNITY BANKS IN All 50 STATES OPPOSE THE DURBIN-MARSHALL CREDIT CARD BILL: The Durbin-Marshall Credit Card Bill would create harmful new routing mandates on credit cards that would put consumer data and access to credit at risk. The threat of Durbin-Marshall to small financial institutions is so clear that America’s approximately 9,000 credit unions and community banks across America are opposed to the bill. Credit unions and community banks also see through the so-called “carveout” for smaller banks, an unworkable policy designed to disguise the negative impact of this legislation. Our message to Congress is simple: on behalf of 140 million credit union and community bank customers in all 50 states, commit to opposing the Durbin-Marshall Credit Card Bill. Lawmakers who choose not to support their local financial institutions can expect to hear from our 140 million customers this fall.