Episode summary
DOJ Drops Powell Probe, Smoothing Path for Warsh to Lead Fed | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Paul Sweeney, Scarlet Fu · Guests: Michael McKee, Dan Ives, Chad Moutray
Summary
The discussion opens with the Justice Department ending its investigation into the Federal Reserve’s building-renovation cost overruns, a move the host and a guest said could make it easier for Kevin Warsh to advance as President Donald Trump’s Fed nominee. Michael McKee said the development improves the odds, but warned the nomination still faces procedural hurdles and that Jay Powell may want an immunity agreement before stepping down.
The guest also said the episode would not change next week’s FOMC decision because there is no new economic outlook or dot plot at this meeting. He argued Powell may not need to make an immediate public statement about his future, though he is nearing the May 15 transition point and could still remain on the board briefly.
Later, Dan Ives said the tech trade is being driven by the question of whether massive capex is finally translating into monetization beyond Big Tech. He was upbeat on Intel, Oracle and Tesla, arguing Oracle can fund its AI buildout and Tesla’s higher AI capex fits its shift toward autonomous robotics. Chad Moutray then described a restaurant industry still squeezed by labor shortages, immigration constraints and thin margins, but helped by no tax on tips and overtime.
Key takeaways
- Michael McKee said the DOJ move “smooths the path” for Kevin Warsh, but the nomination still depends on Senate procedure and timing.
- McKee said the next FOMC meeting should not be materially affected because there is no new dot plot or economic outlook.
- Dan Ives argued the market is starting to see capex “bear fruit,” especially in cloud growth, software modernization and AI infrastructure.
- Ives said Oracle’s debt load is manageable relative to cash flow and expects the stock could double as AI backlog monetizes over time.
- Chad Moutray said only 22% of restaurants reported understaffing last year, but 42% were not profitable and labor costs remain a major burden.
Notable quotes
“it uh smooths the path, but whether the path gets taken or not, we don't know yet”
“I don't think it changes much at all. it's not going to be a factor in the decision- making in terms of interest rates”
“I think right now it's really about, okay, capbacks, but where's the monetization? Are you starting to see it”
“I believe the street is way miscalculating this name”
“the good news is that only 22% of restaurants told us last year that they were underst staffed”
How the episode opens
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Listen on demand wherever you get your podcasts or watch us live on YouTube. Department of Justice has dropped its investigation into JPEL and the Federal Reserve regarding its uh building cost uh overrun. Let's bring in Michael McKe, our chief international economics and policy correspondent.
Mike, this is something that should smooth the path for Kevin Walsh, uh President Trump's nominee for the Federal Reserve chair to uh become Fed chair, doesn't it? it uh smooths the path, but whether the path gets taken or not, we don't know yet because we don't know whether the agreement to have the inspector general continue a probe into the buildings and we don't know uh whether that includes Powell, which Piro had included. Uh but we don't know whether that's enough for Tom Tillis to say, "Okay, let's have a vote.
he has not commented and everybody's madly watching his Twitter feed and etc to see what what he thinks. That would be step one. And then step two is getting a the nomination to a vote in committee and getting it out to the floor.
There isn't a lot of legislative days left, but uh they can make things happen if they want to. So it is
Uh odds are a little better now. Yep. Shall we say? — We were talking in the studio to Elliot Stein. He's a a litigation analyst for Bloomberg Intelligence. He's a lawyer. Um he said if he were advising uh Chairman Jay Pal, he would say you need to get an immunity agreement.
Yeah. — I mean that's that's a big move.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- doj powell probe
- warsh fed chair nomination
- intel earnings forecast
- tesla cybercab robotaxi
- restaurant industry headwinds
Companies and tickers mentioned
- INTC
- TSLA
- Wedbush Securities
- Intel Corp.
- Tesla
- National Restaurant Association
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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