WSJ What’s News - Dimon Defends Fed Independence as Process to Pick New Fed Chair Begins

Episode Date: July 15, 2025

P.M. Edition for July 15. JPMorgan Chase CEO Jamie Dimon has become the first head of a U.S. financial institution to publicly address the Trump administration’s broadsides against Federal Reserve Chair Jerome Powell, even as Treasury Secretary Scott Bessent announces that the formal search for Powell’s replacement has begun. Plus, consumer prices rose 2.7% in June from a year earlier. WSJ chief economics correspondent Nick Timiraos joins to discuss what this means for the Fed. And Apple strikes a multimillion-dollar deal with the biggest U.S. supplier of rare earth magnets. We hear from WSJ senior reporter Jon Emont about the significance of the deal. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Is bedtime a nightmare? If you fear the chance of accidental leakage and skin irritation, you need to try Tana Sensitive Care Overnight Pads. Its skin comfort formula acts as a barrier to help protect your skin. Try them now and have a smooth night. Jamie Dimon defends the Fed's independence, as Treasury Secretary Scott Besant says the process to pick a new Fed chair is underway. Starting the search now is far earlier than usual, and that could be something you do if you want to make him more of a lame duck, announce who his successor will be sooner than you otherwise would, and try to get people to stop focusing on the lame duck pal and

on whoever the new guy is. Plus, tokenized stocks have just become available on crypto platforms, but problems are already emerging. And Apple strikes a multi-million dollar deal with America's biggest rare earth producer as the US seeks to bring an end to China's dominance. It's Tuesday, July 15th. I'm Alex Osila for The Wall Street Journal.

This is the PM edition of What's News, the top headlines and business stories that move the world today. We begin this evening with news that the process to choose the next head of the Federal Reserve is getting underway. That's what Treasury Secretary Scott Besant said today in an interview with Bloomberg Television and suggested that when current chair Jerome Powell is replaced, he should also step down from the board. When asked, Besant said President Trump is not looking to remove Powell before his term

ends next year. Meanwhile, JPMorgan Chase CEO Jamie Dimon sounded Wall Street's clearest warning against the Trump administration's attacks on Powell. Speaking to the media in a call after the bank's earnings announcement, Diamond said that the independence of the Fed is absolutely critical and that, quote, playing around with the Fed could have adverse consequences. Diamond became the first leader of a major U.S. financial institution to publicly address the administration's broadsides against the central bank chief.

Although many on Wall Street have privately worried that political pressure will undermine the Fed's credibility. U.S. inflation picked up last month, a potential sign that companies are starting to pass tariff costs onto consumers. The Labor Department said today that consumer prices rose 2.7% in June from a year earlier. That's faster than May's increase of 2.4% and was in line with the expectations of economists

surveyed by the Wall Street Journal. Core inflation, which excludes volatile food and energy prices, was 2.9% also in line with forecasts. For more on what these numbers mean, I'm joined by WSJ Chief Economics correspondent Nick Timmeros. Nick, the Fed has been in this continuing wait and see posture as we all know. They've been waiting for more data. What does this data show to the Fed? This data doesn't show enough to change your mind about what's happening with tariffs. So if before this report you thought, look, the economy is just not going to be strong enough for a lot of businesses to raise their prices.

This report would validate that hypothesis. On the other hand, if you came into this thinking prices are going to pick up, retailers are just going to take more time to pass along these increases. You do see in this report prices up for furniture, clothing, toys, other tariff sensitive items. And you'd have reason to say it's going to get even more of this kind of price increase in July and August. So you don't want to do anything now to cut interest rates or stimulate the economy ahead of that. So this is what I would call a choose your own narrative inflation report.

Recent comments from Fed Chair Jerome Powell indicated that the Fed is open to possibly cutting rates as soon as September. Does this change that timeline? This report probably shouldn't change that. The question really in the inflation numbers right now, everybody's focusing on goods prices because those are the items

that are getting hit with tariffs. You should also focus on services. If you look at this report, things like hotel prices were down, travel has been soft, and so one theory here is that well if businesses that are getting hit with tariffs are pushing along more price increases but the economy is just not that strong, then consumers are going to pull back in other areas. And in that environment you could get a one-time increase in prices, but you wouldn't get the sort of inflation

that we saw a few years ago, which was year after year of businesses raising their prices. That was WSJ Chief Economics correspondent Nick Timmeros. Thanks, Nick. Thanks for having me. corporate earnings season has kicked off, with America's biggest banks saying that

the U.S. economy showed signs of resilience despite escalating threats of a global trade war, a sign that American corporations and the consumer are still charging ahead. JPMorgan Chase reported a better-than-expected profit for the second quarter, benefiting from volatile markets and a steady U.S. economy. Fellow big banks Wells Fargo and Citigroup also posted better than expected profits and revenue, saying the economy was resilient. Meanwhile, giant asset manager BlackRock has become the world's first $12 trillion money manager.

However, the firm's shares tumbled today after it said a large client in Asia pulled $52 billion from its index funds during the second quarter. The company didn't identify the Asian client. Major U.S. indexes were mostly lower today. The Dow fell about 1 percent, while the S&P 500 edged 0.4 percent lower after hitting an intraday record high earlier in the session. The Nasdaq was up about 0.2% to not a fresh high, boosted by a rally in chip stocks. We're exclusively reporting that Tesla's top sales executive in North America has left

the company after 15 years. That's according to people familiar with the matter. Troy Jones, vice president of sales, service and delivery and Tesla's largest market, is the latest high-level executive to depart the automaker as it faces a steep drop in sales. A top aide to Elon Musk who oversaw sales and manufacturing operations, as well as the company's director of human resources and vice president of engineering have all departed in recent months.

Coming up, want to trade Amazon on a crypto exchange? Well, be prepared for the price to be off. Maybe buy as much as 300%. More after the break. It won't take long to tell you Neutral's ingredients. Vodka. Soda. Natural flavors. Vodka, soda, natural flavors. So, what should we talk about? No sugar added? Neutral. Refreshingly simple.

Crypto companies have grand plans to reinvent the stock market using the blockchain. But in some cases, those plans are off to a bumpy start. Alexander Osipovich covers cryptocurrencies and exchanges for the journal and is here now with more. Alex, some of these accounts have not been around for all that long and already some sort of cracks in the foundation are emerging since they're launched only two weeks ago. Some of the tokens that are designed to track popular stocks

such as Amazon and Apple have deviated wildly from the price of the underlying shares. What's going on there? The way that these things work is that there is a company that controls a vehicle that buys shares of stock and issues new tokens. In theory, that's supposed to create a mechanism that helps keep the price of the token

in line with the underlying stock. In the case of backed tokens, they can be traded on many different marketplaces. And some of the marketplaces don't have a lot of liquidity. So if somebody goes in and places a big order, it can suddenly move the price before anybody can catch up and try to make the price get back in the line.

So we have seen some examples where, for instance, Amazon, the token, was trading at about four times the price of Amazon the stock. Granted, that was over the weekend, so we're just going off the last closing price of the stock. And there are incidents like that a lot. The company behind this is working with different exchanges to try to improve the situation and potentially these are growing pains for a new product.

But it is definitely a bumpy start. Another issue that has already emerged was Robinhood launched token based on OpenAI, which the company did not consent to. Is this the kind of thing that we might see more often as these kinds of exchanges and tokens mature? What happened with Robinhood was that as part of its tokenized stock launch, it gave out tokens that are tied to the eventual performance of OpenAI. Now, OpenAI is not a public company and the company disavowed any relationship

with Robinhood's OpenAI tokens. Robinhood's European regulator said that it was examining the issue and seeking answers from Robinhood. So far Robinhood is sticking to its guns, says everything is legal and it has conducted its giveaway of OpenAI tokens. OpenAI has been silent about it. This also speaks to a larger issue, which is that you have a lot of crypto companies that are enthusiastically issuing tokens that are attached to some underlying stock, but in their enthusiasm, they're not bothering to go and check with the companies whether they're okay with that or not. Now it may be legal for them to do so, but as tokenized stocks roll forward and there's

more experimentation in this area, we're likely to see more conflicts of this nature. Saving out a little bit, Alex, tokenized stocks are part of this broader effort to rebuild traditional markets on the blockchain. Given some of these issues you've identified and just how nascent this market really is, will this work? This current approach that we've been talking about is probably not going to be the one that lasts for the long run. There are people working in the financial industry and in the crypto industry to try to completely reinvent stocks so that the native element of the stock would be the blockchain. If we get to that, there could be some potential

advantages to it, but to get there is a much longer road than simply launching these wrapper tokens that point to a stock and say, we're going to try to track that price. That was WSJ reporter Alexander Ossipovich. Thanks, Alex. Thanks for having me. Apple said today that it has struck a $500 million deal with MP Materials, America's biggest producer of rare earth magnets. Apple has been under pressure by the Trump administration to expand its US supply chain.

The move comes just a few days after the Department of Defense said it was making a big investment in MP materials as a way to undercut China's dominance over rare earths. WSJ senior reporter John Emont says the company has quickly become a key player in an industry that has recently been in the spotlight. MP seems to have just changed the game over the last week. It's a clear sign that there has been a real change in the landscape and that the United States government is much more committed to actually putting its money where its mouth is and making sure that there's ample supply of Western magnets and also that companies, including big companies like Apple that go through a lot of magnets are actually really going to invest in this.

This has been a big week for domestically produced rare earths and it does suggest that after a few months where companies in the United States were terrified that they weren't going to be able to get magnets from the US, there really is a path towards an alternative to Chinese domination. Well, China is still seeking to further consolidate its global lead in some industrial areas. Today, the country added technologies for producing materials used in EV batteries onto its list of export restrictions. The move comes on top of China's domination of the EV battery supply chain, from lithium processing to battery production.

Now Beijing is taking the next step to ensure other countries can't easily catch up. And that's what's news for this Tuesday afternoon. Today's show is produced by Anthony Bansi and Pierre Bienamé with supervising producer Michael Kosmides. I'm Alex Osler for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening. ["The Daily Show Theme"]