WSJ What’s News - Trump Denies He’s Planning to Fire Powell

Episode Date: July 16, 2025

P.M. Edition for July 16. In comments from the White House today, President Trump denied that he was trying to oust Federal Reserve Chair Jerome Powell, though he raised the prospect that Powell could be removed for cause. Plus, big banks like Goldman Sachs have reported bumper earnings for the second quarter. But as Journal reporter AnnaMaria Andriotis tells us, the factors that made the quarter so strong may not continue into the next few months. And Oracle, the software company founded nearly 50 years ago, is striking big deals for artificial intelligence that’s boosting its stock price. WSJ Heard on the Street columnist Dan Gallagher joins to discuss what it would take for Oracle to become one of the biggest names in AI. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter.  Learn more about your ad choices. Visit megaphone.fm/adchoices

Stop. Do you know how fast you were going? I'm going to have to write you a ticket to my new movie, The Naked Gun. Liam Neeson. Buy your tickets now and get a free chili dog. Chili dog not included. The Naked Gun tickets on sale now, August 1st. President Trump denies that he's trying to fire Federal Reserve Chair Jerome Powell. Plus, as banks like Goldman Sachs report bumper quarterly earnings, does past performance guarantee future results? The second quarter was a quite good quarter for the large banks, but a lot of uncertainty remained.

And in the world of investing banking, uncertainty is not something that tends to help growth and deal-making. And how a nearly 50-year-old software giant may become one of the biggest players in artificial intelligence. It's Wednesday, July 16th. I'm Alex Osceola 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. President Trump has denied that he was planning an attempt to fire Federal Reserve Chair Jerome Powell after polling Republican lawmakers during a closed-door meeting about whether he should oust him. Answering reporters' questions at the White House, the president suggested he could attempt

to remove Powell for cause, arguing the central bank spent too much money on renovations of two historic office buildings. I don't rule out anything, but I think it's highly unlikely, unless he has to leave for fraud. I mean, it's possible there's fraud involved with the $2.5, $2.7 billion renovation. This is a renovation. How do you spend $2.7 billion?

And he didn't have proper clearance, et cetera, et cetera. So you know that's going on. So there could be something to that, but I think he's not doing a good job. He's got a very easy job to do. You know what he has to do? Lower interest rates. Trump also said that during a meeting yesterday

at the White House, he asked GOP lawmakers how they felt about firing the Fed chair, and several expressed support for the idea. I talked about the concept of firing them and I said, what do you think? Almost every one of them said I should. But I'm more conservative than they are. According to a senior administration official, the president then suggested he could move to fire Powell in the near future.

Trump has for years raised the prospect of firing Powell. So far, he hasn't done so. But the president has grown increasingly frustrated with Powell in recent months and has hammered the Fed chair for what he has characterized as dragging his feet on interest rate cuts. Trump also told reporters today that he was considering choosing Kevin Hassett, one of his closest economic advisors, to succeed Powell as Fed chair. U.S. stocks rose today after President Trump denied

he would try to fire Federal Reserve Chair Jerome Powell. The Dow finished about 0.5% higher, the S&P 500 added roughly 0.3%, and the Nasdaq was up about a quarter of a percent. Bank stocks remained a weak point, with Morgan Stanley dropping about 1.3% and several other large U.S. lenders in the red on the day. Wall Street fears that Powell's replacement

could set off an unruly period in markets and increase the risk of inflation rebounding. Goldman Sachs has reported bumper earnings for the second quarter. Its profit jumped 22%, beating analyst expectations, and its revenue rose 15%. It's the latest big bank to report surging profits. JPMorgan Chase, Bank of America, Citigroup, and Morgan Stanley also reported higher trading revenue.

WSJ reporter Anna Maria Andriotis covers big banks for the journal. Anna Maria, what is driving these profits? Anna Maria Andriotis What's driving the profits is all the uncertainty and market volatility that has been around President Trump's tariffs. There's two layers here in terms of what's going on. Number one, on the trading side for these banks like Goldman, pretty much all of the major big banks, Goldman, JP Morgan, Morgan Stanley, and so on, saw increased revenues in trading. And that's a reflection of the fact that in Q2, in the second quarter, there was basically

a lot of repositioning that investors were doing with their portfolios because of the uncertainty. Meanwhile, this quarter, also driving profits for several big banks, including Goldman, is on the investment banking side. This was kind of a whipsaw type of quarter on the deal making front. What I mean by that is, at the very beginning of the quarter, because of the initial tariff announcement on Liberation Day, a number of deals that were being worked on were essentially put on hold, in particular in the IPO market. So what played out as the second quarter went on was improved confidence from company CEOs,

more of a willingness and an appetite by companies to get back to deal making. It's almost a two sides of the chaos surrounding tariffs because obviously the tariffs and trade policy, there's a lot that has not been finalized on that. Anna Maria, looking ahead, what does the next quarter look like for some of these big banks? So several big banks talked about there being a lot of deal making in the works

on the investment banking front. So there's definitely optimism that's been shared by a number of banks. However, at the same time, there are several things that are, quite frankly, pretty uncertain. Number one, there's a number of trade deals that still have to be worked out. There's also the unknowns of the impact that tariffs will have on growth, on economic growth. And then there's also the ongoing geopolitical risks in particular in the Middle East. So a way to summarize what's going on right now is that the second quarter was a quite good quarter for the large banks, but a lot of uncertainty remained.

And in the world of investment banking, uncertainty is not something that tends to help growth and deal making. That was WSJ reporter Anna Maria Andriotis. Thanks, Anna Maria. Thank you. The Labor Department said today that the producer price index held steady in June, missing forecasts for a slight rise. Economists watched the PPI closely because some of its data are used to calculate the Federal Reserve's preferred inflation metric, the Personal Consumption Expenditures Price Index. Coming up, why Oracle's stock is booming. That's after no. But a banana?

That's a yes. A nice tan? Sorry, nope. But a box fan? Happily yes. A day of sunshine? No. A box of fine wines? Yes. Uber Eats can definitely get you that. Get almost almost anything delivered with Uber Eats. Order now. Alcohol in select markets. Product availability may vary by Regency app for details. The artificial intelligence boom has turned lesser known companies like TSMC and Nvidia into household names. One unlikely success story is 48 year old Oracle. The company had already built up a cloud business to compete with those offered by industry titans

like Amazon, Microsoft, and Google. Now its stock price is surging. WSJ herd on the street columnist Dan Gallagher joins me now with more. Dan, Oracle's market cap is around $650 billion. What is driving its business now? It's become an AI story. And what's interesting is AI is still a relatively small part of their actual reported revenue.

Oracle started with database software product that like every major company uses in some fashion. And they parlayed that into a position in cloud computing. So that has put them in this great position for essentially handling AI workloads. Earlier this year, there was a big deal announced in the White House that was to build this massive data center project to power AI that was going to essentially be for open AI. So that money hasn't even yet or just barely actually started flowing in, but it's really big.

You note in your column that Oracle is the biggest tech company that's not yet in the trillion dollar club. What does business look like moving forward? They have a lot of potential. A few weeks ago, they put in a filing that they just got a deal that's going to drive up around $30 billion in revenue starting in their 2028 fiscal year. If you think about it, that's one single contract that's going to really potentially almost double in size in terms of annual revenue.

So does it have the potential then to really be one of the biggest names in AI in the coming years? It's certainly possible. They have to make a lot of things go right. And they have to compete against these other companies that are even bigger to get the chips from Nvidia and other things to build up this capability. And they obviously like the others need AI to really pan out into a huge, huge business. Oracle is kind of facing that risk that maybe that doesn't pan out the way optimists think it will or as fast as it will.

But that's not really different from what pretty much all the companies in the trillion dollar tech club are exposed to that risk right now. That was WSJ herd on the street columnist Dan Gallagher. Thank you, Dan. Thank you for having me. Ford Motor is recalling nearly 700,000 vehicles, adding to the automaker's record-breaking recall tally this year. According to the National Highway Traffic Safety Administration, fuel injectors in certain vehicles, including some Bronco Sport and Escape models, may crack and leak fuel inside

the engine compartment, increasing the risk of a fire. The regulator said a fix is currently under development. As an interim repair, dealers will update the engine control software free of charge. Ford estimated it will incur about $570 million in costs associated with the recall in its second quarter results. And Europe's exports to the U.S. edged down to around $54 billion in May. That's according to the European Union's statistics agency, Eurostat. It's the second consecutive month that the EU's exports have fallen, after they reached a record high in March, when American importers stockpiled goods ahead of the Trump administration's impending tariff announcements.

But May's numbers were still higher than a year earlier, a sign of resilience that will be tested as higher tariffs look set to become a settled feature of transatlantic trade. And that's what's news for this Wednesday afternoon. Today's show is produced by Anthony Bansi and Pierre Bienneme with supervising producer Michael Kosmides. I'm Alex Oseloff for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.