WSJ What’s News - Trump Weighs Naming Next Fed Chair Early to Undermine Powell

Episode Date: June 26, 2025

A.M. Edition for June 26. The dollar sags on news President Trump could name his pick to replace Fed chair Jerome Powell almost a year before his term ends. WSJ finance editor Alex Frangos explains how markets might view such a move. Plus, a new vaccine panel selected by Robert F. Kennedy Jr. starts re-examining shot advice for kids. And WSJ reporter Chelsey Dulaney details how Ireland’s pharma dominance has put it in Trump’s tariff crosshairs. Luke Vargas hosts.  Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

The dollar sags on news that President Trump could name his pick to replace Fed Chair Jerome Powell almost a year before his term ends. Plus, a new vaccine panel starts reexamining shot advice for kids. And Ireland's pharma dominance puts it in Trump's tariff crosshairs. The reason they've been making these drugs ingredients in Ireland is because it's been cheap to do so. This could definitely undercut the logic of that. It's Thursday, June 26th. I'm Luke Vargas for The Wall Street Journal, and here is the AM edition of What's News,

the top headlines and business stories moving your world today. We begin with a journal exclusive this morning as we have learned that Donald Trump is considering naming the next Fed chair early in a bid to undermine current chair Jerome Powell. Finance editor Alex Frankos told me that Powell has come under increasing pressure over the central bank's take-it-slow approach to cutting interest rates. Basically, Trump wants Powell and the Fed board to cut rates and wants them to do it now. And Powell's basically saying that's not the right thing to do.

Inflation is still too high. The economy is still strong enough to withstand the higher rates. So Trump has been railing against him and calling him names and really putting pressure on the Fed to cut rates sooner. Alex, according to our reporting, some of the names being considered here are former Fed Governor Kevin Warsh, National Economic Council Director Kevin Hassett, even the Treasury Secretary Scott Bessent. There are a few other names as well.

All of this 11 months before Powell's term is set to end. What impact could that have on markets? Usually the president will name their Fed pick three or four months before the end of the term. Naming someone 10 or 11 months before the end of Powell's term, which is next May, would create this kind of backseat driver effect, where you have the person who's going to be in charge of policy coming, and that person can signal to the markets what they intend to do.

If their cutting rates are not cutting rates, the new person might just reverse course. And so the market is going to have to think there's not going to be a lot of predictability here. The change could be abrupt and then you could have this big overlap and makes a lame duck even lamer. That was Finance Editor Alex Frankos. The head of the UN's Atomic Energy Agency says that U.S. and Israeli strikes against Iran's three main nuclear sites caused enormous damage and that any centrifuges installed

at the underground Fordow site at the time of the attack are no longer operational. A day after Iran's parliament passed a law ending cooperation with the International Atomic Energy Agency, its chief Rafael Grossi expressed concern that Iran's refusal to work with it could unleash a new crisis, saying he had yet to hear back from Iran's foreign minister about whether it could resume inspections within the country. Meanwhile, back in the U.S., Defense Secretary Pete Hegseth will hold a rare news conference at the Pentagon this morning to address reports that an intel assessment found that U.S. strikes on Iran had merely

delayed the country's nuclear ambitions by a few months. And a panel of vaccine advisers selected by Health Secretary Robert F. Kennedy, Jr. is planning to re-examine which vaccines are given to kids and teens and the schedule of shots. Speaking at the first meeting of the Advisory Committee on Immunization Practices since Kennedy dismissed all 17 of its previous members, new chairman Dr. Martin Kulldorf said that the group might look at vaccines for hepatitis B and for measles, mumps and rubella, or MMR, and he praised the panel's new direction. Secretary Kennedy has given this committee a clear mandate to use evidence-based medicine when making vaccine recommendations.

And that is what we will do. Vaccines are not all good or bad. If you think that all vaccines are safe and effective and want them all, or if you think that all vaccines are dangerous and don't want any of them, then you don't have much use for us." Today, the panel is set to hear a presentation on a preservative that anti-vaccine activists often blame for autism from a nurse practitioner who works at the anti-vaccine non-profit previously helmed by

Kennedy. Coming up with the end of Trump's 90-day tariff pause looming, economic partners like the EU are still working on a trade deal. But one country's surging trade deficit with the U.S. could complicate matters. We've got that story and more after the break. At Desjardins Insurance, we know that when you own a law firm, your bar for everything is high. That's why our agents go the extra mile to understand your business and provide tailored solutions for all its unique needs. You put your heart into your company, so we put our heart into making sure it's protected.

Get insurance that's really big on care. Find an agent today at Desjardins.com slash business coverage. A surge of U.S. imports weighing no more than a handful of cars is having a massive impact on the U.S. trade deficit. We're not talking here about semiconductors, though that would be a good guess. Rather, ingredients for weight loss drugs from Ireland, tens of billions of dollars of which have been flown into the U.S. this year in a trend that has put the country on President Trump's radar and could make it the target of coming tariffs.

Reporter Chelsea Delaney has this story. Chelsea, we're going to talk tariffs, we're going to talk trade policy in just a minute, but first let's just talk about the details in your latest reporting about this pharmaceutical trade. It's pretty vivid stuff. Take us into it. Yeah, so there's been this global rush to get products to the US before tariffs. But Ireland really stands out. It's sent more to the US this year for almost the entirety of 2024. And

that really comes down to one single category. And that category is a type of hormones that go into obesity and diabetes drugs like Mount Jaro and ZephBound. And so what we know is that Ireland has sent about $36 billion worth of those drugs to the US this year. All of that has flown on planes. And even more interestingly, almost all of that has gone to one single state, Indiana, which is where Eli Lilly, the company that makes Mount Jaro and Zephound is based. And Chelsea, it's powering a huge share of Ireland's trade, its overall economic growth. Give us some statistics there, but also just why is this happening in Ireland in the first place? Yeah, it's driven some kind of crazy economic swings this year.

Ireland's economy grew almost 10% in the first quarter compared to the end of 2024. You don't see numbers like that every day. It's boosted industrial production. So Ireland has really been benefiting a lot from this. And that has a lot to do with the role Ireland has. It has this very special role in the global operations of a lot of US companies. It's a huge production hub for a lot of pharmaceutical companies. It's where Botox is made. It's where Merck's cancer drug, Keytruda, the best selling drug in the world, is made. And it's because Ireland has generally pretty favorable tax policies in comparison to the US. So you get a lot of US companies. Also tech companies have set up their big operations overseas there. And so for Ireland, this has brought in a lot of money. It's benefited their economy,

but it also has made them extremely vulnerable to Trump's tariffs and his efforts to bring home US companies. Nat Senners Yeah, tell us about the options that the White House is weighing here. Dr. Lauren Lyle So Trump has said that he wants to put tariffs on the pharmaceutical industry. He said those were likely to come very soon. That's going to come after what's called a Section 232 investigation that's going on right now. It's expected to result in tariffs both on pharmaceutical products that are being imported and ingredients like this hormone that goes into

the obesity drugs. And so a lot of these pharmaceutical companies like Lilly, Johnson & Johnson, Merck have already said they're going to reshore some production. Tariffs likely will give them more reason to do that. The reason they've been making these drugs ingredients in Ireland is because it's been cheap to do so. This could definitely undercut the logic of that. Got it. I'm mixing metaphors and expressions here, but it's sort of maybe from the Irish perspective like make hay or make pharmaceuticals while the sun is shining, but it sounds like this industry may, I don't know, be heading overseas pretty

soon. A lot of these companies have been in Ireland for decades. They've spent billions of dollars building out these operations. They're likely not going to uproot themselves overnight. But the fact that Ireland's trade deficit with the US has just exploded in part because of these obesity drugs, it does put this very unwelcome spotlight on Ireland right now. Reporter Chelsea Delaney, thank you so much, as always, for the update. Thank you. Oil giant Shell is denying that it's in takeover talks with UK rival BP.

This morning's statement comes after a journal report Wednesday that Shell was holding early stage talks to acquire BP. Shell also said that it's now bound by UK takeover rules, meaning it can't make an offer for its peer in the next six months unless it does so with the agreement of BP's board, if a rival suitor emerges, or if there's a material change in circumstances. A BP spokesman declined to comment. Could Elon Musk's recent split with President Trump create a business opportunity for Jeff Bezos?

We are exclusively reporting that the founder of space company Blue Origin has spoken to Trump at least twice this month, according to people familiar with the matter, and that in at least some of the conversations with the president and his staff, Bezos and other company executives appealed for more government contracts. Blue Origin has long trailed Musk's SpaceX as NASA's dominant contractor, but there are signs that dynamic could be disrupted. In May, Trump rescinded his nomination for a Musk-backed nominee for the head of NASA, and earlier this month, mused about cancelling Musk's government contracts as a cost-saving

move. The White House and Blue Origin declined to comment, while Musk and SpaceX didn't immediately respond to requests for comment. And finally, shares of Nvidia closed trading yesterday at a record high, with the chipmaker also reclaiming the title from Microsoft of largest company by market size. As the journal's Asa Fitch reports, that comes as Nvidia is starting to ruffle feathers with Microsoft and fellow tech giants Amazon and Google by moving into cloud computing. It's an area where profit margins are usually quite large and the big dominant

players are making a lot of money. So for Nvidia, it's a fertile area for them to grow into. They launched a cloud computing business a couple of years ago called DGX cloud. That business is still relatively small in the grand scheme of things, but it's growing. Nvidia has also invested in new cloud companies that specialize in artificial intelligence computing, the likes of CoriWee, which is now listed on the Nasdaq, and another company called Lambda. While new cloud competition would be worrying for Amazon, given its high margins, and for Microsoft and Google, given there are already macro concerns

about IT spending trends, Nvidia is also on the defensive. After being the beneficiary of deals with cloud companies that see most of them rent its AI chips, helping Nvidia secure an estimated 80 percent market share in that business, all of the cloud giants are developing their own custom AI chips. You come for us, we'll come for you. And that's it for What's News for this Thursday morning. Today's show was produced by Daniel Bach and Kate Bulevant.

Our supervising producer is Sandra Kilhoff, and I'm Luke Vargas for The Wall Street Journal. We will be back tonight with a new show. Until then, thanks for listening.