WSJ What’s News - Trump’s Cabinet Picks Have Conflicting Views. That’s How He Likes It

Episode Date: December 17, 2024

P.M. Edition for Dec. 17. President-elect Donald Trump’s cabinet picks have a range of perspectives. Wall Street Journal senior political correspondent Molly Ball tells us what conflicts may arise as they govern. And the Fed is expected to cut interest rates tomorrow, but WSJ chief economics correspondent Nick Timiraos says what happens after that is far from certain. Plus, Luigi Mangione is indicted on murder charges over the killing of UnitedHealth executive Brian Thompson. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

How do airplanes fly? What's in this box? What does this thing do? Kids are curious about everything, including guns. Learn how to store your guns securely and make your home safer at nfamilyfire.org. Brought to you by N Family Fire, Brady and the Ad Council. Investors are expecting the Fed to announce a rate cut tomorrow. But what happens after that? And President-elect Donald Trump has assembled a cabinet of people with a wide range of ideological viewpoints, which offers hints as to how he will govern.

This is a cabinet that represents his own rather heterodox range of views. And it is, as one of his advisors put it to me, a broadly populist array of perspectives. Plus, Luigi Mangione has been indicted on murder charges in New York for the killing of a UnitedHealth executive. It's Tuesday, December 17th. I'm Alex Osela 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. Let's start with the latest news about the man accused of murdering UnitedHealthcare CEO Brian Thompson in midtown Manhattan earlier this month. Luigi Mangione has been indicted on murder charges by a grand jury in New York. Mangione was indicted on account of murder in the first degree, murder in the second degree, and murder in the second degree as a crime of terrorism, among other charges. The last two times the Federal Reserve has met, it's cut interest rates.

Investors are expecting that the central bank will do the same when it announces its decision tomorrow. But from there, the Fed's path is less certain. Some officials aren't sure continued cuts are the way to keep inflation and the labor market moving in the right direction, and their estimates for where rates will settle out have continued to rise over the past year. My colleague Pierre Bienneme spoke with Wall Street Journal chief economics correspondent Nick Timouros and asked him how much support there is for the expected rate cut among Fed members.

This week's rate cut is widely expected in financial markets. Investors have close to 100% probability of a rate cut. That overstates the degree of support that this rate cut is going to enjoy. It certainly isn't seen as an easy layup or a slam dunk inside the Fed. But the case for cutting this month is a lot like the case for cutting last month, which was basically inflation has made a lot of progress this year and interest rates were much higher than they probably needed to be for that level of inflation. So officials are confident enough to continue lowering interest rates. Well, what are some of these dissidents within the Fed worried about?

Well, if you go back to when the Fed cut by a half percentage point in September, it looked like the labor market was wobbling, maybe deteriorating more than people wanted. Since then, the labor market's been hanging in there just fine, and inflation, which had been coming down pretty briskly this summer, has sort of stalled out. So there are a number of people who would argue, you don't really need to cut here, the economy is basically fine, and you've already made three-quarters of a percentage point in interest rate reductions, you don't need to keep going. There are some people who are concerned that maybe the normal interest rate for this economy

is higher than it used to be. And if you keep cutting, you're going to blow past it. How does Jerome Powell, the Fed chair, plan on getting everyone to agree on this rate cut and perhaps some beyond? The path of least resistance would be to pair a rate cut at this meeting with guidance that suggests the Fed could go one or more meetings before it lowers interest rates again. And at this meeting, Fed officials will produce quarterly economic and interest rate projections

where they can do just that. They could sort of suggest through those projections, you know, we've cut four times this year, you shouldn't expect us to keep cutting at this same pace next year. That was Wall Street Journal Chief Economics Cor Economics correspondent Nick Timmeros speaking to my colleague Pierre Bienamay. In more news out of the Federal Reserve, industrial production decreased by 0.1% in November from the previous month, according to statistics that the Fed released today. That's the third straight month of declines, though economists were expecting a slight

increase. And, according to the Commerce Department, U.S. retail sales increased by 0.7 percent in November, after rising by a revised 0.5 percent in October. This extends the stretch of resilient consumer spending, which has powered continued growth. In U.S. markets today, all major stock indexes fell. The Dow led the losses, falling about 0.6 percent. The S&P 500 lost nearly 0.4 percent, and the NASDAQ closed down about 0.3 percent. Yesterday, we mentioned that Progressive Representative Alexandria Ocasio-Cortez was vying to be the top Democrat on the influential House Oversight Committee. House Democrats rejected her effort.

She lost out to 74-year-old Representative Jerry Connolly of Virginia. The outcome marks another setback for Ocasio-Cortez's brand of politics, after two fellow members of her progressive squad lost their House re-election bids. Coming up, what the ideological backgrounds of Trump's cabinet say about how his government will function and about Trump himself. That's after the break. The cabinet that President-elect Donald Trump has assembled is a jumble of seemingly conflicting ideologies.

There are populists and plutocrats, traditional conservatives and hard-right disruptors, even a couple of former Democrats. As Washington looks ahead to the incoming administration, these nominees offer clues for how Trump plans to govern. Wall Street Journal senior political correspondent Molly Ball is here to tell us more. Molly, what are some of the factions or dividing lines that are already emerging here? You have people like a Cash Patel, the nominee to lead the FBI, or even Pete Hegseth, who's been nominated to run the Pentagon, the Department of Defense. Neither of them have experience leading large organizations, nor do they have very much experience in the specific organizations they're being tasked to lead.

This seems to be the point for Trump, that these people are outsiders and because they are coming in from outside of the culture of these agencies, they have the ability to see the need for disruption and for major change. Of course, anyone who spent any time in Washington is appropriately skeptical of whether that is possible given the entrenched bureaucratic cultures that exist throughout the federal government. So, as you wrote, there are some areas where certain ideological conflicts are going to come to a head, right? The Department of Agriculture would be one example. The nominee for Health and Human Services, Robert F. Kennedy Jr., has famously been very critical of the food supply, of both the way that farming is done and of the additives that are used in processed food, for example. RFK and his allies were lobbying very strongly to have someone of a similar mindset in charge

of the U.S. Department of Agriculture. But instead, Trump's nominee to lead the USDA is Brooke Rollins, whose background is in the world of conservative think tanks. Many Republicans represent large, red, rural agricultural states where a lot of farming is done, including a lot of industrial farming. And so Brooke Rollins at the Department of Agriculture is someone who's expected to be much more sympathetic to those big agricultural lobbies. So there's a number of areas in which these types of ideological conflicts could be brought to bear. And then there's Trump's personal ideology. So a lot of questions about how all of these different ideologies are going to play out when and if this cabinet is finally assembled. How did Trump choose his cabinet as far as we can tell? It's worth saying that Trump himself is a man of idiosyncratic ideological impulses.

This is a cabinet that represents his own rather heterodox range of views. And it is, as one of his advisors put it to me, a broadly populist array of perspectives. So we often hear about this idea of a sort of team of rivals that presidents appoint people with diverse views in order to give them a sort of sounding board or to be able to hear different objections to things they might be proposing to do. Trump isn't exactly that kind of leader. He does like to hear from a lot of people, but he also certainly likes to make his own decisions. This is a cabinet that really reflects where his head is at, rather than the first time

when he became president without a lot of transition plans in place, and really followed the lead of a lot of entrenched interests in the Republican Party. This time around, I think this is a cabinet that reflects, for better or worse, Trump himself. That was Wall Street Journal senior political correspondent Molly Ball. Thanks so much, Molly. Thank you for having me. Information about payloads launched by SpaceX for the U.S. military and spy agencies are

usually only shared with select employees who hold special government security clearances. But SpaceX's founder and CEO, Elon Musk, isn't one of them. According to people familiar with the matter, the company's lawyers advised senior executives not to seek higher security clearance for Musk. These people say Musk would have to answer questions from the government about his contacts with foreign nationals and his drug use, which has been previously reported by the Wall Street Journal. Lawyers and executives for SpaceX worry that if Musk sought higher security clearance,

he would risk being turned down, or worse, losing the top-secret clearance he already has. But WSJ Investigations reporter Joe Palazzolo told our Tech News briefing podcast that those concerns could soon become irrelevant. The Department of Government E efficiency has this mandate to cut spending and cut regulations and Musk has already mentioned the Pentagon is a potential target for those cuts. You'd think that if you're gonna be cutting at the Pentagon you're gonna need access to all its spending on classified programs and that means he's gonna need access. And while SpaceX may not have wanted to

put him through the traditional security vetting, Donald Trump, the president-elect, will as president have power to give him access without having to go through that traditional review. Trump hasn't said he's going to do that, but it's a possibility that has been raised. And within SpaceX, they are preparing for that eventuality. Representatives for Musk, SpaceX, and the Trump transition team didn't respond to requests for comment. And a spokeswoman for the Pentagon's Defense, Counterintelligence, and Security Agency said

a federal privacy law prevented her from commenting on the details or status of an individual's security clearance. You can hear more about this story on today's Tech News Briefing podcast. And that's what's news for this Tuesday afternoon. Today's show was produced by Pierre Bienamé and Anthony Bansi, with supervising producer Michael Kosmides. I'm Alex Osela for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.