Overview of Trump Expected to Nominate Kevin Warsh as Fed Chair
This episode of The Journal’s AM edition of What's News (Jan. 30) covers the top business and political headlines: President Trump is expected to nominate former Fed governor Kevin Warsh as Fed chair; OpenAI is targeting a Q4 IPO as AI rivals jockey for position; Apple reported record iPhone sales but investors worry about rising component costs; Congress is close to a short-term deal to avoid a DHS funding shutdown; and lighter culture/business pieces including “Costco tourism” abroad. The show highlights immediate market reactions, political maneuvering in Washington, and near-term economic data to watch.
Top headlines (quick bullets)
- Kevin Warsh expected to be nominated by President Trump as Federal Reserve chair; Jerome Powell’s term ends in May.
- OpenAI reportedly targeting a Q4 IPO; Anthropic also eyeing a potential listing.
- Apple posted record quarterly sales (iPhone revenue +23%) but shares were muted amid concerns over rising chip/component costs that could pressure margins.
- White House and Senate Democrats reached a deal to temporarily fund the Department of Homeland Security to avert an imminent partial shutdown (short stopgap extension).
- Trump publicly pressured U.S. allies over closer ties with China; Panama’s Supreme Court annulled a port contract with CK Hutchison; U.S. eased some measures on Venezuela’s airspace and oil restrictions.
- Feature: Americans traveling internationally to visit Costco stores — “Costco tourism.”
Kevin Warsh — expected Fed nominee
- What was reported: President Trump is expected to nominate Kevin Warsh, a former Fed governor with strong Wall Street ties, to be Fed chair.
- Character and positioning: Warsh is seen as market-friendly and has in recent years signaled alignment with Trumpian views (notably favoring rate cuts). But observers wonder which version of Warsh will serve — the independent, sometimes contrarian former Fed official or the candidate aligned with Trump’s policy preferences.
- Implication: Markets likely comfortable with Warsh’s background, but his stance on inflation vs. rate cuts will determine Fed policy direction. Confirmation and how he acts once in office are key unknowns.
- Timing: Jerome Powell’s term expires in May — confirmation process and early policy signals will matter for markets.
OpenAI IPO and AI race
- Report: OpenAI is targeting a Q4 IPO, accelerating plans amid competition from Anthropic and other generative-AI firms.
- Rationale: Being first to market could capture investor attention and public capital; private funding has limits given high costs to develop and run large models.
- Financial context: These firms burn cash on model development and cloud/compute costs; Anthropic reportedly projects break-even earlier than OpenAI in its investor materials.
- Note: News Corp (owner of The Wall Street Journal) has a content licensing partnership with OpenAI.
Apple earnings — record sales, investor worries about parts costs
- Results: Apple posted record quarterly revenue; iPhone sales rose ~23% year-over-year to over $85 billion (driven by heavy upgrades to iPhone 17).
- Market reaction: Despite the strong top-line beat, Apple shares were essentially flat in after-hours trading.
- Why investors worry: Rising memory and other component prices (TSMC capacity pressures, NVIDIA demand, specialized materials) could push up input costs and squeeze gross margins. Analysts suggest Apple might absorb some of those costs rather than raise iPhone prices, potentially reducing profit margins for future models (iPhone 18).
- Related datapoints: Upcoming corporate earnings from Chevron, ExxonMobil, American Express, Verizon; December producer price index (PPI) due — will give another read on supplier inflation.
Washington: short-term DHS funding deal and political dynamics
- Deal reported: White House and Senate Democrats agreed to a plan to avert a partial government shutdown by quickly passing spending bills already cleared by the House while extending Department of Homeland Security funding via a short, two-week stopgap.
- Political context: Democrats gained leverage after high-profile events that intensified scrutiny of ICE/DHS operations; Republicans and the White House acceded to a temporary extension rather than fight immediately.
- Next steps: The short extension buys time for negotiations — Democrats can either seek policy wins quickly or press harder (including possible moves against DHS leadership). There was a possibility of a technical lapse over the weekend as the stopgap moves through Congress.
Trade and geopolitics: China, Panama ports, Venezuela
- China trips: President Trump criticized allies (including remarks about British PM Keir Starmer’s trip to Beijing and comments aimed at Canada) for pursuing business ties with China, threatening tariffs and other retaliatory measures.
- Panama ports: Panama’s Supreme Court annulled the operating contract for CK Hutchison at two ports near the Panama Canal; the move has geopolitical implications and was framed in the episode as aligning with U.S. security concerns about Chinese influence in the region.
- Venezuela: The U.S. has eased some restrictions — reopening commercial airspace and loosening some sanctions on Venezuela’s oil sector — following Venezuelan legislative changes that allow more autonomy for foreign companies in hydrocarbons.
Feature: Costco tourism abroad
- Trend: American Costco members increasingly travel internationally specifically to visit foreign Costco warehouses to see local bulk goods, unique food-court items, and region-specific products.
- Color: Reporters describe mostly familiar layouts across countries with interesting local differences (e.g., region-specific baked goods, snacks, and specialty items). TikTok/YouTube videos help fuel the phenomenon.
Notable quotes / soundbites
- On Warsh: “Which Kevin Warsh will show up at the Fed?” — Journal Finance editor Alex Frankos, highlighting uncertainty over whether Warsh will act independently or align with Trump’s policy preferences.
- On Apple: “People are upgrading to this new iPhone 17 in crazy numbers… but the stock’s not reacting,” — Rolf Winkler, noting demand strength but investor concern over future component-cost-driven margin pressure.
What to watch (near-term)
- Kevin Warsh nomination and Senate confirmation timeline; Fed policy implications ahead of Powell’s term end in May.
- OpenAI (and Anthropic) IPO timing and related public-market appetite for generative-AI companies.
- December PPI release (supplier inflation read) and this week’s corporate earnings (Chevron, ExxonMobil, American Express, Verizon).
- Any follow-up DHS funding negotiations or moves against DHS leadership during the short funding extension.
- Signs of rising component/chip pricing and how Apple (and suppliers like TSMC) respond — potential margin impact for tech firms.
Producers: Hattie Moyer (producer), Daniel Bach (supervising producer).