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TRANSCRIPT

Jane Coaston: It’s Thursday, July 17th, I’m Jane Coaston, and this is What a Day, the show that was going to ask why President Donald Trump keeps being so weird about disgraced financier and sex offender Jeffrey Epstein, but then saw that Trump wants Coca-Cola to use real sugar in Coke, and now is totally back on Team MAGA. Finally, America has returned. Except that Coca-Cola hasn’t confirmed this is happening, but quote, “Appreciates Trump’s enthusiasm for the matter.” [music break] On today’s show, PBS Kids says new episodes of Daniel Tiger could be at risk because of President Trump’s rescissions package, and Vice President JD Vance travels to Pennsylvania to tout Trump’s BBL. That’s big beautiful law, not Brazilian butt lift, unfortunately. But let’s start with the economy, and specifically the Federal Reserve. Yes, the Federal reserve. It’ll be fine. We can do it together. Jerome Powell is the chair of the Federal Reserves, and President Trump is very mad at him. He even reportedly had a letter drafted to fire Powell and asked Republicans this week if he should do it. Never mind the fact that just two months ago, the Supreme Court strongly suggested the president can’t touch Powell until his term ends next year, unless he has reason to fire him. Speaking from the Oval Office Wednesday, Trump refuted any plans to oust Powell while still leaving himself some wiggle room. Of course. 

[clip of President Donald Trump] 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.

Jane Coaston: Sure. But Trump is still mad at the Fed chair. He’s downright flummoxed that Powell even got the job in the first place. 

[clip of President Donald Trump] He’s a terrible Fed chair. I was surprised he was appointed. I was surprised, frankly, that Biden put him in and extended him, but they did. 

Jane Coaston: Except that the person who first appointed Powell was Trump in 2017. Biden did nominate him for a second term, but once again, the ongoing theme of does Donald Trump know Donald Trump is president continues. Anyway, the actual reason Trump is so upset with Powell is because he wants Powell to lower interest rates. Like he really, really wants him to lower interests rates to 1%. Currently, they’re a bit north of 4%. Here’s Trump on Tuesday speaking to reporters outside the White House. 

[clip of President Donald Trump] I told him he’s doing a very bad job. He’s way late. That’s why I call him too late. Jerome Powell is too late, he’s way late! Interest rates should be coming down. We have a very, very successful country. We should have the lowest interest rate anywhere in the world. And we don’t. Jerome Powell has done a terrible job, and frankly, I don’t think he could do a worse job. He’s called everything wrong. 

Jane Coaston: Hot take. Too late is definitely his weakest nickname. It’s no lion Ted. Why does Trump want Powell to lower interest rates? Because Trump believes lowering interest rates will supercharge the economy. And yes, there are a few problems with that. Namely, it could cause inflation to spike. Again. And if I’m remembering correctly, the American people were very mad about paying more for groceries, for good reason. So to talk more about inflation, interest rates, and Trump’s very focused campaign of loathing at the chair of the Fed. I talked to Bloomberg Senior Editor and friend of the pod, Stacey Vanek Smith. Stacey, welcome back to What a Day. 

Stacey Vanek Smith: Thank you. It was good to see you, Jane. 

Jane Coaston: So we’re recording this interview at 4:30 p.m. Eastern Time. 

Stacey Vanek Smith: Yes. 

Jane Coaston: All day Wednesday, we’ve seen reports that Trump is considering firing Fed Chair Jerome Powell, who, and I cannot emphasize this enough, Trump picked to run the Fed during his first term. Why is this such a big deal? 

Stacey Vanek Smith: This is a big deal for a few reasons. The Federal Reserve chair, the head of the central bank, is supposed to be in an independent position. You’re not supposed to able to oust the person in that position. And in fact, legally, Trump cannot do that. But it doesn’t mean he can’t try. And it has to do, the independence of the Federal Reserve Chair is seen as a really important thing to the economy. 

Jane Coaston: Can you go into that a little bit more like why is it important that the Federal Reserve Chair be independent and why is it important to the economy? 

Stacey Vanek Smith: This has been such a topic of discussion. Economists argue about this all the time. So the argument for having the Fed chair be independent from politics, essentially, is sort of the same way that a Supreme Court justice is. It’s so that they can make tough unpopular decisions that might be really good for the economy. So, for instance, dealing with inflation, keeping interest rates high, keeping the economy slowed down, it’s no one likes it. People don’t like it. Businesses don’t like it. People complain to politicians. Politicians get thrown out of office for it. That is part of why the Federal Reserve chair has to say, like, we’re going to protect the currency. We’re going make the tough unpopular decision. It’s going to be painful. It’s gonna raise unemployment, do all of these things, but it prevents inflation from going out of control. That’s the logic. 

Jane Coaston: Now, going to the point you were making about interest rates, that seems to be Trump’s main issue with Jerome Powell. But interest rates have been at relatively high levels for the last couple of years to bring down inflation tied to the pandemic. So a few questions on this. Why has the Fed so far kept interest rates high, even while other countries have lowered their interest rates? 

Stacey Vanek Smith: I mean everybody’s kind of been watching Jerome Powell with bated breath, and he has lowered interest rates several times. Um. I think he’s been slower to lower them because inflation kind of spiked for the first time in a long time during the pandemic. I mean, I think we were all dealing with it. We’re still dealing with it. A lot of people say that inflation was responsible for the election of Trump, that people were so upset by the price of things going up. So, I think there’s this this feeling that in order to sort of keep prices under control and prevent it from spiraling out of control, you have to keep interest rates high for a while and kind of bring some pain for a little while before you start to see results. I guess the way like if you went to the gym, you’d have to like work out for maybe longer than you think before you see results, it’s kind of that logic. 

Jane Coaston: I know that logic very well. 

Stacey Vanek Smith: I know me too. 

Jane Coaston: And just generally speaking, setting aside current economic conditions, under what circumstances would the Fed typically choose to lower interest rates? 

Stacey Vanek Smith: Well, lowering interest rates tends to make the economy grow. People spend more money. Businesses borrow, they expand, they hire. It does all kinds of good things. The trouble is that it can also cause inflation because you get more money circulating in the economy. That can mean the value of that money is less, so prices go up. So generally, you would cut interest rates if you feel like inflation’s not an issue.

Jane Coaston: So, presumably, and I do not purport to see into how Trump thinks, but presumably that’s what Trump thinks will happen if interest rates go down, that more people will borrow, more people will do business things, the economy is happy, yay. But how could Trump, the person, and the businessman potentially benefit from lower interest rates? What would he personally stand to gain? 

Stacey Vanek Smith: Oh, I mean, a lot. Right. And so his businesses can borrow money uh for less. And when businesses can borrow money for like, very cheaply, they can just expand at a very low cost. So they can kind of do all kinds of things. They can kind of get creative and take risks and things like that, and then personally, he can take out loans and invest that money. Um. And it costs very little. So it creates all kinds of opportunities, both for individuals and for businesses to sort of take bigger risks. 

Jane Coaston: Just this week, new federal data showed that inflation rose last month to its highest level since February. Consumer prices rose about 2.7% last month compared to a year ago. And economists have largely put the blame on Trump’s tariffs. So what are the risks of lowering interest rates right now? 

Stacey Vanek Smith: The risk of lowering interest rates is that you have another thing pushing up prices. So I think we are potentially starting to see tariffs pushing up prices. Because there are certain things that are very sensitive to tariffs, because we import a lot of them. That would be things like furniture, toys, clothes. Prices of all those things went up, and food, too. Um. The issue is, too, if then there’s more money in the economy that will push prices up because supply. If there’s more demand, it increases the supply. So suddenly, inflation is starts to tick up and we start to see things cost more, both because of tariffs and because people have more money to spend because there’s money kind of in the economy. And those two forces together, that could create kind of a situation where there are two things pushing up prices, which could be potentially really bad. 

Jane Coaston: Now you are the person who explains how the economy works to me. And one thing I currently do not understand is that a lot of people, you know, we talked about it on the show a couple of months ago, we’re talking about how tariffs were going to be very bad for the economy, but since tariffs have been putting into place now, not all of them, because a lot of them have gotten postponed. The economy has remained relatively steady since Trump returned to office, even with tariffs. And Trump said on Truth Social last week, quote, “the fake news and the so-called experts were wrong again. Tariffs are making our country ‘boom’.” Boom is in quotation marks. I don’t know why. But is he right? Have the experts been wrong or is it just way too early to tell? 

Stacey Vanek Smith: He’s not wrong. I mean, I would say I was one of the people who thought prices were gonna go up right away because of tariffs and that just hasn’t happened. But there are a couple of potential explanations for this. One that you hear a lot is is stockpiling. So companies kind of knew that these tariffs were coming and a lot of them basically stockpiled as much as they could so they wouldn’t have to raise prices. Like Apple famously airlifted all these tons of iPhones into the U.S. right before the tariffs took effect. Um. And so we have a few months of runway before we see tariffs because stores have all this extra inventory. So that’s one explanation. The other one is I’ve been talking to a lot of small businesses. A lot of them feel like they cannot raise prices. So they’re trying to find other ways to absorb these costs into their business. I was talking to one woman who owns a bakery in Los Angeles and she was saying that she’s just trying to fine recipes that don’t use cocoa and don’t us vanilla because those are two things that she imports and that are getting more expensive. So she’s just trying to find a way to make things that are cheaper or make mini versions of things because she just does not feel like customers will pay more. So that’s another explanation too. 

Jane Coaston: No cocoa and no vanilla. 

Stacey Vanek Smith: I know. 

Jane Coaston: I’m sorry. I don’t I don’t really know where you go from there. But–. 

Stacey Vanek Smith: Where? 

Jane Coaston: I don’t know. I don’t know. But inflation was such a political albatross for the Biden administration. That was something people said over and over and over and over again from basically the entire time of his term. Is there any reason to believe inflation wouldn’t be an albatros for the Trump administration too? 

Stacey Vanek Smith: I mean my instinct would be to say, yes, I mean, people, if there’s one thing people are sensitive to, it’s prices going up. And that is, you know, that will get a politician kicked out of office faster than anything because, you now, this affects every day of our lives. You get a raise, you’re all excited. Well, all of the sudden, the price of everything’s going up and your raise doesn’t mean anything. Or you don’t get a raise and suddenly you’re just watching your savings kind of dissolve and it’s it’s inflation is really, really, really destructive. I mean, I guess you can spin it um certain ways. And if you get the message out that it’s somebody else’s fault potentially or a temporary thing, I think the Trump administration’s been very explicit, like, oh, tariffs will temporarily raise prices. But that is the pain that we need to endure for, you know, a more, you know, independent economy. So I think if he can spin any inflation in a way that people will accept, that’s a possibility. But people are really sensitive to prices of things going up. I mean you know, eggs, coffee, they’re both up in the double digits since last year. That’s that that upsets people. People vote on that. 

Jane Coaston: People do vote on coffee, specifically. 

Stacey Vanek Smith: Coffee and eggs. Yeah, it’s true. They really do. 

Jane Coaston: Stacey. As always, thank you so much for joining me. 

Stacey Vanek Smith: Thank you, Jane. It’s a pleasure. 

Jane Coaston: That was my conversation with Bloomberg Senior Editor Stacey Vanek Smith. We’ll get to more of the news in a moment, but if you like the show, make sure to subscribe, leave a five-star review on Apple Podcasts, watch us on YouTube, and share with your friends. More to come after some ads. [music break]

[AD BREAK]

Jane Coaston: Here’s what else we’re following today. 

[sung] Headlines.

[clip of Vice President J.D. Vance] Let me just say a few things about where we are before I get into what I want to talk about which is the one big beautiful bill and the way that it’s going to bring Pennsylvania roaring back and American manufacturing roaring back to life. 

Jane Coaston: Can we get a please clap up in here? As you can tell, Vice President JD Vance was met with uproarious applause when he traveled to Pennsylvania Wednesday to promote Trump’s big, beautiful bill turned law. Vance spoke to a crowd of supporters in West Pitston, the small town is part of a Pennsylvania swing district where Democrats hoped to use the law to attack Republicans in next year’s midterms. Funnily enough, Vance didn’t talk much about the massive Medicaid and food stamp cuts in the law. Those cuts were scheduled to take effect after the midterms, which I’m sure is just a coincidence. Instead, he focused on tax cuts, getting rid of taxes on overtime and inflation. 

[clip of Vice President J.D. Vance] I’m really excited about the fact that for the first time in a very long time, workers’ wages are rising faster than inflation. You’re able to buy more, you’re able do more, and we’re just getting started. 

Jane Coaston: Vance, of course, left out the part where that gap between inflation and wages is getting smaller, leaving Americans with less disposable income. Vance’s trip to Pennsylvania is the first attempt by the administration to counter negativity about the spending package. Trump told NBC last week he probably won’t do much promotion of the bill because, quote, “it’s been received so well, I don’t think I have to.” But more than 60% of Americans oppose the big Republican spending law debacle disaster adventure, according to a CNN poll conducted by a research firm called SSRS. The Senate’s vote-o-rama is underway, and up for debate are budget cuts to foreign aid and public media. If President Trump’s rescissions bill makes it through Congress this week, it would take back more than a billion dollars already allocated to the Corporation for Public Broadcasting, which funds PBS and NPR. The move would disproportionately affect people in rural areas, many of whom rely on their member stations as the only source of local news. Sara DeWitt, senior vice president and general manager of PBS Kids, spoke to What a Day’s newsletter writer, Matt Berg. 

[clip of Sara DeWitt] This is an incredibly fragmented media landscape right now, it’s really hard to break through. It’s really hard to remind people that there’s still this free educational resource that’s really good for kids. Um. And it’s gonna make it harder for us to tell that story. 

Jane Coaston: DeWitt said that while PBS Kids has an impressive library, creating new shows would be difficult, which could affect their ability to keep PBS Kids current in a constantly changing media environment. She also said the budget cuts could jeopardize their ability make new episodes of existing programs, like the incredibly popular Daniel Tiger. DeWitt told us PBS Kids is already facing an existential crisis after Trump’s Education department cut other forms of funding, like the Ready to Learn grant. Which provided PBS and NPR with $23 million to create educational shows and games. Trump has warned Republicans who might have doubts about cutting funding for public broadcasting, saying, quote, “Any Republican that votes to allow this monstrosity to continue broadcasting will not have my support or endorsement.” Freedom of the press. The Trump administration sent five migrants to the Kingdom of Eswatini, a country in southern Africa on Wednesday. None of the migrants are from Eswatini or have any ties to the kingdom. The migrants are from Vietnam, Jamaica, Laos, Cuba, and Yemen. And in case your geography is rusty, none of those countries are in Africa. In June, the Supreme Court cleared the way for these, quote, “third country deportations” by lifting an order from a federal judge in Boston that would have required migrants be given a chance to challenge their deportations. The Trump administration claims that third country deportations will be reserved for some migrants, mainly those from countries that won’t take their citizens back either due to a criminal history or a lack of diplomatic relations with the U.S. The White House has fired 50 immigration court judges in the last six months. And according to the union that represents immigration court judges, 17 in the last week, the union claims that the most recent firings were issued without cause. There’s currently a backlog of about 3.5 million cases in the immigration courts. Virginia Democratic Senator Tim Kaine took part in the scolding and questioning of Deputy Secretary of State for Management and Resources Michael Rigas on Wednesday. Rigas testified before the Senate Foreign Relations Committee about the State Department’s reorganization, aka the mass layoffs. During the hearing, Kaine cited reports from Reuters and the Atlantic that tons and tons of emergency food has been sitting in a U.S. Agency for International Development warehouse in Dubai and is set to expire this month. The Atlantic reports the high-energy biscuits were purchased by USAID during the end of the Biden administration. Per Reuters, they could feed at least 27,000 acutely malnourished children for a month. But since the State Department absorbed USAID, the food has been stuck in limbo. And now, the expired food will be destroyed, according to the Atlantic. That’s despite numerous reported requests from federal workers to ship the biscuits to other countries in the region while they are still viable. Kaine railed against Rigas over why nothing was done to distribute the food months ago. 

[clip of Senator Tim Kaine] Why has the State Department decided to burn it rather than distribute it to starving children? 

[clip of Michael Rigas] Yeah I I don’t have a good answer for that question Senator, I am as distressed about that as you are. 

[clip of Senator Tim Kaine] Okay, so so I was going to ask you, does does that kind of make you feel ashamed? Are you proud of it or are you indifferent to it? 

[clip of Michael Rigas] Look, I don’t think it’s you know I’m not going to say I’m ashamed or proud or indifferent to it, but I think that was a failure. 

[clip of Senator Tim Kaine] How about this, just as a statement of proposition. 

[clip of Michael Rigas] Yeah. 

[clip of Senator Tim Kaine] If the U.S. uses taxpayer dollars to buy specialty foods for starving children, I think it’s better that the food be distributed to starving children. 

[clip of Michael Rigas] Of course. 

[clip of Senator Tim Kaine] Rather than incinerated. We would agree with that.

[clip of Michael Rigas] I completely agree with that. 

Jane Coaston: The most ironic part about this hearing was that a little before Kaine discussed the tons of food going to waste instead of being given to hungry children, Republican Senator Jim Risch of Idaho said the U.S. is too hard on itself, and there’s quote, “no more generous country on the planet than the United States of America.” As of our recording time, I disagree. And that’s the news. [music break]

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Jane Coaston: That’s all for today. If you like the show, make sure you subscribe, leave a review, do not bring back this giant flightless bird, and tell your friends to listen. And if you’re into reading, and not just about how no, I don’t care that Lord of the Rings director Peter Jackson thinks that the same company that sort of brought back the direwolf should bring back the moa, a flightless birds from New Zealand that stood 12 feet tall, like me, What a Day is also a nightly newsletter. Check it out and subscribe at Crooked.com/subscribe. I’m Jane Coaston, and seriously. Look up photos of the moa and tell me you don’t think that bird looks like he is absolutely down for violence. [music break] What a Day is a production of Crooked Media. It’s recorded and mixed by Desmond Taylor. Our associate producer is Emily Fohr. Our producer is Michell Eloy. Our video editor is Joseph Dutra. Our video producer is Johanna Case. We had production help today from Greg Walters, Matt Berg, Tyler Hill, and Laura Newcomb. Our senior producer is Erica Morrison, and our senior vice president of news and politics is Adriene Hill. Our theme music is by Colin Gilliard and Kashaka. We had help with the headlines today from the Associated Press. Our production staff is proudly unionized with the Writers Guild of America East. [music break]

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