taylor: take a look at how accurate performed on the week. usually, we do an intraday chart but given how to the downside it was on the week, you see with tech and big tech, they bore the brunt of this selloff. it was a federal reserve -- they had been focused on some of these inflation expectations. ecb not quite getting to that 2% but it is all about the focus on inflation. "what'd you miss?" starts now.

romaine: the focus is the fed leadership. we know jay powell, he could be returning for a second term. lael brainard is set to serve as vice chair. central bank watchers are waiting to hear about the other positions that need to be filled. spots are open on the board. we are going to dig into who those candidates are and their importance to the financial system. we are going to start with the white house which gave us an update on where that search process stands. >> this is taking a while but we heard from jen psaki earlier today and she gave us a little better idea of the timeline for an announcement. >> i don't have anything on a timeline. it is still something we would like to announce before the end of the year. so soon.

>> let's bring in and along -- anna wong. as you think about how this full to the economics. talk to us about the search and the delay has made any impact on economics for if that search does have an impact, as were thinking about that list of candidates? >> we don't think that the search, the delay in announcing has any material impact on monetary policy since there is just one currently vacant board see right now -- board seat right now and the vice chair's corals are not leaving until december and january. but in terms of the names of the

candidates floating out there, even though we don't know for sure, it would be two things. one is that there is going to be more diversity on the board and two, three people who are coming in will not be more hawkish than the vice chair and in terms of how that would affect monetary policymaking, this is what we thought. in the sep police this week, we saw that in terms of -- sep released this week, we saw that it was pretty close between three heights versus four hikes and three heights is marginally has more votes, but if the biden administration, if they were to nominate someone slightly more dovish than the current vice chair, you will to the balance toward three rate hikes for 2023

among the voting participants. romaine: we were just looking at a couple of the names that have been thrown around. you talk about raskin, i think seth carpenter's name has popped up. we talk about the potential for diversity but there is the idea of -- valerie wilson -- names here that most people assume not only deserve it but probably one of these folks is going to end up there. is there any sense that the process for getting any of these people in their -- there could be contentious? anna: there are many ways to think about diversity. there is diversity of skin color but there is also diversity of views. in terms of if it is raskin, byman, and seth carpenter, you

have the diversity of the former type but in terms of the views, these three are very much mainstream and aligned. dinan overlapped with bernard at harvard and seth carpenter, raskin, and brainard served in the same treasury under obama at the same time. so their views are very similar to mainstream economics, but if you do have lisa cook, you do have the former, skin diversity, but he definitely introduced this additional element of diversity which is diversity of view because william sprague is more the kind who thinks, we should not care about [indiscernible] we should care about the livelihood of the lower quintile

of the income distribution, whether workers are getting enough jobs and it is too premature to worry about inflation. his initial comments about the pivot at the fed is that he is disappointed that the fed is making this pivot. and lisa cook is also -- i personally have not read much research from her that would suggest that she would be more hawkish or anything like that. romaine: an interesting lineup of folks an interesting to see that they are at least considering some of these names. the question is, when do we get those names out of the white house? anna wong, doing some great research, going to continue this conversation with greg valliere. this is a big chance to not reshape the fed, maybe not reship it completely in terms of its ideology, but he got maybe

the potential for different thinkers and i'm wondering if you see anything political in some of the selection process or but we are speculating the selection process to be. greg: absolutely. i think elizabeth warren was not happy with the renomination of jerome powell. she made that clear. she said he is a dangerous man. i think there would probably be an effort on the part of the white house to appease her and senator sanders and others who wanted more dovish officials. i do think that would be a big part of their thinking. yes, i think it will be very political. >> if the administration opted the more dovish, progressive direction commodities see any confirmation battle? we are waiting for just the nominations but then you have to handle confirmation. greg: we have already seen some instance.

the woman who was going to become shoulder of the currency -- going to be comptroller of the currency dropped out. some unlike cordray -- someone like cordray does a nominee, very close to elizabeth warren, i think that would be a tough confirmation fight as well. as we all know, there is a narrow margin in the senate. joe manchin has proved that. i think that a narrow margin in the senate may apply to fed nominations. taylor: if you understand the way d.c. dynamics work, a lot of our previous guests have said, waiting to have a good debate, discussion, understanding of these different people is healthy, but at some point, there comes a time when you stop debating and make a decision. why has the decision taken so long? greg: i think there is so much

on joe biden's plate, so much that has to be done, people have to get vetted. it is just the way washington works. let me make this point. the big story, now that we know where the fed is headed for at least the next few weeks, i thought the story today in the last couple days was fiscal policy. we now see that the build back better bill is on life-support, we have to acknowledge that we have this new variant that is a problem. also looking to next year, there is two headwinds on fiscal policy. one is the child tax credit probably will get scaled back to where it was a year ago and number two, starting february 1, student loans have to start being repaid. fiscal policy has gotten restrictive as well as monetary policy. that is not a good combination. romaine: i am curious about the midterms because the two things you mentioned, child tax credit

being scaled back as well as the student loan relief, these have become two big issues at least four progressives on the far left, things they say they want to see. you are hearing that if they do not get it, that could hurt the democrats in those midterm elections. do you anticipate that? greg: it is not looking good and we have a long way to go, we have 11 months to go before the next elections. when i talk to people on capitol hill, they do not say whether the republicans will take the house, the issue is by how many seats. could it be 20 or 25? they only need three or four. with inflation likely to persist into next year, with urban crime, immigration issues, is going to be a tough election for the democrats. kailey: this talk about that inflation because that has created a problem for president biden. he has been trying to be seen attempting to do something about it. we saw that with the petroleum

reserves. is the administration out of moves? do they have to rely on the fed? greg: there is not a lot left in taking oil out of the strategic reserves, it did not make a huge difference. there are not a lot a policies. the build back better bill is delayed at least until mid february, that is when we have to revisit the issue of keeping the government open. the deadline is february 18. inflation is going to be an albatross for the democrats. i think when he met with jerome powell, he said, i would like to hear you act more aggressively on inflation. as we have seen, the fed will act more aggressively. but if this is not subsiding by summer, i think it is going to be a tough collection -- tough election for the democrats. >> the shift we have seen lately, passing the baton on

from monetary stimulus to fiscal, that is something we did not see in 2008 when it was more of an ad -- more of an era of raining and. when you think about the composition of the fed in addition to a lot of the fiscal stimulus, and i know you said 2022 is in the bow, but where are we in terms of those dynamics working together? greg: i think that, for the last year and a half, we may have overdone the stimulus. now there is a risk that we are going to overdo the restraint. with both monetary and fiscal policy looking more restrained, just as we fight a new variant, that is not a good combination for the economy. we could overdo the raining and on interest rates and fiscal policy. romaine: always great to get your insights. we are going to continue this conversation, taking a deeper

dive. whoever fills the role will be the fed's top banking regulator and play a key role in future baking policy. kathryn judge is going to be joining the program and a second to discuss. this is bloomberg. ♪

>> the fed has always been a chairman led organization. it is not really a democracy. but people sometimes vote against the chairman.

but it is not a democracy, it is led by the leader and we sort of know where the leader stands. >> that was the former fed vice chair speaking with us earlier. today, we are focused on the future of the fed and one of those unknowns is who joe biden is going to pick for vice chair of supervision. you are taking a look at the top contenders for the post that could matter a lot. taylor: you know what is interesting, i know we are all guilty of this, it also gets on the chair and vice chair, but when you think about what actually matters, it could be the vice chair of supervision as well. this is a post we don't usually talk about when you think about policy regulation oversight of the banking system. this is where you get to the meat and potatoes. our previous guests, he said, watch out for cordray. closer to elizabeth warren and maybe not so much in the running anymore. you look at raphael bostic and sarah bloom raskin, and what i liked what anna wong said is not

only the diversity of skin color but the diversity of views, in terms of where they were getting their phd's. romaine: they have talked a lot about this. i saw a stat about the number of folks with degrees. not specifically harvard. kailey: i don't think any of us counted that. romaine: don't worry, there is no risk of any of us getting picked for that role. our next guest has written a lot about the complexities of financial markets and regulation. she has some great insights so let's bring her into the conversation, the professor of law at the columbia law school specializing in financial regulation. let's talk about the idea of diversity of ideas. when you look at the fed, the structure that it has been, hasn't really been homogenous in thought? kathryn: yes and no. there is a degree of homogeneity

across central banks. for a long time, it has been a technocratic institution and that means there is a narrowness of thinking. the fed has a unique structure with the federal reserve board goes through president trump ointment, senate confirmation, but you also have the regional blanks -- regional banks. the structure is to consistently bring in different perspectives to the conversation. >> talk to us about those different perspectives. we have their names out -- we have thrown names out and he think about the importance of this role to financial markets -- and you think about the importance of this role to financial markets. how important is this for setting longer-term policy? kathryn: it is essential and a time he could not be more important. if you look across the different candidates that are in play, the

difference in terms of how they might approach monetary policy is probably less varied than the differential that we see with respect to what are going to be the priorities when it comes to financial regulation, the regulatory environment, but also the role of the fed in providing services more broadly. it has always provided critical services to the banks, but there are questions about central-bank digital currency and these are the types of issues that we are likely to see the vp of supervision taking a leading role on. kailey: there are certain issues that elizabeth warren is focused on and there has been discussion about what the fed's mandate should entail and what realms the fed should or should not venture into including climate. howdy think about those policy issues and the approach to those

issues changing depending who fills these seats? kathryn: climate is one of the most important issues when we talk about the vacancies. the fed has already made a meaningful pivot. we did see climate-related risks showing up in the last financial stability reports, they are starting to recognize the myriad channels through climate disruption but also policy changes could affect the stability of the financial system and we are going to continue to see movements in the direction. the question is how far are they going to go? is it going to include scenarios when you are engaging in things like stress testing and what are the ramifications for failures to have adequate systems in place? those are some of the issues. romaine: to play devils advocate, there has to be some balance and we have heard from a lot of banks and financial institutions that say, too much oversight or too many restrictions means when crunch time comes, we are not going to

have the ability to pump money into the system. is there a balance that is to take place or is that a strawman argument? kathryn: there certainly is a balance that is to take place but i would flip it. i would say, by having a stricter set of regulations in place and capital requirements during times of peace, that we unsure banks have the firepower they need to continue to support the real economy when things go wrong. >> it is funny when we talk about things that could go wrong. previous guests were talking about how it is different from 2008 in terms of the inflation debate and handoff of stimulus from monetary to fiscal and this time, a lot of people were arguing that 2008 banks with accounts of this but this time, the banks were in good shape. does it lend any credence that the policies in place are working and he did not need a drastic change giving -- given

that the banks were helping us this time around? kathryn: yes and no. i think we had a much smoother financial response in many ways to the shock of the pandemic then we saw play out in 2008, but there were a lot of reasons for that. one, we had unprecedented levels of fiscal support. when the government's pumping money into people's pockets and into businesses, the loans the banks have made are going to perform better. we also saw the fed taking an incredible array of actions to support the financial sector, banks and nonbanks. saying thanks perform well, which is true, does not necessarily tell us how resilient they are and how much resilience is baked into the system, it -- it tells us they managed well when you have a huge amount of government support being provided. i don't think that tells us what we need to know about their ability to withstand shocks. >> we appreciate your time and

perspective, kathryn judge. thank you for joining us. final thought is up next, stick with us. this is bloomberg. ♪

>> what is going on?

romaine: another great episode of "what'd you miss?" focusing on those vacancies that president biden has to fill, primarily guided for supervision. it is about how these new ideas are brought to the table. >> and what is taking so long? the supervision post has been vacant for a few months. romaine: the reason we did this show today, we thought we would have the announcement. >> my bad. kailey: it could be an exciting

holiday period when it comes to fedex. romaine: we are eight days away from the holidays and they said we look at it before then. that does it for "what'd you miss?" you got a big episode of bloomberg technology coming up next. this is bloomberg. ♪

>> from the heart of where innovation, money, and power collide, in silicon valley and beyond, this is "bloomberg technology" with emily chang. >> this is "bloomberg technology ." coming up, new york state reporting a one-day record of more than 21,000 infections as omicron variant spreads in the u.s., we