Good morning, CFOs. National Economic Council director Kevin Hassett says he would rely on his own judgment should he become the next Fed chair; PCAOB on private-equity stakes in accounting firms; plus, highlights from the CEO Council Summit.

It's no secret that President Trump wants his own candidate to succeed Federal Reserve Chairman Jerome Powell, whose term expires next May. Two candidates have been seen as front-runners, and they’re known as the Two Kevins: Kevin Hassett, who is the director of the White House National Economic Council, and Kevin Warsh, a former Fed governor nominated by former President George W. Bush.

Yesterday we had one of the two Kevins at a Wall Street Journal CEO Council event in Washington, D.C., where Hassett said he wouldn’t bow to political pressure to decide whether to cut interest rates if he becomes the next Fed chairman.

"There are a lot of things that look political in recent behavior of the Fed, and I think that's unacceptable," he said. "The Fed cannot be a political body."

Hassett, who has emerged as a Polymarket favorite to replace Powell, said there is “plenty of room” to cut rates in the months ahead, aligning himself with Trump’s repeated calls for lower borrowing costs. “If the data suggests that we could do it, then—like right now—I think there’s plenty of room to do it,” he said, when pressed by Poppy Harlow, chair of the WSJ Board of Directors Council.

Asked if he thought he would be the next Fed chair, Hassett deflected:

• “The thing about President Trump is that he'll make his choice, and then he changes his mind too. It's something that happens."

Other comments on rates:

• “You just do the right thing,” he said when asked whether he would listen to Trump if he took to Truth Social to order Hassett as Fed chair to cut interest rates.
• “Suppose that inflation has gotten from, say, 2.5% to 4%. You can’t cut,” Hassett said. He said he would instead rely on his own “judgment, which I think the president trusts, and the firm commitment to not being partisan.”

On AI:

• “The way to think about what AI is doing right now is it's teaching itself to be a really good coach for a person who's a worker who wants to be really good at their job.”
• “And so imagine if you've been at a job for three years, and you've got somebody who's been doing the job for eight years and then you gotta like get this part to fit into that thing…. And what AI is is basically a really good coach for people across a wide variety of professions.”

Read on below for further highlights from our CEO Council Summit this week.

📆 Earnings

• Adobe
• Chewy
• Nordson
• Oracle
• Synopsys

📈 Economic Indicators

The FOMC announces its monetary policy decision. The FOMC is widely expected to cut the federal-funds rate by a quarter of a percentage point to 3.5%-3.75%. The central bank also releases its quarterly Summary of Economic Projections.

Private-equity investment in accounting firms could cause profitability to outweigh audit quality as an incentive of the firms over time, George Botic, acting chair of the Public Company Accounting Oversight Board, said Tuesday at a conference at Washington, D.C.

Since 2021, more than two dozen of the 100 largest U.S. accounting firms have either sold an ownership stake to private equity or been acquired by a firm that has done so.

Private-equity firms are focusing on accelerating growth and looking ahead to selling their interest to another buyer, Botic said.

"Consolidation, driven by private-equity roll-ups, may reduce the number of accounting firms performing public-company audits by concentrating market power and potentially leaving smaller public companies with far fewer auditors competing to provide them with audits," he said.

—Mark Maurer

If you couldn’t join us in Washington, not to worry. We have the highlights from the panelists here, including WSJ Leadership Institute President Alan Murray’s interview with Starbucks CEO Brian Niccol. Speakers from the CEO Council Summit in Washington, D.C., included:

• Starbucks CEO Brian Niccol

“One thing I've learned over the last year is our espresso is really the thing that we have to organize so that if you're ordering in mobile, or you're ordering in cafe, we can sequence those orders correctly.”

Watch: Niccol, on a new feature the company is testing for customers who schedule mobile orders in advance, ensuring the order is ready at the precise time of pickup

• National Economic Council director Kevin Hassett

Watch: Hassett, comparing the AI boom to the 90s computer revolution

• Sen. Lindsey Graham

“I think the key to all this is as the technology develops, we need to create laws that when you apply that technology, you're responsible for it,” Graham told participants at the CEO Council Summit, which began Monday night. “That's a moderating influence.”

Watch: Graham on national standards for AI regulation
 

Kathryn Mikells, Exxon Mobil’s chief financial officer, said she plans to retire from the role Feb. 1, citing health concerns. During a Tuesday investor presentation, Exxon said a non-life threatening health issue led to her decision to leave the company. The Chicago native helped oversee a financial overhaul at the largest U.S. oil company in recent years, which included a sharper focus on structural cost savings and debt reduction, and record company payouts to shareholders.

—Collin Eaton contributed to today’s Ledger.

📰 Other headlines

• Massive Debt-Fueled Deals Are Back on Wall Street
• Nvidia AI Chips to Undergo Unusual U.S. Security Review Before Export to China
• How Trump’s U-Turn on Nvidia Chips Changes the Game for China’s AI
• Columbus’s Reputation as an Affordable City Is Making Its Homes More Expensive
• Eli Lilly to Build $6 Billion Alabama Plant as Part of U.S. Investment
• Five Takeaways From Luigi Mangione’s Evidence Hearing
• Thomas O. Hicks, Who Had Big Wins and Big Losses in Private Equity, Dies at 79
• The Everyday Investors Hedging Against an AI Bubble

📈 Earnings wrapup

• Tariffs Dent Campbell’s Soup Sales
• AutoZone Profit Falls as Higher Costs Continue from Tariffs
• CVS Health Boosts Guidance, Expects Momentum to Continue
• GameStop Sales Fall as Collectibles Remain Only Bright Spot

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The Wall Street Journal's CFO Journal offers corporate leaders and professionals CFO analysis, advice and commentary to make informed decisions. We cover topics including corporate tax, accounting, regulation, capital markets, management and strategy.

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