Prof G Markets: Why Trump’s War Week Didn’t Break Markets

Podcast Summary – January 19, 2026
Hosts: Scott Galloway & Ed Elson, Vox Media Podcast Network

Overview

This episode of Prof G Markets unpacks a tumultuous week packed with policy crises, geopolitical shocks, and surging commodity markets, focusing especially on why a flurry of provocative moves from President Trump—including a DOJ investigation into Fed Chair Jerome Powell—failed to rattle financial markets. Scott Galloway and Ed Elson discuss Powell's unique role as an institutional hero, the resilience of the markets, record rallies in metals, the evolution of the AI business race, and investment insights for a year of global instability.

Key Discussion Points & Insights

1. The Trump–Powell Showdown: Why Markets Shrugged ([09:16]–[27:43])

• Event: President Trump announced a DOJ probe into Fed Chair Jerome Powell, alleging Powell misled Congress over Fed HQ renovations—the real issue, Powell claims, is his refusal to lower interest rates.
• Powell’s Defense: In a rare video, Powell called the probe "unprecedented," arguing it’s retaliation for his independent policy.
• Institutional Outcry:
  • Jamie Dimon (JPMorgan) warned that threats to Fed independence are "probably not a good idea."
  • European Central Bank and Bank of England publicly backed Powell.
  • Bipartisan condemnation, including Republican senators and, surprisingly, the WallStreetBets Reddit crowd, who hailed Powell as "an American hero."
• Galloway’s Analysis:
  • Strong economies require central bank independence to resist politicians’ "temptation" to juice the economy for political gain ([10:33]).
  • Powell’s feat—raising rates from COVID-era lows to curb inflation without triggering a recession—was described as "threading a needle in space with no opposable thumbs." ([12:53])
  • Trump’s goal is less about removing Powell as chair (term ends in May) and more about ejecting him from the Board of Governors, where his influence persists.
  • Boards respond to the person perceived as wisest, and "when Governor Powell goes, 'I think we should keep rates steady,' what do you think the decision is in the room?" ([16:53])
• Market Reaction:
  • Initial selloff reversed; markets hit record highs after the dust settled.
  • Predictive markets show sharp drop in probability Powell will be ousted.
• Why the Market Doesn’t Panic:
  • "Jerome Powell wins. He stuck it to Trump." (Ed Elson, [17:15])
  • Support was not just from the usual institutional/Wall Street suspects, but from the 'Reddit army' as well—reflecting a reversal in anti-institutional sentiment ("If you had told me in 2026 the Reddit army would be praising the Fed chair, I just wouldn’t believe you." Ed Elson, [19:04])
  • Galloway: "I don’t think this is different...I think he’s going to have to back down. I think he keeps thinking, wait, I’m a strongman...but America won’t tolerate inflation."

Notable Quotes

• Scott Galloway ([10:33]):

  "The strongest economies in the world...are the ones that have some form of an independent central bank."

• Ed Elson ([19:04]):

  "The most interesting group to be against Trump in this...is the Reddit army...Their view is that Trump is the villain, Jerome Powell is the hero."

• Scott Galloway ([21:43]):

  "Americans will tolerate that [police overreach], but they won’t tolerate inflation."

• Sen. Thom Tillis, cited by Ed Elson ([17:15]):

  "Now it is the independence and credibility of the Department of Justice that are in question."

2. War & Instability: Why Geopolitical Crises Drove Metals, Not Markets ([31:04]–[53:40])

• Stunning Rallies: Gold (+72%), silver (+187%), copper (+36%), and other strategic metals all at or near all-time highs.
• Causes:
  • A wave of global unrest (protests in Iran, US-Venezuela operation, tensions with Denmark/Greenland).
  • Traditional risk-off assets aren’t as safe (concern over US Treasury ‘full faith and credit’), so investors flock to metals.
  • Industrial demand for data centers, EVs, and power grids compounds the upward pressure on metals ([34:14]–[36:25]).
• Bitcoin Flops as a Hedge: Despite being pitched as ‘digital gold’, bitcoin was down 1% year-on-year, even as metals soared. Galloway confessed to a major loss on a Bitcoin treasury company ([36:25]–[38:47]).
• Long-Term Investing in Wartime:
  • Short term, stocks typically dip and metals rally on conflict news (average: stocks down 2%, gold up 3% in the four weeks after conflict begins).
  • Longer term, stocks recover and even outperform—Dow Jones soared 88% after WWI market closure, per JP Morgan ([38:47]).
  • "I think we have a tendency during conflict, during wartime, to think 'sell stocks, buy gold'. I think…long-term, you probably don’t want to give in to that tendency." (Ed Elson, [40:50])
• Venezuela and Oil:
  • Trump’s dramatic military operation in Venezuela invoked praise for swift strategy—a show of force reminiscent of “a Bond film” ([41:48]).
  • Galloway argued for a "Marshall Plan" for Venezuela, not exploitation:

    "The playbook here is very simple...When you’re at your weakest, really help you."

  • Cautions against short-termist, imperial resource grabs: "The rationale for invading Venezuela for oil would be like me saying I’m going to invade Costa Rica for sand." ([44:43])
• Denmark/Greenland & Iran:
  • Galloway dismissed plans to threaten Denmark over Greenland as the “lowest IQ moment” of the Trump administration ([50:32]).
  • On Iran: Advocates targeted US military backing for the Iranian opposition; sees it as a historic opportunity for progress on women’s rights and Middle East stability ([54:40]).

Memorable Moments

• Scott Galloway ([44:43]):

  "You don't want to control oil. You want to control the flow of oil...The world isn’t being shaped by the ownership of oil, it’s being shaped by the control of the flow of oil."

• Scott Galloway ([54:40]):

  "The best ROI for our military right now would be to stand behind and finish the job for the incredible, incredible brave Iranian people."

3. The AI Race: Google, Anthropic, and the Shifting Power Dynamics ([60:19]–[78:24])

• Major Moves:
  • Apple to use Google Gemini’s AI model for Siri, pushing Google past $4T in market cap.
  • Anthropic’s Claude Cowork launch generates viral buzz—seemingly leapfrogging ChatGPT in product utility.
  • OpenAI’s absence conspicuous; rumors swirl that Apple pays Google but not OpenAI for integration.
• The New Pecking Order?
  • Gemini’s superior reach and viability contrasted with OpenAI’s questionable monetization ([63:37]–[66:41]).
  • Anthropic is rapidly gaining ground, especially in enterprise, where 80% of its revenue now comes from business clients (versus just 30% for OpenAI) ([69:15]).
  • Galloway: "I think whoever runs strategy at Apple is probably very smart...ensure that this is a robust market with more than one player...they can command the greatest licensing fee." ([67:05])
• OpenAI’s Existential Crossroads:
  • Greg Shove (Section AI CEO) tells Galloway: "There are two doors...Door one: OpenAI inspires really quickly massive enterprise adoption, or door two: bankruptcy."
  • Only 5% of ChatGPT users pay for it; brand recognition strong, but monetization and enterprise stickiness lag ([69:15]).
  • "There is no consumer model...that gets anywhere near the valuation they have in the markets right now." (Greg Shove, relayed by Scott, [72:37])
• AI & Entry-Level Jobs:
  • Claude Cowork’s demo shows near-total automation of entry-level information work, from emails to presentations to meeting summaries ([74:01]).
  • Rising concern over diminished on-ramps for young professionals as employers hire fewer new grads and AI layoffs start to bite.

4. Crystal Ball: Disney the Next Big M&A Play? ([78:24]–[81:29])

• Disney may be "put into play" in 2026, Galloway predicts.
• Company is "breakable" (no dual-class shares, staggered boards, or poison pills).
• Activist investor Nelson Peltz already circling; leadership uncertainty under Bob Iger creates opportunity.
• Galloway: "I am shocked Disney’s stock has not gone up in sympathy with Warner Brothers because Disney’s actually a much better company with even more singular assets." ([78:46])

Segment Timestamps

• [09:16] – Trump’s DOJ attack on Powell & why independent central banks matter
• [17:15] – Market reactions, Reddit's surprising defense of Powell
• [24:14] – Why Americans fear inflation more than anything else
• [31:04] – Metals rally and shifting safe havens in 2026
• [36:25] – Bitcoin’s continuing underperformance as a ‘hedge’
• [38:47] – How stocks/commodities behave in conflict
• [41:48] – Geopolitics: Venezuela, Iran, Greenland/Denmark
• [50:32] – Why US threats toward Denmark/Greenland are misdirected
• [54:40] – Galloway’s ROI view on supporting Iranian opposition
• [60:19] – Apple–Google Gemini deal, Anthropic’s Claude Cowork splash
• [69:15] – AI pay dynamics, user stickiness, enterprise vs consumer
• [74:01] – AI’s impact on entry-level information jobs
• [78:46] – Disney as a likely 2026 M&A/activist target

Tone & Style Highlights

• Irreverent and humorous: Regular quips about media appearances, personal foibles, and sharp banter ("If dick jokes are wrong, we don't want to be right, Ed." – Galloway, [09:00]).
• Deep expertise, no-nonsense takes: Both hosts deliver pointed historical comparisons, economic theory, and market context alongside clear-eyed skepticism (especially regarding crypto, government, and tech hype).
• Pop culture analogies: Bond films, Star Wars, and even Howard the Duck are invoked to demystify financial and geopolitical concepts.
• Raw honesty: Galloway openly admits bad trades and pushes for transparency in AI valuations and market hype cycles.

Notable Quotes

“To do what [Powell] pulled off is like threading a needle in space with no opposable thumbs. His ability to do that is just a feat of economics.”
— Scott Galloway ([12:53])

“The most important thing to Americans is inflation...I was almost heartened to see the collective support for Jerome Powell, because people like Jerome Powell usually lose in the cultural conversation.”
— Ed Elson ([24:14])

“The rationale for invading Venezuela for oil would be like me saying I’m going to invade Costa Rica for sand.”
— Scott Galloway ([44:43])

“There are two doors...Door one: OpenAI inspires really quickly massive enterprise adoption, or door two: bankruptcy.”
— Greg Shove (as relayed by Galloway, [72:37])

“Disney is breakable…It is highly breakable.”
— Scott Galloway ([78:46])

Episode Takeaways

• Markets remain resilient in the face of political and geopolitical shock—so long as institutional guardrails (Fed independence chief among them) remain respected.
• Precious metals are in 'risk-off' favor thanks to global instability, but stock investors should beware knee-jerk selling: history shows long-term returns can defy short-term war scares.
• AI business model battles are heating up: Enterprise focus is overtaking consumer hype as valuations search for justification.
• Expect activist moves and consolidation in legacy media—Disney’s vulnerability is especially acute.
• Cultural tides can shift: Jerome Powell’s unlikely meme-ification shows even establishment figures can become folk heroes when policy stakes are existential.