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Squawk on the Street
SOTS 2nd Hour: Trump vs. Powell - Yellen Comments, Market Takeaways, & What Comes Next 1/12/26
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Carl Quintanilla, Sara Eisen, & David Faber kicked off the hour with new comments from former Treasury Secretary Janet Yellen - not mincing words when it comes to a new DOJ probe targeting Fed Chair Powell - before breaking down the market impact with Truist Wealth's Chief Investing Officer. Plus: former CEA chair Jason Furman joined the team with his take on the action - fresh off a new joint statement with Yellen and other important officials - arguing these moves have highly negative consequences on inflation and the broader economy. Elsewhere: hear about how the consumer's holding up with the CEO of Shopify - and the latest on media stocks as Paramount files a new lawsuit in its quest to own Warner Bros. Discovery. Squawk on the Street Disclaimer
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This episode is brought to you by.
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Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and subscribe@schwab.com Market Update podcast or find Schwab Market Update wherever you get your podcasts.
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Not every sale happens at the register. Before AT&T business Wireless, checking out customers on our mobile POS systems took too long. Basically a staring contest where everyone loses. It's crazy what people will say during an awkward silence. Now transactions are done before the silence takes hold. That means I can focus on the task at hand and make an extra sale or two. Sometimes I do miss the bonding time.
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Sometimes AT&T business Wireless connecting changes everything.
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Good Monday morning. Welcome to Squawk on the Street. I'm Sarah Eisen with Carl Quintanilla. David Faber live as always from post nine of the New York Stock Exchange. Do have some breaking news to begin the hour for you around the DOJ's investigation into Fed Chair Powell. I did just speak with the former Federal Reserve Chair and former Treasury Secretary Janet Yellen about all of this and she did not hold back. Here's what she told me as far as the investigation. She did tell me that it was very chilling for Federal Reserve Independents. She clearly thinks that this is political on the part of the administration when it comes to investigating Fed Chair Powell. We talked about, here's the quote. I find it extremely chilling for Fed Independent we talked about how it appears to be that they're looking into some testimony from Fed Chair Powell before Senate Banking about the building, about, you know, everything with the the cost overruns and how much the building costs and everything. So here's what the former Fed Chair Yellen did tell me. She said, knowing Powell as well as I do, the odds that he would have lied are zero. So I do believe they are going after him because they want his seat and they want him gone. She did say as far as the market reaction, I'm surprised that the market isn't concerned. It seems to me that the market should be more concerned. Talked about some of the market reaction. Yes, we're seeing a bid for gold. Yes, the dollar is a little bit weaker, but she thinks this is a real cause for concern here. And then we talked a little bit more, guys about other other ways she's concerned about Fed independence. She's really eagerly waiting to see what the Supreme Court decides on Lisa Cook first instance. And she also referenced this notion from the president that he has said about how the Fed should be cutting rates to lower payments for the federal government. And here was the exact quote from former Fed Chair Yellen. You have a president that says the Fed should be cutting rates to lower payments on the federal debt. She completely disagrees with that and says it is the road to a banana republic. She also cited with me in the conversation examples like Argentina in the past, Turkey in the past, Venezuela, where the federal government, basically, because of mismanagement and bad fiscal policy, has to rely on the central bank to monetize the debt. And then you get hyperinflation. So that was in the discussion of why central bank independence is so important. And then finally on the Tillis statement, she said the Senator Tillis statement, where he said that he would oppose any other nominations from this administration until this was dealt with. She was encouraged to see the Tillis statement, she said, because the, the fact that he was willing to do so publicly, she said, is a strong statement and then continued to talk about how, and her word was weaponized, how she thinks that the administration is weaponizing the Department of Justice to go after people that they disagree with and how that is going to end up hurting people's ability, especially at the Fed, to disagree with the president.
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D
Yeah, Tillis, of course, not running for reelection, but he is a key Republican on Senate banking. You saw the prediction market odds of Powell staying on the committee even after he leaves his chair, and which was reiterated by a couple of notes. Evercore said they could see him staying and that would actually be against work, against the administration's goals of achieving lower rates.
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C
Right. And clearly the administration, I think, wants his seat. So maybe, I mean, who knows if this is behind this. I think that's something that Janet Yellen would probably speculate. And, you know, in our conversation, what she said is, you know, Fed Chair Powell has been at the, at the Fed for a really long time, better part of 14 years. And wouldn't be surprised to actually see him maybe want to leave before this because he's put in his work as a public servant. He's done a lot. He's been through the COVID crisis, the inflation spike. But now I think there are questions about, you know, he was pretty defiant in that video message last night and whether he would continue to serve as on the board, as governor, because now the question is about an independent central bank and not having the president get a majority because of this threat of a criminal investigation. Right.
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E
Point out it's not just the idea, in particular of this case that may be brought criminally to prosecute the Fed chair, were he to be found guilty, by the way, conceivably would end up in jail. It is, Sarah. I think the idea that this will hang over every Fed chair who follows.
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C
Correct. That's part of the problem. You know, I talked to Yellen about some of the nominees, and she said she didn't want to comment on anyone in particular, but just hopes that whoever gets it, whoever gets the nomination would put a strong stand for Federal Reserve independence. But clearly this makes, as she said it, harder to buy into the credibility of whoever will be the next Fed Chair because the President has already said that he wants him to agree with him on monetary policy and, and is now threatening this criminal indictment on our investigation.
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E
You spent a good amount of time with Powell. I don't. You know, obviously we know him as a fierce defender of Fed independence. Do you think that argument that he might choose to stay is. Is one that is logical?
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C
Sure. I mean, because I think that anyone. I think. I think he values Fed independence. I think it's why he chose to come out and make a video statement yesterday, which was very unusual.
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Very much so.
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C
And you've sensed in his tone the defiance, I think, that was there. And he has been sort of verbally harassed and harangued by the President for lower interest rates for a long time now, and now taking it up a notch to get the DOJ to investigate. Now, the President would say, I have nothing to do with this. You know, we should, we should report that the President has said, I have nothing to do with this. However, I think the administration is playing with fire. This is just to. Just to review what this is all about in terms of the building and the cost overruns, a budget that was approved by all the Fed Board of Governors every single year, that the administration has no oversight on the Federal Reserve and what it does, what its funds and its building. That is up to Congress and the Senate Banking Committee, which has raised no concerns and no problem. So the legality of this is difficult. And that's why I think that. That we're talking about Fed independence.
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Yeah.
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And what, and what is really at stake here.
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Yeah. Meantime, the number of cuts expected by the market is actually coming down, and we do have the long end of the curve, close to the highest level since about early September. Let's get to Eamon Jabberys in Washington with more details on this investigation. Morning, Eamon.
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Yeah, good morning. To you, Carl. Federal Reserve Chairman Jay Powell struck a defiant tone in that unprecedented video statement on Sunday night, revealing that the Department of Justice had served the Federal Reserve with grand jury subpoenas in an ongoing and previously unknown criminal investigation on Friday. Now, Powell said the subpoenas were served on Friday and relate to his testimony about the Federal Reserve's building construction project before the Senate Banking Committee last June. President Trump has been deeply critical of Powell over the past year, and he's intently scrutinized these cost overruns at the Fed's construction project. But Powell said this investigation is just a pretext.
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The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president. This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions, or whether instead monetary policy will be directed by political pressure or intimidation.
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A Department of justice spokesman told CNBC Sunday that the attorney General has instructed her U.S. attorneys to prioritize investigating any abuse of taxpayer dollars. Now, a source familiar with the investigation confirmed to CNBC that it is being run out of the U.S. attorney's office for the District of Columbia. President Trump denied involvement in the DOJ's action, telling NBC News on Sunday, I don't know anything about it, but he's certainly not very good at the Fed. Now, it's not exactly clear what the Department of Justice may be investigating here, but President Trump's close political ally, FHFA Director Bill Pulte, as early as last summer accused Powell of lying to Congress with his characterization of, of the construction effort. Guys. So the question is going to be, what did Powell say? Was that material and did he knowingly lie to Congress? And presumably that's the subject of these subpoenas that were sent to the Fed to try to get some evidence about what the Fed chair knew at the time and whether what he said was accurate or not also.
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C
Amy. Well, right, and that's what Jenny Allen said, that she thinks that the odds of that are virtually zero, that he, that he lied, given that she knows him well. But the other question politically is if he's shooting himself in the foot here, he's trying to get through a new Fedshare and potential other nominations. And you already have Senator Tillis saying that he's not going to vote to confirm that. I mean, it's going to be a pretty tight vote then for Senate Banking.
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Yeah, absolutely. Remember, Senator Tillis sits on Senate Banking, so that's a key one. And then the other question is, you know, congressional reaction aside, can they get enough evidence in this investigation to prove that it was material and that Powell knowingly lied? Can they get to an indictment? And if they get to an indictment, can they get a jury to convict Jay Powell and sentence him to prison? That seems, you know, at this early stage, a very long shot. And so the potential for the administration here is some embarrassment if they fail on one of these, one of these thresholds. I mean, at some point or another, either the U.S. attorney is going to conclude that she can't indict or they're going to indict and you have the possibility that a jury will say, you know, we're not going to convict. Those two things are potentially embarrassing now that the administration has raised this dramatic idea of an investigation into a sitting Fed chair.
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E
Aim I'd love to get your perspective more broadly speaking, but things we're covering closely here and obviously given all of your years in Washington. In the last few days, we've had the president say that institutions should not be allowed to own or buy single family homes. Preventing that, we've had potential cap of 1:1 year on the interest rates that credit card companies, banks, many of them, are able to charge their customers 10%. We've had the president say that defense companies should not be able to return capital to shareholders through buybacks or dividends. And we've had him talk about ExxonMobil playing it too cute after its CEO Darren woods expressed at least reservations about around, let's call it security guarantees in terms of returning to Venezuela. I mean, in your years, is there anything that approaches this?
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No, we've never seen anything like this, David. And you know, the president is somebody.
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Who views the, you know, the authority.
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Of the presidency extraordinarily expansively. He believes he has the ability and the responsibility to really direct all aspects of national life. And you're seeing that here with this sharp populist turn. They're concerned about affordability. They're concerned about the midterm elections. They want to show Americans that they're doing everything they can to lower costs for American voters. And at the same time, they're asserting enormous authority over vast swaths of the US Economy. Now, some of that authority the president is asserting, he doesn't necessarily have. I mean, you know, it's not clear that he's going to be able to tell, you know, banks that they can't go in and invest in single family homes. It's not clear what he's going to be able to do in terms of the defense sector, it's not clear necessarily that he's going to be able to restrict the credit card fees to just 10%. You know, all of that is stuff that he says he has the authority to do and he's sort of asserting, but it's not backed up by legislation and some of it might be challenged in court. So I think about the big Lebowski, you know, the response is to some of this stuff, you know, well, that's just your opinion, man. And at some point, the institutions will push back on a lot of it. But by, by pushing on all these fronts simultaneously, what the president is doing is expanding that scope of authority and looking for places where there's no pushback. And then he can push a little farther there and get what he wants. And what he wants is an economy that's responsive to him and does what he tells it to do. And it sets himself up nicely for a success in 2026 in the midterms.
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D
Yes, no more taco now. It's a Big Mac. Midterms are coming, as Claudia Sahm wrote over the weekend. Amen. Thank you, Eamon Javors. Let's talk about the market reaction as stocks do pare some early losses. Joining us this morning, Truist wealth chief Investment officer Keith Lerner is with us. Keith, it's good to have you. And once again, we're back in a conversation about how much of this is real risk to the economy and our standing in the in the world and how much is going to apply to earnings of the S and P. Yeah.
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G
Well, great to be with you call and the crew. And I think you laid that out absolutely the right way. And you know, at this point, we've had over the last year what I call a carousel of concerns. We have one concern that comes up as that phase, another one comes up and it's just kind of the environment that we have to live with. But I would say from market perspective, staying away from the political side, you know, Fed independence is important. And the way that, you know, I think investors should track this is how this manifests itself. And what but we're looking at closely is is the movement in the ten year Treasury. I think that's one of the biggest risks for the market this year. Even though we're positive so far, the reaction, as you see, call, you know, relatively muted. We are seeing the other side of this, too, where the currency, the US Dollar is coming down a little bit. And you are seeing today International markets outperform and you're seeing gold up over 2%. We've been favorable on gold all last year and remain so this year as well. So put this all together. You know, this is, tells me more broadly as you're investing, you have to be more diversified and more globally diversified than maybe where you would have been a year or two ago.
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D
So would you anticipate more calls to take international to, from a, from an underweight to an equal weight or even more aggressively ex US.
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G
Yeah, I think in general you'll see maybe more of a pivot towards that way. I'll be careful not to try to overreact to any one, you know, headline. And you know, in the US Though, even though it's been underperforming somewhat recently, the technology sector still has a lot of earnings momentum. Excuse me. And over the weekend we saw this big announcement with Wal Mart and I and Walmart's up today. So excuse me. On the margin, I would say you'll probably see more of a pivot. We think we still have a modest bias to the US but it's less than where it was, say the last few years.
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C
I mean, if we're talking about things, just reflecting on this conversation I just had with Janet Yellen, if we're talking about things like Banana Republic and Fed independence, seriously compromise and a Federal Reserve, that, that will be forced more to do the bidding of a politician. Why is the dollar only down point 3%?
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G
Well, I think because we've had a lot of headlines over the last year and I think if we go back to last April, the market in some ways overreacted to some of the headlines and some of the things actually didn't come to fruition. Meaning, you know, where terrorists were last year, what the expectation was and where it ended was a lot different. So I think, I think the market's still trying to sort out what is, you know, actually market impact versus potential noise. It's too early to say with clarity. So I think the market has taken more of a, of a tepid initial reaction and to see how this plays out again. I think having that recency bias of the last year is having investors where they're not reacting as sharply as if this announcement came out at the same time last year when we had, you know, a new fresh administration. We're adapting to these kind of onslaught of headlines that keep coming.
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I don't know. I feel like this is totally new territory.
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Keep. We do have gold up about 2%, obviously, after a very strong year. I don't know, how do you view that from an asset allocation perspective? Should people be cutting their exposure or is that warranted that continued move higher?
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You know, our view is still warranted to have at least a modest position in portfolios. And you know, a couple of things that we're looking at, David, is one we've looked at on days where the stock market and bonds are down, gold over the last year has been up more than 50% of the time, just like it's doing today. So it still has that portfolio diversification standpoint then I would say when we look at prior gold cycles relative to the current one, this it suggests this one has further to go. And because of all the kind of headlines we're talking about geopolitical uncertainty, we still think has a place in portfolios and we still want to have a position.
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D
Keith, appreciate that very much. Good to talk to you. Keith Lerner joining us from Truist.
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Great to be with you. Thanks.
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C
Let's turn to the consumer now. The National Retail Federation NRF conference is underway in New York City where global commerce company Shopify is announcing new shopping features in conjunction with Google. Shopify president Harley Finkelstein joins us now first on CNBC on a big morning and a big announcement. Harley, so, so tell us what, what is the news here around AI Commerce?
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Yeah, thanks for having me on. It's always fun to be here during nrf. We spoke last year as well. So the metaphor that I've sort of been using the last 24 hours has been that it feels like 2026 is the year that commerce breaks through the sand barrier. All that really means is that, you know, when you break the sound barrier, it means you go really fast and the drag disappears. And I think 2026, Sarah, is that moment for commerce. I've been, you know, at Shopify for half my life. I think AI is the biggest shift in commerce probably since Internet. And I think we're going from these algorithms guessing what actually understanding and remembering it. And, and I don't it's hype at all. I think it's maybe it's underhyped. And I think the end result is going to be there's probably going to be more billion dollar brands born in the next decade than in the last century. And our announcement yesterday with Google is effectively that we're making it possible for any agent, no matter what application they use, to connect with every single merchant and, and solve for every retail use case.
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C
So what does that mean? If I'm a consumer shopping online, how does My experience change.
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Yeah. So effectively now what's happened is that we sort of, you know, we're not telling any consumer where to what application news, wherever they go, if they're having a conversation with that agent. Ucp, which, which is the universal commerce protocol, which is that open standard we develop with Google, allows agents to connect and transact with merchants. So it's built to be very flexible in the actual ways that commerce happens. So whether it's discounts or loyalty or subscriptions or delivery options, all these will now get ported over inside those agents. And so from a merchant perspective, it's not simply about I'm looking, I'm going to ski trip, let me see boots, it's show me every product I'm going to need for the particular weather and temperature in that place where I'm going, show me discounts because I'm looking for a good deal. But I also, if, if it's a brand that I've already been doing research on, show me those brands. And this idea that we're setting up this common language for agents where these AI tools can act independently and show consumers products on a merit based perspective, we think is going to be a huge, huge advantage for both consumers, but also for brands getting found.
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C
Is it open AI doing this already? I mean can you, do you work with them or are you competing with them? Because they've also sort of painted this picture of agentic commerce.
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Yeah. So actually with Shopify you can sell everywhere commerce happens and it's powered by Shopify Checkout. But we actually have made it so that through Shopify you can syndicate your products to every single AI platform. We announced, we've already announced that we working with OpenAI back in, back in Q4, but now we're announcing working with AI mode, with, with Google and Gemini as well as Microsoft and Copilot. So this idea that you can sell across every single agent, including, including chat, CBT makes it so that every brand can be found.
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D
Harley. It certainly does fit with the, the ongoing thread that this is going to empower the consumer. But the flip side is that margins might be under more pressure, there might be more compression because the consumer is now armed with a tool that curates better than it could ever curate on their own.
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Yeah, I mean that actually we think is a great thing for brands that are a little bit lesser known historically. You know, a consumer may use some, some sort of, they'd find an ad for example, and they would click on that ad and then eventually that would lead them to a particular product. Which of course would preference there or the priority there would be on these brands and merchants that have more money. Whereas now because it's merit based it's actually about what is the best product for the consumer based on everything the AI agent knows. So for example one of my favorite brands on Shopify is Birkenstocks or on running for example this idea that I've been doing research on, you know know mountain climbing boots or hiking boots on and figuring the weight of the on running boot means that if I'm going on a hiking trip the actual the product that's going to be shown to me based on merit because of all the context the agent has it's going to show me the boots that I want rather than the companies that are simply paying the most. We think this is, that's why I think this is such a huge shift Carl and democratization of commerce because it's no longer about who's spending more on ads and it's really more about who has the merit to deliver that product to the consumer.
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C
It was interesting. Sundar Pichai was at the NRF yesterday. He was speaking, he was on stage with Wal Mart's incoming CEO John Furner and I think which shows you highlights how much they're prioritizing Google that is this, this area of business when it comes to AI agent commerce. So where are we just going to continue to see these kind of partnerships and, and announcements from the big retailers and the big companies. Where does this go?
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A
Yeah, I mean look, if you 12 months ago I was on stage given the keynote at NRF. I'm going to give the keynote this year at 2:30pm today. And last year one of the questions that I got was is this overhyped? That I said I think it's underhyped. If you look back over a 12 month period at least just on Shopify in terms of orders being sourced from agentic agents in it is a 14x on Shopify alone. So I think that every retailer large or small who wants to participate in this next wave of commerce must understand what agent is going to do. And what we're trying to do is make it so that natively and organically from Shopify you can do that. Also for the first time ever we're opening this up, this UCP to any merchant that's not on Shopify. So if a merchant was not currently powered by Shopify wants to participate, they actually can use this. We've, we've created this thing called the Agentic plan which is for non shopify merchants to also participate because we think this is that big of a deal.
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C
Yeah. I was just going to ask like what, what it ultimately means for your business. Stocks trading near the highs again. Could we see a retail boom in this country as a result of some of these developments for Shopify and for, for other retailers, which it's kind of been slow going lately.
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A
I mean, if you look at holiday season, you know, BFCM, for example, was incredibly strong for Shopify in 2025. We were up about 27% year on year. I heard this morning on CNBC that core retail year on year for December was up, it was 3.6% year on year. So certainly it does feel like consumers are, are buying. But I think the key here, Sarah, is that they're voting with their wallets to buy from brands they love. There's this intentionality now where they're being incredibly thoughtful about who to buy from, where to buy and this idea that there's now a new surface area. It's not just online or offline or social commerce, but now there's this new surface area called the Gentex where so many of us are spending our time and that can deliver more, more merit based results we think is a massive tilt for, for commerce and retail. And I mean, I'm certainly optimistic and excited about where this is going to go because I think it's going to introduce more great brands to more consumers and I think consumers will have more choice, they're going to have more freedom and they're going to create more delightful experiences and in purchase.
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C
Harley, really appreciate it. It is exciting to hear it from you. Harley Finkelstein from Shopify, where he's the president.
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D
Still ahead this morning, the market impact as tensions reach this boiling point between the White House and the Fed. Former CEA chair Jason Furman will join us with his take. The president reportedly weighing options including military strikes on Iran as civil unrest in that country continues. This morning. We'll discuss what it could mean for the oil market later on. First, though, ANF shares plunging double digits in early trade. We'll tell you why. Talk more about the ICR conference this week after the break.
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C
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Restriction supply this episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading.
- [26:52]
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Download the latest episode and subscribe at.
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Schwab.Com/Market update podcast or find Schwab Market Update wherever you get your podcasts.
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C
We are about 30 minutes here into the hour. Here are three stocks to watch. Metta making a big move at the executive level, naming Dina Powell McCormick as president and Vice Chair, reporting directly to mark Zuckerberg. Paul McCormick is a former Trump administration official, worked for many years at Goldman Sachs as well, very well known on Wall street and corporate America. Meantime, a number of retailers updating guidance this morning. Abercrombie the biggest loser right now saying they now expect Q4 and full year sales at the bottom of the prior range. Lululemon actually raised guidance citing a strong holiday season, Abercrombie getting whacked down almost 19% and Lululemon only up 1%. Still a show me story there.
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E
I want to take a look at some of the media stocks, particularly Warner Brothers discovery we reported earlier. Paramount choosing to sue in court in Delaware trying to get more transparency around how Warner Brothers is choosing or its board of directors is choosing to value the global network so called Stub, the spin off entity at least as part of its deal to be acquired by Netflix. Remember Netflix only acquiring the studio and streaming business and we haven't really heard from the Warner Brothers board around how it truly views the value. There are a lot of, as you might imagine, different opinions, certainly in part Based on the multiple that our own parent company, Versant, gets versus what Warner Brothers would say is a far more valuable asset in terms of what it owns. They want that. They also are going to nominate for the board of directors shareholders if there is an annual meeting that in fact could precede the shareholder vote on the Netflix deal. And they also want bylaws to say that there needs to be a vote from shareholders on whether the company should be split. Of course, it was the split that set all this off. That is the bidding war between Netflix and Paramount, when Warner Brothers decided to split itself in two. Not a raised bid here, which certainly some had hoped for. And that is why Warner Brothers shares, you can see them down over 2%. What do you hear from the Paramount camp? Well, they basically said, listen, we're on eight bids. Why should number we do number nine? We only would do that when someone actually wants to negotiate with us seriously, and they don't feel as though they've been treated fairly, hence the lawsuit and the like. Very much unclear whether that really is the case. And of course, whether or not, when the time comes, Larry Ellison will choose to add more equity to a bid that conceivably is going to even have to go higher, despite what, of course, are the protestations to the contrary from paramount, which says $30 a share, all cash for the entire company, is in excess of what Netflix's current deal is worth. Interesting to note our old parent Comcast also up, guys. And Paramount up a bit. You know, there is this view that, well, if this doesn't happen for Paramount, would there be another deal in its future and what would that look like? Well, you could imagine perhaps an NBCUniversal slash Paramount combination, difficult as that might be, given you've got CNN and, excuse me, you've got NBC and cbs. But nonetheless, I can imagine there's some speculating on what would be next, given we didn't get that higher bid from Paramount that some at least might have been hoping for. It doesn't mean it is incoming one day.
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D
Right. And you did see the B of a upgrade of Comcast. Jessica Reeve going to buy Target goes from 31 to 37 on some of the parts and the notion of maybe.
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E
Monetization of NBC monetization at some point. So good timing on her part in terms of at least. Also today, again, we've got a long way to go until that shareholder vote, which won't take place till late spring or early summer. As the company's chairman has said, let's.
- [30:47]
D
Get a CNBC News Update with Pippa Stevens. Morning, Pippa.
- [30:50]
C
Good morning, Carl. Iran said today that it is keeping communication open with the US amid deadly anti government protests in the country. A US based rights group says nearly 550 people have died in the protests and nearly 11,000 have been arrested. President Trump will reportedly be briefed Tuesday on options to respond to the protests. That's according to the Wall Street Journal. Pope Leo met today with Venezuelan opposition leader and Nobel Peace Prize winner Maria Corina Machado at the Vatican. It comes as she is expected to meet with President Trump this week following the capture of Venezuelan President Nicolas Maduro. The Pope has called for Venezuela to remain an independent country following the US Operation. And former Democratic Representative Mary Peltola announced today she will challenge Republican Dan Sullivan for his Senate seat in this year's midterm election. Her name has been put forward by top Democrats to defeat Sullivan, who was elected in 2014. Democrats will need to flip four seats to retake the majority in the chamber. Carl, back to you, but thanks.
- [31:52]
D
Still to come this morning, former Council of Economic Advisers Chair Jason Furman's with us, joining Bernanke, Greenspan and Yellen and others in a joint statement just now slamming DOJ's investigation into Jay Powell, saying this is how monetary policy is made in emerging markets with weak institutions. Jason's going to join us next later on the CEO of Global Payments as they finalize this $20 billion plus deal for Worldpay. Stay with us.
- [32:22]
A
This episode is brought to you by.
- [32:24]
B
Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trad. Download the latest episode and subscribe@schwab.com MarketUpdatePodcast or find Schwab Market Update wherever you get your podcasts.
- [32:51]
C
At Capella University, we believe accessible education can make a difference. That's why we offer scholarship opportunities to all eligible students. Un futuro diferente esta mas cerca de lo que cres con Capella University. Learn more at capella.edu what made you confident that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women Changing the Game One of my favorite pieces of advice Think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just got to think big to accomplish big. Things. Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts.
- [33:39]
E
Welcome back.
- [33:40]
C
We have some news on Apple. The company says it's joining forces with Google to help power AI features for products including Siri later this year. Our own Jim Cramer obtained a statement outlining the multi year partnership Apple saying in part in that statement, after careful evaluation, we determined that Google's technology provides the most capable foundation for Apple foundation models. And we're excited about the innovative new experiences it will unlock for our users. So another deal here with Google and good to get the confirmation, Kramer.
- [34:12]
D
Yeah. By the way, Google Alphabet at a $4 trillion market cap for the first time. Meantime, DOJ launching a criminal investigation into Fed Chair Powell over comments to Congress about the Fed's renovation project. Former Fed chair and former Treasury Secretary Yellen telling Sarah earlier this hour that this is, quote, extremely chilling for Fed independents, adding that this is the road to a banana republic. Joining us this morning is former CEO Chair Jason Furman. Jason just signed a joint letter on subsidies stack with Yellen, Bernanke, Greenspan and others slamming the DOJ's move, saying in part this is how monetary policy is made in emerging markets with weak institutions with highly negative consequences for inflation and for the functioning of their economies more broadly. Jason, appreciate you being with us. Good morning.
- [34:56]
H
Morning.
- [34:57]
D
What is, what's the intent of the statement? What do you want to see happen?
- [35:02]
H
I'd like to see them drop this investigation. I would like to see the president come out and say, not expecting this to happen, that he respects and understands the independence of the Fed. And I'd like to see whoever he picks for Fed chair be someone who really will protect and defend the institution the way that Jay Powell has done.
- [35:22]
D
When you say negative implications for inflation, I mean the market's not reflecting that today. What do you think it takes?
- [35:31]
H
I think this move has been counterproductive. It's been really ham handed. People understand it actually makes it more likely that Jay Powell will stay on the board, more likely that other FOMC members will not want to look like they're giving in by cutting interest rates more the courts and juries likely not to go along with this. So this is a very dangerous threat. If the president was successful, I think the market is correctly betting that he will not be successful.
- [35:58]
C
I totally agree. That's why I said I felt like they're shooting themselves in the foot here. They were getting lower interest rates. He wanted the Fed to be cutting. The Fed was cutting. Maybe they Were going to get the seat from Fed chair Powell. As I mentioned, he's been there for a really long time now. It feels like, you know, in the name of Fed independence, he might ultimately stay knowing, knowing him and his personality, they want to put a new Fed chair in. I think that this jeopardizes a little bit the credibility of putting a Fed chair in. If the President is just saying he wants him to do whatever he wants and there's a threat of a criminal investigation on the other side of it. Jason. So I don't understand what the, what the strategy is here.
- [36:35]
H
Yeah, I don't understand either. And that's why it is important that you can't just sort of sit back and hope that it plays out that way. People have to make really clear and this is an area where there's just much more unity. You know, we saw last week debates as different people watched a video and thought different things about it. Well, when it comes to inflation, everyone would like less. And when it comes to the stock market, everyone would like more. And I think most people understand that leaving the Fed to do its job is a better way to get to that end than using, you know, criminal prosecutions to try to push them into doing something different than their job.
- [37:13]
E
Assuming the President doesn't listen to your advice, which seems likely. Jason, I'm hurt. Do you think the next Fed chair really is? I mean, give me a sense as to how you think they will be thinking about the job, given this potential for an indictment of Jerome Powell.
- [37:29]
H
Look, I am cautiously optimistic that whoever the President picks is going to care about their place in history, is going to care about their standing in financial markets. And there are an enormous set of incentives. Just once you walk in to the Fed building, all of a sudden you're breathing almost a different type of air than you were breathing before. So I think there's a lot of constraints, a lot of protections. That being said, the Fed and its independence has not faced more, more danger and more peril in decades than it is right now. I think it's going to win, but I wish I could say I know it's going to win.
- [38:07]
C
I wonder if the market reaction, you know, you look at where you look at the credibility trade, the dollar, it's weaker. Gold, it's a little bit stronger. Nothing extreme, but we look at 10 year, 30 year bonds, I mean, yields are a little bit firmer. Wonder as we keep making the point, the chair only has one vote, right? It's still voted by committee. And I wonder what your senses of the rest of the committee in terms of loyalty, how this might go down, how independent they are and just how many spots the president will ultimately have this year when it comes to those votes.
- [38:41]
H
Yeah, you've already seen a growing number of dissents on the Fed, the most in a very long time. The more extreme the Fed chair pick, the more dissents you're going to end up getting. If you get a reasonable person, then you know they might be able to persuade the committee. If people think the Fed chair is just reading Donald Trump's talking points, the committee is not going to vote with the chair. So it's one of the really, really important protections that we have. Now. A danger is how many slots end up turning over and changing on the fomc. If Jay Powell stays, it's not that many. If he leaves, you might suddenly not just get more governors, but four out of seven governors can for cause at least remove one of the Reserve bank president. So the Lisa Cook case is going to be important. Jay Powell's choices are going to be important. But I have a certain amount of faith that the committee will be wiser than any one individual.
- [39:38]
D
Right. Speaking of which, Jason, we are going to get a lot of Fed speak throughout the week that was scheduled already. It's going to be hard to avoid a question about this. Do you envision those being interviewed or giving remarks rallying around the Fed chair?
- [39:52]
H
I expect to see it. Absolutely they do. These are not people that want to get involved in politics. Jay Powell doesn't want to get involved in politics. Part of what made his statement so powerful was it was clearly reluctant, clearly forced on him. He tried to avoid being here. I think you're going to hear it from a number of other committee members. Central bank independence is axiomatic for them and they all view it as their job to protect it.
- [40:18]
D
Jason, thanks for coming on and talking about the statement. Good to see you again.
- [40:22]
H
Thanks for having me.
- [40:23]
E
Jason Furman, after the break, the CEO of Global Payments. As this company completes more than $20 billion acquisition of Worldpay. It's forming a new fintech that could process nearly a trillion transactions a year. We're back. Global Payments officially closing its worldpay acquisition today. Completes a major strategic reset, turns the company into a pure play commerce and payments provider. Joining us now in a CNBC exclusive is Global Payments CEO Cameron Brady. Cameron, good to have you. I think some of our viewers may well remember that day in April. You announced a series of transactions. They were very complex. Your stock went down fairly significantly but here you are, effectively, as I just said, a pure play commerce solutions provider. Why is that better than what you were prior to the, to the acquisition?
- [41:21]
F
Yeah, great question, David. Thanks for having me this morning. It's a pleasure to be with you. Yeah. When, when we announced our transaction back in April, we did see a little bit of pullback on the share price. Naturally, we announced it in the middle of a period of great uncertainty as a result of the tariff announcements that were still being sort of addressed through the, through the system at the time. But by and large, we're generally back to where we were when we announced the deal in April. I think as it relates to the transaction, it really does position us as a pure play commerce solution provider for merchants of all sizes. I think that's incredibly important for our business because it allows us to focus, I think in an environment where the competitive intensity continues to increase. Being a monoline business with the ability to focus all of our time, effort, attention and resources on a single line of business and delivering the best capabilities we can to our clients across commerce solutions and payments all around the globe is really powerful for us. It also allows us to amplify our investment more effectively in the business to drive better returns. So we think that pure play focus at a time in the industry where again the competitive intensity continues to, to grow and the demands of our clients continue to increase, is really a powerful differentiator for us as we go forward, coupled with now an immense amount of scale that I think many of our competitors obviously will not have.
- [42:37]
E
Yeah, I want to get to that scale in a moment, but I think there was concern, Cameron, certainly around the time of the announcement that you were going to be divesting a business that had fairly high margins, that being issuer solutions and you know, kind of trading off in a way, way and some concern around that. Can you address that?
- [42:55]
F
Yeah, look, I think that's a fair observation, but I would tell you the pro forma margins for the combined business are very healthy with Worldpay. They're in the 40 plus percent range on an EBITDA basis. And obviously that generates a significant amount of cash flow in the business that we can use to invest to drive new innovation and deliver exceptional capabilities and solutions for our clients. I think the worldpay business is very complementary to our existing business today and allows us a diversification across vertical markets, size of business and geography that I think is really powerful and certainly more than offsets the loss of what was a fairly stable business with our issuer solutions business that We've now sold. So we think the business profile of the combined company is enhanced relative to what we were previously and the level of again scale diversification globally across 175 geographies, vertical market, large enterprise, digital, native E comm down to small SMB. The diversification of the business is, is really terrific and I think enhanced relative to where we were historically.
- [44:01]
E
Yeah, you mentioned scale of course, hundred seventy five countries, I think six million merchant locations. But what about the integration risk here? How far have you come already? How much more do you have to go and by what metrics should we best measure your success in executing on that integration?
- [44:17]
F
Yeah, it's a great question. The good news and bad news of having a long regulatory approval process is it gives us plenty of time to plan for our integration activities. So we feel like we are extraordinarily well prepared to move forward now as one company and execute on our integration agenda. And I think as it relates to how should we be judged, I think ultimately it's what going to be around our ability to realize the revenue and expense synergies that are premised in the transaction. We expect roughly $200 million of run rate revenue synergies from the combination within three years post closing and we expect to achieve somewhere in the neighborhood of $600 million of expense synergies as well. So our ability to put our two businesses together to harmonize our go to market strategies, our product suites, our service environments for our clients and then value capture around the integration synergies, I think ultimately is how the business will be judged and we're very confident in our ability to go now forward and execute against the integration plans that we've established. We've combined our leadership teams across two companies. It is almost a 5050 mix of global payments and Worldpay executives. I think we have the strongest leadership team in the industry. Of course I'm biased on that front, but I think we are extraordinarily well positioned to move forward now and execute against our integration agenda, against our capital return agenda for our shareholders. And I think obviously the value creation from that will be significant.
- [45:40]
D
Cameron, you alluded to some of the verticals, retail, health care, hospitality. Do any of those stand out at the moment as an engine of growth?
- [45:50]
F
Yeah, we're seeing good trends I would say by and large across the board. The consumer remains remarkably resilient from my perspective and very stable. And the trends that we've seen most recently are pretty consistent with what we saw throughout the course of 2025. I continue to be encouraged, I think, by what we're seeing from the consumer despite obviously some, some choppiness from a macro perspective. You know, the labor market, I'd say heretofore has been largely constructive. Certainly wage growth has been constructed towards consumer spending and we're seeing generally good trends across the consumer spending space, notwithstanding somewhat of a slowdown in sort of new job creation. Unemployment remains low and wage growth has been solid and that's been a good bolster for consumer spending more recently. But we're seeing pretty good trends across a variety of different vertical markets. Telecommunications, retail more broadly have been strong. Government's been fairly strong, construction's been fairly strong. So we're seeing good trends across a number of different verticals. The nice thing about our business is we're well diversified across both consumer discretionary, non discretionary verticals markets and we have good visibility into the macro more broadly. And again, we continue to see trends, I would say by and large, that are fairly stable from, from the consumer.
- [47:07]
E
All right, we'll leave it there on that fairly optimistic note. Cameron, thank you for joining us.
- [47:12]
F
Thank you very much for having me. Have a great day.
- [47:15]
C
Still to come, we will break down potential fallout for energy prices as protests escalate in Iran. And speaking of energy, do not miss the CEO of Oklahoma talking about this new deal with Metta that sends shares surging on Friday. We'll be right back. President Trump reportedly weighing options including military strikes on Iran as civil unrest in that country escalates. Pippa Stevens joins us with more on what it all means for the energy complex pipa as we've been glued to to any images out of Iran all weekend. Hey, Sarah. While Iran produces about 3.4 million barrels of oil per day, roughly half of that is exported and virtually all of those exports are going to China. That's according to data from Kepler. China is the world's largest crude importer and imports from Iran have significantly increased over the last five years, now accounting for about 13% of China's seaborne crude intake. This shadow market oil is vital for China's independent refiners, known as teapots, who have been buying the oil at a discount. They've also been buying Venezuelan crude at a discount, so supply disruptions from both simultaneously could increase their costs. For the time being, we're unlikely to see a big response in oil from the Iran unrest since the general consensus is that the crude market is oversupplied and so far no oil infrastructure has been impacted. But the market is on high alert for any possible spillover to a broader regional conflict, including any threats around the vital Strait of Hormuz.
- [48:49]
D
Karl yes, watching shipping very closely as well as production. Pippa thanks Pippa Stevens Watching the energy markets. A lot more on the DOJ's investigation into the Fed Chair today with Wall street insider and former White House official Anthony Scaramucci. That's when Money Movers begins in just a few minutes.
- [49:10]
C
All opinions expressed by Squawk on the street participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or AFFIL affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Such opinions are based upon information Squawk on the street participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Squawk on the street disclaimer, please visit cnbc.com squawkonthestreetdisclaimer at Capella University, we believe accessible education can make a difference. That's why we offer scholarship opportunities to all eligible students. Un futuro differente estam ma serca de lo que cres con Capella University. Learn more at Capella. Eduardo.