The Exchange (CNBC) – Episode Summary

Episode: “A Shadow Fed, A Cap Contrarian Call, and Chips & Caso”
Date: January 13, 2026
Host: Kellyanne Evans

Overview

This episode of "The Exchange" dives into three major business stories shaping the market today:

• Political turmoil and its impact on the Federal Reserve’s leadership (the “Shadow Fed” scenario)
• The President’s push for credit card rate caps and its effect on stocks like Visa and MasterCard
• The ongoing AI arms race, the U.S.–China tech rivalry, and why Nvidia remains a top pick for some analysts

Throughout the show, Kellyanne Evans and her guests break down the day’s market movers, political intrigue affecting financial regulation, tech sector positioning, and offer both tactical and strategic investment views.

Key Discussion Points & Insights

1. Political Pressure on the Fed – “Shadow Fed” (00:48–12:10)

Political Stand-off and the Powell Investigation

• The President escalates his criticism of Fed Chair Jay Powell, with harsh words raising concerns over Fed independence.
• Ongoing DOJ investigation into Powell creates a potential roadblock for the next Fed Chair nomination.
  • Emily Wilkins (02:28): Reports that Senate Banking Committee Republicans, especially Senator Thom Tillis, pledge to block any new Trump Fed nominees until Powell’s investigation concludes.
  • Tensions are high as multiple senators express skepticism or outright opposition toward the investigation.

Notable Quote:
“If there were any remaining doubt whether advisers within the Trump administration are actively pushing to end the independence of the Federal Reserve, there should now be none.”
— Emily Wilkins quoting Senator Tillis ([02:28])

Implications for Markets and Regulation

• Dan Clifton (04:59): Analyzes how the probe is an “unforced error,” jeopardizing not only appointment timelines but also the President’s broader deregulation agenda.

  • With Powell possibly remaining as a “shadow Fed Chair” if the process drags on, markets face increased uncertainty.
  • Affected areas: financial deregulation (banks), rates policy, investor confidence.

• Timeline Concern:

  • If no action taken by spring (April-May), the Fed Board itself may have to pick the new Chair, creating potential for further market unease.

Notable Quote:
“It almost feels then like it’s the biggest setback for the president’s agenda that he could possibly be facing this year.”
— Kellyanne Evans ([06:33])

Dan Clifton’s Perspective (07:00):
“The backdrop here for the U.S. economy is so great... That’s why I would call it an unforced error. But, Kelly, this is so offsides that... the president’s going to need to move this process forward to get his new Fed chairman in.”

Legal & Procedural Next Steps

• DOJ is “walking back” from harsh action—there’s acknowledgment that no indictment has been issued, only a subpoena.
• Uncertainty remains around whether a grand jury or indictment will happen; most expect odds of Powell being found at fault are low.

Notable Quote:
“I think you’ve got to see some real action on that nominee in the Senate Banking Committee by April if you’re going to have that person in there by the time the chairman's term expires.”
— Dan Clifton ([11:49])

2. Microsoft, Data Centers & U.S.–China AI Race (14:03–18:46)

Microsoft’s Community Pledge for Data Centers

• Microsoft pledges that growing AI/cloud data centers will not increase consumer electricity prices—an attempt to address local political resistance.
  • Five core commitments: affordable electricity, minimal water use, job creation, tax contributions, community investment.

Notable Quote:
“What we pledge today is five things addressing five issues that are important to local communities... electricity, water, jobs, taxes, and skills.”
— Brad Smith, Microsoft President ([14:50])

• The President publicly praises Microsoft, positioning this as a model for other tech giants.

Warning on China’s AI Momentum

• Microsoft’s Brad Smith voices concern that Chinese AI models are gaining global adoption—especially in Russia, Africa, and even 6–10% adoption in North America.
• Deirdre Bosa (16:51): Frames this as Big Tech’s new strategy: raising the “China threat” to argue for fewer local regulatory delays in AI infrastructure.

Notable Quote:
“Smith said that Chinese models are gaining adoption globally and if the US slows down, the gap could close faster than anyone expects. Now, this is a calculated move—weaponizing national security to counter friction at that local level...”
— Deirdre Bosa ([16:51])

3. Credit Card Rate Cap, Swipe Fee Legislation & Buy Now Pay Later Tactics (20:55–24:45)

The Impact on Visa, MasterCard & Payments

• Visa and MasterCard shares both drop sharply, attributed to the President’s proposed cap on credit card rates (10%) and attention to swipe fees.

• Dan Dalive (21:19):

  • Fears may be “overblown”—Visa and MasterCard aren’t direct lenders, so the cap alone doesn’t hit their revenue.
  • The real disruption could be in volume (if credit use shifts down) and more so with swipe fee legislation.

• Shift to Buy Now, Pay Later (BNPL): If credit cards become less attractive or harder for consumers to get, BNPL services might benefit, as a single lost credit transaction may spawn multiple BNPL transactions (often settled over debit).

Notable Quote:
“One credit transaction that’s gone is going to create four Buy Now Pay Later transactions because people settle those through debit. So I actually think in a weird way it’s a positive catalyst...”
— Dan Dalive ([22:28])

Real vs. Potential Regulatory Change

• Dan Dalive expects some compromise may eventually pass Congress, but not the “total annihilation” of interchange; probably a mixed outcome slightly favoring consumers and merchants over banks.

4. Market Overview & Buffett Special Preview (26:24–31:14)

Market Movers

• Dow down ~400 points, with financials and tech under pressure.
• L3Harris rockets on $1B US government investment.
• Oil surges to a seven-week high due to Middle East tensions and new tariffs on Iranian business.

Warren Buffett Special Sneak Peek

• Becky Quick previews a two-hour documentary featuring never-before-seen Buffett interviews.
  • Buffett admits size has changed Berkshire’s approach: “It’s harder to compound extremely large numbers than small numbers...” ([28:38])
  • His children will spearhead giving away his fortune, with fun anecdotes about “losing” allowance to their dad’s in-home slot machine.

5. Sector Strategies & AI Stock Picks (31:27–47:01)

Valuations & Populist Overhangs

• Chris Grison (33:21):
  • Strong economic backdrop, but valuations expensive; sees sector-rotation “landmines” from the President’s populist regulatory themes (notably credit cards and potential further action in other sectors).
  • Advises caution on Visa/MasterCard (uncertainty over swipe fee legislation) but sees upside opportunities in stocks like Dell and UPS (“gag factor” picks).

Homebuilders & Housing Data

• New home sales beat expectations, up 18.7% YoY for October 2025, boosted by falling mortgage rates.
• Homebuilder ETF up 12% since the President’s announcement to have Fannie and Freddie purchase $200B in mortgage debt.

Top AI Stock Picks (“Chips & Caso” Segment)

Chris Caso of Wolf Research (41:43 onward):

• Rotating favorite AI plays—Micron’s 300% run in 2025, but Nvidia is back as his “favorite idea” for 2026.
  • Nvidia’s pullback in price, strong upcoming product cycles (Ruben Ultra), and sustainable pricing power seen as key advantages.
  • Points out Nvidia’s software platform and systems (not just hardware) deepen its competitive moat over rivals like Google TPU.

Notable Quote:
“The most important thing... what's most misunderstood about Nvidia is most of this upside... is actually coming from pricing... we think the pricing tells the story there about both the sustainable competitive advantage as well as their ability to sustain the margins.”
— Chris Caso ([42:31])

• Also likes semiconductor capital equipment stocks as “the only way” to meet memory demand, but warns many of those names have already run up.

Memorable Moments & Quotes

• “If there were any remaining doubt whether advisers within the Trump administration are actively pushing to end the independence of the Federal Reserve, there should now be none.”
  — Emily Wilkins ([02:28])

• “It almost feels... like it’s the biggest setback for the president’s agenda that he could possibly be facing this year.”
  — Kellyanne Evans ([06:33])

• “Smith said that Chinese models are gaining adoption globally and if the US slows down, the gap could close faster than anyone expects.”
  — Deirdre Bosa ([16:51])

• “One credit transaction that’s gone is going to create four Buy Now Pay Later transactions... it's a positive catalyst.”
  — Dan Dalive ([22:28])

• “It’s harder to compound extremely large numbers than small numbers. And I've always known that.”
  — Warren Buffett ([28:38])

• “The most important thing...what’s most misunderstood about Nvidia is most of this upside...is actually coming from pricing...”
  — Chris Caso ([42:31])

Detailed Timestamps for Key Segments

• [00:48] – Kellyanne Evans opens show; market and policy backdrop
• [02:04] – Political battle over Fed Chair Powell, featuring Rick Santelli and Emily Wilkins
• [04:59] – Dan Clifton explains stakes for Fed leadership and deregulation agenda
• [12:23] – Rick Santelli recaps strong 30-year bond auction
• [14:20] – Eamon Javers reports Microsoft’s data center commitments
• [16:51] – Deirdre Bosa on U.S.–China AI race and regulatory strategy
• [20:55] – Dan Dalive (Mizuho) on card caps, market fears, and BNPL opportunity
• [26:24] – Market check & oil price update
• [27:58] – Becky Quick previews Warren Buffett special
• [33:21] – Chris Grison on valuations, sector risk, and “gag factor” stock ideas
• [38:42] – Diana Olek on new home sales and homebuilder surge
• [41:43] – Chris Caso (Wolf) details the AI trade, why Nvidia still leads, and memory/semicap rotation

Conclusion

This episode weaves together the political challenges facing the Fed and potential impacts on financial regulation, rapidly evolving dynamics in the payments and credit industry, and the enduring theme of technological leadership in AI hardware. The panel offers nuanced ways investors might brace for volatility (Fed uncertainty, populist regulation), ride the next wave in AI (stick with Nvidia, consider memory/semicap), or hunt for value in overlooked sectors. The tone is candid, analytical, and offers both skepticism and optimism in the face of a rapidly shifting economic landscape.