Podcast Summary: The Exchange – Countdown to the Fed Decision (10/29/25)

Date: October 29, 2025
Host: Dominic Chu (in for Kelly Evans)
Guests: Tim Seymour (Seymour Asset Management), Barbara Duran (BDIA Capital Partners), Claudia Sahm (New Century Advisors), John Belton (Gabelli Funds), Michael Schumacher (Wells Fargo), Ross Mayfield (Baird), plus others from JPMorgan, RBC, and more.

Overview

This episode of The Exchange provides real-time insights and expert opinions leading up to the highly anticipated Federal Reserve rate decision. With U.S. markets at or near record highs, headlines dominated by tech earnings—including Nvidia reaching a $5 trillion valuation—and uncertainty from a government data blackout, the show explores what the Fed’s move means for investors, how top tech stocks are positioned, the health of the labor and housing markets, and implications of global monetary policies.

Key Discussion Points & Insights

1. Setting the Stage: The Fed’s Big Decision

• Steve Liesman (live at the Fed) outlines expectations: markets are pricing in a 25 basis point (bp) rate cut.
• The Fed faces a data vacuum due to a recent government shutdown, lacking many official economic reports except for the CPI.
• There’s debate about further cuts in coming months; futures markets price high probability for December, less so for January.
• Notably, the Fed could soon halt quantitative tightening (QT), potentially restarting bond purchases, though officials emphasize "not QE."

“Markets are almost certainly going to get the quarter point cut they priced in from the Fed. The question is whether ... the Fed feels comfortable affirming the outlook for additional cuts while inflation runs above the 2% target and the Fed lacks key economic data points.”
— Steve Liesman [01:46]

2. Investor Sentiment Amid Record Highs

• Dominic Chu asks if the ongoing rally can last in the absence of traditional data.
• Tim Seymour points to strong seasonality and resilient corporate earnings.

“I think the setup remains very strong between now and Thanksgiving... sometimes that wall of worry is what takes markets higher.”
— Tim Seymour [04:31]

• Barbara Duran highlights continued strength in “big tech” and broad earnings beats, but warns of periodic profit taking and high valuations (market at ~23x earnings).
• Private sector data—from credit card companies to travel platforms—are cited as helpful substitutes for missing government stats.

3. Labor Market & Recession Signals

• Claudia Sahm discusses challenges from the absence of federal data, especially lacking core unemployment measures that her "Sahm Rule" needs to detect recessions.

“What we're missing is the core of the data ... particularly a measure of unemployment. The timing is really unfortunate because ... the Fed began reducing rates again because it is concerned that the labor market would be deteriorating...”
— Claudia Sahm [09:02]

• She notes recent labor trends driven by supply changes, such as immigration, make traditional signals less reliable, and the current reading is nowhere near recession territory.

4. AI & White-Collar Labor: Are We Ready for Structural Change?

• Tim Seymour raises the impact of AI on white-collar layoffs.
• Claudia Sahm tempers the hype: Layoffs at big firms make headlines, but net employment remains healthy, and AI adoption, though rising, is “still very low overall.”
• Notably, new Census Bureau surveys track business AI use, but widespread labor force impacts aren’t visible yet.

“The statistics aren’t missing it. It’s just we’re not at full adoption. But it is giving us a window of where the labor market could be headed.”
— Claudia Sahm [12:36]

5. Mega Cap Tech Earnings and AI Bull Run

• Focus shifts to the evening’s tech earnings from Alphabet (Google), Microsoft, and Meta—combined with Nvidia’s historic $5T valuation.
• John Belton (Gabelli Funds) says “we’re still in the early innings of the AI buildout” and that fundamentals—not bubble-like multiples—justify current valuations, especially for Nvidia.
• Both Barbara Duran and Belton favor Amazon among the “Mag 7,” citing its cloud strength and undervalued retail innovations in AI.

“Nvidia is kind of the perfect example... three years ago Nvidia was trading at 25 times forward earnings. It’s more like 20 times today. ... You keep buying these stocks so long as the fundamentals remain strong.”
— John Belton [19:24]

• Tim Seymour prefers Google, highlighting underappreciated growth in search, YouTube, and AI, and sees its valuation as attractive.

“I think there’s a lot to the Google story that doesn’t get into the valuation... This is a $300 stock easily.”
— Tim Seymour [22:18]

6. Housing Market: Rates Down, But Activity Still Soft

• Diana Olek reports mortgage rates are at 1-year lows (around 6.1%), spurring a huge jump in refinancing (+111% YoY), but purchase demand remains tepid. Pending home sales are flat or down.
• Barbara Duran is cautious on homebuilders (owning Home Depot “underweight”), citing lingering affordability issues and consumer confidence setbacks.

“Affordability is still a real problem. ... Even though rates are coming down, the actual cash outflow per month ... is still a little bit high."
— Barbara Duran [26:59]

• Tim Seymour suggests any further rally for homebuilders is unlikely to be rate-driven.

7. Gold & Commodities: Still Bullish

• Tim Seymour and Barbara Duran both advocate exposure to gold, citing multi-year supply constraints, central bank buying, and a long-term asset allocation case. Duran prefers ETFs over miners.

“This is a multi year trade... the free cash flow yields with gold at 4,000 are extraordinary. I actually think it’s a very interesting time to find those miners, also with exposure to copper.”
— Tim Seymour [30:47]

8. Global Equities: U.S. Exceptionalism vs. International Opportunities

• Despite strong YTD performance in Europe and Japan, Duran remains overweight U.S. equities for long-term innovation and margin reasons, but sees international allocations as “trades.”
• Seymour sees value in Japanese industrials and European banks, noting U.S. investors are underweight international; sees this as a generational rebalancing opportunity.

9. What’s Next for the Fed? Rate Cuts, QT, and Market Implications

• Michael Schumacher (Wells Fargo) says balance sheet (QT) policy is a big focus; surprise continuation of QT could “shock” markets.
• Over the next 6–12 months, tariffs and the Fed’s response are key drivers; rate cuts are widely expected, but not all are convinced they're necessary.
• Ross Mayfield (Baird) sees Fed easing plus no recession as “a powerful mix,” but notes “AI is the main market driver, not rates.”

“Fed rate cuts plus no recession has been a very potent mix throughout history... but it’s far second to AI and the developments on the front of the Mag 7.”
— Ross Mayfield [38:31]

Notable Quotes & Memorable Moments

• Dominic Chu, on Fed communication:
  “Not flying blind, but maybe slightly visually impaired there...” [03:59]

• Claudia Sahm, on lack of data:
  “I can't even give you the updated version of my indicator because we don't have the unemployment rate for September.” [10:16]

• On market psychology and the rally:
  “Sometimes that wall of worry is what takes markets higher.” — Tim Seymour [04:31]

• On the current investing regime:
  “This is a trade that’s as much about supply ... It’s miners. The free cash flow yields with gold at $4,000 are extraordinary.”
  — Tim Seymour [30:47]

• Barbara Duran, on U.S. vs. international outlook:
  “This idea of ​​American exceptionalism ... is about innovation. It’s our company. Earnings are higher, our margins are higher, we have flexibility in our workforce and that’s going to continue.” [32:51]

• David Kelly (JPMorgan), on the risk of “feeding the animals”:
  “When you go to the zoo, they say don’t feed the animals. The Federal Reserve shouldn’t feed the animals here.” [44:27]

Important Segments and Timestamps

• [01:46] - Steve Liesman previews the Fed rate decision, outlines market expectations and policy drivers.
• [04:31] - Tim Seymour discusses the case for continued market strength into year-end.
• [07:06] - Barbara Duran gives her perspective on investing amidst data uncertainty.
• [09:02] - Claudia Sahm analyzes labor market visibility during the data blackout.
• [12:36] - Discussion on AI-related layoffs and how measurement may need to evolve.
• [19:24] - John Belton explains why current tech stock fundamentals still justify “buying the rally.”
• [25:14] - Diana Olek details the housing market’s mixed signals and mortgage rate effects.
• [30:47] - Tim Seymour and Barbara Duran on commodity trades, especially gold.
• [32:51] - Panel considers U.S. vs international allocations.
• [35:47] - Schumacher and Mayfield frame next steps for Fed policy and potential market repercussions.
• [40:08] - Final thoughts before the Fed decision: risks, opportunities, and what to watch.
• [43:45] - All-star panel discusses the likelihood and wisdom of current and future rate cuts.

Final Takeaways

• The quarter-point Fed rate cut is expected, but market focus is on the signaling for next year and the possible end to quantitative tightening.
• AI and big tech remain the dominant market narrative, with strong fundamentals backing recent gains.
• Housing and labor markets show resilience but also lingering weakness. Lack of government data is a significant challenge, leading investors and policymakers to rely more heavily on private sector alternatives.
• Gold and commodities continue to be favored hedges and secular trades.
• **Cautious optimism prevails—**the bull market’s path still seems upward, but high valuations and uncertainties demand vigilance.

This summary captures the tone, expertise, and main themes discussed throughout the episode, with clear attributions, quotes, and timestamps for key moments.