The Exchange (CNBC) – Episode Summary

Episode: DOJ’s Powell Probe, Not Nvidia, and Credit Card Cap
Date: January 12, 2026
Host: Kelly Evans

Overview

This episode centers on a dramatic day for business and markets, dominated by political interference at the Federal Reserve and new White House proposals for credit card interest rate caps. The DOJ’s investigation of Fed Chair Jay Powell sparks urgent debates over central bank independence, with guests—including a former Fed governor, Wall Street strategists, and investigative reporters—weighing in on the economic and market implications. The episode also covers the latest market trends, housing affordability, and landmark tech partnerships.

Key Topic 1: DOJ Investigation of Fed Chair Powell & Central Bank Independence

Background & Breaking News

• Markets React: Indices initially drop on news of the DOJ subpoenaing Fed Chair Jerome Powell, but then recover, suggesting investors see the probe as short-lived ("The Dow has now gone positive. Markets...are essentially taking this in stride." – Kelly Evans, 15:37).
• Powell Responds: Powell posts a rare, direct video statement, denouncing the subpoena as a "consequence of the Fed not allowing President Trump's preference for lower rates" ([03:25]).

  Quote:
  “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.” - Jerome Powell, [03:23]
  “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.” - Jerome Powell, [03:35]

Former Fed Officials’ Support

• Joint Statement: Former Fed Chairs and Treasury Secretaries (Greenspan, Bernanke, Yellen, Rubin) condemn the DOJ action, calling it “how monetary policy is made in emerging markets with weak institutions... It has no place in the United States...” (Eamon Javers, [02:29])

Analysis: Larry Lindsey (Former Fed Governor, Lindsey Group)

• Prosecution is “Foolish”:

  "If the President were to ask me my opinion about prosecuting the Fed chair over construction costs, I would say he shouldn't do it. It's very, very foolish." – Larry Lindsey, [05:08]

• “Caesar’s Wife” Analogy: Both Fed and administration have failed to avoid political appearance:

  "If the Fed wants to cry, don't take away our independence because we're not political, well, they shouldn't behave in a way that makes people think they're political." – Larry Lindsey, [07:54]

• Historical Context: The Fed has broken tradition by making moves (rate cuts/hikes) near elections— “Exactly once” in over a century ([08:39]).

Lindsey on the Long-Term Impact

• No Big Lasting Effects:

  "This is going to be completely forgotten in the great long history of the Federal Reserve." – Larry Lindsey, [13:27]

• Lawfare Reflections: The current climate of legal actions against public officials is not new ([14:14]).

Key Topic 2: Market Impact and Investor Sentiment

Market Trends

• Record highs last week; Dow dips but then recovers as bond yields drop slightly ([01:02], [14:06]).
• Flight to Safety: Sectors such as Staples, Utilities, and Real Estate rally; gold and silver hit new records, with gold crossing $4,600 ([01:02]).

Auction Recap: Sima Modi

• 10 Year Treasury Results:
  • $39 billion auctioned, yield of 4.173%, with steady demand from domestic buyers; foreign appetite ticks slightly lower ([14:46]).

Expert View: Tom Hancock (GMO US Quality ETF)

• Fed Drama Not Spooking Markets:

  “I think the market is telling us that they don't think this is a big deal. I'm actually a little bit surprised about that.” – Tom Hancock, [16:16]

• Uncertainty Over Policy (“Populism”):

  “That overall sense of uncertainty discourages investment and that's bad for the economy and bad for the market.” – Hancock, [17:26]

Key Topic 3: Credit Card Rate Caps—Populist Moves & Market Fallout

Proposal

• President Proposes 10% Cap on Credit Card Rates: Lending and credit stocks like Synchrony and Affirm tumble ([01:02], [41:45]).

Expert View: Tim Seymour (Seymour Asset Management)

• Opportunities Amid Selling:

  “I think if you look at banks overall, Citi bank's overreaction today is just that... I like Citi here. I'm long Citi. I think you're buying weakness.” – Tim Seymour, [42:23]

• Regulatory Overhang:

  “Every populist move is effectively a regulatory one.” – Kelly Evans, [43:43]

• “Buy Now, Pay Later” Under Pressure: The cap would squeeze many in the space ([41:45], [43:53]).

Key Topic 4: Housing and Mortgage Policy

New White House Housing Moves

• Fannie & Freddie to Buy $200 Billion in Mortgage Bonds: Pushes mortgage rates below 6%, boosting housing stocks ([21:58]).

Interview: Glenn Kelman (CEO, Redfin)

• Band-Aid, Not Solution:

  “Mostly band aids. The fundamental problem in America is that we've stopped building houses. We're about 5 million units short.” – Glenn Kelman, [22:40]

• Affordability Hinges on More Supply:

  “The simplest thing we can do is just eliminate some of the regulations, especially around zoning.” – Kelman, [23:32]

• Home Price Correction:

  "If you want society to heal, where people can afford houses, you nailed it. Home prices need to come down.” – Kelman, [25:55]

Key Topic 5: The “Not Nvidia” Chip and Tech Trade

Portfolio Focus: Tom Hancock (GMO)

• Beyond Nvidia:

  "It's really become kind of a two horse race between Nvidia's world and Alphabet's World." – Hancock, [19:10]

• Semiconductor Supply Chain: Bullish on TSMC, Lam Research, and Broadcom ([20:09]).

Alphabet and Apple Tie-up – Deirdre Bosa

• Gemini to Power Siri:

  “The deal locks Google into the most expensive part of the AI stack while Apple gets to keep control of the customer and the data.” – Deirdre Bosa, [38:46]

• Strategic Implications: Good short-term for Google, but long-term advantage may go to the platform (Apple) that owns the user relationship ([39:37]).

Key Topic 6: Powell’s Unprecedented Response—Institutional Consequences

Analysts’ Take: David Wessel (Brookings), Nick Timiraos (WSJ)

• White House Overreach:

  “I think... it’s a manifestation of President Trump’s determination to control the Fed like he does everything else.” – David Wessel, [31:59]

• Could Backfire—Ways the strategy may fail:
  • Next Fed chair faces higher scrutiny ([33:55])
  • Could unite moderate and Senate Republicans against political appointees ([34:58])
  • Powell might stay in his seat out of principle, maintaining a pro-independence majority ([35:10])
• Historical Precedent: Only once before has an outgoing Fed chair stayed on as governor after chairmanship ([36:59]).
• Powell’s Stay as Principle, Not Politics:

  “It may look partisan, but I think it looks pretty principled to me.” – David Wessel, [36:19]

Additional Memorable/Punchy Moments & Quotes

• Lindsey on Washington:

  “This is Washington. A big cost overrun happens all the time. I mean, it's like Rick in Casablanca saying, I'm shocked, shocked, shocked.” – Larry Lindsey, [05:08]

• Tensions Over Home Prices:

  “For most products, we want [them] to be cheaper…with housing, we treat falling prices as a calamity. That’s just because a lot of homeowners have formed cartels… to keep home prices high and to limit supply.” – Glenn Kelman, [24:46]

• Tom Hancock:

  "So we've got Caesar and John Adams so far, tells you what kind of day this is for investors…” ([18:05])

• On the Metals Rally:

  “Weaker dollar, less Fed independence are big ingredients. But this is a secular trend... Gold is the best 25 year chart of any chart you can find.” – Tim Seymour, [44:12]

• Deirdre Bosa on Apple-Google:

  “Owning the customer may ultimately matter more than owning the model, especially in this next leg of the race.” ([39:37])

Important Timestamps

• 03:21 — Powell’s direct public statement on DOJ probe
• 05:08 — Larry Lindsey on the “foolishness” of prosecuting Powell
• 14:46 — Sima Modi on 10-year auction results
• 16:16 — Tom Hancock on muted market response to Fed drama
• 22:40 — Glenn Kelman on housing: “Mostly band aids”
• 24:46 — Kelman on U.S. housing “cartels”
• 31:59 — David Wessel: White House “manifestation…to control the Fed”
• 33:55 — Nick Timiraos on risks for next Fed Chair
• 38:46 — Deirdre Bosa on Apple-Google Siri/Gemini deal
• 41:45 — Tim Seymour on credit card stocks and policy risk
• 44:12 — Seymour on the lasting bullish case for gold

Tone and Style

Balanced, urgent, and conversational. Kelly Evans guides guests through complex policy and market issues, allowing for characterful, frank commentary. Guests employ historical analogy and plain language, making institutional finance and politics accessible.

Conclusion

This fast-moving episode offers critical context on the threats to Fed independence, the ripple effects of regulatory moves on finance and housing, and seismic shifts in tech. The prevailing message: While headline uncertainty sparks fierce debate, market fundamentals and institutional memory exert a stabilizing force—at least for now.