Podcast Summary: The Exchange (CNBC)

Episode: Hesitation over Hassett, the Billionaire Tax Battle, and a Power Auction

Date: January 16, 2026
Host: Kelly Evans
Notable Contributors: Rick Santelli, Steve Liesman, Robert Frank, Drew Pettit, Gene Munster, Deirdre Bosa, Pippa Stevens, Victoria Greene

Episode Overview

This episode of The Exchange dives into three major business and policy stories shaping the market’s narrative mid-January 2026:

• The uncertainty around the Federal Reserve Chair nomination after President Trump’s comments about Kevin Hassett and Kevin Warsh,
• The ramifications of a proposed billionaire tax in California, especially for tech founders,
• An emergency power auction prompted by White House demands that big tech companies pay to expand electricity capacity.
  The episode features real-time market reactions, expert debate, deep dives into AI and tech trends, and lively banter on core economic and regulatory developments.

Main Discussion Points & Insights

1. Fed Chair Uncertainty: Hassett vs. Warsh and Market Impact

[01:31 – 11:53]

• President Trump publicly expresses a reluctance to move Kevin Hassett from his White House role into the highly anticipated Fed chair position, despite Hassett being the frontrunner. This "monkey wrench" throws the nomination process into chaos and boosts the odds for Kevin Warsh, a more hawkish and Fed-critical candidate.

  • Steve Liesman: “Warsh has openly praised the President’s economic policies and been highly critical of the Fed… Warsh is seen as more hawkish than Hassett.” [03:05]
  • Rick Santelli downplays the effect, suggesting technical market factors matter more than "water cooler talk":
    “All of that is really fun water cooler talk. But what’s going on is technical.” [08:13]

• Treasury Yield Movements: After the President’s comments, 10-year yields pop above 4.2% for the first time since September.

  • Steve Liesman: "Yields rose. You could ignore that if you like and superimpose your own personal views on what's happening." [10:07]

• Market Implications: Debate over whether the Chair's identity deeply impacts markets—Santelli argues the technicals and underlying economy matter more.

  • Kelly Evans: “Does a stronger economy mean we need higher rates?” [09:31]
  • Santelli: “Everything the economy in my opinion is going to get higher rates for exactly that reason. We’re going to get back to old school type trading. The Economy is going to do well and interest rates are going to go up a bit.” [09:35]
  • Liesman: Wall Street’s concern is about Fed independence if Hassett is nominated. [10:32]

• Fed Independence Debate:

  • Rick Santelli: Dismisses the drama, “The Fed is the Fed. Nothing's going to change at the Fed. There's going to be more eyeballs and more reporting on every twitch of the Fed now than there ever has been in history.” [11:41]
  • Steve Liesman (counter): “Kevin has said there's going to be changes at the Fed if Kevin Warsh comes in, that's for sure.” [12:08]

2. Economic Growth, Inflation, and Market Resilience

[12:46 – 16:39]

• Drew Pettit (Citi US Equity Strategist): The economy is showing strength, demonstrated by robust industrial production and positive earnings growth across more stocks.

  • “The economy’s working. There’s more stocks with positive earnings growth. How you offset higher rates and equities is better growth.” [12:46]
  • Inflation at 3% is manageable for equities; pricing power remains strong, and input/cost inflation is normalizing, making the environment better for margins. [13:54]

• Small Cap vs. Large Cap: Pettit advocates for both small cap value and large cap growth, citing secular AI drivers and earnings momentum.

  • “You find risk at the corner in the size and style box… Buy growth, buy momentum, and you should have a pretty good portfolio.” [15:59]

3. AI Trade, OpenAI Monetization, and 'Agentic Commerce'

[19:55 – 26:29]

• OpenAI to Launch Ads on ChatGPT: Julia Boorstin (CNBC) explains the revenue drive, directly challenging Google. Projections see potentially $100 billion in search ad revenue by 2030 for OpenAI if it can take significant share. [19:55]

• AI Investment Theme:

  • Gene Munster (Deepwater Asset Management):
    • Sees both Google and OpenAI as “winners”—user behavior is shifting, and time spent searching/using chatbots is growing overall, not simply shifting from one to the other.
      “This can be one of those rare cases when both companies can win. Consumer behavior is changing.” [22:00]
    • The next hurdle for AI companies is “Capex guidance”—how much the hyperscalers will invest in infrastructure. Munster forecasts even higher spending than the already-upgraded street expectations, predicting continued tailwinds for both large and especially smaller-cap AI infrastructure plays.
      “The inference market last year in 2025 was five times as big as the training market… This party is going to continue longer.” [24:59]
    • Favors small cap AI stocks for greater near-term upside due to likely higher earnings revision rates. [25:27]

• Policy Risk: With calls for Big Tech to pay for power grid expansion, Munster notes this could slightly favor small players over giants financially burdened by new costs. [26:07]

4. California’s Billionaire Tax and Tech Founder Fears

[28:09 – 30:38]

• Robert Frank (CNBC): A provision in California's proposed wealth tax could—depending on interpretation—increase tax bills disproportionately for founders with “super-voting shares,” such as Google’s Larry Page and Sergey Brin.
  • Example: They could be taxed at $60 billion instead of $6 billion each if the law interprets these shares as non-public—though the law’s architects deny this interpretation, calling it “absolute nonsense.” [28:09–30:06]
  • Tax would hit official on Jan 1, 2026 if passed; many wealthy individuals are already considering moving to avoid it. [30:15]

5. Emergency Power Auction: Tech Pays for Grid Expansion

[32:20 – 33:38]

• Pippa Stevens (CNBC): President Trump pushes for tech companies to fund new power plants to ensure enough electricity for data centers.
  • Emergency auction called by PJM (regional operator) to allocate long-term power agreements to tech firms.
  • Immediate stock reaction: Independent power producers like Constellation, Talon, and Vistra drop sharply, while suppliers like GE Vernova and Siemens Energy surge due to anticipated demand for turbines. [32:20]
  • Implementation remains unclear, but the auction is intended to clarify the real long-term cost of power for tech firms and the sector.

6. Policy Volatility, Market Plays, and Political Jockeying

[34:28 – 38:54]

• James Lucier (Capital Alpha Partners):
  • Describes the administration’s frenetic pace of policy announcements as generating an “ice cream headache.” [34:28]
  • Trend: Investors try to preemptively position for policy moves (“follow Trump in these trades”)—whether it’s housing, drug prices, or energy. [35:28]
  • Both President Trump and Senator Elizabeth Warren embrace a populist focus on affordability; bipartisan alignment on pocketbook issues. [36:00]
  • Prediction: Democrats narrowly win upcoming midterms, largely due to structural districting, not a big swing in support; the next 6-8 months are crucial for the administration to push through policy. [37:18]

7. AI Coding Inflection & Tech Disruption

[39:53 – 43:49]

• Deirdre Bosa (CNBC):
  • Demonstrates “vibe coding” via Claude Cowork—tools that let non-programmers rapidly build useful (and whimsical) software apps via AI prompts.
  • Argues these tools won’t immediately replace enterprise software like Salesforce, but could disrupt smaller point solutions and ultimately transform software creation.
    “This is the worst that it’s going to be. It’s only going to improve… big companies like Salesforce and Workday are safe for now, but upstarts or point solutions may be at risk.” [43:03]

8. Earnings Preview: Netflix, Intel, Schlumberger

[44:40 – 47:14]

• Victoria Greene (G Squared Private Wealth):
  • Netflix: Hold rating—deal news (WBD acquisition) raises regulatory and execution questions.
  • Intel: Buy rating—compelling turnaround narrative, the focus is on execution and foundry progress.
  • Schlumberger (SLB): Positive outlook—offshore and international drilling boom counterbalances stagnation in US shale, particularly boosted by developments in Venezuela and Saudi Arabia.

Notable Quotes & Time Stamps

• Steve Liesman on Warsh:
  “Warsh is seen as more hawkish than Hassett who has raised concern that he would be less independent from a President.” [03:05]
• Rick Santelli:
  “All of that is really fun water cooler talk. But what's going on is technical… in the end it does not matter. It's great stories give the finances matter.” [08:13]
• Drew Pettit:
  “How you offset higher rates in equities is better growth… That’s the kicker. It’s growth.” [12:46]
• Gene Munster:
  “I think this can be one of those rare cases when both companies (OpenAI and Google) can win. Both companies can have massive businesses, advertising businesses within AI agentic commerce.” [22:00]
• Robert Frank:
  “If their super-voting shares are considered non-public… these two could face a tax of $60 billion each.” [28:33]
• James Lucier:
  “The technical term is ice cream headache. There’s just too much fun, too many things coming out to really make sense of.” [34:28]
• Deirdre Bosa:
  “With zero technical experience, I was able to make a fully functional earnings analysis tool with just a few prompts. That indeed is a ChatGPT-like inflection moment for software investors.” [39:53]
• Victoria Greene:
  “Netflix is definitely betting on [regulatory approval]. They've got like a $5.8 billion breakup fee if they can't get approval… But it's going to be all about the Warner Brothers deal.” [44:40]

Key Segment Timestamps

• Fed Chair/Market Reaction: 01:31–11:53
• Economic & Market Analysis (Pettit): 12:46–16:39
• OpenAI/AI Trade (Munster): 19:55–26:29
• California Billionaire Tax (Frank): 28:09–30:38
• Emergency Power Auction (Stevens): 32:20–33:38
• Policy Volatility (Lucier): 34:28–38:54
• AI Coding Demo (Bosa): 39:53–43:49
• Earnings Preview (Greene): 44:40–47:14

Episode Tone & Style

• Language: Fast-paced, financial newsroom style peppered with energetic debate and the occasional dry humor or friendly banter.
• Highlights: Spirited (sometimes combative) exchanges between market veterans (Santelli vs Liesman), rapid-fire expert analysis, real-world immediacy (breaking news and live reactions), and hands-on demonstrations (AI coding).
• Accessibility: Offers both technical commentary and plain-English explanations for wide audience utility.

In Summary

This episode spells out the intersection of politics, technology, and markets as policy uncertainty, AI-driven innovation, and populist challenges collide. Listeners receive real-time analysis, actionable insight, and a front-row seat to the ongoing tug-of-war between policy, innovation, and market reaction—all delivered in classic CNBC style.