The Exchange – Episode Summary

Episode Title: Inflation Cools, Metals Dip and the Christmas Countdown is On
Air Date: October 24, 2025
Host: Courtney Reagan (in for Kelly Evans)
Podcast: The Exchange (CNBC)

Overview

This episode of The Exchange covers a fast-moving day across U.S. markets—record index highs on the back of cooling inflation, swings in metals and oil, the escalating government shutdown, and major global trade and geopolitical stories. Expert guests weigh in on the trajectory for Fed rate cuts, the real world fallout from the shutdown, the impact of tariffs, sector-level investment strategies, and the looming critical holiday retail season. The tone balances urgency and insight, with notable quotes and real-time data throughout.

Key Discussion Points & Insights

1. Market Rally: Cooler Inflation Drives Record Highs

• The Dow, S&P, and Nasdaq hit new records after a softer-than-anticipated CPI report.
• Yields mixed: 10-year Treasury just under 4%.
• Gold gives back previous gains; oil up but off weekly highs.
• Crypto upbeat, boosted by JP Morgan upgrade.
• Bitcoin holds near $110,000.

2. US-Canada Trade Drama & China Negotiations (00:57–03:53)

• Eamon Javers details breakdown in U.S.-Canada trade talks, triggered by a controversial Ontario TV ad, and provides context on upcoming Trump-Xi talks and U.S. Section 302 investigation into China.

  "This relationship is the defining relationship on planet earth between two nations." — Eamon Javers, [02:59]

• Emphasizes the importance of "pre-packaged deliverables" before leadership summits, noting uncertainty going into the next round of U.S.-China negotiations.

3. Inflation, the Fed, and Tariff Pass-Through

Guest: Krishna Guha (Vice Chair, Evercore ISI), interviewed by Courtney Reagan
(03:53–11:11)

• CPI comes in at 3%; core inflation also steady at 3% (YoY), both ex-food & energy.
• Krishna Guha calls inflation “benign for markets,” and expects Fed rate cuts of 25bps each in October and December.

  "The absence of bad news on the inflation front gives the Fed a free hand to cut rates in response to labor softness and risks." — Krishna Guha, [05:01]

• On labor: Recent layoffs (e.g. Target’s first in a decade) are notable but not enough yet to change the Fed’s course.
• Government shutdown effects will likely appear as “noise” in unemployment data—focus remains on underlying private sector employment.
• Tariff impact: Tariffs are nudging up goods inflation, but the effect is less severe and more “dragged out” than feared. Companies are mitigating through productivity and supply chain shifts.

  “Cumulatively the tariff pass through is going to be a bit less than we had feared, but certainly still plenty of it lying ahead.” — Krishna Guha, [10:13]

4. Shutdown Reality: Human Impact

Reporter: Emily Wilkins, live from Alexandria, VA (11:37–14:09)

• 300+ federal workers line up at a food distribution; many more nationwide miss paychecks.
• SNAP benefits (42M recipients) at risk of running out by month-end if shutdown continues.
• Bipartisan efforts are underway but no imminent end to the shutdown.

  “There was not enough food to meet demand... some actually had to be turned away.” — Emily Wilkins, [12:12]

5. Sector Rotation & Market Strategy

Guest: Barry Knapp (Director, Ironsides Macroeconomics)
(14:46–21:45)

• Argues two crucial inflation factors are overlooked:
  • Government spending’s key role in sparking and now slowing inflation (down from 11% growth to 3%).
  • Persistent margin pressure in staples/discretionary sectors due to tariffs; fiscal and monetary policy impacts differ across sectors.

  "All the conditions that were in place to create inflation in '21 are not in place today, and inflation is likely to head lower in the months to follow." — Barry Knapp, [17:43]

• Advising underweight in tech ("pretty stretched"), preferring sectors benefiting from corporate tax incentives: industrials, energy, materials, and utilities.
• Strong case for continued Fed rate cuts to support small business credit and labor market.
• Underweight or short consumer-facing sectors until margin/sales pressure abates.

6. Corporate & Commodity Movers: News Rundown (21:45–25:35)

• Ford: Best day since Jan 2022 after strong Q3 and renewed cost-control plans.
• Comfort Systems: Up >17% on AI data center-driven demand.
• Deckers Outdoors: Down >12% on weak sales guidance, with $150M annual tariff hit.
• News flash: U.S. sends carrier group to Latin America (military buildup); big Louvre heist reported.

7. Gold, Oil, and Commodity Trends

Guest: Francisco Blanch (Head of Commodities, BofA Securities)
(25:35–30:51)

• Gold: Near-term “overbought but underowned”—still a solid portfolio hedge, but best to buy on dips rather than chase.

  "Gold is both overbought but also under owned... We've revised our forecast... to $5,000." — Francisco Blanch, [25:37] “Gold is money. Fifty years ago 10 ounces bought you a car, and today 10 ounces of gold buy your car.” — Francisco Blanch, [27:40]

• Oil: Ongoing volatility from new U.S. sanctions targeting major Russian energy firms. Temporary rally, but OPEC production increases mean oil supply will likely stay ample.

8. Intel and Legacy Tech: Market Skepticism & Geopolitics

Reporter: Christina Partsinevelos (31:52–34:56)

• Despite profitability and outsized stock gains in 2025, Intel remains a “show me story.”
• Wall Street concerns: Foundry business lagging TSMC, supply constraints, growth driven more by political tailwinds than fundamentals.

  "Intel remains a total 'show me' story with a ton of unanswered questions and he's saying no real AI exposure." — Christina Partsinevelos, summarizing Mizuho, [33:41]

• Trend: Some enterprises prefer “old school” proven chips over cutting edge.

9. Holiday Season Outlook & Consumer Behavior

Retail Executives & Bill Simon (ex-Walmart US CEO) (35:35–42:06)

• Retail leaders describe consumers as both “resilient” and “choiceful,” hunting deals and timing purchases.
• Bill Simon: The U.S. consumer is “flush” (nominal wages +4%), in control, and able to absorb moderate price increases by trading up, down, or across product categories.

  “In the end, the consumer decides... In the end, Christmas is going to come and it’s going to be a good one.” — Bill Simon, [36:54]

• Private label and value strategies continue as trade-down persists.
• Layoffs and muted holiday hiring reflect sector-specific pressures, growing use of automation, and online retail shift.
• Retailers & consumers manage tariffs with mixed pricing strategies—impact seen but largely manageable unless macro conditions worsen.

  "The impact of tariffs may be 100, 150 basis points, but it's not going to be tragic." — Bill Simon, [41:38]

10. Alaska Air’s Troubles

Reporter: Phil LeBeau (42:39–43:38)

• Alaska Air faces a “trifecta” of challenges: disappointing earnings, weak guidance, and a major IT outage leading to wide delays.
• Jet fuel costs and operational disruptions expected to weigh on Q4.

Notable Quotes & Timestamps

• "This relationship is the defining relationship on planet earth between two nations."
  — Eamon Javers, [02:59]
• "The absence of bad news on the inflation front gives the Fed a free hand to cut rates in response to labor softness and risks."
  — Krishna Guha, [05:01]
• "There was not enough food to meet demand... some actually had to be turned away."
  — Emily Wilkins (on federal worker food lines), [12:12]
• "All the conditions that were in place to create inflation in '21 are not in place today, and inflation is likely to head lower in the months to follow."
  — Barry Knapp, [17:43]
• "Gold is both overbought but also under owned... We've revised our forecast... to $5,000."
  — Francisco Blanch, [25:37]
• “Gold is money. Fifty years ago 10 ounces bought you a car, and today 10 ounces of gold buy your car.”
  — Francisco Blanch, [27:40]
• "Intel remains a total 'show me' story with a ton of unanswered questions and he's saying no real AI exposure."
  — Christina Partsinevelos on Intel skepticism, [33:41]
• “In the end, the consumer decides... In the end, Christmas is going to come and it’s going to be a good one.”
  — Bill Simon, [36:54]
• "The impact of tariffs may be 100, 150 basis points, but it's not going to be tragic."
  — Bill Simon, [41:38]

Important Timestamps by Segment

• [00:57–03:53] – Washington/Trade: US-Canada breakdown, Trump-Xi summit preview (Eamon Javers)
• [03:53–11:11] – CPI, Fed rate outlook, Tariff pass-through (Krishna Guha)
• [11:37–14:09] – Shutdown impact: food insecurity, SNAP, live from VA (Emily Wilkins)
• [14:46–21:45] – Market/sector rotation, investment strategy (Barry Knapp)
• [25:35–30:51] – Commodities: Gold, Oil, global volatility (Francisco Blanch)
• [31:52–34:56] – Intel and tech “show me” era, sector skepticism (Christina Partsinevelos)
• [35:35–42:06] – Holiday retail, consumer behavior, value focus (Retail CEOs, Bill Simon)
• [42:39–43:38] – Alaska Air’s operational and financial stress (Phil LeBeau)

Concluding Takeaways

• U.S. markets are at record highs—but undercurrents of consumer stress, global trade unpredictability, and sticky inflation remain.
• Tariffs and the government shutdown continue to hit harder outside Wall Street, with millions feeling the pinch.
• The Fed is widely expected to cut rates again, supported by a benign inflation backdrop, but sectoral and labor market effects are uneven.
• Commodities see wild swings: gold remains favored long term, but caution urged; oil’s short-term rally belies longer-term supply comfort.
• Retailers and consumers alike are adapting—seeking value, controlling costs, and preparing for a robust, if choiceful, holiday season.

For listeners seeking actionable insights, sector rotation, risk management, and understanding consumer behavior are this week’s major themes.