The Exchange – CNBC

Episode: "Inflation vs. Jobs, Pharma’s National Security Issue, and $160 Lipstick"

Date: September 11, 2025
Hosts: Mike Santoli, Melissa Lee
Featured Guests: Steve Liesman, Rick Santelli, Michael Schumacher (Wells Fargo), Jared Holtz (Mizuho), Ryan Barney (Pantera Capital), Diana Olek

Overview

This episode of The Exchange tackled the intersection of inflation data and the jobs market, the mounting national security concerns over pharma’s dependence on China, and the cultural curiosity of ultra-premium consumer goods like a $160 lipstick. The hosts and guests delivered real-time market analysis, deep-dived into legislative risks, and examined notable headlines in tech, crypto, and real estate.

Key Discussion Points and Insights

1. Market Reactions to Inflation & Jobs Data

• Context: All-time highs across major indices. Recent CPI (Consumer Price Index) and jobless claims figures are fueling market bets on an imminent Fed rate cut.
• Bond Market: The 10-year Treasury yield briefly dipped below 4% for the first time since April.
• Stocks: Nasdaq on track for its 24th record close this year.

Roundtable Takeaways

• Steve Liesman: Points out that jobless claims data is distorted by seasonal adjustments, notably a 58,000 increase, overstating current labor market softness. While inflation isn't "satisfying" economists, key worries persist in sticky service price inflation.
  • "The market...is not really embracing much concern over the inflation numbers. It is embracing the concern over the jobs numbers." (02:05)
• Rick Santelli: Initially felt the jobless figures would create enough room for a Fed cut but later doubts 50 bps is realistic. Warns the market may be too optimistic and inflation-fighting is “on hold.”
  • "The stock market might like it because it's a little candy now, but in the end, does that mean their inflation fighting is on hold? I think that's a tough course." (03:15)
  • On the yield curve steepness and housing implications: “The curve is going to probably remain steep. The only reason anybody’s concerned about the 10 is because of housing and implications for the economy.” (06:08)
• Melissa Lee: Challenges panel on whether persistent, non-tariff inflation threatens the market's cut expectations, pointing to consumer pain points.
  • "If we do see inflation sticky...that's going to be a rude awakening for the stock market come October." (08:12)
• Consensus: Markets see the first rate cut as baked in, but future cuts hinge on inflation’s trajectory. Concerns linger about deeper, non-tariff-related inflation.

2. Deep Dive: Underlying Inflation and Fed Policy

• Michael Schumacher (Wells Fargo):
  • September cut is “baked in,” but the gap between where the market prices “neutral” and the Fed’s definition needs to widen. Expects more aggressive Fed easing, especially in short-dated yields.
    • "The market's going to price more aggressive Fed activity, more easing, that's going to pull down yields somewhat..." (11:58)
  • Less concerned about deep-rooted inflation; believes current hot readings are primarily tariff-driven, but expects inflation behavior to remain “hot” for another six months.
    • “If there's a structural inflation problem, that's a huge issue...But we disagree...Our econ team...calling for inflation to run hot for a good six more months. So...maybe it's the beginning of the end, but it's not the end just yet.” (13:08)
  • Foresees increasing global competition for long-term debt due to growing government deficits, pushing the spread between 30- and 10-year yields wider.

3. National Security & Pharma’s China Dilemma

• Headlines: Draft executive order from the Trump administration could restrict drugs from China due to national security—a major issue for US pharma, which now sources many experimental and in-demand drugs from China.
• Jared Holtz (Mizuho):
  • Doubts the US could immediately or meaningfully restrict Chinese pharmaceuticals, despite the rising share of US licensing deals involving China-based drugs (38% in the first half of 2025).
    • "To think that the US Government is going to...disallow companies from...creating business ventures with...entities over there seems very unlikely." (20:42)
  • Discusses how big pharma stocks (Pfizer, Merck, Bristol Myers) are pressured simultaneously by pricing and patent cliffs, with little optimism for near-term growth.
    • "...They're impacted...on pretty much both sides of the equation. So you've got drug pricing over the near term and then you've got patent exclusivity...over the longer term." (21:44)
  • On Novo’s restructuring to support R&D and adapt to “consumer market” realities for weight loss drugs: “I thought what was really interesting...Novo kind of admitted that the GLP1 class was more of a consumer market than anything else.” (23:03)

4. Viral Markets & New Technology IPOs

• Opendoor: Meme trade resurgence, stock up 60% after a new CEO announcement—echoes of early-pandemic speculation.
  • "It’s kind of a back-from-death’s-door story...But it seems like people think things are going in the right direction...the willingness to believe is back and the adrenaline trade is back." (27:11, 28:18, Mike Santoli)
• Blockchain Lender Figure Technologies:
  • Priced IPO well above range; key investor Ryan Barney of Pantera Capital explains the real-world advantages of DeFi in unlocking home equity.
    • "Figures a blockchain business...The highest percentage of [Americans'] net worth is locked up in...home equity. Figure...allows folks to get liquidity...much faster, more efficiently, and sometimes cheaper than a bank would." (31:40, Ryan Barney)
    • On stablecoins as potentially safer than banks: "96% of stablecoins today in circulation are backed one to one by US dollars or treasuries. There's actually an argument...these stablecoins...might actually be safer than the traditional banking system today." (34:21)

5. Housing Market Update

• Reporter Diana Olek:
  • Despite dropping mortgage rates (now ~6.27%), affordability remains the primary obstacle for buyers.
  • 72% of builders are buying down rates for customers, often by over 100 bps, creating margin pressure.
    • "What she [housing analyst Ivy Zellman] said was that 72% of the builders are now buying down mortgage, mortgage rates. And...half of those rate buy downs are more than 100 basis points each." (39:53)
  • Low-end sales weakest due to affordability, high supply, with expected national price dips next year but higher prices persisting at the luxury end.

6. Rapid Fire: Tesla, Tech, Luxury, and M&A

• Apple: DA Davidson downgrades rating citing uninspired product event and lackluster AI vision.
  • "It feels as if, you know, you’re only just buying kind of the financial quality...Not a lot of leverage to the upside." (45:51, Mike Santoli)
• Chipotle: Expanding to Mexico, South Korea, and Singapore.
  • "It will be interesting to see how Chipotle’s burritos are received in Mexico." (46:32, Melissa Lee)
• LVMH $160 Lipstick: Reflects broader luxury trade struggles; host reactions marvel at the price point and what it says about premium retail strategies.
  • "Is $160 a lot for lipstick?" (47:14, Mike Santoli)
• Media M&A: Paramount/Skydance prepping a bold bid for Warner Bros Discovery—a possible mega-merger that would be closely scrutinized for antitrust, reflecting ongoing consolidation and regulatory debate in entertainment.
  • “From an antitrust perspective, this is the kind of merger that you can't really imagine getting approved just a couple of years ago..." (37:53, Courtney Reagan)

Notable Quotes & Memorable Moments

• Steve Liesman on FOMC cuts: "If inflation don't cooperate, the rate cuts ain't going to happen. How's that for bad news?" (04:10)
• Rick Santelli on market sentiment: "The stock market might like it because it's a little candy now, but in the end, does that mean their inflation fighting is on hold? I think that it's a tough course..." (03:15)
• Melissa Lee on inflation risk: "If we do continue to see... the stuff that households pay for every day ... that's going to be a rude awakening for the stock market come October." (08:12)
• Michael Schumacher on global rates: "We think that means the gap between 30-year and 10-year rates globally...is going to increase pretty significantly over the next year or so." (15:18)
• Jared Holtz on pharma’s China conundrum: "[To] disallow companies from...business ventures with...entities over there seems very unlikely." (20:42)
• Ryan Barney on blockchain’s promise: "The highest percentage of [Americans'] net worth is locked up in their home equity. Figure...allows folks to get liquidity on that much faster..." (31:40)
• Mike Santoli on meme stocks: "The willingness to believe is back and the adrenaline trade is back... It's a bull market acting like a bull market." (28:18)

Timestamps for Important Segments

• [01:07] – Market overview, inflation/jobless data discussion kicks off
• [02:05] – Liesman on jobs/inflation balance
• [03:15] – Santelli on Fed’s inflation fight and market pricing
• [11:58] – Michael Schumacher (Wells Fargo) on Fed cuts, yields, inflation at root
• [19:24] – Jared Holtz (Mizuho) on pharma policy, US-China tensions
• [27:11] – OpenDoor meme stock spike and market psychology
• [31:17] – Ryan Barney (Pantera) on Figure’s IPO, blockchain lending, stablecoins
• [39:53] – Diana Olek (Zelman Conference) on housing/mortgage rates, affordability
• [45:31] – Rapid Fire (Apple, Chipotle, LVMH, Paramount/Skydance)

Tone & Language

Fast-paced, analytical, often witty and colloquial—especially during roundtable debates and rapid-fire segments.

For Listeners

This episode is especially relevant for anyone tracking investment strategies linked to Fed moves, inflation, and new tech IPOs, or with interests in pharma, luxury retail, housing, or the revived meme stock/crypto sectors. The program offers insight into the day’s market drivers, policy debates, and consumer trends in a lively, sometimes skeptical, but always deeply informed style.