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New Housing Plan, Big Oil at the White, and Meta goes Nuclear 1/9/26
00:45:41
President Trump directs GSEs to buy $200B in mortgage bonds, will it help lower rates? Oil Executives meet at the White House to discuss what’s next in Venezuela. Plus, Meta’s big bet on nuclear power.
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- [00:00]
Bill Pulte
Everyone deserves to be connected. That's why T Mobile and US Cellular are joining forces. Switch to T Mobile and save up to 20% versus Verizon by getting built in benefits they leave out. Check the math@t mobile.com switch and now T mobile is in US cellular stores. Savings versus Comparable Verizon plans plus the cost of optional benefits plan features in Texas. And fees vary. Savings with three plus lines include third.
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Darrell Cronk
Line free via monthly bill credits.
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Eamonn Javers
Credit stop if you cancel any lines.
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Darrell Cronk
Qualifying credit required.
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Jennifer
Thy ticket Lady Jennifer of Coolidge. Well, many thanks good sir. Here is my Discover card. They accept Discover at Renaissance fairs. Yeah, they do here.
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Kelly Evans
Discover is accepted at the places I love to shop.
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Jennifer
Get it with the times. With the times. You're playing the lute. Yeah. And it sounds pretty good, right?
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Bill Pulte
Discover is accepted at 99% of places that take credit cards nationwide based on.
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Darrell Cronk
The February 2025 Nielsen.
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Kelly Evans
Thank you very much, Scott. A new power play, a new housing plan and new jobs data today. But does it move the needle for the Fed and should it? Welcome to the Exchange. I'm Kelly Evans. All of this is coming up this hour. Let's start with the markets where the S and P is hitting a new all time high once again today. You can see it there a gain of about 2/3 of 1%. All three major indices are on track for a winning week. The dow still about 500 points shy of 50k. The Russell's are leading the way today. And for the week, as you can see there, a gain of nearly 5%. Impressive. The nuclear earlier names are also on the move with OCLO and Vistra, O Glow and Vistra surging on a new deal with Metta. More on that later on. We're also keeping an eye on the oil industry as executives meet with the president at the White House to talk about next steps in Venezuela. Look at the rebound in WTI crude. Though we were at 55 earlier this week, we're back at 59 now. Brian Sullivan is there. He's got a stick Mike. And we'll go to him live in just a little bit. Let's begin in Washington. In fact, as the phrase Washington meets Wall street is truer than ever this week. Amon Javors joins us to wrap of the major policy moves we have seen thus far. Eamonn.
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Eamonn Javers
Hey there, Kelly. What a week. So first of all, President Trump driving market action with announcements in almost every sector. This week he said he's going to be taking action against the defense sector, arguing that firms there are producing weapons too slowly and demanding that they stop stock buybacks and cap executive compensation. He threatened to cut Raytheon's government contracts until they get their act together, he said. He said he wants large institutional investors out of the residential housing market as part of an effort to lower housing costs. He announced that the US will be receiving between 30 and 50 million barrels of oil from Venezuela and announced that he won't conduct a second wave of military strikes in that Latin American country. He threatened military action to acquire Greenland, which is a NATO ally. He ordered Freddie Mac and Fannie mae to buy $200 billion worth of mortgage bonds in an effort to lower mortgage rates for home buyers. And last night he published CEA analysis of this morning's job numbers well ahead of their public release and in defiance of the usual pro that are designed to safeguard sensitive market moving data. But this week's not over, Kelly, we still have a couple hours to go.
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Kelly Evans
We do a lot more still could happen. Eamonn, for now, thanks. We'll leave it right there. Eamonn Jabbers Last night's housing announcement, which Eamonn referenced there, has pushed mortgage rates below 6% today to hit their lowest level in nearly three years. They're 599, as you can see. Let's dig a little deeper into the president's proposals now with Bill Pulte. He's director of the Federal Housing Finance Agency. Bill, it's great to see. I was almost going to give you a pop quiz. I mean, is that about the level you think that mortgage rates should be after this announcement?
- [03:45]
Jeff Curry
Pretty much.
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Bill Pulte
Well, you know, I don't want to comment too much on price action, but I will say this. The president finally, we finally have a president that knows that Fannie Mae and Freddie Mac exist. We have all of this cash. Why not put it to work? Why not put it back in great mortgage bonds that we have. And it's great to see that the action happens that, you know, this is a president that is laser focused on getting housing affordability back. And we're going to take any tool that we can that makes sense. The president's about to announce a couple other things, Kelly, in a couple of weeks at Davos. So stay tuned for that.
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Kelly Evans
All right. We'll get to that 200 billion bill. Why not make it a trillion? In other words, these agencies could do more. In the past, they have done more. And we're wondering whether we're preparing them for an IPO where this risk would potentially be put onto investors or looking to keep them in the hands of the government where they could become a tool of these kinds of policy moves.
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Bill Pulte
Well, 200 billion is a lot, a lot of capital. As this is a very big buy. We're very excited about it. We've already begun executing upon it. I don't want to talk too much about how we're staggering it or what we're going to be doing, but this is also in the best interest of the American people and it is in the best interest of the Fannie and Freddie team as well. Because why these mortgage securities actually yield a higher result and we feel very confident in the mortgage underwriting standards that the companies have post the Great Recession under President Trump. We are running Fannie and Freddie like businesses and that's why we have the flexibility to do this and feel very confident that it's going to be safe and sound while also having the effects, like you said, of lowering mortgage rates. I mean, to be in the 5% range and half of the five handle, that's huge. Kelly, nobody thought that was possible.
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Kelly Evans
You know, we know these levels are psychologically important, but so you are preparing these agencies to go public and you think that directing them to buy more mortgage backed securities is consistent with that. But if it's good business, why haven't they been doing it already?
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Bill Pulte
Absolutely. Well, that's a good question. Why haven't they done it already? Why didn't the Biden administration put everybody years after Covid in order and back into Fannie and Freddie's offices? Why did the Biden administration have so much inflation? I can't answer these questions. I can just tell you we have a president who is a commander in chief, but as a builder in chief, he is laser focused on housing. Kelly, we are going to keep housing prices high, but we're going to make things more affordable. And that's what the American people voted him in for. And you see that today with the mortgage rates being with the five handle, this is a very big deal. This coupled with the ban on institutional investors buying, which I believe will happen, this is going to be very big. This is a big one, two punch this week. And there's more to come.
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Kelly Evans
One more and then I'll move off of this topic. But there are many on Wall street who are somewhat confused because I've seen reactions that say, oh, obviously they're not going to IPO these companies. Now obviously the president is pleased that they haven't done so. And yet you're saying that this is part of a plan to IPO with them. And I Wonder if that's because you want to make sure that the losses go onto investors and not onto taxpayers if anything, you know, goes wrong. But can you just clarify the intentions? This is definitely an effort. Even though they're being kind of marshaled to support a policy.
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Bill Pulte
No, I shouldn't say that.
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Kelly Evans
It's part of an effort to take them public.
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Bill Pulte
I'm just saying that they're not. I'm just saying that they're not mutually exclusive. You can take them public if the President decides to do that, and it actually may actually help the ipo. And you can also look out for the American people. So it's a good use of cash and it helps the American people. It's a. It's a. It's a very good thing as far as I'm concerned.
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Kelly Evans
Yeah. And as you mentioned, Bill, there's been so much on the housing front this week. I noticed your tweet yesterday, post on X. What would it do to say to the builders? A little bit more of a tit for tat. In other words, we're talking right now about a move that would lower mortgage rates and some say push up home prices. But there's other things going on here as well, which is to increase supply. Right. Which helps with all of this. But this suggests that you guys want builders who do business with Fannie and Freddie, which implicitly is kind of everybody, to increase supply. Can you talk a little bit about how that would work? And by the way, all the builder stocks are flying today. They all seem to be excited that these moves are going to do more and better for their business. But how exactly would something like this work?
- [07:39]
Bill Pulte
It will help, but the builders need to do their part, and they need to do their part also, from a safety and soundness standpoint. The builders have 2 million lots, if you can think about that, 2 million lots. Now, a lot of people say, oh, well, some of it's optioned. Last I checked, option meant control. So they can control it. This is entitled land that they can put into production. We need them to put it into production. And part of the reason we didn't need them to put it into production, frankly, Kelly, is because we want to make sure that people are accurately reflecting if they're going to be doing business with Fannie and Freddie, that they're accurately reflecting the inventory value of the land on their balance sheets. And so we want to make sure that they're churning through that inventory. And it also happens to help the American people. So there's a lot of different reasons that we want it to happen. But if you're going to do business with Fannie and Freddie, you really need to look at your lot. Supply and action. Inflation may be coming on that front.
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Kelly Evans
I'd love to broaden this out. And I think that David Zervos has, has really illustrated the broader thing that could be going on here. And traders understand this. I mean, look at the reaction last night. They pushed bond yields down, they're pushing mortgage yields down and spreads down. Obviously they, they understand, as Servos has said, that now you don't want to fight the Treasury. It's not don't fight the Fed, it's don't fight the Treasury. He's even gone so far as to call all of this trumpet tative easing or T, because it's like quantitative easing. But you know, the President's version. And he's also said on a note this morning that this is like mortgage qe. So can you talk more broadly about all of these goals, including the Treasury Secretary who's talked about the treasury buying long term securities to bring rates down a bit. How big is the vision here and how much coordination could there be between and amongst all of these industries to bring rates significantly down on both the treasury and the mortgage aspect of this?
- [09:15]
Bill Pulte
Well, the administration is working very close together. Both Secretary Bessen, Secretary Lutnick, Secretary Turner, Kevin Hassett, Vice President Vance, Susie Wiles. We are all working as a team. This is an all hands on deck effort to get mortgage rates down, to get affordability back into the housing market. I can say in terms of my lane and what Fannie and Freddie has, we have a president who understands that we want to keep home prices high. It represents a lot of people's net worth. At the same time, we need to make it more affordable after these last four years of inflation. So you say don't fight the Fed, I say don't fight Trump because if you fight Trump, you're going to lose. And so we're really fighting for the American people. Trump is fighting for the American people. And all these companies, they, they can have a great business, they can have a great free market, but they can't rip off American consumers. And that's what we're focused on at US Federal housing is making sure whether it's the credit bureaus, the title insurers, the mortgage insurers, everybody needs to create a competitive environment where we're not ripping people off like it's happened the last four years.
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Kelly Evans
No, I think that's exactly what Zervos and the trading community and others are picking up on is that the kind of treasury is the new Fed. They're doing all of these things using their resources instead of kind of through the Fed channel. Anyway. That's kind of a theoretical thing on the side. But a point you've made a few times, Bill, is you want to keep home prices high, understandably, you don't want to hurt the equity that existing homeowners have while making it more affordable. I'm trying to think of what other options that really leaves other than like a 50 year mortgage, which I've heard may not help that much at the margin. Even this move, look, we've seen sometimes with QE in the past it brings down mortgage spreads and then they widen again or Maybe this is 5 or 10 basis points on the margin. So it's hard to achieve both of those goals at the same time without kind of like over leveraging household.
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Bill Pulte
So I don't necessarily agree.
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Kelly Evans
I think you know, there you mentioned the announcements that might be coming. I would love to know if you can give us a hint of what other announcements may be in store.
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Bill Pulte
I think what you said would be true if we had a Joe Biden or a Barack Obama or George Bush as president, but not President Trump. President Trump understands how to build. He understands how to build at a low cost. And frankly, you look at the ban on institutional home buying, that is a home run for the price of new homes. I mean, you have a situation where institutional buyers were buying homes for 20, 30, in some cases 40% less than the American consumer. That's crazy. We can't let that happen. And so I do think that you can keep home prices high. You can also make sure that the builders are building affordable products for people and not corporations. And I really think it's going to work out well. And look, we've changed the entire momentum of the housing market. This week you had the ban on institutional home buying. You have Fannie and Freddie doing what they're doing with mortgages and as I said, wait a couple more weeks for Davos.
- [11:48]
Kelly Evans
All right, 50 year mortgages. 40, 50. What else?
- [11:52]
Bill Pulte
What other, what are you, a lot of other.
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Kelly Evans
Could you change capital gains tax on, on making a home sale? I've heard that one could potentially help people. You're trying to get people out this ironically a little bit out of their homes too, right? We got to get the inventory of the existing homes into the market.
- [12:08]
Bill Pulte
Well, we're trying to look at everything and we are looking at everything. We've presented the president with anywhere between 30 to 50 different options. This has to do with HUD, Treasury, Commerce, everybody has come to the table. It'll be up to the president to decide which, if any, of those he wants to do. But look, this president is about action. If you bring him a good idea and he likes it, boom, he gets it done. There's no more talk from, you know, these politicians on Capitol Hill who complain about institutional homebuyers. We're going to do something about it. This president is doing something about it.
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Kelly Evans
Bill, thank you for joining us and you know, keep us posted, tell us ahead of time if you you can. But we really appreciate your time today. BILL pulte, Director, Take care.
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Bill Pulte
Thanks, Kelly.
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Kelly Evans
Fhfa, fhfa and it's not just housing either. The president, of course, has also taken aim at oil and defense this week. The Supreme Court, meanwhile, surprised markets by not making a tariff announcement today. So here to answer what's next is Libby Cantrill. She's head of public policy at pimco. Libby, would you like to respond to anything on the housing front that you just heard that maybe kind of change the way you're thinking about what could come next, what happens to home prices, what happens to Fannie and Freddie? Welcome.
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Libby Cantrill
Yeah, thanks so much, Kelly. Yeah, I mean, I think, you know, like the director said, I mean, we, we anticipated that Fannie and Freddie would likely be using their balance sheet in order to buy more. Of course, they've already bought around $65 billion of mortgages over the past five months. So in some ways we were expecting them to do that. $200 billion is obviously very significant. I think there's still some questions about over what time period. But as you said, there are some caps, the cap of their balance sheets, $450 billion. Now they're around 250 billion. So if they exceed that 200 billion, there would have to be some actions by FHFA and, and Treasury. Of course, you know, during the financial crisis, our pre financial crisis, those balance sheets look like they were one and a half trillion. So there is still a lot of room for them to be, to be more involved. I think, though, that something that's, that's quite interesting is around what the director said about you going public. I think our view would be that this does make going public maybe a little bit more difficult.
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Kelly Evans
Right.
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Libby Cantrill
More in, more in that if, if, if they're public, fhfa, the regulator Director Pulte oversees, it just has less, had less, has less power. So they can, you know, they're More hamstrung in terms of actually using Fannie and Freddie to advance policy goals if they are public.
- [14:43]
Kelly Evans
Exactly.
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Libby Cantrill
I think we would say this kind.
- [14:45]
Kelly Evans
Of complicates that, you know, and that is self evidently true. However, if they do not go public and there are losses stemming from, I can't, you know, some market moves, housing rates, economic moves, recession and there are losses, would this not leave taxpayers on the hook again? Allah. You know, not to the same degree, but is that you think why the effort to kind of. We want them to go public. We want investors to bear these losses, not taxpayers. Or maybe I'm overthinking it.
- [15:13]
Libby Cantrill
You know, I think there are a couple of things. One is just as the mortgages that are being originated are high quality, so this is not a question of sort of this, you know, adding these real subprime, you know, sort of credit impaired mortgages to the, to the balance sheet. So that, you know, so, so that I think is quite important. The other is that these GSEs are very profitable and all of those profits are effectively going to the taxpayer right now. So yes, they may be a bit more on the hook if these BAL rates expand, particularly if they expand to the size pre gfc, which we don't see happening. But also just keep in mind that they're pretty symmetrical right now that taxpayers are actually receiving the benefits, unlike if they were public, where those benefits would be going to shareholders.
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Kelly Evans
True, true that. So we kind of broaden out and go, okay, well while this is all working and I'm surprised the mortgage rate went below 6% that quickly. I mean, I think that if it stays there, and I don't know what all goes into that, but that Americans will go, wow, okay, maybe that makes buying a house on the margin a little bit more attractive. I mean, do you think it's going to have a big impact?
- [16:18]
Libby Cantrill
Yeah, I mean we already think, I mean, you know, our view is that this would go under six. Obviously you're seeing that today. I think the open question is, you know, what does the Fed do here? Of course, the Fed is effectively a seller of mortgages, just passively letting these mortgages roll off their balance sheet. So does the Fed change their policy not necessarily by kind of buying actively mortgages, but just making sure that that mortgage exposure stays constant, which effectively would be buying.
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Kelly Evans
Right.
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Libby Cantrill
And so that means, so that that change plus this would, we think lead to a materially lower mortgage rate. So I think that's the open question. You know, the Fed Governor Myron last night did suggest that the Fed could look at this. Does this make sense to just continue to allow this NBC to roll off or maybe just stabilize on a completely.
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Kelly Evans
Different topic, then what do you make of the Supreme Court not dealing with the tariff question today? Some say, okay, then it could be next Friday. I noticed a lot of the retail stocks moving. They're obviously hoping for a windfall if they overturn them. What would you tell investors and what's your anticipation?
- [17:29]
Libby Cantrill
I think just given how busy this week is, many of us actually welcomed the respite. We welcomed maybe the delay in, in that opinion. You know, I think our view, just based on the oral arguments, is that it does look likely that the Supreme Court could overrule the President's actions. Of course, this represents about half of the tariffs that have been imposed so far. They've been imposed under this IPA statute. I think the important thing that we're telling our clients is that even if you do see an immediate reaction in the markets, you could see a bearish steepening of the yield curve, meaning that deficits become an issue again, particularly if the Supreme Court rules that they have to pay back this revenue. The President has a lot of other tools to impose tariffs, and that's been our message to clients is that even if AIPA is being overruled, he has this sort of section 232, section 301, section 122. So there are many other tools that the President has. They may not be as flexible or as nimble, but he could basically recreate the tariff rate pretty, you know, pretty easily, you know, even if these IPA tariffs are overturned. So obviously open question about how the Supreme Court rules, but again, the President has quite a lot of authority here.
- [18:43]
Kelly Evans
And maybe more bark than bite, to use imperfect analogy there, I guess. Libby, thanks so much. We really appreciate it. Take a rest. Take, you know, see you on Monday.
- [18:52]
Libby Cantrill
Thanks so much.
- [18:53]
Diane Swonk
See ya.
- [18:53]
Kelly Evans
Libby Cantrell with Pimco. Coming up, the Fed's next meeting is in just a couple of weeks. We'll talk about what we learned from the jobs report this morning. Plus, Goldman's former commodities head, now Carlisle's chief strategy officer of energy Pathways, Jeff Curry will join us with his take on today's oil meeting at the White House, the future of Venezuela's production, and his outlook for the whole commodity complex. We're back after this. This is the exchange on cnbc. Oh, could this vintage store be any cuter?
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Jennifer
Right? And the best part, they accept Discover, except Discover, in a little place like this. I don't think so. Jennifer oh yeah, huh?
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Kelly Evans
Discover is accepted where I like to shop.
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Pippa Stevens
Come on baby, get with the times.
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Jennifer
Right.
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Kelly Evans
So we shouldn't get the parachute pants.
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Jennifer
These are making a comeback, I think.
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Bill Pulte
Discover is accepted at 99% of places that take credit cards nationwide, based on.
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Darrell Cronk
The February 2025 Nielsen report.
- [19:52]
Kelly Evans
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Pippa Stevens
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Kelly Evans
Protein and just one pan to clean up. She just tossed it in the oven and boom plating like she's got followers. So go to blue apron.com Steve make.
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Pippa Stevens
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Kelly Evans
Listen 50 terms and conditions apply.
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Pippa Stevens
Visit blue apron.com terms4more is it time.
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Jennifer
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Kelly Evans
The jobs report almost gets lost in a week like this. But it came out this morning back to its normal regularly scheduled programming. And we found out we added fewer than expected jobs in December, ending a year marked by a slowing labor market as firms seemingly have gotten a lot more cautious on hiring. The market is pricing for rates to stay the same in January, but should they be lowered sooner? Joining US now is KPMG's chief economist Diane Swonk and Wells Fargo wealth and Investment Management CIO Daryl Cronk. So is it seriously Swonk and Cronk? Guys, this is too good. Welcome to both.
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Darrell Cronk
Done this before actually, have you?
- [21:27]
Kelly Evans
Okay.
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Diane Swonk
Got to think it's something.
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Kelly Evans
Ok Diane, first to you and I guess the the obvious statement. You and I have talked about the risk that the Fed doesn't finish the job and rates go higher. But do we think now perhaps enough soft labor market reports? Productivity data seems strong. It's time to lower the rate.
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Diane Swonk
Actually, productivity growth being strong is an argument for higher rates and growth is still extremely robust. And that's something that gets lost in translation. The underlying if the underlying weakness in the labor market is more structural rather than cyclical related to things like curbs and immigration. Along with the uncertainty, we had sort of a perfect storm of events causing the hesitation and really virtual stalling out. Since the April tariff tantrum in April, since May on, we've seen no job gains. It's really something pretty stunning. 84% of all job gains for the whole year were in the first four months of the year. This is a really hard situation. And if these are structural rather than cyclical weakness cuts in rates alone cannot cure that problem. And that's what's really the challenge for the Fed. And it's why the Federal Reserve has said, you know, they're going to step back and pause. They're looking to get beyond some of the noise of the government shutdown and the loss of economic data due to that and see better where the economy is. But we think the first rate cut is now in June.
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Kelly Evans
In June. It's so crazy, Diane, that you have a situation. I've seen the charts and I agree with you. I mean, Occam's Law, right? What happened in April? Tariff announcement. What happened? Employment, since it's kind of flatlined. But at the same time, third quarter GDP was what, four and something. And do you see Atlanta Fed's fourth quarter tracker is now over 5%. What's going on?
- [23:09]
Diane Swonk
Yep. Well, we've got consumer spending is still extremely robust, which is that's something we actually count fairly well. There's other things in GDP we don't count as well, but that's 2/3 of consumer of GDP is consumer spending and it's being carried by the top 20% of households. Some work that the Dallas Fed did, sort of dovetailing off of Moody's analytics suggests that 57% of that spending is now done by the top 20% of households, a record high that is, you know, not helping the bottom 80% who are struggling to make ends meet and not able to spend much more than the pace of inflation. I know that Mark Zandi is going to be updating his own analysis of the distribution of spending in the next day or so, but these are really important because they're against those things are giving us a jobless boom. We've had jobless recoveries. We've never had a jobless boom. This is something quite striking. And we don't know that the productivity gains, they're not due to AI yet. They're due to a lot of factors over staffing in the wake of the pandemic and getting staffs back to right. Level sizes by hiring freezes and trying to write attrition. Although quit rates have plummeted with the exception of leisure and hospitality, where they soared in the month of November. But I think these are very important things to understand because that slowdown in the pace of hiring that we've seen, much of it is structural. And if it's structural, the Fed can't, Can't cure what ails us with rate cuts, and they could risk stoking a more persistent bout of inflation. Yeah, we know that inflation will be lower just because of the zeroing out that happened on many of the cells for the month of October due to the loss in the October data. But we are worried about sort of a lingering inflation a bit in early part of next year.
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Kelly Evans
Yeah, no, I agree. I think that's why I keep an eye on the 10 year. And you go, it's 417. It's, you know, it's not getting below 410. It's not getting below for Darrell. Jump in here. What does it mean for the markets?
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Diane Swonk
Yeah.
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Darrell Cronk
Yeah, I think that's exactly right. I mean, in fact, most people have missed the fact, Kelly, that since the beginning of the year, US Rates have, of course, started to catch a bit and drift back higher. But it's not just US Rates, it's global rates. You see it in Germans, you see it in Aussies, you see it in French, you see it in Swedish rates. So everybody's moving higher. The question you ask is, is it a function of an inflation problem, a debt problem? Probably not at this point. But what it is, is you're building in a growth premium into the back end of that yield curve. Right. That needs to be there. And to your earlier conversation with Diane should be there. When you had 3.8% in Q2, 4.3% in Q3, and to your point, tracking over 5 in Q4. Remember, trade is a big element here too. Right. Obviously, the shrinking of that trade deficit. There was a lot of noise in those GDP numbers. But we do still think that the yield curve steepens from here. It steepened materially in 2025. We think it continues to steepen in 2026. And frankly, a steep yield curve is a very healthy sign economically. Remember a couple of years ago when we had the inverted yield curve? We're kind of setting up for high GDP growth, let's call it restrained inflation. I agree with Diane's points about, like, there's some upward pressure on inflation. We don't see runaway inflation. But I don't see inflation dropping meaningfully and that's nirvana for markets, right?
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Kelly Evans
And they're acting like, like they're in, what do they call it, bliss right now, Darrell. But that being the case, if employment eventually picks back up because things are going to be ok, then does this whole happy story. I don't mean to say it falls apart because hiring is strong, but you know what I mean.
- [26:50]
Darrell Cronk
Yeah, it could. But if it does, it's down the road a ways, Kelly. I think. I mean, look, I mean when you sit there and look at GDP growth, you look at inflation being restrained, you look at corporate earnings where they are, you look at monetary stimulus and fiscal stimulus working in 2026. Right? That's why, I mean, if you look at the equation today, it's really hard to find bears out there, right? I have. You can't find somebody who's bearish on the market stepping off into 2026. And if you get below that and say, where are the bears? They're probably in oil and maybe in the dollar. And that's about it. Beyond that, you just really have a hard time finding people, which is always from a contrarian standpoint, a reason to kind of look over your shoulder and make sure you're not missing something.
- [27:31]
Kelly Evans
No, for sure. Well, I really appreciate it. It's great to have you both and perplexing start to the year. If I may. Diane Swonk, Darrell Cronk, we appreciate it. Thank you guys. Coming up, Metta is going nuclear with a number of deals they're signing with vistra, TerraPower and Oklo to power their new AI supercluster. Let's get into the details and whether it's a good time to get into Metta, which is still nearly 20% below its August all time highs. We're back after this. Oh, could this vintage store be any cuter?
- [28:02]
Libby Cantrill
Right?
- [28:02]
Jennifer
And the best part, they accept Discover. Accept Discover in a little place like this? I don't think so, Jennifer. Oh yeah, huh?
- [28:10]
Kelly Evans
Discover's accepted where I like to shop.
- [28:12]
Pippa Stevens
Come on, baby, get with the times.
- [28:15]
Jennifer
Right.
- [28:15]
Kelly Evans
So we shouldn't get the parachute pants?
- [28:18]
Jennifer
These are making a comeback, I think.
- [28:22]
Bill Pulte
Discover is accepted at 99% of places that take credit cards nationwide, Based on.
- [28:27]
Darrell Cronk
The February 2025 Nielsen report.
- [28:29]
Jennifer
Is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University, we offer a relevant education that's designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals like business management, strategic planning and effective communication, and you can apply these skills right away. A different future is closer than you think with Capella University. Learn more at Capella Eduardo TikTok for.
- [28:59]
Kelly Evans
Business is helping owners like you reach new customers every day.
- [29:02]
Pippa Stevens
We saw up to a 10x return.
- [29:04]
Kelly Evans
On our TikTok shop ads a few years ago. I started sharing my love for fashion on social media and Willow Boutique was born. We're not just a place to shop, we've really become a community. TikTok allows us to find more people to have that great experience.
- [29:18]
Libby Cantrill
I cannot imagine my business without TikTok.
- [29:21]
Kelly Evans
It's completely changed my life and I could not be happier here. Head over to get started.TikTok.com/TikTok ads.
- [29:32]
Pippa Stevens
Welcome back to the Exchange. I'm the Stevens with your CNBC News Update. The District Attorney's office in Minneapolis today announced an evidence submission portal for people to send in any videos they have of the shooting of motorist Renee Good by an ICE agent. This comes after the FBI took over the investigation against excluding state investigators. The Hennepin County District attorney says despite the administration's decision to assign it solely to the FBI, that her office is responsible for the investigation. Pope Leo today denounced how countries are using force to assert their dominant their dominion worldwide. While not mentioning any countries by name, the Pope told ambassadors from around the world that, quote, war is back in vogue and zeal for war is spreading, arguing it is undermining peace and the post World War II international order. And House Judiciary Chairman Jim Jordan said today that he will invite former special counsel Jack Smith to testify in an open hearing about his investigations into President Trump. Smith sat for a closed door deposition last month. He and his team have repeatedly requested to argue his case in a public forum. The Exchange is back right after this.
- [30:45]
Kelly Evans
As America celebrates its 250th anniversary, CNBC.
- [30:49]
Eamonn Javers
Spotlights the business leaders who forged American.
- [30:52]
Bill Pulte
Industry and an extraordinary legacy of philanthropy. John D. Rockefeller Sr. Was a titan. He built America during the Industrial Revolution and helped together with others, create the modern country we have. In doing so, he of course, went from being someone who came from modest resources to the world's wealthiest individual and decided he would use that wealth to give back to society and help shape a future that was hopeful and optimistic not just for the winners of that age, but for everybody. The Rockefeller foundation was established more than 100 years ago. We were founded to do scientific philanthropy because John D. Rockefeller believed that science applied to health, agriculture, energy and even social sciences applied to governance could really help transform society and make it an environment where everyone flourishes, not just the select few. The very first big project the foundation took on was eradicating hookworm in the American South. They in fact successfully eradicated hookworm, went on to tackle malaria, and that process created both huge successes in modern public health, but also seeded the American public health system in county by county across this country and presented the antecedents of the Centers for Disease Control based in Atlanta. We focused today on bringing science, innovation and partnership to lift up vulnerable populations across the planet. To me, what really propelled America's rise over the last 250 years has been innovation and inclusion because a long time ago we created a nation based on the basic idea that everyone matters.
- [32:48]
Kelly Evans
Welcome back. Mortgage rates may be lower today, but don't sleep on crude oil, which is actually back up towards 60 a barrel, 3% gained today nearly and it's on pace for its third straight weekly gain. It's all coming as the president wants to go to the other direction, back towards 50. We've heard top oil executives are meeting with the president at the White House at the top of the hour to discuss the situation in Venezuela, the impact on oil prices and more. Brian Sullivan is live for us there. Talk more about what's on the agenda. Brian, you've already been trying to catch up with people as well?
- [33:18]
Brian Sullivan
Yeah, we caught up with a few people here in the 47 degree rain. I never thought I'd long for the CNBC studio coffee until just now. But yeah, we've seen a couple oil and gas CEOs go in. I'm going to give you an updated schedule that we have, by the way, just break some news on the air. So 2:30, the president will begin speaking at 240, Secretary of State Marco Rubio will speak. 250, Interior Secretary Bergam will speak. Secretary Wright will speak at 255, followed by some of the executives here that are on site, Chevron, Repsol, any and others, a discussion at 3:15 and the meeting will conclude at 3:30. So we are here outside. The White House is just over here. The energy executives are coming in here and as you said, Kelly, they're all kind of pulling up and coming in. It's not just US companies, by the way. You got representatives from Italy, Eni, Spain, Repsol and more. Ryan Lance, the CEO of ConocoPhillips, he came in, gave us a few words, basically said I hope to listen and that we're going to talk about Venezuela. There's some breaking news Harold Ham, the billionaire founder of Continental Resources, did come up the street. And as he is, he's generous enough to stop and said a couple of things. I asked him sort of what, what their goal is from this meeting. Here's what Harold Ham had to say. What would be the best possible outcome of the meeting today?
- [34:32]
Bill Pulte
Harold?
- [34:33]
Kelly Evans
Yeah, Brian, I think, you know, the collective nature of the president bringing people together to talk about the situation and.
- [34:40]
Darrell Cronk
Hopefully come up with some very good results.
- [34:45]
Brian Sullivan
Would Continental be willing to or able to go into Venezuela?
- [34:49]
Kelly Evans
You know, sure, sometime, probably, but, you know, we have no plans to do that. That's something that had to be addressed.
- [34:58]
Brian Sullivan
By a lot larger companies. So Ham's saying what every oil and gas company CEO that I've talked to, which is pretty much all of them in the last 24 hours, 36 hours, has said, Kelly, which is, yeah, Venezuela is there. Some of these companies like Conoco and Exxon used to be there, but they're not going to go there until there's security guarantees the country is stable. We don't even really know who at this point is ruling the nation. Also, you mentioned the price of oil on the way in. Let's be very clear. At the wellhead, as they call it, Venezuelan oil is fairly inexpensive, but it's an expensive proposition to operate in that nation. And that country's oil infrastructure is in shambles, literally in some cases physically falling apart. They went from 3.4 million barrels a day, January 1998 to about 8 or 900,000 barrels a day now. First step would be to rebuild some of that infrastructure. We know the US Is going to get some Venezuelan oil, sell it, keep that money and give it back to Venezuela when they think they are ready. Listen, we should get more details from this meeting. Maybe we'll let us inside. We're going to find out. I think all future meetings should be held in Miami.
- [36:07]
Kelly Evans
Yeah. Or, Brian, if they're in a construction mood, they need like a portico, right. So you don't have to stand outside under the open, you know, like under.
- [36:13]
Brian Sullivan
The open sky or something called an umbrella, which apparently too, that would be cheaper to purchase.
- [36:18]
Jennifer
Yeah.
- [36:18]
Kelly Evans
Brian, we'll see you soon. Thanks very much. Brian Sullivan.
- [36:21]
Brian Sullivan
Thank you.
- [36:21]
Kelly Evans
And the Trump White House may be going big on developing the oil industry in Venezuela, but our next guest says it'll only have a modest impact on the oil price. Joining us is Jeff Curry. He's the Chief Strategy Officer of Energy Pathways at Carlisle. And Jeff, I think it's important to highlight at a time when a Lot of other folks expect or think the oil price is going to be where it is a little bit lower. The administration's pushing it that way. I mean you're warning the price should and could start to go much higher. Is that right?
- [36:45]
Jeff Curry
Well, I think the market has gone up, you know, $3 yesterday, another dollar today. But let's look at gold. Gold is, you know, testing new highs. You know, I like to point as you said, the fundamental impact is relatively modest on Venezuela on oil. But the situation in Venezuela and the impact on geopolitical risk is very large. That's what gold is telling you. You for oil importers, whether you're China, India or Europe, the world got a lot more dangerous to now. And part of the risk that you have in that bear view that everybody has is predicated on this big oil supply glut. It's a floating oil at sea and like the South China Sea. Now if I'm China, I'm looking at what's happening with these dark fleet ships being confiscated outside of the Caribbean. And there's a high probability that China just goes in mine and just takes all of that oil. Why wouldn't they with the risk right now who's oil is seeing disruptions to their supply so high.
- [37:48]
Kelly Evans
So, and I've heard this and many, many people we've talked about this. Amrita Sen, Alima Croft, Peter Bocvar, this idea that the market sees a glut of a couple million, I don't know how do you describe barrels a day or barrels in general this year and is therefore keeping the oil price down. But, but more and more people are saying no, but that glide is only in ships that are on the sea. You're saying they're near China and China could just take it, take it.
- [38:11]
Jeff Curry
Most of those ships are dark fleet ships anyway. They're already Chinese insurance, Chinese payment systems. They're either Russian, Iranian, you know, part of what you know, when we look at Venezuela, it was in the crosshairs of Iran, Russia and Venezuela. And there's a lot of issues there from a geopolitical perspective. But I think going back to when we look at the oil market in that, in that surplus that you're talking about, the short in the market, the short in the market now is bigger than that excess floating storage in most of it sitting outside in places like the South China Sea. So you're looking at that going what are your relatively risk. I like the point. You got a record short. Demand is holding up in geopolitical risk is quite high. That's a recipe for some potential upside movements in prices. Again, the market has moved a lot recently.
- [39:06]
Kelly Evans
It has. It's moved five bucks since you and I spoke about this. I mean, what about the idea of fundamentally the supply and demand situation? I thought it was that we were oversupplied for a variety of. You can go through country by country, demand is whatever it is, and there's like a structural oversupply that just kind of. We work through by 2027. Is that not the case?
- [39:28]
Jeff Curry
Well, I like to make this point is if you're having to scrape the data to find the evidence of your supply glut. It's not a real supply glut. I've lived through them and Kelly, you've been through them. These things hit you over the head like a sledgehammer. You don't have to go through the data and try to find them. You know, prices would be collapsing. The front of the curve would be hit hard. Inventories would be swelling around in here. Let me point this out. Inventory tanks sitting on land are the cheapest ones out there. Keeping oil on a tanker is the most expensive out there. If you were doing storage arbitrage and building inventories because of a glut, wouldn't you be putting it in the cheapest tanks in the world and not the most expensive ones and not just so? There's a lot of problems here. Your market is backwardated, doesn't pay for storage, storage. Your refinery margins are elevated, physical grades are relatively strong. And so when we look at the downward movement in price, there's 230 million barrels of shorts out there. I'm not going to say I know better yet, but you got to look at all these flags and ask, hey, what is this thing flashing? And let's look at gold are going, hey, geopolitical risk. You got Iran, you got Russia. There's a lot of risk out there. And having that big of a short with that type of risk I think is quite dangerous.
- [40:51]
Kelly Evans
You've answered one of the questions, which is, as far as I understand it, I understand that our inventory levels, like in the U.S. for instance, are fairly low. And people have talked about how we've depleted a lot of the Strategic Petroleum Reserves. So, you know, those two things don't quite fit with this narrative of, you know, an oil glut that seems to be going on. And if that's not the case, are you suggesting that we could realize it kind of all of a sudden, like, I don't know if it'd be an opec announcement or something to do with Venezuela, where the market all of a sudden goes, hey, wait a minute, demand is strong. You know, US GDP is growing at 5% or what have you. We're not switching over to electric cars apace in this country anyway. And all of a sudden you know, where's the supply?
- [41:33]
Jeff Curry
Exactly. Now let's now let's focus on China. And China's watching. Oh, all of that. Venezuelan supply is being redirected.
- [41:41]
Diane Swonk
Redirected.
- [41:41]
Jeff Curry
Europe is looking at all that. Supplies redirected. India is looking at that. They're large oil importers. Remember the US is a exporter right now, so it's not focused on that kind of risk. It's Europe, India and China. Now they look at and they go, okay, let's say there is some surplus oil out there. Wouldn't you want to take it and protect yourself in this kind of geopolitical environment? I'd argue it probably would be a wise thing to do. And you're asking what could be the catalyst. We could just wake up one morning trying to do this again. Goes mine, I'm taking it and did that. And then you're back to square one and you have an enormous amount of shorts in the market. You unwind those shorts, it's going to be a race to the door.
- [42:21]
Kelly Evans
Very interesting. You always give me something to think about, Jeff. Thanks. We'll check back in soon, see what happens now on that front. Jeff Curry, appreciate it with the Carlisle Group. More breaking news out of the White House. Let's get back to Amen Javers.
- [42:34]
Eamonn Javers
Amy, Jeff Kelly, we've got a response now from the White House to this issue that cropped up this morning. Remember we reported earlier in the day that the President posted on social media last night in advance of the jobs number being released this morning, some CEA analysis of the jobs picture which sort of implied that some of the details that were in the jobs report. Remember the President gets the jobs report the night before it's released publicly. Lots of security around that in order to protect that number because it is such a big market moving number. Now the White House is responding to the fact that the President posted that on social media. Here's what they say. They say following the regular procedure of presidents being pre briefed on economic data releases, there was an inadvertent public disclosure of aggregate data that was partly derived from pre released information. The White House is accordingly reviewing protocols regarding economic data releases. Then they go on to criticize the media here. They say instead of grasping at straws to foment another fake controversy. However, the media would be better off covering what today's jobs report actually shows. President Trump's policies are laying the groundwork for an economic resurgence. So the White House here saying that this was an inadvertent release and saying that they are going to go back and review their protocols here. Kelly that's interesting because all of the rules around this are BLS and Department of labor rules. And the president being the boss of the Department of Labor and BLS can sort of authorize release as he wants to of that data. So not clear that he violated any particular rule here, given that he is the ultimate authority on what is authorized to be released and what is not. But still the White House says they're going to go back and look at their protocols and it looks like this is an effort to make sure it doesn't happen again.
- [44:21]
Kelly Evans
Kelly yeah, kudos to those who spotted it at the time. And it goes back to the old line in markets, which was if I told you the jobs report ahead of time, could you guess the right trade?
- [44:29]
Eamonn Javers
Right, right. We all think we could, but maybe not.
- [44:31]
Kelly Evans
Yeah, maybe some people did make money on it. That might be part of this as well.
- [44:34]
Eamonn Javers
I don't know. I spent years covering those job releases. And you have to have a code word when you check in with the camera guy before you do the jobs number. We're not even allowed just to give you a sense of the security. We're not even allowed to say any word at all other than the code word. So they give you a word. It's like pineapple or something. And that's all you can say and you don't.
- [44:54]
Kelly Evans
Welcome back some big news in the energy space this morning that has nothing to do with oil and Venezuela. Metta is striking deals to secure a massive nuclear supply of energy for its data centers. In fact, inking agreements with three providers including Oklo and Vistra, who shares are up about 10% today. Let's get to Julia Borson for the details in today's tech check. Hi Julia.
- [45:14]
Jennifer
Hey, Kelly. Well met. His nuclear deals are all about its fight to secure energy to achieve its its AI ambitions as a social giant works to become a real player in terms of AI functionality as its tools lag Google's and opens AIs, it's also working to secure the energy to fuel that battle. Today's deals aim to help catch up with OpenAI, Microsoft and Google's nuclear deals. Echoing past comments from Mark Zuckerberg wedbush writing quote, the hyperscalers aren't backing off one bit in their ambitions. And while GPU data center construction have been a gating factor in years past, the focus now is pivoting to energy availability. Meta shares are down 13% since it warned in its last earnings that this year's capital expenditures would increase quote at a significantly faster pace. The company forecasts Capex as high as $72 billion for 2025. That's up from $39 billion in in 2024. And today's deal could impact this year's spending. Although Metta isn't disclosing any of the financial terms of these deals. The question is when and how Metta will justify its lofty investments. B of A writing this morning that Metta Quote is not a hyperscaler building data centers for other customers, yet it is also not thought of as a top three LLM. That comment reflecting that matter hasn't fully laid out its plan to monetize AI investments such as LAMA Met. Its nuclear energy is set to come online by 2030 at the earliest. And Kelly, a lot can change by then.
- [46:53]
Kelly Evans
Talk about taking the long view. And I know they have to, but 2030. Wow. Julia, thank you very much. Let's talk a little bit about that timetable. In fact, what will this AI build out look like when we're talking about nuclear facilities and projects that are still being developed? Here on set with some answers is our own Pippa Stevens. Welcome again.
- [47:10]
Pippa Stevens
Pippa, thank you so much.
- [47:11]
Kelly Evans
Julia, just mentioned 2030. You and I have talked many a time about these nuclear centers. Some of this capacity already exists. A lot of it is yet to even break ground. So what do we know?
- [47:20]
Pippa Stevens
That's right. So first of all, it's important to remember here that as of right now, the Nuclear Regulatory Commission has not granted an operating license to any small modular reactor company. So that still remains a big hurdle here. When you think about companies like Oklo or TerraPower, which media is partnering with, they don't have that operating license yet from the nrc.
- [47:40]
Kelly Evans
So all of these are. This is my first question. Glad you answered it. These are all the small modular reactors. We're not talking about existing nuclear capacity that's coming back online or anything like that. This is new stuff that has yet to be built.
- [47:51]
Pippa Stevens
So for TerraPower and Oklo, it's new. For Vistra, it is an upgrade. So that means getting more power out of existing facilities and then elongating the light lifespan. And so that is really much more of a sure bet. We saw a similar move by Metta Last June when they said that they would buy from the Crane Clean Energy center, that's a similar move where the company is giving that financing to the utility and saying here is we will buy the power at a set price. And so that gives the utility long term visibility and then they can extend the life of that nuclear power plant. It's different with Oklo and Terrapower because that is a bet on new power. Coming online with unproven technology is Vistra.
- [48:29]
Kelly Evans
A classic nuclear power plant, the likes that we would think of with the big Exact.
- [48:32]
Pippa Stevens
So they're actually, they're the, the largest nuclear capacity generator and they are the largest independent power producer in the US So they have a number of nuclear facilities and so these ones in Ohio and Pennsylvania I believe it was. So one of the focuses here is on that upgrade ability. So it's maximizing resources we already have that's kind of the lowest hanging fruit. And so that's why tech companies, companies especially are interested in upgrades and existing reactors versus the newer.
- [48:57]
Kelly Evans
What happens if, if the small modular reactors that MET is now paying for, helping to pay for are not fruitful?
- [49:03]
Pippa Stevens
Well, we'll see. I mean that is the question. We've seen a lot of tech companies make a lot of the hyperscalers make bets on different types of Mars. There are now many a similar designs out there. I heard one person Compare it to EVs actually and how there were initially a lot of EV companies. We've seen the fields become narrower over time and so that's what we might see with smarts as well. But there are certainly going to be some leaders here and right now companies are betting on different types of technologies.
- [49:27]
Kelly Evans
Fascinating to talk about something that is coming down the pike. Literally. Five, six, no. What year is it four years from now? I guess 20, 26. Never mind, it's right around the corner. Pippa, thanks. Good to see you. Pippa Stevens. And that's it for the exchange the Nasdaq that session highs and power lunch picks up after this break.
- [49:43]
Jennifer
Is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University we offer a relevant education that's designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals like business management, strategic planning and effective communication. And you can apply these skills right away. A different future is closer than you think with Capella University. Learn more at Capella Eduardo.