SOTS 2nd Hour: Fed Governor Waller, Canada’s International Trade Minister, and Trump’s Treasury Pick Before The Senate 1/16/25

Sarah Eisen, David Faber, and the team analyze the current state of the stock market, noting pressure on tech stocks with the Nasdaq down while financials, utilities, and industrials show strength amidst better-than-expected earnings results from banks like Bank of America and Morgan Stanley. Rick Santelli reports on business inventories data, which were up slightly, indicating a better inventory backdrop compared to the previous year. The segment transitions to housing market data, where Diana Olick shares insights into home builder sentiment, revealing mixed feelings due to rising interest rates.

Federal Reserve Governor Chris Waller discusses recent inflation reports and the possibility of rate cuts in the coming months. Waller highlights that six out of the last eight months showed encouraging trends in inflation, and if this continues, the market could see rate cuts as early as March. He expresses cautious optimism about inflation trends, expressing hope that recent disinflation will lead to the Fed's target of 2%. Waller also manages expectations regarding the labor market and acknowledges the challenges of high shelter and food prices in sustaining long-term inflation goals.

Discussion shifts to potential economic implications of Trump's tariff threats towards Canada, featuring Canada's International Trade Minister. The minister warns that tariffs could lead to higher prices for American consumers and businesses, stressing the unity of the Canadian and US economies. She underlines that Canada is the largest customer for many US states and argues that tariffs will ultimately hurt American interests, countering the narrative of tariffs as beneficial economic tools. The team anticipates Scott Bessent's confirmation hearing for Treasury Secretary, focusing on how he navigates trade policies and potential tariff strategies.

The podcast delves into Scott Bessent's Senate confirmation hearing as he faces various questions regarding his approach to tariffs, taxes, and broader economic policies. Senator Graham introduces Bessent as a well-qualified candidate. As Bessent prepares to speak, questions arise about his views on the relationship between the Treasury and Federal Reserve, especially regarding central bank independence. The hearing is expected to scrutinize Bessent's tax policies and how he aims to balance economic growth with reducing the nation's debt.