Power Lunch - S&P 500 rises in volatile session as Trump denies he is firing Powell 7/16/25

Episode Date: July 16, 2025

Stocks were taken on a wild ride Wednesday, as a White House official indicated to CNBC that President Trump was moving closer to firing Jerome Powell from his post as Federal Reserve chairman, initially knocking down the S&P 500. The benchmark rebounded as Trump later denied the report, but traders still fear he could follow through. We’ll cover every angle of that story, and the market impact, for you. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

And welcome to Power Lunch alongside Kelly Evans. You just saw. I'm Brian Sullivan. The market's reacting to the latest headlines on the future of the Fed. President Trump responding to a report that he is planning on firing. Fed Chair Jerome Powell and soon. But then Trump's saying it's also highly unlikely. And is it even possible, Kelly? That's a question.

A senior White House official did tell CNBC that he told Republican lawmakers this will likely happen soon. Our next guest is a Washington insider who's been tracking the Fed for years. So let's get his take on what's happening. Joseph LeVornaz, as counselor to Treasury Secretary, Scott Besson. I said, oh, I'm so glad you're on today, Joe. I'm glad to be to you, Kelly, and glad to be with you, Brian. We're good friends. We go back a long time.

Yes, yes. Oh, we go back. So I'm like, tell me, give me the spin. Is there spin on this, Joe, or what? No, there's no spin. I mean, President Trump is he is very unique. He's a very special way he connects with the public. He voices his opinions.

his opinions are known. A lot of people like the fact that he just, he's like a regular Joe, not like me, but just sort of like he just says what he thinks. And he made it clear he's not going to fire Jay Powell. And the president should be able to comment on whatever he wants to comment on. So that's well earned. The message from you is he's made it,

the president has made it clear he is not going to fire the Fed chair. That's what he said. That's right. Did he say that all the way, though? It doesn't matter. Tomorrow he could wake up and say, yeah, forget it. I'm sending the letter. Yeah, I mean, I don't know, Kelly.

I mean, the president has a way to, he has a way of communicating that makes him special and very effective. And I'll leave it there. I was watching a show, Joe, called The Exchange with Kelly Evans, which is exactly right before this one. Kelly, you might know the show. I did worldwide exchange with you at like 5 a.m. 5 a.m. at this point, we love having you on at any time, Joe. So welcome back. But on the exchange with Kelly Evan, she had Richard Fisher on, former Fed of Dallas Fed guy, probably your buddy.

And he said something interesting. He said, well, if there was a chance or something like this, Kelly, right? That if there was a chance it was going to be a Fed rate cut now that is, forget it. Forget it. He said, forget July for sure. Do you think this will alter Powell's thinking? No, I mean, look, the Fed has said that, look, the Fed has said that it's going to base their decisions on the data, which I think is understandably why the president is so frustrated because the inflation data, have been much better than expected. And yours truly, of course, the administration was on this before anyone else,

the president and Secretary Besson, but the argument that I'd made was that tariffs are not inflationary. They'll be absorbed in foreign profit margins, which they have been, and that the market was getting itself way excited about something that wasn't likely to happen. And the data have been much better. Even the sort of the pet metric that Jay Powell likes is the Supercore metric, which is consumer services, including rents, that's about 150 basis points lower than where it was last September when the Fed

first began cutting rates. So I totally understand the president's frustration. But if the data continue to ease as we expect and growth continuing to generate non-inflationary activity and the markets continue to price Fed easing, history shows the Fed always follows where the markets are. So rates should eventually be going lower. Joe, take your point about, you know, if we're not seeing a huge effect, although it was in the goods prices, as we mentioned yesterday. I just can't figure out if there's no U.S. hit here, then how are we raising $100 billion in tariff revenues? Well, that's the thing. It's not even $100 billion, Kelly. We're in an annualized pace depending on what you think the next, you know, basically six months look like.

We have June data. We don't have July. Right. But we could be upwards of $300 billion. And this is the point I think is key. But those are Americans paying that, you know. So in other words, let me just give an example. Let me just give an example. So Japanese car makers have been cutting prices, right?

Which is a classic way of saying, look, look, the exporters absorbing it. This doesn't even affect American companies. This is a win, win, win. Fine. But then if that's the case, we shouldn't be collecting any tariff revenue. So the fact that we're collecting $100, possibly $200 billion, tells you that the importers are paying that. Well, no, not necessarily no, because import prices, which will get tomorrow,

have also been weak. So it's not just PPI, CPI, import prices. They've all been soft. In fact, my colleagues... They're just not passing it along, but someone's clearly paying it. No, I just want to just finish this. So this is important, colleague. But my colleague and the CEA, Stephen Myron, wrote a great paper.

Team did a great job looking at import prices that would have direct impact from tariffs. Those prices actually fell. So what's happening is they're adjusting the price as it comes in, and they're building that tariff into their margin. That's fine. But they're paying it. But they're not paying it because if they were paying it, we would see it in the inflation data. And we know that the tariffs are there because, as you said, we're going to collect upwards of $300 billion in revenue. And again, this comes back to when I was in other programs, people saying in March it'd be there, in April it'd be there, and May it'd be there.

June, it has not shown up. And we don't think it will show up. And if it does, at some point, it will be de minimis. and the burden needs to be on the people who are saying these tariffs are going to be inflationary. A similar argument was made that, well, we had this big inventory bill in the first quarter, and therefore companies aren't going to raise prices, which made no sense, because demand has been strong, and you're going to raise the price if you can get away with it. But the fact is the U.S. is the world's largest consumer. We dictate the terms. President Trump knows from a negotiating standpoint that everybody wants to be in the U.S. market,

and the U.S. has the leverage, and you just haven't yet to see it in any of these prices. I don't understand why the economics community is so dense and not understanding that. I just don't understand then. Okay. Whatever they can cut prices for like here. This could be outright deflation. That's fine. But whomever that importer is is paying $200 billion.

That's all I'm saying is that they're paying the tax. It's not like all the adjustment is coming from the foreigner. But the price they're buying it from is cheaper. Either way they're paying. That's the difference. Yeah. No, but no, but they're not. It's the importer is not paying.

It's the foreign producer. The foreign company is paying for it. Not if we were paying more, we would see it in the import price data. We'd see it in PPA. We'd see it in CPA. That's still a point. It's not there. I mean, if it was, we could debate the extent to which it was there, but it's not there at all.

I want to go back to the Fed, Joe, and I don't want to try to separate politics as much as I can because I want to be clear to the audience. I was a little perplexed about this at the time before the election. And that is, of course, the Federal Reserve's rate cuts in the fall of last year. They were larger than many people had expected, larger certainly that I had expected, especially at a time when we were repeatedly told how strong the economy is. Now, I understand it's an election cycle. Politicians are going to say a lot of things.

But is there some level of frustration, maybe with you or others that you may know, wink, wink, that the Federal Reserve was cutting last year into an economy we're told was so strong, and now there's concern about the economy, and yet there are no cuts. Do those fall cuts come up in conversation? My frustrations, mainly Brian, with my golf game, which is probably speak for a lot of people there. I'm frustrated with your golf game as well, Joe. I just want to be clear with that. You get caddy for me, but you're kidding.

But look, we know that last year's 50 basis point rate cut, which was significant, unexpected by the markets, was the largest cut ever in the history going up to presidential election. So I think there certainly was some concern at the time and rightly so that it was a political action. Then we learned in the fall of the economy looked better with better data. Data got revised up. And yet monetary policy was cut in November. again in December. So I don't think it's frustration, but I do think there is legitimate concern again, speaking on past actions, not current actions, that something didn't really, you know, smell right, that it was incorrect. So what I could say to you now, and this is what Kelly and I were

debating, and that is that there is no question, here we are in July, there has yet to be any tariff effect, quite the opposite. The inflation numbers, if you look at today and what the latest FOMC forecasts are, and where they were in March, inflation has moved down relative to expectations, not up. And the market continues to look for lower interest rates. And that suggests to me that monetary policy is tight on the surface. Even Chair Powell has admitted as much. So we'll see what happens. The one thing I will say is very important. It makes us very optimistic on the strong versus weak economy is that the one big beautiful bill which the president passed in record time and no one thought it would happen is going to help solidify a second half growth story because all the

uncertainty that was posed by whether tax rates were going to go up by an historic amount has now been put aside. And we've got a lot of pro-growth policies as it relates to capital investment, accelerated depreciation, full business expensing, full expensing for factories and plants. That itself is disinflationary. So I think the outlook is much better. And hopefully as we move a few months forward, this tariff stuff will just, will just finally dissipate in terms of the inflation side. I see now how this could both be true at the same time, and we got to go to the beige book, but that you could, if foreigners cut the price by enough, you could have importers paying

a tariff, but the price for the consumer still lower. That's exactly correct. I'm tracking. Yeah, they're absorbing. It's a good way to put it, Kelly. That's exactly what I was getting at, is that the forum producer effectively absorbing the margin. Right.

Because if we were paying for it, if you have. us importers are paying for it, we would see it in the data and it's not there. Yeah. No, I take your, they're in some of the goods prices, but I'll leave it there. Top level. I take your point. Joe, thank you. Thank you, everybody.

Speaking of the central bank, the Federal Reserve is out with the beige book. Megan Kisela has some details. Megan, any better tone on the economy this time? Kelly, I would call this something of a wait and see beige book. Businesses appear to be in something of a holding pattern is my interpretation as they're braced for what they think might be coming later this year. The top line was economic activity increased slightly from late May through early July, the period this page book covers. Five districts the Fed says reported slight or modest gains.

Only two districts noted a modest decline in activity, so that was better than the last report. But overall, the outlook was neutral to slightly pessimistic. Only two districts say they expect economic activity to increase. Others first saw flat or slightly weaker activity. And the biggest theme, once again, seemed to be uncertainty, which remained elevated. That then contributed to ongoing caution by businesses. And that was most apparent in the labor market. The Fed says employment increased very slightly overall.

Hiring remained generally cautious, which many of their contacts attributed to ongoing economic and policy uncertainty. And then looking ahead, many of them expect to postpone major hiring and layoff decisions until some of that uncertainty has diminished. Now, layoffs were limited overall, somewhat more common among manufacturers. And then as for inflation, prices increased. across districts either moderately or modestly, mostly similar to the previous report.

But in all 12 districts, businesses reported modest to pronounced input cost pressures related to the tariffs. They say that was especially for raw materials used in manufacturing and construction. Many firms, they say, passed on at least a portion of cost increases to consumers through price hikes or surcharges. Some of them held off raising prices because of growing price sensitivity among consumers.

But interestingly, guys, contacts in a wide range of industries, the Fed says, expect cost pressures to remain elevated in the coming months. And they say that increases the likelihood that consumer prices will start to rise more quickly by the end of the summer. Guys, oh boy, don't, don't, we're just leaving that data point. Megan, thanks, Megan Kassella. Drew Mattis is here for more. He's the chief market strategist at MetLife Investment Management here on set with us. Do you want to jump into this debate over, do you perceive that yes, in largely speaking, we're not seeing a lot of pass through on the inflation front, which means that foreigners are eating the cost,

you know, some importers reading the cost, corporate margins are taking it somewhere. Just what's your macro thought about what we're seeing? Well, I think that's right. I think that, you know, it's getting eaten in a lot of different places. It's not showing up completely on the consumer side yet. Yet. Right? Everything takes time. And, you know, if there's the potential for pricing power, firms will exercise it. If there is too much margin compression, they'll cut back. So I do, you know, I'm kind of more in the Waller camp. Like, we're going to see it, but it's going to be a temporary feature because it's just going to boost prices for a year. And then the trend rate and price appreciation or price growth is going to go right back to kind of the 2% to 3% rate that we're seeing.

I don't think there's going to be a spiral higher in price. We need a bell to ring when I think somebody nails it. Like, ding, ding, ding, ding. Because I think you just absolutely nailed it true. And we would expect nothing. I'm sure we could get that sound effect. We need to have it. Call Kramer's office.

We'll get ding, ding, ding. But because the hamburger went from $15 to $20. So you have a 25% jump in inflation rate on the burger. Then it goes to 21. Well, okay, that's a tiny jump. But it doesn't mean the burger's cheaper, right? It went from 15 to 20 than 20 to 21. So the inflationary effect is much smaller.

I feel like, to your point, the tariffs will do that. And others I've talked to say, well, I'm not to raise prices a little. bit. And then that year-over-year number that we always like to cite, 3 percent, will be baked in? Are you saying that tariffs are kind of a one-year-year or one-time phenomena? You don't want to be raising prices every month. So you want to basically get your price increase. You want to know what that price increase should be, and then you want to execute on it, right? And so maybe you're willing to actually take it on margin for a little bit until you figure out what actually the full price effect will be, and then you determine how much of that to pass.

You take the medicine now. Or the consumer takes the most. You want to make sure that when you put through the price increase, that it's sufficient to cover that your increased costs, right? Because you don't want to do it. You don't want to raise prices last month and then raise them this month again and then raise them next month again. Because for the consumer, they're like, wow, this person just keeps raising prices.

Whereas if you just do it once in kind of the shock system, then they just see the one-time price change and then it... Okay, I'm sorry to belabor this point. Is there a... And I'd love to hear the audience can tweet at you, Kelly, or me if they're nice. on how they feel about it. Because if the burger goes from 15 to 20, they're aggravated. They're annoyed, right?

If they really want the burger, they're going to pay the 20. They're not as annoyed when the burger goes from 20 to 21 because it doesn't feel as painful, even though it is a lot more expensive than it used to be. I believe economists have a term for this. But if you add up the level of annoyance, it would have just been better to go take the burger from 15 to 21. And then, hey, we're not raising prices again.

And then three months later, everyone forgets that the burgers were $15 to begin with, and you're off to the races. You know, the other thing, too, I mean, you know, it's funny, and this isn't related to terrorists. But, like, you know, all those credit card surcharges and things like that. I mean, like, that's not showing that. That's not in CPI, right? The fact that, you know, every time you go to use your credit card now, you have to pay a couple extra percent, like, you know, or carry around a load of cash. Yes, which is what now often, well, I better have cash on hand. Some people, they now have signs where they say, we're actually marking it up more.

more than just the pure price of what we charged the credit card company, which I thought was interesting. Well, what's amazing is that there's a price to actually transacting in cash, right? You can lose cash. You can get stolen. There's lots of things that go wrong with cash, and yet, you know, somehow that doesn't get the duck. Anyway, that's just, that's my little rant right there is that, you know, there's a lot of different price things going on right now. Tariffs are one of them. Some of the other things that are. I don't think it's a rant at all.

I don't know about, I'd love, again, love to hear our viewers. And I understand that we live in more expensive areas. And so whatever, more people than ever in my life are asking me to be paid in cash. Do you find that true, Kelly? Yeah, absolutely. I mean, I'm not talking about smaller things. I'm talking about big things. Paint my house.

Well, here's the cash price. Like, bro, if I pay you in cash, first off, I don't have a bag of cash laying around. Secondly, you're not going to pay taxes on that, which is just going to ultimately come back to me. Then they walk away. It's actually a fascinating inflationary or is it, would that be deflationary or disinflationary? I don't know what these words mean anymore. I don't know what it is. I just know that it's becoming increasingly frustrating to try to buy things.

And actually you saw that in the Bayesian book today, right? Like, you know, they were talking about how consumers are pulling back. There was a rush to get ahead of the tariffs, right, with autos and things like that. And people cut back on everything else so they could buy the new car. And now they're rotating out. and it's not clear that they're going back and rotating back into the services and other goods in the same pace. You know, if firms were seeing that this activity is going to continue, you wouldn't see the weakness in the labor market, because firms are smart enough to realize that they need to hire now if they think demand is going to be stronger in three months.

And so I do think that there's a decent amount of, there's not a huge amount of weakness now, but there are the hints that things are kind of slowly grinding a little slower. And I think that that's something that we ignore at our peril. Although I would say if I ran a company now, even if I thought demand was going to get better, I might see how AI could fill some jobs before I hired somebody. Well, I mean, so there's an interesting thing, right, because people are using AI to improve the productivity of their workers, but do they have a plan for what to do with the extra time that's being created,

the extra spare time being created for all those workers. So right now it seems like, oh, we're going to throw an AI tool at it, and then you're going to have this worker sitting around doing nothing for another hour. Well, okay, great. You really haven't accomplished anything. Your total productivity hasn't gone up, even though everyone's more efficient. Or if not a little higher because you're probably paying for the higher level use of AI. And it's not to say that you even have to lay people off,

but you have to have a plan for what you're going to do with the spare time that you're generating because you will generate additional time that they can do things with. And whether it's, hey, you get to go do research on whatever you want now that you've done your job with the help of this AI tool and maybe something good will come out of it on the other end. You ask him or her to use that spare time to find a place with the burger is still $15. Well, you will eventually drive that burger back down to $15. That's the hope.

That would be nice, wouldn't it? Drew, thanks. Appreciate it today. Drew Mattis with MetLife Investment Management. All right. Lots more show to come, including hopefully solving this riddle why about 80% of stocks fell Tuesday,

but the markets overall barely budged. Watch is sponsored by crypto.com. Crypto.com is America's premier crypto platform. All right, welcome back to Power Lunch. The company that makes the semiconductors powering much of the AI revolution and all the capital spending that we talked about yesterday in Pittsburgh is a little startup by the name of Invidia. You might have heard about it.

Well, yesterday it said it would be receiving approval from the American government to resume selling some of its chips to China. Now, NVIDIA's stock continues to be red hot. It just crossed the $4 trillion market cap threshold last week. But that positive news has some on Wall Street already looking at how quickly Nvidia can hit $5 trillion. Do I hear six? You're not a breakdown what it might mean for this NVIDIA and everything else.

CNBC Tech Check co-anchor, Dear Dribosa, and Deer, here's what's interesting. Yesterday, Howard Lutnik, I pressed them on NVIDIA. I think you heard this. And he said, well, we're allowing them to sell the fourth best Nvidia chip to China. Is that how others would characterize the, what is it, the H20? Yeah, the H20. I mean, it is not even close to any of Nvidia's best chips.

But, you know, the Chinese have done a really good job around optimizing around older hardware. And that's why the H20 is valuable in China. but what I would say when we talk about this sort of Nvidia picture and what makes Wall Street so bullish, talking about five and you're not crazy to say $6 trillion, Brian. At this point, it's not just about chips. It's about the whole Nvidia ecosystem. We talked about this yesterday, but the Kuda software has been so critical to Nvidia's continued success and continued dominance.

And that's also why the Chinese are prepared to take this less performant H20 chip because it operates on the software. And that's what everyone is building on, right? So that has been extremely positive for Nvidia. And even without China, I mean, the China headlines when they couldn't sell, I mean, it was a huge hit, billions and billions of dollars. Yet, Nvidia still continued to do well because it's only a small part of the story. There's inference, right? That comes after training. Once you have the models, it's about how much the models are being used by enterprise, by consumers, every single day.

That is just like hockey stick going up and up. So it has inference in its favor. It has the huge CAPEX. prevention, Brian, all these companies. You have Zuckerberg this week saying he wants to spend hundreds of billions of dollars in compute capacity. We know Google's doing the same thing. You've got Project Stargate with Open AI and Oracle. You just got a lot going in its favor. And even though there's more competition in this phase of the AI race inference versus training, it's in VEDIOS ecosystem that keeps it so dominant, not just in China, but everywhere in the world. And it's rate of progress,

And meta, Facebook, Zuckerberg, announcing two days ago that they wanted to build these new super data centers, five gigawatts. And we were talking about it with the Secretary of the Interior, Doug Bergam also yesterday, because gigawatts, megawatts, kilowatts, all very confusing. He put it well. He said that's five Denver's worth of power in one building. I would imagine that building is going to be filled within video chips. It's also a little bit of a pipe dream. We don't have, and you know this better than anyone, Brian. We don't have the energy capacity to actually build that out right now. And that is where we get to maybe some cracks in the story, right? I mean, there's all of these intentions, but also Zuckerberg has said that he's going to do huge buildouts for the

Metaverse just to walk it back. And there's so much uncertainty around here about how they get to that level, how they even get the energy and the chips possible to produce five Denver's worth of, you know, compute capacity. And then I'll also just mention the ASML results this morning. another crack in the AI bull case here as well. What are they seeing? Their biggest customers in the world are the companies that are making these chips, TSM, Samsung, Intel. Are they not ordering the equipment necessary to make them? So are they seeing something different than what investors and Wall Street are seeing? So, you know, while people are talking about Nvidia to $5 trillion already, it may not be such a straight shot. I think it's an important point to make that not, I mean,

everybody's bullish until they're not. Let's see what happens. And you're right, five gigawatts, five Denver's. I guess buy a nuclear power plant and you'll get close. They take time. Yeah, decades, actually. Dear Drosso, thank you very much. All right, on deck.

More on Trump trying to trounce Jerome Powell. And it may all come down to interest rates. Your bond report. Next. Welcome back. We're taking a look at the bond complex, which has been on the move today and this week. week. Treasury yields reacting to renewed uncertainty around the future of the Fed, its independence,

any change in monetary policy as well. 446 on the 10 year, the 30 years still above five. Let's head to Rick Santelli in Chicago for more. Rick, what do you think? Well, you know, today's an interesting day. Let's start at the beginning. We had PPI definitely cooler than expected pretty much on every metric until you looked at the late coming revisions. And on the month-over-month data, they were a bit warm. On the year-over-year data, they were a little bit warm. So for the most part, if I had to summarize, PPI didn't really change much of the landscape. But then again, at 1054 Eastern time, everything got a bit weird with the headlines coming out about Mr. Trump firing Powell. My first reaction was, sorry, don't believe it,

some balloons getting floated here. I think he knows, percent knows, I think they all know, that they can't. But anyway, let's go to the markets, let's go to the whiteboard. 30-year heels were hovering right around 5% of 1054 Eastern. They moved up to 507.5, and this chart is static, so it ends around 115 Eastern. But you see the point. And once again, I'm going to ask the only question, all my sources were asking. I do think Jerome Powell's worth a little bit more than 7.5 basis points, don't you? And when it comes to 10-year, we move from 444 to 448.5.

4.5 basis points, honestly. I think that if the Fed official was going to get fired, knowing my history with markets going back to 1979, the moves would be much, much larger. Let's look at two-year. Now, two-year really did make sense in many different ways because its yield, unlike tens and thirties, its yields moved down. So we went from 391 to 386, and it's the one maturity that's still holding a bit of that. But do keep in mind, we had cooler and expected PPI. Now, the commodity that wins, the trade that wins, the most volatility is the dollar index. It was at 9870, it broke down to 9780, a little less than a full cent move.

But do keep in mind, it bounced right back, A, and B, there's a lot of speculative force in the dollar index that don't necessarily play in the treasury complex. I guess what I'm saying here is, is that I would continue to look for it. Lots of verbiage, lots of hyperbole, and lots of keeping Powell in the news and not in a nice fashion by this administration. Maximum pressure. Now, does that mean the Fed chairman's going to leave or he's going to ease? I can't answer that. And I can't even tell you whether he's going to actually try to fire him. I'm just telling you what the market's telling me.

And that is, they're not looking at the story very seriously. Back to you. Well said. Great work on the easel. Rick Santelli. Thank you. All right. coming up, Washington and your money.

Stable coins dealing with a little instability. The Genius Act moving along, but not without facing some Roblox. Roblox. Roadblocks. I've got Roblox in the brain because I have a kid that won't stop playing that game. Glad I'm not there yet. Plus, the White House readying an executive order to bring private equity to more 401Ks. We'll have the details when Power Lunch returns.

Our crypto is in focus on Capitol Hill again today. GOP House members advancing a trio of bills after the same boat failed yesterday, but there is still work to be done. Bitcoin and other cryptocurrencies all moving higher at this hour. Emily Wilkins, joining us live from Capitol Hill with where things stand right now. Emily, where do things stand right now? Hey, hey, Brian. Well, really, where things stand are where they stood yesterday. There is a vote that lawmakers need to approve of if they want to move ahead on actually passing these three crypto bills. and they are stuck. Right now, we've seen three Republicans so far vote against moving ahead.

16 others have not even voted yet, and many of them are huddled off the floor with Speaker Mike Johnson trying to figure out a way to get to yes. Again, at issue here are concerns about banning central bank digital currency. A lot of these conservative hardliners, that's not something they want to see.

They have a lot of concerns about it. One lawmaker, Keith Self, he was one of the lawmakers who voted against this yesterday, is currently a holdout. I caught him on the way into votes. And this is what he said about his concerns about the central bank digital currency. It has to do with the CBDC, which is toxic, toxic in my district. We will protect my citizens from CDC. House Freedom Caucus Chair, Andy Harris also tweeted out that there had been an agreement now to potentially rework one of the bills on market structure, no,

as clarity to add a stronger language in there to ban a central bank digital currency. He tweeted out that this is an important step to ensure Americans are protected from government overreach into their financial privacy. However, the fact that this rule vote is still open, that we still have not been able to advance, means that there's a lot of debate about exactly how to move forward on this. Certainly other concerns from lawmakers who want to see wide support for this crypto market structure bill. And at this point, guys, it's just not.

clear exactly what's going to happen next if they're going to be able to get this resolved and get Crypto Week back on track to potentially get Trump that Stablecoin bill to sign by the end of the week. So we'll keep you updated as we get more from Capitol Hill. Guys? Crypto Week is the new infrastructure week. Hopefully we'll get something done. Emily Wilkins, thank you very much. Right now, let's get to Pippa Stevens with a CNBC news update. Hey, Brian. Vice President J.D. Vance delivered remarks in Pennsylvania this afternoon in a bid to sell President Trump's so-called big, beautiful bill to the public. His speech took place in a working-class district of northeastern Pennsylvania. President Trump signed the sweeping domestic policy bill into law earlier this month.

It includes tax and Medicaid cuts and increases border and defense spending. The Syrian government and leaders in the Drew's religious minority announced a renewed ceasefire today. after days of clashes that led to intervention from neighboring Israel. The agreement comes after the Israeli military launched air strikes in Damascus near the presidential palace in a movement to protect Drew's fighters. And federal authorities charged three current or former Louisiana police chiefs today in an alleged visa fraud scheme. Officials to say they took bribes in exchange for filing false police reports

naming non-citizens as victims of crime, so they would qualify for what's known as what's known, as a U visa. The accused allegedly took payments of $5,000 for each of the hundreds of people for whom they provided the false reports. Brian, back to you. All right, Pippa, Stevens, thank you very much. All right, still ahead. Could private equity soon have access to your 401k plan potential White House order that could change retirement accounts forever? That is next. Welcome back to Power Lunch. President Trump is reportedly expected to sign an executive order in the coming days that would help make private market investments more available to U.S. retirement plans.

Could pave the way for big managers of these private assets to access the vast sums of retirement savings held by workers who don't have a traditional pension. What it could mean for you and your money, let's ask no one better than CNBC senior personal finance correspondent Sharon Epperson. Sharon, we've talked about crypto and retirement plans. And I guess you could do some of this now, but a lot of people aren't doing it because they're concerned. about the fiduciaries and all the other states. If this now becomes a bigger, safer thing to do, just walk us through how it might work, what the options to people might look like. Well, this, what we're talking about is the president precepts giving guidance to the Department of Labor and the Security Exchange Commission about how this could work by putting private

market investments into target date funds, into balance funds within a 401k plan. And so this is something that Trump has been signaling he's very interested in since 2020. He sent an information letter out, you know, the Department of Labor under him, saying that this could be an additive to 401K plans. The way that it would work is when you look at the amount of assets that are available in the 401k industry, some $12 trillion in assets, there is a lot of potential for those who have private market investments to want to have them in 401K plans. The reality is the average account balance for a Fidelity 401K holder,

at the end of the first quarter was $127,000. And we're talking about just over $10,000 for a Gen Zier, if you look at different generations, and almost $250,000 for a baby boomer. So the way they would work is for investors who have more sizable assets. That's what I was going to ask. So not everybody could access.

Everyone will be able to access it. Not just accredited? But the people who are not just accredited investors, but the people who it probably would be best for based on the financial advisors that I've spoken to, have as well would probably be those who have significant assets already. In our interview yesterday about energy and energy infrastructure, Larry Fink of Black Rock, kind of alluded to this. He said, well, soon, and I'm paraphrasing, I should have the direct

quote, so I don't want to screw it up, but it was something like, well, soon we're going to have access to private capital in your 401 case, something like that. Black Rock and firms like that would benefit big time if this were to happen. They would benefit big time. And so that's why firms like Black Rock, Apollo is also very interested in this. Even there are some retirement plan providers who are saying, yeah, this makes sense to do, like Empower. They want to make sure that that's available to their 401K holders to, as they would say, level the playing field.

But there's a lot of controversy over if people don't understand today how a target date fund works right as it stands now, or maybe not even how an S&P 500 fund works. They're just defaulting into whatever the default. for their plan, adding something that is an alternative investment that is less liquid, less transparent, that has high fees, not sure if this is something that is truly for everyone. I mean, I worry a lot that it's basically great for the industry and this huge, huge win for private equity, private credit, and all the rest of it. I'm not sure there's enough of a track record to say this needs to be part of anyone's retirement portfolio. Also, because in a way,

this asset class is still so young. It's like when we say America is still young, you know, Relative to the stock market, this is still very young, and it hasn't been tested through many, many, many decades of returns in order to know kind of what position exactly it should occupy and why. Well, the concern that financial advisors I've spoken to say is that people are always looking for a quick fix. And so I haven't saved enough. Maybe this will help me meet my retirement goals, not understanding all the challenges. The other concern is are they getting independent financial advice, not from a plan provider, about how this fits in. into their whole financial life. Do you guys ski? No, I've not one or well.

Snow ski. Okay, I'm a big snow ski. Literally a big snow skier. Yeah, well, French fries and pizza is what they call it, Sharon. So maybe we need to go to a system like skiing. In skiing, you have the green slopes, you've got the blue slopes, you got the black and the double black, right? Double black is basically if you fall, you're in big trouble. Don't go on that unless you're an expert skier. Green is, we're going to learn, right?

And then there's some people that shouldn't be on either one. Either way. Like me. I can invest. And I'm not, I don't want to talk about skiing, but I want to talk about investing. Maybe we go to a system like that for 401Ks where you get the access to the private capital, private credit. But there's like a thing on your 401K. It's like expert investors only.

Be careful. I ask that question. Right? The person in the Biden administration, formerly in the Biden administration who ran 401k plans oversaw this. And it's not something that the industry where, want to do because they don't want to shut anyone out. And it's not something that legally you may be able to do because you can't say, well, you have 250,000 assets, so you should be able to do this in your 401? No, no, no, just how, just you can have zero dollars in assets. But are you,

are you accepting the risk, in other words, of being an expert investor? Like basically have a separate, you know, we choose our 401K things, target date funds, whatever. But again, what Kelly started off by saying, plan providers are very concerned about being sued, about the, fiduciary responsibility that they have to do what's in the best interest of their clients or of their participants. Having that would be a great idea if people actually read the fine print and wouldn't then go back, even though they signed it, saying, I never said that. I didn't know how that would work. That just happens already. So I think that that's a big concern, that that if you, even if you had those qualifications, that people would say yes, I agree. So once again, lawsuits ruin America.

America, the end. Yeah, I think lawsuits are a big factor and why this has not been picked up by more providers. I'll be curious this time around. It's everyone kind of hold hands and start to jump in together and make a... Well, certainly, if the Trump administration is providing guidance on this to say that we're okay with it, and so maybe then providers will say, okay, maybe we're less likely to have any litigation against us after this. We can just invest in the Target Date Fund where no one knows what's in there. I hate Target Data Fund. This is... I don't, I'm not going to... But, you know, we're a little, the three of us on this table are a little different than the average. Exactly.

And many people are default, default into that. I don't know what's in the stew, but serve it up, Jimmy. Sharon, thank you. For more on managing your money and your retirement and all the rest of it. Be sure to sign up for Sharon's Money 101 Newsletter. It'll walk you through it. This mystery stock posting some healthy games after reporting a surprise earnings beat. Here's your hint.

There's the hint. There's the chart. We're going to reveal the name. Coming up next. All right, time now for a power check. Check out drug and medical device maker Johnson and Johnson. That is the mystery stock that we just teased. And it kicked off the health care earnings season. By the way, Kelly, may I be the first to wish you a happy health care earning season? Oh, thank you. Yeah. So they had a better than expected report.

Growing cardiac device sales, not ideal, boosting results. Good for J&J, bad for people. The shares are seeing their best day in nearly two years. It's the best stock in the health. health care sector today. Stock did take a hit earlier this year when a patent ran out for one of its blockbuster treatments of psoriasis. J&J, along with Abbey and Eli Lilly, have seen a lot of volatility. The health care sector in general, down about 2% for the year. Anything they can do to save lives is good. You just hate when people have to need cardiac stuff. Exactly. That reason itself is quite interesting. And there's the volatility that we just mentioned. Still ahead, another mystery chart for you. The fund's not over. This stock's record rally has now

held its co-founder to the second richest person in the world behind Elon Musk. We'll reveal the name next. And as we head to break, be sure to follow and download our podcast. Just look for Power Lunch on any platform you listen to. And we'll be right back. Before we go, get this. Larry Ellison is now the world's second wealthiest person for the first time ever. Net worth, Brian, $251 billion. This is according to the Bloomberg billionaires index. More than 80% of his wealth is in the form of Oracle stock and options. And Oracle, which was, we used to call it always. Remember for years we called it old tech. This was kind of a dot-com name that has completely reinvented itself. A key winner as investors have piled into AI stocks that hit a record

high last week and the shares are up 230 percent in the last three years. Big beneficiary of the Trump administration as well. Obviously, they've been part he was there for the big announcement of the Texas Data Center and things like that. Yeah, and I don't, I can't confirm this, but I'm pretty sure I'm the last TV interview he's ever given. Let's go find the footage. Didn't really go well. But, Mr. Ellison, we'd love to talk with you again. Let's just make nice. Come on back.

Let's come on back. Let's have an interview. I'm glad he could feed his family, though. That's good news. AT&T was named a top picket Morgan Stanley. The analyst at MS, riding the company's fiber cat growth and now lower cash taxes, relatively insulated relatively from any potential wireless industry. Slowdown.

That kind of caught my eye, like wireless and potential slowdown. Yeah. There's always a potential slowdown. No, but there are a lot of disintermediators here. Competitors, let's use the old-fashioned word. Look, Starlink, you've got some of these fixed-off, fixed whatever they're calling Wi-Fi offerings. You've got offerings from our Comcast,

or soon-to-be-former parent company and the rest of it. Ryan Reynolds? Yes, Mint Mobile. I hear the ads all the time. So there is a lot of competition in this space. Now, AT&T was interesting, had a great year last year because they had spun off some of those media assets. They just spent a couple years of billions a couple years before.

They did. the former CEO Randall Stevenson building up. He leaves. His number two now becomes stanky becomes number one. He sells them off. And they were rewarded for that. Now, this has just been a tougher year. Verizon as well, you know, it's got high dividend yields.

We were talking about this one yesterday. It was a market navigator's pick, but tough share performance. The only people who ever win all the time. Are the consumers? No, the bankers and the lawyers. Verizon's offering me great deals right now. I woke up in Pittsburgh. I'm grumpy. Thanks for watching. Power Lunch, everybody. Closing ballot starts right now.