SOTS 2nd Hour: Big Tech on Deck, RFK Jr. Confirmation Hearing, and Fed Expectations 1/29/25

SPEAKER_1 (0:00)

For 140 years, MultiCare has been in Washington, prioritizing long-term solutions, partnering with local communities, and expanding access to care. Together, we're building a healthier future. Learn more at multicare.org.

SPEAKER_2 (0:16)

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.edu.

Sara Eisen (0:47)

Good Wednesday morning. Welcome to another hour of Squawk on the Street. I'm Sara Eisen with Carl Quintanilla, David Faber, live as always from Post 9 of the New York Stock Exchange. Take a look at stocks here in the early going. We're down on the S&P 500 about two-tenths of a percent, so nothing extreme like we saw earlier in the week. NASDAQ down half a percent, giving back some of yesterday's gains. The Dow remains higher by 51 points. It's all about the bond market today. It's Fed Day and we've seen this follow-through on buying of bonds. Yields lower 4.5 on the 10-year, two-year just below 4.2. We'll talk about what to expect from the Fed meeting in just a bit.

Carl Quintanilla (1:22)

Meantime, it's a very big morning on Capitol Hill. Senate Finance kicks off their confirmation hearing for Robert F. Kennedy Jr. to become Secretary of Health and Human Services. And President Trump's Commerce Secretary Pig Howard Lupton testifies before Senate Commerce, Science and Transportation. At his hearing, we're going to bring you the headlines as they happen later this hour.

Sara Eisen (1:41)

Particularly watching this Pharma and Food Stocks. We are 30 minutes here into the session. Here are three big movers we're watching. T-Mobile gaining beating estimates thanks to continued growth in wireless subscribers and home internet customers. Stocks up 8.5%.

Starbucks also in the green despite a sales decline. Many on the street calling the numbers better than feared. With more than eight firms raising their price targets on the name this morning. More highlights from the CEO in just a bit. And then watch Big Tech today with Microsoft, Meta and Tesla. All set to report results in just a few hours. More on the Mag 7 names coming up. But guys, it's Fed Day and not a lot of drama expected in today's Fed announcement. The Fed is expected to pause for the first time since September after about a hundred basis points of cuts that started in September. The question going into today that I have and that I think investors have is March on the table, right? The market is upping the odds of a March rate cut. You don't get one fully priced in until June and then another one in December. But all the turmoil in the market around deep seek and the potentially deflationary implications of that, along with the fact that we've heard the bias from several Fed members over the last few weeks, that they're still kind of in cutting mode, even if the market has moved on. We also saw progress on the last CPI report on inflation, all of that adding up to the fact that we're going to get a pause. But how likely is Fed Chair Powell going to signal that he's ready to cut sooner rather than later? I think the biggest question hanging over everything is tariffs. What do they look like and will they be inflationary? We've heard from a number of Fed policy makers over the past few weeks on how they view tariffs, and this is really going to be key to determining the Fed's policy. I don't expect Powell to be able to say anything definitive today, but okay, here's the St. Louis Fed President. Will it be a one and done or will it be two years of sequential, a sequence of tariffs in many different sectors of the economy? If it's over two years incrementally, every month or every two months, it gets harder to parse out. And then remember what Fed Governor Waller told us? He doesn't, he's not too worried about him.

Robert F. Kennedy Jr. (3:46)

Listen.

SPEAKER_6 (3:49)

I don't think tariffs are going to have a significant impact or persistent effect on inflation, but we'll just have to wait and see what actually happens.

Sara Eisen (4:00)

And the last one I just showed, Kushkari, Minneapolis, the challenge becomes that there's a tit for tat and one country imposing tariffs and then responses and it's escalating. That's where it becomes more concerning and frankly, a lot more uncertain. We just don't know.