SOTS 2nd Hour: Fed Chair Race Developments, The 4 O's of a Bubble, & Moody's Chief Economist 12/15/25

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Sara Eisen (0:52)

Good Monday morning, welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber, live as always from Post 9 of the New York Stock Exchange. Coming up on today's show, the four O's of a bubble. Rockefeller's Ruchir Sharma joins us with his take on whether stocks are starting to look stretched here with the market at record highs. Plus Moody's chief economist Mark Zandi will be with us, head of a key double jobs report coming in less than 24 hours. And then later, can't miss interview with Fed Governor Stephen Myron after his third dovish descent in a row at last week's Fed meeting.

Carl Quintanilla (1:25)

Let's get some NAHB with Diana Olick this morning.

Tali Lezer (1:27)

Hey, Diana.

Diana Olick (1:28)

Hey, good morning, Carl. Yeah, homebuilders' sentiment for single family homes in December rose 1.239 on the National Association of Homebuilders' Index. That's a small beat. The street was looking for unchanged, but anything below 50 is considered negative and sentiment has now been below 50 for all of this year. Now, of the index's three components, current sales conditions increased 1.242, future sales expectations rose 1.252, the only one, the positive, and buyer traffic was unchanged at a low 26 Builders continue to cite rising material and labor prices due to tariffs, rising inventory in the existing home market also has increased competition for newly built homes. Now, regionally, on a three-month moving average, sentiment rose everywhere except in the Northeast, but that is actually where it is the highest. Now, 40% of builders reported cutting prices. The second straight month, that share has been at 40% or higher since May of 2020 And the use of sales incentives was 67% in December. That is the highest percentage in the post-COVID period. Back to you guys.

Sara Eisen (2:32)

Okay. We'll take a beat on sentiment there. Thank you, Diana. Diana Olek. This is a very exciting week because we get all our data back from, especially October and November. So it really kicks off with an unusual Tuesday jobs report coming tomorrow, where we'll get non-farm payrolls for October and we'll get the full report for November, which is going to be absolutely key. Of course, retail sales as well, see how the consumer is doing. And then Thursday, also exciting day because we get the first CPI report that we've had in about two months. So that will be key and up to date for November read on CPI. Of course, this is very important because not just for investors to figure out what's going on with the economy, but for the Fed too, which is data dependent. And we're trying to figure out if they have one more cut next year, which is what the dot plot said, or if they have two more cuts next year, which is what the futures market is saying, or possibly more. And then of course, a lot depends on who the next Fed share will be. And there's a little bit more intrigue and mystery here. I just wanted to pull up the Cal-She odds, which you can see have moved a lot since Friday, when President Trump said both Kevins are frontrunners. That would be Kevin Hassett and Kevin Warsh. So Warsh's odds go all the way up there to, I don't know, in the 40s percent, I think we are right now. Hassett still is the 45 Hassett's still, you know, 50 percent odds. But the president has expressed satisfaction with both of them. I'm not sure it matters in terms of the policy outlook, David, but there is this view in the market that, like, maybe Warsh would add a little more credibility because Hassett has been too close, which has sort of dogged his candidacy. I'm not sure necessarily that's true, but that's showing up in the notes this morning.

David Faber (4:14)

Wouldn't Warsh also, I don't know, my sense is Warsh would, as an institution, in terms of the Fed, he has a lot of ideas as well in terms of changing it.