SOTS 2nd Hour: More Powell Probe Fallout, CPI Market Impact, & Bank Earnings Breakdown 1/13/26

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Sara Eisen (1:07)

Good Tuesday morning. Welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber. We are live from Post9, as always, of the New York Stock Exchange. Coming up this hour, first on CNBC Interview with Microsoft President Brad Smith, as President Trump touts the company's new efforts to, quote, pick up the tab for AI data center power consumption in this country. Plus, Evercore's Julian Emanuel with us to talk about his new warning around near-term volatility as we get more inflation data and earnings season kicks off. Speaking of earnings, we'll break down bank results and look ahead to more big name reports later this week with former Barclays CEO Bob Diamond.

Carl Quintanilla (1:45)

Busy morning for data as we got CPI. Now some housing numbers. Let's get to Diana Olick. Morning, Diana.

Diana Olick (1:50)

Good morning, Carl. These are just breaking. We have two months now of October new home sales data. We got October and September, both of which we did not have because of the government shutdown. I'm going to go with October right now. We got 737,000 versus expectations of 718,000. This is 0.1% below September 2025 of 738 So that tells us that 738 in September was actually above expectations of 710 And it is 18.7% above October 2024 So we're seeing a nice gain year over year. And I guess, yeah, well above expectations on that. For sale inventory is also moving higher. It's unchanged from September but is 1.7% above October of 2024 And it is a 7.9 month supply. So that's still, you know, well above that median between you want 6 months is a balance market between buyer and seller. The median price of a home sold in October was $392,000. This is 3.3% below the September price of 405 And is below the, it is 5, it is 8% below October 2024 Now, we do like to use those year over year numbers for prices. So it does show that the builders are lowering prices. What we do know in September, October is that mortgage rates basically didn't move. They were between 6.2 and 6.4%.

These numbers are based on people out signing contracts. So not closing. It's people making their decisions in October when those rates weren't really moving. And when the builders did note that there was a lot of concern about the economy. So we did get a beat on that and that's good for the builders. I would also note that we finally got housing starts numbers last week. Housing starts, however, were 4.6% below the October starts from the year before. So we're seeing a weakening in housing starts. We saw a weakening in building permits, which are a future indicator of housing starts. But a nice beat on new home sales for October, at least. Hopefully this data will start to get more timely as we move forward. Back to you guys.

Sara Eisen (3:50)

Yeah, kind of a mixed picture there for the home builders as well. Diana, thank you very much. Diana, look, I'm still focused on these new developments that are happening around this federal investigation into Fed Chair Jay Powell, because I think the developments in the last 24 hours have showed that the strategy is backfiring a bit.

Let's take the top prosecutor in Washington DC, that's Judge Jeanine Pirro, who brought this investigation. She comes out today and says, The US. Attorney's Office contacted the Fed multiple occasions to discuss cost overruns in the Chairman's congressional testimony, but we were ignored, necessitating the use of the legal process, which is not a threat. And here's the key, the word indictment, she says, has come out of Mr. Powell's mouth, no one else's. None of this would have happened if they just responded to our outreach. This office makes decisions based on the merits, nothing more and nothing less. We agree with the Chairman of the Federal Reserve that no one is above the law, and that's why we expect his full cooperation. That sounds a little like there's someone's blinking there, right? I mean, this is after a number of Democrats find, but Republicans even have objected to this probe into the Fed share, this criminal probe. Here's some key ones on the Senate Banking Committee. At this time yesterday, we were talking about Tom Tillis, but we also heard Senator John Kennedy, Senator Kevin Cramer, Senator Dave McCormick, all coming out against this criminal investigation by the federal government against Fed share J Powell. Something I've always said is that Fed share J Powell has worked really hard to earn the respect and credibility and support on both sides of the aisle of lawmakers. Remember, this is an agency that is overseen by Congress, not the administration. So given some of the Republican opposition here, the fact that now we're hearing her say that this is not an indictment, maybe walking it back a little bit, blinking a little bit. Look, a lot of people are pointing to the market rally yesterday. Carl has evidence that the market's OK with this. But what I think it speaks more to is that there was so much condemnation on both sides of the aisle against this that maybe it looks like that the president won't be able to carry this further. And the strategy looks like it is not working.