SOTS 2nd Hour: The Fed Playbook - What Comes Next, & LIVE: Bullish, Expedia CEOs 9/18/25

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Sara Eisen (1:09)

Good Thursday morning, welcome to Squawk on the Street. I'm Sara Eisen, with Carl Quintanilla and David Faber. We are live, as always, from Post 9 of the New York Stock Exchange. Take a look at stocks here on the Early Action. We're digesting the Fed. We've got Intel sharply higher. S&P's up by half a percent. NASDAQ also rallying. Tech leads up 8 tenths, and the Dow's up 83 points. As for Treasuries right now, take a look. We are seeing some selling. Yields are a little bit higher. We see the 10-year going past 4-1, and the 2-year 3.58 percent. We'll talk a lot about what we learned from the Fed. Today I mentioned Intel shares are skyrocketing as Nvidia takes a multi-billion dollar stake in the company. We'll talk to long-time chip analyst Patrick Morehead about what the news means for both companies and their competitors. Plus, reaction to the Fed decision and where the market will head next. Bank of America, Savita Subramanian, and Evercore's Krishna Guha join us with their first take. A newly listed crypto firm Bullish moves higher this morning on the back of earnings, CEO Tom Farley will be with us to break down the results.

Carl Quintanilla (2:08)

First though, let's get some LEI this morning with Rick Santelli. Hey Rick.

Rick Santelli (2:13)

Good morning Carl. Yes, leading economic indicators for the month of August. Expected down 2 10s, double it. Plus, we're down half of 1 percent. And that number is the weakest going back to April when it was down 1.3. We did have a revision in the rear view mirror and the only reason I mentioned it, it takes one of those negative numbers last month, minus 1 10th, and makes it positive. So, instead of 7 of 8 being negative this year, it's now 6 of 8 Last year, it was 10 of 12 The year before is 12 of 12 Leading economic indicators have been leading us in negative territory for years now. Listen, it's a big day in the market. You heard Sara. It's only up 3 basis points at 412 in a 10 year. It's only up 3 basis points at 358 in a 2 year, but it's much more than that. If you look at the 2 day charts, the entire curve yields went up. Even Europe yields went up because all the fixed income, all the securities around the globe, the sovereigns, when they traded above yesterday's high yields, they zoomed. And this is a rejection of 4% in the 10s. So even though it's only up 3 basis points, consider the investors and how quickly they reversed from the notion that Fed easing was going to put longer dated treasury yields under, and especially the 10s under 4%. It's not happening. Most likely, we're going to see a B line right back to that 4.25, potentially into the 4.30s. If we settle here, it'll be a 2 week high yield close for 10s. Sara, back to you.

Sara Eisen (3:44)

Okay, Rick. Rick Santelli, thank you very much. Going to dig into that a little bit more as well, because I think one of the key questions that investors are asking is, now what? We got the first rate cut of the year. The market had really high expectations that we're going to see at least two more this year. I'm not sure that Powell necessarily promised anything as far as what's next. Here was the money quote from the news conference that everybody's trying to read into this morning. Listen.

Jerome Powell (4:15)

I think you could think of this in a way as a risk management cut, because if you look at the SEP, actually, the projections for growth this year and next actually ticked up just a little bit, and inflation and unemployment didn't really move once. So what's different now? What's different now is that you see a very different picture of the risks to the labor market. You've seen, you know, we were looking at 150,000 jobs a month at the time of the last meeting, and now we see the revisions and we see the new numbers. And I don't want to put too much emphasis on payroll job creation, but it's just one of the things that suggests that the labor market is really cooling off. And that tells you that it's time to take that into account in our policy.