SOTS 2nd Hour: Where The Fed Stands, How To Trade The Tech Tumble, & Apollo's Chief Economist 11/14/25

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Sara Eisen (1:06)

Good Friday morning. Welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla. We are live as always from Post 9 of the New York Stock Exchange. David Faber is off today following this market sell-off. Coming up this hour, Mohamed El-Erian will be with us to break down his latest thinking on the markets as stocks come off their worst day in more than a month, trying to make a comeback here in early trading that we're down about a half a percent on the S&P. Plus, the bull case for Big Tech. We'll talk to one analyst who says this week's sell-off is a major buying opportunity. And big news today out of Walmart. CEO Doug McMillan says he plans to retire after 12 years on the job. We'll talk about the man who will lead the company next and what it means for shareholders. But first, Carl, you know, with the odds at 50-50 of a rate cut in December, that's probably adding to a little bit of the angst here on Wall Street this week. I decided to go back and look at what every voter has said, because I think there's a lot of confusion about, let's be voters and non-voters. The voters are the ones that will have a say when it comes to December policy. And the good news is, is that we should get some more economic data now that the government has reopened before the early December Fed meeting. But here's why the market is so unsure about what the Fed will do on that day. I think there's a lot of sort of, eh, we can afford to wait and see kind of messaging. Let's just look at some of the voters, okay? Michael Barr, he's a Fed governor. Here's what he has said in mid-October. The FOMC should be cautious about adjusting policy so that we can gather further data, update our forecast and better assess the balance of risk. Doesn't sound like he's itching to cut. Michelle Bowman, who we know is in contention for next Fed chair, she sounds like she's up for a cut. Although it was in September, she said recent data show materially more fragile labor market, along with inflation that excluding tariffs has continued to hover not far above our target. Lisa Cook, governor, kind of could go either way. I'm reading her comments. I'm committed to reaching our 2% inflation target. Moreover, I will be prepared to ask forcefully if the tariff effects appear to be larger or longer lasting than expected or if other evidence emerges that higher levels of inflation are becoming entrenched in expectations. In other words, sounds like she could go either way. What I think caught the market off guard is some key members like Jefferson last week in Germany saying, the current policy stance is still somewhat restricted, but we have moved it closer to its neutral level that neither restricts nor stimulates the economy, which kind of tells you that he might be okay also pausing. And Mussolam saying on Thursday, monetary policy is somewhat between modesty restrictive and neutral, and it's getting close to neutral in terms of financial conditions. In other words, they feel like they've done a lot in terms of cutting interest rates, and it does feel like they're inching more toward being cautious. Let's see what the data shows. That's why I think Carl, the Susan Collins data saying, I would be hesitant to ease policy further at this point, absent a notable label of market deterioration, because then it sounds like she would be a dissent if the Fed cuts. Schmidt, last time, dissented because he wanted to stay pat. So the assumption is that he would dissent again for a cut. So, I mean, he's speaking this hour.

We'll see what he says. But that's the assumption. And maybe Powell doesn't want to have two dissents or more, you know, in favor of staying pat and not cutting interest rates. So I think that's why the market is confused. But hopefully we'll get some jobs data, although it'll be a little stale. The next data report will get its September jobs.