Weak Jobs Report, AI Model Fears, and the Data Center Economy 8/7/26

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**Kelly Evans** (1:03)
Socks are rising to close out a strong week. Following today's worse than expected jobs report, I'm Kelly Evans and welcome to The Exchange. The NASDAQ jumping 4 percent this week as the semis rebound, the Socks ETF up 7 percent, while software and cyber names are breaking out as well. And that is offsetting the memory slump. The DRAM ETF is now 40 percent below its late June highs. Copper and gold also making big moves. Gold up 5 percent for its best week since January. While copper hit a new all-time high, Dan Jurgen is here to explain and weigh in on that. And the surprisingly soft jobs report. The odds of a rate hike are now falling after the US lost 23,000 jobs last month. And that's where we begin today. While this morning's report was disappointing, it also showed a lot of losses in areas like leisure, perhaps post-World Cup, and local government that may be seasonal one-offs. We have CNBC Senior Economics reporter Steve Leesman here to explain along with KPMG Chief Economist Diane Swann. But Steve, before we get into that, we have some breaking news on the Federal Reserve. What's happening?

**Steve Liesman** (2:07)
Yeah, well, it just broke. ABC News is reporting that the administration has sent Lisa Cooke, the Fed Governor, a letter saying they're considering removing her and asking her to respond to allegations of more of alleged mortgage fraud that, by the way, they have not charged her with, and she has in the past denied. Obviously, the Supreme Court ruled that the president was not within his rights to fire her last year.
I guess that was perhaps earlier this year. And saying that among the failures in the president's actions was not giving her notice. So perhaps what's happening here, all I can surmise is that the administration is going through what it believes to be the blueprint that maybe the Supreme Court laid out for the president to fire a Fed official, correcting the imperfection perhaps mentioned by the Supreme Court of not giving her sufficient notice to respond. That's all I know. I've contacted the Federal Reserve and the White House for comment, but no response at this point. The story just broke about 15 minutes ago.

**Kelly Evans** (3:13)
All right. That's a good explainer as well, Steve, about how they might now be trying to follow the process that the Supreme Court said could end up with, possibly with her removal. Diane, do you want to weigh in on that at all before we kind of get into the nitty gritty of what's happening here more broadly?

**Diane Swank** (3:28)
Well, I think it's just more noise that's really not good for the Federal Reserve and concerns about its independence at this stage of the game. We know that Kevin Warsh was hoping to use Jackson Hole as a reset. This puts even more pressure on that to look very independent from the administration, and that's a heavy lift right now, and that's an unfortunate situation that we're in. An independent Federal Reserve is really crucial when you've had inflation for over five years and even with one month of a dollar jobs report, that doesn't change that equation.

**Kelly Evans** (4:01)
Which then leads to the question I was going to ask you because, of course, we've been following your... Yeah, go ahead, Steve.

**Steve Liesman** (4:07)
I was going to make one more comment, which is just to note that the president has complained about the committee being political and whether or not they are supportive or against his views and what should happen at the Federal Reserve. So the president has expressed his displeasure of the committee, as opposed to what he mostly did was express his displeasure of Fed Chair Powell. Right.

**Kelly Evans** (4:31)
Well, as we know, he and Warsh are in touch quite a lot. So maybe you can roll this all together for us, Diane, but here comes a weak jobs report. The odds of a rate hike are falling, which is, again, my opinion playing into what Warsh probably wants to do anyway, which is not to have to hike, and maybe that's going to take the market pressure off of him that he was experiencing during that press conference last week.