Fed Leaves Rates Unchanged… And SoundHound AI’s Nvidia Partnership 3/19/25

0:00Live from the Nasdaq market site in the heart of New York City's Times Square this is fast money Here is what's on tap tonight. The Fed in focus stocks up and yields down after the central bank held rates steady again. What changed in their outlook and what do they have to say about the impact of tariffs? We will dive in. And NVIDIA's Jensen Wong holding a Q &A session with the media for the past hour. All the headlines from that event and the CEO of SoundHound on his expanded partnership with the chip duck giant. Plus, Boeing gets a bounce on comments from its CFO. Cigna Jewelers rings up a win after earnings.

0:36And we're counting down to Nike results tomorrow. How will tariffs impact the shoe giant? We'll find out what the options are saying later this hour. I'm Mike Santoli in for Melissa Lee. Coming to you live from Studio B at the NASDAQ and on the desk tonight, Karen Feinerman, Dan Nathan, Guy Adami, and Michael Cantopoulos, Deputy Chief Investment Officer at Richard Bernstein Advisors. Welcome to you all, and thanks for having me. Whoa, whoa, whoa, whoa. Slow your roll. Important things. I mean, this is the hardest working person at the entire net, Mike Santoli. Do you agree with that, Dan Nathan?

1:12100%. And he's gracing us after an extraordinarily long day, finds out he's hosting Fast Money during his last show, and here he is. Come on, a little round of applause for Mike Santoli. Little known, every day I save up like one hour. I still have left in the tank. So hopefully hopefully this is it. Let's do it. We'll see how it goes. But we do start with stocks surging after today's Fed decision, though closing off their highs of the day. The central bank holding rates steady for a second straight meeting, but saying it still sees two cuts potentially ahead this year. The Fed also upped its inflation expectations as economic uncertainty rises and tariffs begin to have an impact.

1:52Our Steve Leisman has all the details. Hey, Steve. Hey, thanks, Mike. Yeah, the market's taking a dovish cue from the Fed today. It kept rates unchanged, 4.25 % to 4.5 % as expected, and that's despite concerns about higher prices coming from tariffs. It emphasized the uncertainty and the outlook from these changing policies from the Trump administration, but it still forecasts rate cuts this year.

2:17If the economy remains strong and inflation does not continue to move sustainably toward 2%, we can maintain policy restraint for longer. If the labor market were to weaken unexpectedly or inflation were to fall more quickly than anticipated, we can ease policy accordingly. Our current policy stance is well-positioned to deal with the risks and uncertainties that we face in pursuing both sides of our dual mandate. Notice no talk of hikes there. Fed officials in their projections raising their core inflation outlook this year by 3 tenths to 2.8, most of which is linked to higher tariffs. They lowered the growth forecast by four-tenths.

2:54That's down to 1.7 percent, exactly, by the way, matching the CNBC Fed survey. And yet it kept that forecast for two rate cuts this year, with the median forecasting a 3.9 by the end of the year from the 4.37 now. The takeaway is that Powell made clear he would be watching closely to see if tariff raised prices. Only one time it became a broader inflation problem. He's pretty cool about it. He basically said he would not be taking any preemptive action. And, Mike, I just want to get on a little news right here that I got while I was talking there. Megan Casella, our ace Washington reporter, has confirmed a Washington Post report where she found that one White House official tells me the total value of goods hit with tariffs on April 2nd could be, quote, in the trillions.

3:37But nothing is for sure yet. So there's this idea that there is, as you know, a massive additional wave of tariffs coming. Powell knows about it, but he was pretty cool in the face of it. Hey, Steve, it's Karen. Thanks for being on today. So right after the language came out, the market down and then up and then down a little bit, seemed like it was the press conference where it seemed to be that it was the absence of a hawk is a dove. Was that your take on it? I think so. Look, the chair has been kind of on the dovish side. If you peered inside of the dot plot, the so-called projections for rates this year and next, it was a little hawkish.

4:21Your doves went away. They came up towards the median. And there are a few people out there, four now, who are saying no cuts this year. But again, no talk, Karen, of rate hikes in the face of this, no preemptive actions and talk to the idea that these tariffs could be transitory. And don't say thanks for being here. I have to be here if you're throwing down the gauntlet of Santoli being the hardest working guy. I'm just being polite. One and one. So, Steve, I mean, listen, first of all, on a daily basis, I say things I regret. But with that said, it was about 11 months ago that when asked about stagflation, Chairman Powell said, I don't see the stag nor the flation.

5:01Yet today, as you just mentioned, they lower their growth forecast and they raise their inflation forecast and the unemployment forecast as well. So was that sort of tacit acknowledgement that, you know, maybe I shouldn't have said it when I did? Well, no, because the stagflation he was asked about 11 months ago is very different from what he faces now. And Guy, we're kind of simpatico in that thinking. That was exactly the question I asked him, which is how the Bank of Canada responded to that where he said, hey, or the Bank of Canada said, I'm going to deal with inflation and I can't do much about a trade war.

5:36Powell didn't kind of take that bait, didn't take that stance. He kind of said, we're going to wait and see. We don't have that problem now. He is indeed, as you say, Guy, facing likely higher prints on inflation, likely lower prints on growth, but neither is going to dissuade him, I think, or persuade him into the idea of hiking rates because he thinks he's in a good place and because the unemployment rate is relatively low and growth has been pretty strong. Look, if the bottom drops out, the Fed will act. And that's the idea. There's a couple of different ways to get to lower rates, lower inflation as well as lower growth and higher unemployment.

6:15So there's two different ways to get there. and doesn't look like there's a whole lot of ways or a whole lot of routes right now to higher rates themselves. Right. And just with so many acknowledgments that there's a pretty opaque outlook ahead of them and they got to take the time and the data as it comes. Steve, thanks a lot. We'll see you tomorrow, I'm sure. Dan, the market action as it was unfolding, it seemed like just the general tone from Powell of some tolerance of higher inflation readings at the same time they're keeping their two potential cuts on paper was enough for a market that's kind of oversold and was down 1 % yesterday.

6:52And we obviously still closed below yesterday's odds. Well, you do the work all day long, and you talk about a lot of these indicators, the sentiment. And again, it was pretty oversold. And whether you're looking at it technically, whether you're thinking about it anecdotally, just talking to folks on the street and, you know, look at the degrossing that we've seen over the last few weeks, but also the pace in which the market sold off. It's really hard for us to put that in some context. We've all been doing this a long time. I think that's one of the reasons why, especially if you're like a retail investor, you didn't really have time to think about a whole heck of a lot, the way in which we just went down 10 percent in a straight line.

7:24The good news is the S &P, you know, the silver lining thing that I do most of the time, you know, is that the S &P is only down three and a half percent of the year. You know what I mean? So maybe they took a lot of this euphoric sort of price action and some of the biggest names in the market that we've all been talking about this concentration for a long time. I think almost more importantly, it's the meme stocks like Palantir that went to$100 billion, then$200 billion, then$300 billion. To see the back of some of those things broken makes me feel a little bit more optimistic that you might go back into the prior leadership if we do sort of get an all clear on some of the tariff stuff and some of the rate stuff.

7:58Yeah, I mean, XMAG7 markets up this year, and sometimes the MAG7 acts as defense. We'll see if that can happen again. Mike, what's your take on how the bond market took? It obviously yields pretty much down in a pronounced way across the board. Yeah, I mean, listen, I think the bond market is pretty much what you expected, right? You didn't have a huge change in the dots, obviously still pricing in two cuts, higher expected inflation. You expect a steeper yield curve, and that's pretty much what you had from the bond market. You had a steeper yield curve. I think that probably continues to steepen as well.

8:27When you look at, you know, you miss inflation expectations, you look at input prices, you look at the Fed's own forecast, and then you look at the lower growth, you know, 1.7 percent GDP. you'd expect a steeper yield curve. So I think, listen, the Fed, excuse me, the bond markets seem to take this in stride. I think we're going to be in a range bound market for some time. I do think you could go higher on rates because if you do get a strong equity market, if growth doesn't disappoint, you know, you don't get down well below 2 % on GDP, if earnings remain strong, then essentially the Fed is remaining easy.

8:59Liquidity is plentiful. Look what Bitcoin did today. And you could actually see higher yields in the back end. And so that's, you know, I think that could be in the future over coming months. Powell was pretty dismissive of the University of Michigan inflation expectations number. Now, when it's convenient on the way up, he was grabbing hold of it. But I do think in general that's the big debate, and he sort of characterized it this way, too. When we've seen consumer confidence, CEO confidence, small business confidence plunge from high levels, and what does it mean? Does that actually get transmitted into real hard data?

9:31And I think that's the vigil right now. Yeah, and I mean, I think Chair Powell mentioned this during the press conference in the sense that oftentimes the soft data, the survey data doesn't actually translate into the real economy. But remember, a lot of the data that we're seeing on the economic side is lag data. So we don't really know where things are going to go going forward. The best thing that we can model are profits, and profit growth still remains pretty healthy. And so, you know, that's sort of my cue in terms of where the equity market's going to go from here and, you know, really sort of where the opportunity set might be.

10:00So, Karen, do we put the Fed in the column of things that have the markets back, or is it still just sort of completely, you know, in the middle here? I mean, I guess I think of it as having a put, but it's not an at-the-money put at all. It might be, you know, several percent out of the money, so I don't take a lot of faith in that. But I do, I have noticed, I mean, you know, discretionary, which that consumer number was terrible, yet the stocks did seem to bottom right around that time. Yeah, yeah. Yeah, I mean, they were stretched, I'm sure. Guy, I'm usually a, you know, half full. A Fed balance sheet doesn't really mean that.

10:36No, thank you for mentioning that because the runoff, this reduction in the runoff. Yes. You're 100 % right, going from$25 billion down to$5 billion starting in April. I think that's what the market sort of took its cues from. And that initial run higher, people were saying, party on, we're going to go from QT to QE. I don't think it's that linear, in my opinion, but I think the market took a lot from that. I think it's one of the reasons that yields might have gone lower in a meaningful way. But with that said, you could also make an argument that that could potentially be sort of inflationary as well.

11:04So it works in the short term. It might sort of nip them in the butt in the longer term. I mean, it's a couple hundred billion less that the Treasury is going to have to issue, essentially. I mean, so just right there, I don't know if that's inflationary just because the Treasury has got to issue less debt. But it was maybe just a – was it a slight surprise, Mike? No, I think the bond market was pretty much. It was fairly in line with what the bond market was expecting. So I don't think that was a huge driver today. But, you know, if you had gone to zero, I think that would have been a little bit of a surprise.

11:34So was the bond market at least kind of bracing for something a little more hawkish? I'm just trying to explain the market action after. You know, I don't know if it was necessarily bracing for anything more hawkish. I think it was just sort of more of a relief that it was in the sense that, you know, a relief that this is going to be the status quo from here on out. It's not necessarily that there is a big expectation for something more hawkish. But, hey, you know, he acknowledged the uncertainty out there. That keeps them on, you know, on hold, keeps the cuts in play. And so, yeah, I think it's just sort of a nothing burger.

12:08Yeah. And, you know, also just taking what Steve was saying that Megan has confirmed about White House saying, OK, so whatever we do on April 2nd is going to cover trillions of dollars. First of all, goods imports annually like three trillion. Yeah. Right. So maybe not that much of a surprise that reciprocal tariffs are going to apply to that much in the way of goods. But it's a debate as to whether we should think of it mostly as friction that causes growth to slow or as something that's. I think the friction. I mean, when you think about just what's going on, you just mentioned all of those sentiment indicators, consumer sentiment, small business.

12:42You know, they've fallen off a cliff because the uncertainty that we have on the tariff front. And if you go back and look at Trump 1.0, I mean, the tariffs did not create new jobs here. It did not reshore a whole heck of a lot of stuff. When you think about agriculture, they might have taken in$60 billion in tariffs on that. They gave them right back to the farmers. You know what I mean? So to me, I think it has less to do with policy and more to do with politics. But I look at what's going on right now, and I say to myself, I just have a list right here. I haven't seen these sorts of companies announce layoffs in a very long time.

13:14I have to go back to maybe 2022. too. Starbucks, Chevron, Estee Lauder, Meta, Southwest, and Morgan Stanley. That's just a handful, and they're small right now. But you know what's much bigger? It's the ones that are being cut in the government. And if you start seeing tariffs sort of weigh on all of those confidence indicators, we start seeing lower prints, 1.8 % GDP. No one was expecting anything with a one handle for the better part of this year. So again, I think we run the risk of the longer we have politics, we're playing politics with this policy, then I think you have the risk of the economy slowing, unemployment going higher, and a whole host of other things going off the rails.

13:53Yeah, well, we'll get weekly claims tomorrow. It doesn't count federal employees, but you know, it's also, the case has been made. I mean, federal employment is pretty small, even as a percentage of public sector employment. You know what I mean? Like, state and local is like eight or nine times that. Maybe that's going to be a lagged effect. All right, we'll take a look at another one of the big drivers today. NVIDIA shares up nearly 22 % today as its GTC conference continues. CEO Jensen Wong telling CNBC this morning that the tariff impact on the company will be minimal. He's been holding a Q &A session with media for the past hour.

14:24Christina Parts Nevelos was there, and she joins us now with all of today's highlights and what you heard that was fresh. Christina. Yeah, I just ran over from two hotels, so it's still ongoing because we started a little late. And I started that was my first question question to the CEO, Jensen Wong, is if he's saying that there's going to be no meaningful impact in the near term regarding tariffs, how is that going to happen? And he said that they are if they get on shoring going by the end of the year, things will be quite good. So he didn't really elaborate on what on shoring meant, given the lack of U.S.

15:00president presence for manufacturing. Of course, we have TSMC, but Intel, you know, in terms of advanced nodes, a lot of it isn't up to par. Global foundries not advanced enough. So I was a little bit still confused on how he plans to onshore everything in the near term when we don't have enough manufacturing capabilities. And it's not going to be something that happens in five years. We all know how expensive that is, especially with a president who doesn't want any Chips Act funding going out or any more going out for that sake. Point number two was the reframing of NVIDIA. He just finished saying that we build chips.

15:31We are not a chip company. We are an AI infrastructure company. Then a few seconds later, he followed up and said, we build chips, but we are an AI algorithm company. So in other words, he wants you to know that they're building everything from the sparks all the way to the super pods and supercomputers and really just the full entire stack. And that leads me to my third point, which is demand. I think that was the biggest concern for him that he needed to address is that cloud service providers might be cutting their CapEx, specifically Microsoft cutting their leases. And so in the financial analyst Q &A this afternoon, he spoke about that.

16:07And he said that he underrepresented the demand for Blackwell in the keynote. He just wanted to make sure that everyone knew that demand is out there, but there's still so much more coming from everyone else. But then he also said he was the chief revenue destroyer. And what he means by that is when he's putting out new products every single year, inevitably you're going to cannibalize your own business. And I think that's where the disconnect continues, is that you have the cloud service providers that are really driving a lot of that demand. But what are all the other enterprises doing? Are they waiting?

16:40Are they spending a lot right now? And then that means they won't spend a lot in years to come. So I feel like that's still a concern for some of the analysts here and some of the tech guys here. So those are the three points I got to take away from today, Mike. For sure, Christina. Yeah, I mean, a lot of reassuring words. It's a stock. Modest response. The street was out and defending it. We will see how it continues from here. Thank you, Christina. Don't miss Jim's interview with NVIDIA CEO Jensen Wang on Mad Money tonight. That is at the top of the hour right here on CNBC. Dan, we're getting these headlines as Jensen Wang continues to give this press conference.

17:17He was asked about the potential of buying Intel or a stake in Intel. And he said nobody has invited us to a consortium to purchase a stake in Intel. I don't know why that would happen. And again, you know, they're talking about some other companies like Taiwan Semi and maybe even AMD, like getting into their fabs. You know, they had this big plan to do that. I think this stuff with Jensen is really interesting. He's been talking, it seems like, nonstop for two days, right? And the stock hasn't really, I know it bounced a little bit today, hasn't gotten out of its own way. If this was six months ago, I mean, the stock would be making new all-time highs.

17:47Like, just think about it. From a sentiment standpoint, and some of the stuff that I was reading, there's a great article in the information today saying top developers want NVIDIA Blackwell chips. Everyone else, not so much. They're talking about some of these data center companies that have just gotten their first Blackwell chips. And he's talking about Rubin, right? And so, like, at the end of the day, it went from being very capacity constrained about six months ago, a year or whatever. Now we're kind of seeing some of this come into equilibrium. We saw this. Satya Nadella was on Brad Gerster's podcast, I want to say, a few months ago.

18:16Satya said we are no longer capacity constrained as it relates. He said we're power constrained. But turning the power on is a totally different thing. That's going to take a while. So to me, I think the fever's broken in this trade for a bit. I said it last night, but I just don't know what the next catalyst is. He's out there. He's wearing the leather jacket, and he's talking up Rubin, and it doesn't sound like a lot of people are that excited about it right now. Look, it's nine months it's more or less been in this range, the stock. In the year and a half before that, it added$2.7 trillion in market cap, right?

18:46So maybe it's kind of like the market rushed to this point where it's got big, high expectations for how long it can go. Taking a little bit of a breather. Dead on, spot on. I mean, look, if you want a tradable bottom, it comes in the form of what we saw, I think, September 6th. Traded down to 103. Look where we just traded down to on March 11th. So that gives you something to shoot against on the long side. But to Dan's point, it's not like it had this robust move like we've historically seen after he speaks. Yeah. Is it cheap enough, Karen? I own it. Yeah. So I've owned it for a long time. I totally agree with Dan.

19:19And, you know, that sort of verbiage six months ago would have been very different. But we'll see. Later in April, we'll see the big cloud service providers. They'll talk about CapEx. That will matter a lot. For sure. All right, coming up, Boeing's big day. Shares jumping as the company CFO weighs in on production and free cash flow. The updates that had investors piling in. Plus, GM revving up in recent weeks. But can the stealth rally accelerate further? We'll debate when Fast Money returns. We are back in two. Welcome back to Fast Money. Shares of Boeing leading the Dow and the S &P 500 today up nearly 7 percent after the company's CFO updated investors on production and cash burn improvements.

20:04It was the stock's best day in nearly two years. Phil LeBeau has the details. Hey, Phil. Hey, Mike, this was fairly upbeat guidance from the CFO of Boeing, Brian West. Now, he didn't give formal guidance in terms of earnings per share expectations, but he did give an indication of where the company is and how it is improving. Three things stand out. First of all, he said in the first quarter, the cash burn is easing. That's a huge, huge concern for investors. Working capital is less of a drag, and production is improving. Anyway, you look at that. If you are bullish on Boeing, you want to see these incremental steps here.

20:39And in terms of deliveries, keep in mind that they pretty much, I wouldn't say they bottomed out last year, but they dropped considerably down to 348. The expectation, they've delivered 89 in the first two months of this year. The expectation on the street is that they hit 551 for the full year. And again, there was no guidance today, but this was positive encouragement from Brian West as you take a look at shares of Boeing. And keep in mind that when it comes to tariffs, a lot of people say you got a lot of aluminum. You got a lot of steel in these planes. Surely they're going to be impacted.

21:12He said, look, the tariffs, at least in the near term, no material impact. They've got big, big inventory. That's been known for some time. They also have longstanding contracts with their suppliers, and they source most of their aluminum and steel here in the United States. Put that all together. It's the reason Boeing shares were up almost 7 percent today. Mike? Yeah, and even in normal times, I mean, the price of aluminum can swing around pretty wildly, maybe even more than the percentage tariff that might be put on there. Phil, thanks very much. Karen, was this encouraging? It was encouraging.

21:46I mean, you know, free cash flow, that's going to be the ultimate goal here. You know, we have these acronyms on this show where we make our trades for the year. He doesn't know. He's just nodding. You pick a letter, you know, like he has tube. Right. Right. Right. So I have carved the B in carved is Boeing. OK, his B is Baba. Anyway, I like I like Boeing. I like I like the turnaround. I mean, you know, when you start deliveries, good things happen to working capital and good things happen to cash flow. But he also held out. This is the CFO, the opportunity there. And when they could start really ramping up and converting into cash flow, that's what it really.

22:25Yeah. I mean, that was a core piece of the story for such a long time. All right. There is a guy. What's that? I thought you were going to a break. No, I like. Listen, if you watch Stephanie Link, she's been on all the morning shows. I think that's her top pick for 2025. And it makes sense. The reversal we saw, I think, is interesting. We didn't trade down the levels that we saw when they priced that secondary. The reversal was significant. And this stock could easily be 205, 210. And nothing has changed at all in terms of the fundamentals. So I think Boeing still will buy here. Yeah, I mean, investors are itchy for something that feels like the next GE or one of these mega turnarounds.