Showdown At The Fed… And Another Hit For UnitedHealth As The DoJ Investigates 7/24/25

0:02Live from the Nasdaq market site in the heart of New York City's Times Square this is Fast money. Here's what's on tap tonight. President Trump making a rare visit to the Fed this afternoon, the latest in the escalating feud between the two. The president insists for policy and the impact it could have on rates and time to buy. Health care stocks have been struggling this year, but one top analyst says the worst may be behind them. He'll lay out his top picks in the space later this hour. Plus, airline stocks get grounded after the latest slate of earnings. Industrial size losses for Honeywell after its results and a burrito buzz Hill on Chipotle as those shares see their worst day in nearly eight years.

0:37The trades on all those moves coming up. I'm Melissa Lee coming to you live from Studio B at the Nasdaq. On the desk tonight, Tim Seymour, Mike Coe, Dan Nathan and Guy Adami. But we start off with President Trump turning up the heat on Fed Chair Jerome Powell. Just in the last hour, Trump became the first sitting president to visit the central bank since 2006. The visit comes as Trump has spent months berating Powell for not cutting rates and amid more recent criticism over the cost of renovations of two central bank buildings. Eamon Javers is at the White House with the very latest. Eamon. Melissa, it was dramatic.

1:10It was a power play. It was unprecedented. And it was awkward at time, this meeting between President Trump and Jay Powell at the Fed. Remember, the president's been harshly critical of Powell for not lowering interest rates, also harshly critical of Powell over the cost overruns of this new Fed construction. He went there to the Fed to see the construction in action. The Fed chair was his tour guide, at least for a time. And they approached the media and on camera had a bit of a spat about exactly how much this renovation costs, which costs should be included in the total number, which costs shouldn't.

1:44Take a listen to that moment. 2.7 is now 3.1. I'm not aware of that. Yeah, it just came out. I haven't heard that from anybody at the Fed. So you see the president there taking out a piece of paper listing the details. Powell looks at the piece of paper, says, well, actually, you're including the Martin building, which is the third building on that complex, which has been previously renovated. Powell says not fair to include that in the total. Trump says, well, it's part of the overall building process here. You know, the two men really disagreeing strongly on camera. But then there was this moment as well.

2:21The president then moves through a tour, gets to the end of the process, talks to reporters in sort of an impromptu scrum, and he's asked by a reporter whether or not cost overruns at the Fed building are a for-cause reason to fire Powell. And listen to how he answers that question, because I think the nuance here is important, Melissa. Is this project a viable offense for Jerome Powell? Look, I would love to see it completed. I don't want to put that in this category. It's a very complex thing that could have been made simple. So, Melissa, as provocative and dramatic and unprecedented as this visit was to the Fed by the President of the United States, it's certainly a power play.

3:06But there you hear the President backing off this idea that he's going to want to fire Jay Powell. The President said he doesn't want to fire him. He has said in the past he's just going to wait until Powell's term is over. He says he's got a couple of other candidates in mind. So the president pushing the pedal, but not all the way to the metal here. He backed off of the harsh, harsh personal insults that he's used over social media against Jay Powell. Didn't use any of that in person, said he wanted to be polite, didn't want to get personal and then didn't call for Powell to resign. Didn't say he wants to fire Powell.

3:38So the president not going all the way here, I think. And that's the nuance I think markets are going to be looking for, Melissa, in the end. I think it was interesting, too, Eamon, that the president, you know, he referenced Europe in cutting rates, I think he said, 11 times. And the Fed hasn't cut once, which we know is not true. But in the case still to cut rates, he's still putting the pressure on, even though he's not, you know, dangling, you know, firing him anymore. Yeah, he's absolutely putting the pressure on, absolutely demanding a rate cut and, you know, embarrassing Jay Powell, right?

4:11He's accusing Powell of mismanaging this multi-billion dollar project and forcing him to go on a tour of it on live national television. That is an embarrassment. He's hanging that embarrassment over Powell's head at the same time demanding those rate cuts. So this is not nothing. This is definitely extreme political pressure. But at the same time, he's backing off some of the harshest rhetoric. So it's an interesting sort of push-pull that's going on here. I think markets are going to come away from this saying, well, he's not calling for Powell to resign. He's not firing Powell. We're reassured.

4:41Yep. Eamon, thank you. Eamon Javers at the White House. I think that is exactly the headline that we walk away with out of this press conference. That's the takeaway. And we're here for markets, not political stuff. And I think that's right. And, you know, there'll be days when the rhetoric gets ratcheted up in terms of. But I think I don't think necessarily that something is imminent. I thought that a couple of weeks ago, I thought it was at a point of anger where he was going to push a button over the weekend. Doesn't look like it's going to happen. With all that said, I mean, slow and steady wins the race.

5:10He said, if it ain't broke, don't fix it. Things are fine. And that whole argument that the rest of the world is lowering rates, my grandmother used to say to me, Melissa, little guy, if everybody was jumping off, that would be me. Would you do it as well? And the answer, of course, is no. It has nothing to do with what the rest of the world is doing, which I find the fact that people don't acknowledge that to me is sort of interesting. Well, we also have the most resilient economy in the world. You know, we have like unemployment near record lows, right? We have GDP that's tacking right around, you know, pre-pandemic levels here.

5:39And if you think about what's going on in the markets, I mean, the stock market doesn't care. The bond market doesn't really care. The volatility index is literally at 15. I mean, this is a level that we haven't seen in a very long time. So, I mean, I suspect that we're going to get through this meeting. They're basically going to be, you know, status quo. This is what everyone expects. If you look at the CME Fed Funds tracker, it's only implying about a 40 percent chance that we're still 25 basis points, you know, in September. I mean, right now, I mean, like everything's fine, right? The stock market doesn't care.

6:08And if you just look around, I know we're going to hit a bunch of these stocks. There's a huge disconnect between the indices, though, and what we're seeing about companies, what they're saying, what they're reporting and the reaction to them right now. And I think something is going to actually have to give there. I think the monetary policy thing is probably going to take a backseat in the not so distant future. And it's not just a stock. I mean, the bond market has been pretty complacent about all of these developments. You can make a case for rates to go higher, significantly higher. Uncertainty about the Fed and whether or not Trump is going to fire the Fed.

6:36uncertainty about having to issue all sorts of debt to pay for our deficit. I mean, none of this has really upset the bond market too much, Mike. Well, I mean, just take a look at what twos and tens did today. You know, we saw that two-year rates actually ticked up just a little bit more than the tens did. You know, it's interesting because for all of the complaining that the president is doing about rates, you know, what is it that the White House would really like to see as far as rates are concerned? And what they'd obviously like to see is that their funding costs go down, right? So they're envious that the Biden administration was funding massive amounts of debt at, you know, an adjusted weighted average coupon that was, you know, less than 2%.

7:16And we're not going to go there, right? So we're not going to get 10 years back below 2%. We're not, we're the zero interest rate policy. That's dead and gone. And, you know, there's not something all that attractive about funding everything at the short end of the curve either, which is essentially what they're trying to do. But how much are they saving? 50 basis points on 15 and a half trillion of refi, which is essentially what we have to look at this year, next year and the year after. That's only going to save you, what, about 75 billion dollars in interest rate expense. So, you know, I think Trump is happier having something to complain about and someone to point the finger at than really putting somebody else in that spot.

7:55What's it going to do, honestly? Well, that's a fair point. But at the same time, you know, his argument and those who advocate for lower rates, their argument is, you know, borrowing costs for everyday Americans will go lower as well, Tim. Borrowing costs are in the tens, though. That's what's going to matter for housing costs and things like that. It's off the tenant. You can't force that lower by lowering the federal target rate. And the Fed can cut rates. And we've seen what the 10-year yield has done in the face of a 50 basis point cut. Gone the opposite direction. But there is an argument to be made that the Trump administration does seem to want to desperately help the housing market.

8:29And for that, Tim, that that seems to be directionally important as an investor who's potentially looking at housing plays. Except for the fact that I think the long end of the curve is not going to necessarily be impacted by what the Fed does in the short end of the curve. And we've seen this. And I mean, you know, 420 to 450 is where we've been on this move in the 10 year over the last three to six months. I mean, it's really done almost nothing. I just think that it's a lot of political bluster. I think Scott Besant, when he Treasury Secretary Besant, when he was hedge fund manager, Besant was someone that wanted a lot less fed in, I think, in our lives.

9:11And I think there are a lot of people out there, including the bond vigilantes, that feel actually that central banks have had too large a role. So on some level, I think Scott Besson has been pretty consistent. I think on some level, the idea that the Fed shouldn't be overly involved in markets, I think, is something that is a fascinating conversation to have. I think it's absurd to talk about global interest rates and say the U.S. should be going lower because interest rates around the world are lower and compare us to other interest rate regimes. And that's been done on our show. It's been done out there, you know, maybe even in Washington.

9:45I think the most important thing for markets right now is that the volatility in the bond market's been lower. And outside of I know it's it's a big caveat, but that that V-shaped move or the move down on Liberation Day, if you remove that, we're in an uptrend on markets that goes all the way back to November 22, that has had some band of volatility in it, but basically has been unabated. And we're now almost 37 percent off those closing lows on the Nasdaq from April 8th. So markets aren't paying attention to any of this. For more on what this all means for the Fed, let's bring up CNBC senior economics reporter Steve Leesman.

10:22Steve, great to have you with us. You got a smile on your face. What'd you take? I mean, the big headline is that he's not going to fire Powell. I think that's an important headline, but I think you're really into a fascinating conversation, which is how dovish does the market expect the next Fed chair to be? If you take a look at the two year, it's trading at around three ninety three ninety one today. Well, ticked up a little bit. And that's been a pretty consistent range. It kind of tells you that the market and the same is true when you look at Fed probabilities. The market does not expect Trump's next choice for Fed chair to come in with his rate cut guns blazing.

11:03I'm looking out the curve, guys. OK, so if you look at September, 67%, 68%. And then go ahead and look at the second cut. Comes in December, 65%. That's the next one. But then you look down the road. You don't get a third cut until April. And that's where Powell is still there. So you don't really see too much in the way of the market thinking that the Fed is going there. Plus, another thing I want to underscore what Mike was saying, Melissa, the Fed legally cannot lower interest rates because of debt service costs. It has a mandate to do it for employment or inflation. There is no mandate. It would not be legal for them to lower it because of debt service costs.

11:49And you don't really want it to happen for that reason. Think about it. Let's say you took out a mortgage and that the bank said to you, yeah, take this mortgage out. But we're going to try to raise your interest rate every chance we can. That's kind of what they're talking about. Right. Well, I mean, Kevin Warsh, when he was on Squawk Box, talked about the Fed Treasury Accord from 1955. I mean, under that sort of scenario, let's say the Fed next Fed chair is of that mindset. There could be some more cooperation in terms of what you do with rates and what you do with managing the balance sheet to perhaps manage rates.

12:25So the 51 Accord was one that gave the Fed independence, Melissa, to pursue its mandates from Congress and not have to be concerned about the debt service, which it did prior to that during World War II and the aftermath of that. So that was the Treasury Accord back then. If you did it again, you could imagine some coordination between the Fed and the Treasury about the balance sheet if the Fed was going to wind it down, that kind of thing. But in terms of making policy based upon debt service costs, I think there'd be a bit of a rebellion in the bond market because of that. And you sort of, Melissa, spoke about that earlier, about how the bond market went the other way the last time the Fed cut.

13:07But it's very important, Melissa, when the Fed cuts that it has the market with it and not work against it because the Fed works through the market. So you can't really piss off your agents in the process of trying to lower interest rates. I know you know this adage, Steve, that every new Fed chair is challenged by the bond market. And I can make an argument that the most bullish thing for the bond market, or in other words, the best way to keep rates where they are, is to leave Jerome Powell in the seat to make a change now. That next person will absolutely be challenged. Thoughts on that? I think that's a great point.

13:43And you're absolutely right. Historically, it is true. It was a few months for Greenspan. Bernanke ended up being challenged. Everybody ends up being challenged in some way. Powell had his whatever you call it. I can't remember what you call it, but when when there was a meltdown in the bond market over the winding down of the balance sheet. So that's a great and important piece of information and how the market would challenge the next Fed is unclear. But I think what you're getting at is important, which is, look, the process is not perfect. And Donald Trump could be 100 percent right. God did not say to Moses that interest rates need to be four point three percent.

14:19It's a judgment call. But it's a judgment call made through a process of committee members from around the country, board of governors appointed by the president, that comes up with this answer. Could there be reform in the process? Absolutely. Should it be reformed? Almost certainly. But the market needs to have trust in the process. And that process does not include lowering interest rates or cutting the knees off of your agents in order to reduce the debt service costs, especially, as you guys point out, not entirely clear the market goes with the Fed on that. Steve, always a pleasure. Thank you.

14:52Steve Leisman. Pleasure. For more on how this could play out for rates, let's bring in Michael Cantopoulos. He's a deputy chief investment officer at Richard Bernstein Advisors. Michael, always good to see you. Good to see you as well. What do you make of the bond market remaining very calm, low volatility amidst all of this? Yeah, I think it's telling us that a lot of this stuff from the White House is really just noise. At the end of the day, what matters are our fundamentals more than anything else. And I think the fundamentals right now are pretty unclear. And when you have unclear fundamentals, you stay somewhat range bound until you have clarity, until you have a direction.

15:27And right now, there's really no direction. Do we have higher inflation? Do we have lower growth? What, you know, what's the story? Michael, you know, last year, right around this time, there were debates about what the Fed should do again. Right. And so we got that 50 basis point cut in September. Then we had, you know, two more. What do you think it did for the economy? Like here we are on the other side of that. There was a lot of trepidation. I know that they were worried about the employment picture and that sort of thing. I mean, what did it actually do? We hear that phrase, long and variable lag.

15:53So I just wonder what another 50 basis points would do sooner than the market expects. I'm not entirely sure it's done a whole lot yet. I mean, 50 basis points really isn't that much of a move. If you got another 50, 100, I think it would start to accumulate over time. But 50 basis points, I don't think, had a huge, huge impact on the broad economy. What was interesting is that the Fed cut rates at a time of accelerating earnings growth. That had never happened before. Just like in 2022, the Fed raised interest rates into a profit deceleration. That had never happened before. And what I do think it did is I think it helped to sort of give confidence back into the earnings cycle and the earnings rally.

16:36I think that caused earnings growth to accelerate a little bit longer. Earlier in the show, I said that just because the rest of the world is doing it doesn't mean we should do it. I absolutely believe that. But I also believe that global bond markets are interconnected. I'll bring up the – I think 30-year bonds were introduced in 2007 in Japan. They're basically at all-time highs in terms of yield. JGBs, I think, are the highest since 2008. Bond market is moving in Japan. How important is that to watch what's going on over there for our bond market here? I think it's very important. I think yesterday we saw some moves in the U.S.

17:07market, and that was largely on the back of what was going on internationally. So it is important. You can't really have, you know, the global economy or global rate markets doing one thing and the U.S. really buck the trend unless you get real serious divergences in either growth or monetary policy. And right now that's not really the case. I mean, global growth is pretty much in sync. Generally speaking, central bank policy is largely in sync globally. I mean, maybe that's a little bit off. But yeah, I think it's really, really important for sure. You mentioned so many things are up in the air in terms of the economy and inflation and the impact of tariffs.

17:41At what point do you feel more confident about the result of our trade policy and what's going on with tariffs in the economy? Is it two more readings? Yeah, I think more. One more. I think I think we need to see at least probably two more readings. You know, we know that you had a huge front loading of inventory buildup in Q1. You're working through that now. Now, you're starting to see earnings get hit, right? You saw this week GM earnings get hit. You've seen margins start to compress. Now, I think we're probably starting to see some of this come through in the economy. But I think it's very early days.

18:15We probably won't really know the full impact of tariffs on inflation until later this year. So I would say at least two more prints before you've got any sort of confidence in the direction of where we're going. And the ultimate landing place, I don't think we'll know for a little bit longer than that. Right. All right. Michael, good to see you. Thank you. Michael Katopoulos, RBA. Tim, what do you think? Well, I think we've got a dynamic where, as we've all talked about, we care about the long end of the curve on some level more than the short end of the curve. I do think it's also fascinating to think about where credit markets are.

18:49And we are as tight as they get, at least as tight as they've been in a world where there's all this uncertainty. So those are the things that I think investors need to spend a lot more time at least watching as barometers. We're in the middle of an earning season. I know there's a debate whether a small miss has been a big move lower. But I think the companies that have missed to the downside are ones either that were really expensive going into these numbers and were priced for growth, or those companies that actually just have something structurally wrong with them. So I'm not saying it's, hey, off to the races here.

19:21But I'm saying right now, the economy, the hard data is telling us that the market, that the equity market that's responding to credit markets and the bond market should not be phased by something they're seeing there. Meantime, speaking of earnings, Alphabet losing ground post earnings, the big tech stock rising as much as 4 % early in the session, but closing well off its best levels. Alphabet said last night that it expects more AI related spending, raise its CapEx forecast for the year by$10 billion due to cloud demand. Mike, at the time, you know, we had Gene Munster on, it was a sigh of relief, etc.

19:53for Alphabet. What do you make of the move today? Yeah, I mean, I think that there's obviously some money flow issues that are going on in Alphabet at the moment. I think that the narrative that people have that, you know, the core of their business, which is obviously search, it's more than 70 percent of their revenues, is being impacted by the fact that there's a lot of migration for people who are looking for immediate information or going to large language models. And I think that that basically means that positioning is such that, you know, people are sort of reducing their exposure here.

20:25I still think that on a valuation basis, I'm positive on it for that reason. And I think that they are going to figure out a way to sort this out. On the search basis, they are definitely trying to use Gemini in that. Anybody who's used Google search is probably recognizing that. And I polled people at a conference a week ago and saw that it seemed like more people were sticking with this, at least as a backup for now. And so on that basis, I'm positive. And finally, YouTube and Waymo are still, I think, really significant drivers potentially for this. So I'm not too concerned about it, but I think there is still some concern from people who have big positions on it with the large-time-mustle search.

21:06When we were discussing it in the aftermarket, though, last night, I mean, you know, it was up 3 % or something like that. There was just nothing there that I thought was meaningful that we're going to have this sort of gap that we saw at Microsoft just a few months ago, that sort of thing. And really the issue is how are they going to monetize this spend right now? Because they are in a very unique situation relative to many of their other peers is that they are the ones that have that 70 percent of the search traffic. They are the ones that have 75 percent of the browser, which obviously gets a lot of that surf traffic.

21:35And so how are they going to monetize this as they cannibalize themselves? They get away from the blue links. They get paid. Everybody every time someone presses a blue link based on a search, that sort of thing. So it's great that they're doing the overlays. It's great that they have this technology. They can kind of spread it across all of these different services that they have. But make no mistake about it. OpenAI is getting three times the amount of daily active visitors that Google has. And they're going to have to have a much better product to deploy across all their product and services to really, I think, hold off the assault on their search revenue.

22:06Coming up, a couple of big stock moves catching our eyes today. Dow and Honeywell sinking, why investors were unplugging from Tesla and what Sidney Sweeney has to do with American Eagle's jump. The first shares of Intel on the move after its report. The numbers and the details from the quarter next do not go anywhere. Fast Money is back in tune.

22:30Welcome back to Fast Money. We've got an earnings alert on Intel. The semi-company beat revenue estimates issued better than expected forecast. Shares well off after hours highs even went negative. Briefly, it's now up just under a percent here. CNBC's Christina Parts Nevelis has got the numbers. Hi, Christina. Hi, Melissa. Well, Intel's Q2 revenue beat you talked about was against already low expectations. But the message is clear on the call right now. Intel will continue to be disciplined around cost cutting. Intel expects to end the year at 75 ,000 employees, down from 96 ,000 at the end of the second quarter.