Trump’s Fed Fire Fight… And Eli Lilly’s Weight Loss Win 8/26/25

0:00Live 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. You're fired or not. President Trump wants to ax Fed Governor Lisa Cook after mortgage fraud allegations. But she says she's not going anywhere. So what now? One pill to rule them all. Eli Lilly's obesity pill trial results. That shares that stock much higher and also had a regional bank breakout. Why parents of some college students have finally come to their senses. and the technical take on AI's energy demand. Hi, everybody. Good to see you again. I'm Brian Sullivan in for Melissa Lee coming to you, as always, live from Studio B at the NASDAQ Market Site.

0:42On your desk tonight, Courtney Garcia, Dan Nathan, Guy Adami, and Katie Stockton, founder and managing partner of Fair Lead Strategies. Welcome, everybody. All right, we're going to get to the macro markets in a moment. We're going to begin tonight with the fight rocking the Fed. President Trump's decision to fire, or at least try to fire, Federal Reserve Board Governor Lisa Cook. The president was asked about the potential firing during today's White House cabinet meeting.

1:16She seems to have had an infraction, and she can't have an infraction, and especially that infraction because she's in charge of, if you think about it, mortgages. And we need people that are 100 percent above board. And it doesn't seem like she was. Are you considering for the replacement to nominate for Lisa Cook? And what economic background or history are you? Well, we have some very good people for that position. And I think we have some very good people. We're down to I mean, I think I maybe in my own mind have somebody that I like. The move comes after the White House said it found Cook engaged in alleged mortgage fraud by claiming two different homes, both as her primary residence, which is not allowed.

1:58Trump says she's fired. Cook has not explained the situation, but says she's not going anywhere. So now it may go to the courts. And Trump's saying that he will abide by any court ruling. Obviously still a fast-moving and often confusing situation because it is truly not clear if Lisa Cook has indeed left the Fed or will. Steve Leesman, working a long day today, joining us again with what we know and a lot of what we don't. Yeah, thanks, Brian. The Federal Reserve releasing a statement this afternoon saying it will defer taking any action on the president's decision to fire Fed Governor Lisa Cook until the courts decide.

2:37The statement said that Lisa Cook has indicated through her personal attorney that she will promptly challenge this action in court and seek a judicial decision that would confirm her ability to continue to fulfill her responsibilities as a Senate-confirmed member of the Board of Governors of the Federal Reserve System. As always, the Federal Reserve will abide by any court decision. Sources familiar with the situation telling CNBC late this afternoon that a lawsuit asking for relief from the courts could be filed as soon as tomorrow. Courts in such situations, and there have been many under President Trump, have generally provided preliminary decisions very quickly.

3:13Earlier in the day, Cook's attorney issued a statement saying, quote, President Trump has no authority to remove Federal Reserve Governor Lisa Cook. His attempt to fire her based solely on a referral letter lacks any factual or legal basis. We'll be filing a lawsuit challenging this illegal action. OK, as you just heard, the president said today at a cabinet meeting that he would abide by the courts, but that he already had people in mind to replace Cook. The Wall Street Journal saying late this afternoon, former World Bank president David Malpass is under consideration for one of two now potential open seats.

3:44We don't know if there are two seats. If the president replaces Cook, you have a majority of the seven members of the Fed Board of Governors once Stephen Myron is confirmed for one of those two, again, potential seats. He could also use that board majority to exert pressure on the naming of Fed Bank presidents, five of whom have a vote at any one time on a rotating basis. Given the president unprecedented influence over monetary policy and, of course, raising questions about the Fed's independence in the making thereof. Brian. Steve, this is a quote. We will have the majority shortly on the Fed board.

4:19I mean, I'm choosing this word. That's chilling to me. What are your thoughts on that? Well, I guess my first question is the extent to which it's chilling or not to the broader market. We are all puzzling over whether or not this matters. Does the market think, well, let me We know that it has not been necessarily a good trade to kind of expect the worst from the Trump administration when it comes to certain economic policies. The reciprocal tariff trade was not a good one. Maybe some belief that the president backs off a situation where he provides or he takes some sort of like immediate control and really undermines the Fed's independence.

5:02I think that's on one sim. On the other side, what you have is a situation where right now the threat to the Fed's independence is essentially theoretical. What happens when it's not? When you have a majority of the board and exert influence over the president's and they start cutting rates by 50 or 100 basis points when the inflation rate is running a percentage point above target and then you get the market reaction. Maybe the concern would be more palpable or obvious when there are real actions taken or appear to be taken. Some people, as you say, are concerned. Some people said that this would be the end of the Fed's independence if we continue down this road.

5:40But it does not appear as if the market is trading that way right now. No, it is not. Courtney Garcia, politics aside, I mean, listen, Cook might stay. We don't know. She might voluntarily resign and then Trump gets replaced or a court will uphold that this is valid and she gets replaced. If she does indeed leave the board in some form and a dove comes in, does it change the way we should look at the Fed or interest rates? Well, I think that we should be looking at this either way, because I think regardless of what happens, clearly Trump is putting a lot of pressure here. Powell is going to be out next year.

6:13Likely somebody is going to put in who is somebody of his choosing, who is going to be ideally lowering interest rates as he wants. And I think that's something the markets are trying to figure out. This is why you see the yield curve steepening, because it's widely expected the rates are going to start to come down here in the short term. And longer term, though, this is actually likely going to put more pressure on inflation. That's like the irony of all of this. That's why the longer end of the curve has been rising, because this could actually stimulate the economy and create additional inflation in the long run.

6:40So even though he's putting all this pressure, it doesn't mean inflation is done and actually longer term could potentially be an issue. So I think that gap between the two-year yield and the yield on the 30-year, Dan, the widest in multiple years. Well, you know, what's interesting about this, and again, this could just end up being, you know, a sideshow. It could end up just being a ridiculous situation. I mean, the president was found liable in a civil case in New York state for doing what? Inflating the value of his property to get a mortgage and insurance. I mean, so like, what are we doing here?

7:16You know, we're spending a lot of time talking about this. Why doesn't any of these reporters ask that question? You know what I mean? Like, it's just kind of funny to me. We're just letting this go by and there's no due process. And we don't, we haven't shown anything. Well, there's been no charge. There's an allegation. But there's not even a charge. If there's a charge. He's charging it. He's the president. Well, he's saying it, but he's not charging it. There's no legal charge. I think that was the. I think that's the. It's a clown show. OK. And again, I mean, I don't even. We're spending a lot of time talking about this.

7:47Does the move in the in the in the bond market change anything for Dan Nathan with regards to it? It hasn't moved. I think what Courtney said is perfect. I mean, if it stokes inflation, you're going to see long yields go higher. And that's what's kind of happening. It's happening all over the world, too. So there is this focus right now that inflation is not under control, that every government on the planet has massive debt piles. They want to see, you know, yields go down because they're sick of servicing this debt. We have a trillion dollars in debt to service. And there's a there's a push and a pull.

8:19Right. We get the yields lower. We spend less on our debt service. But it is stimulative. And then you have this situation where who knows what could happen? Well, what I would add there is that when we do see a rate cutting cycle begin, it tends to be negative for the equity market. So as much as we are welcoming it for the economy, perhaps, maybe six out of the last eight times this has happened, the market saw either a major correction or a bear cycle. So to me, I don't know. Maybe we should be careful what we wish. We did cut rates last year, Guy Domi. September, a lot of people looking at that in a political way.

8:57What doesn't matter? The point is the 10-year bond yield and mortgage rates were the same then as they are now, and we got a cut. What are the odds? We get a cut, whether or not it has anything to do with Lisa Cook or not. We get a cut in September, and the bond market says, you know what? Worried about inflation, send yields higher. Better than 50-50. Bank of England cut rates, I think, on August 7th. Don't at me if I'm off by a day. Now they have inflation at 18-month high, and bond yields have been going higher. So to your point, I think the chances are very good. And Dan just mentioned it.

9:29Global, just go across Europe and look what's going on. Look what's going on in Japan. I think there's a very good chance that, again, if you go on this rate-cutting cycle, to Katie's point, I mean, historically it's been because things are breaking down. Maybe it's a little bit different this time. But I'll say this. Be careful what you wish for because it doesn't mean the back end of the yield curve is going to move. And the market will challenge this newly constructed Fed at one of these days in some way, shape, or form. And typically they challenge it by selling off at the bond market and pushing yields higher.

10:00I don't believe it was August 7th. I think it was August 6pence, none the richer. You know what? You know who the lead singer of 6pence, none the richer is? Not Rebecca Patterson. It's Lee Nash, Lee Bird Nash. Rebecca Patterson probably could have been the lead singer of that band. She is former Bridgewater chief investment strategist. She is now senior fellow at the Council on Foreign Relations. Rebecca, there's so many angles to that. This is fast money. We're trying to bring it back to the investor. And what, if anything, to Dan's point, maybe this doesn't mean squat. What's your take? There's so many things that have to line up before the Fed actually loses its independence that the Federal Reserve has a majority of Trump appointees or Trump-friendly policymakers who cut rates despite what inflation is.

10:52So to me, it's not that surprising yet that the markets have only had a modest reaction. We have seen the yield curve steeper. We've seen the dollar lower. We've seen gold higher. So there is a reaction, but it's modest. I think part of that is because this is still a probability, not an eventuality. What I'm looking at, though, taking it back to fast money, You know, President Trump today in one of his many posts said once he gets a majority, so he's not being subtle, this is where he wants to go with the Fed, housing will fly, housing will take off. And I wish someone would sit down with the president and the administration and say, look, if you want housing to fly, doing this, and you all just talked about, is going to push the long-end yield higher, which is how mortgage rates are set.

11:36So that hurts the housing market, which hurts construction. It hurts all those related jobs as well as homeowners. But what we really need to do is focus on supply. We just got housing data out within the last day or two showing that homes under construction was down 12 % over the last year. There are a couple bills in Congress right now that actually have bipartisan support that would make home construction easier, that would ease the permitting process. If the president's serious about housing and this whole thing going on here is really about the long end of the curve, there's a solution. And it's not the Fed.

12:14It's supply. Yeah. Well, that's interesting. So what I was going to ask you, Rebecca, and you end it at the perfect place, because I was going to ask you, there's a feeling everybody around this table has been doing this a long time. I feel like we're addicted to the Fed as an economy, right? Like we're like, well, if rates come down a little bit, it's going to save housing. I mean, we're not talking about COVID level mortgages again. Even if mortgage rates come down a little bit, do you think it'll be that reactionary that suddenly the housing market, which has been stuck because nobody wants to sell because they've got a three and a half percent mortgage, is a five and a half percent mortgage, a five and a quarter percent mortgage going to unstick the housing market?

12:56I don't think so. No, I agree with you. And you answered your own question a little bit there. There are so many homeowners today who have mortgages significantly lower than today's rates that they don't want to, even if they want to move, they don't want to sell now because they'd have to downsize their home. The cost of the home would be so much higher today with the mortgage rates. So the housing market is somewhat paralyzed. So we do need to work on getting those longer term yields down. But to do that, we want to get inflation lower. We want to have better fiscal dynamics, and we're not doing anything to go in that direction right now.

13:30Again, if we move in this world of going to a politicized Fed, you know, core PCE, the Fed's preferred inflation measure, is going to come out later this week, most likely at 2.9 percent. So we're almost a whole percentage point above the Fed's target. It's likely to go higher in the coming months. And if the Fed cuts with inflation that high, it's just going to stoke inflation expectations more. We're in a different world. Looking at history of what the Fed does and how the economy reacts and the stock market reacts is not very helpful right now. We're in a different inflation regime. So the dynamics and the reaction function in the markets is going to be different.

14:11Fair enough. Anybody around this, I'm going to say, I'm just going to lob it out there and see where this goes. It's a jump ball. You shouldn't do that. Here we go. You know what? It's Tuesday. I don't care. OK, the Fed is independent. But let's be clear. The Fed chair is appointed by the president. Arthur Burns is pressed by Nixon to cut it. Who is it shoved William McChesney Martin up against the wall? Lyndon B. Johnson. Lyndon B. Johnson. This whole idea of an independent Fed. I just I'm not 100 percent there. It's a different economy now than every single one of those periods. It's it's a global economy.

14:43This is meant to be a beacon of the best capitalistic, you know, economy that's ever existed. We're meant to be an example. And so if you think about what's going on with a Fed governor, if they have a majority, then maybe they start going after Fed presidents. Then they have a Federal Reserve chairman. That's just an arm of the executive branch. And you think about our form of government, we're meant to have checks and balances. And there's certain parts of our government that are meant to be independent. So where is Jamie Dimon? Where are all these bankers who built these huge businesses, right, in and around this environment.

15:18They've leaned on the central bank as far as, like, the stability of it, right, to create some of the biggest businesses on the planet, and no one has anything to say about this? You think they're going to step in front of Trump? No freaking way. Okay. Well, I mean, how about it, people? I mean, like, look what's going on. In our city, we're likely to have federalized National Guard here, okay, like, you know, federal troops. It's all happening right in front of us in this city that is, again, meant to be this beacon of capitalism. It doesn't feel that way now, does it, Sully? So if I can jump in here, I spent some time looking at countries historically that lost institutional credibility, that lost functional governments.

15:59And I did that in part thinking, what if, what if it happened here? And what you see historically in other countries where this has happened is that their equity markets underperform, relatively speaking. Their long-term yields are higher. Inflation is higher. Their currencies weaken, and they get less foreign direct investment. Longer term, their economies underperform others. Now, the question is, the U.S. is unique. We are the leading economy in the world. We are the biggest consumer market in the world. Our moment might not come as quickly or easily, but looking at other countries who have gone down this road tells us where we're headed if we're not careful.

16:40So I understand why the market's not reacting a lot today, but I do think we shouldn't ignore this at all. This is a big deal, what's going on. Currency moves are important. Rebecca brings it up. And although the dollar has bounced over the last three or four weeks, the bounce has been feeble at best. And there are a lot of people out there that will look at dollar-euro and say, we're headed to 125. Katie, I'm sure, has done work on this. We'll look at dollar yen and say some point 130 ish is in the cards. And you know, all those things might be supportive of equities, but I think it speaks to something more broad based going on.

17:15And I think whether they acknowledge it or not, I think there's a policy of a weaker dollar. And quite frankly, they're right to think that way, because when you have$37 trillion in debt sitting on top of a$28 trillion economy, you're not going to grow your way out. You're basically going to inflate your dollar the way out. And I think that's what's going on. I am a little surprised that the stock market did not take a hit or at least a bigger hit today. Just throwing it out there. Rebecca Patterson, appreciate your views. Thank you. Good to be with you. All right. On deck. Apple's AI ambitions.

17:47Will they get it right or will they completely botch it? And speaking of AI, it needs a whole lot of energy. What Katie Stockton is seeing in the charts, the sectors that could fuel the data boom. Don't go anywhere. We're back in two minutes. You're watching Fast Money here on CNBC. We'll be right back.

18:17There's a lot of news out there besides the Fed. We have an earnings alert on MongoDB. And do not adjust your television or your Internet. that MongoDB shares are actually up 26 % right now, Dan. Software company topping EPS and revenue estimates. They're raising third quarter guidance. This was a name, Dan, you were watching today, but wow. Yeah, we haven't seen this too much in enterprise software names, and I'm sure Katie has some views. They've really been left out for the most part. A lot of these SaaS names, too. That's not what this company does, though. When you think about it, it's like a database management company.

18:52Go back and look at this chart for a second. There's two huge gaps in the last year or so from levels. These are obviously earnings and guidance levels. So when I see a quarter like this, I say to myself, it's very clear that the forward guidance has been lowered probably a couple of times. So it is kind of shocking to see a stock up 24 % or something like this. It's probably beating lower expectations. It's still a 26 % move. Katie Stockton, looking at the charts, you get that kind of a move, it's going to throw the charts all out of whack. In a good way for MongoDB. Really? It's been downtrending since early 24, and this takes it well above a downtrend line.

19:29So we feel like we could see follow through on the back of this type of breakout. As much as something feels overextended when you see these gaps up, they do tend to generate additional momentum. Does a day, just not about Mongo, but just charting in general, Katie, quickly, does a day like a 26 % gain where, you know, the line just goes parabolic, does that change how you look at a chart? No, I mean, it depends on the relationship to resistance or support, right? If you see it clear, an important level, well, that is a breakout. And you just want to make sure that it holds. Typically, what we like to tell people, if you see a gap up, you want to see that gap hold over the coming days in order to preserve the breakout or breakdown.

20:09So it's somewhat reactive that you have to be in this kind of situation. But, you know, this type of move can see follow through. Well, MongoDB, let's surround this real quick. I mean, Katie mentioned 2024. Go back to it because I'm looking at it. 2021, when the stock was north of 500, draw a downtrend if our crack staff can do it. We're probably with this move trading up to it, and you have these major double bottoms right around 160 or so from the fall of 2022. So this move makes sense. You get through that trend line of that four-year or so downtrend line, and the party just starts here, I think, in MDB.

20:46Party just starts. All right. Staying with technology. Everybody out there. mark your calendars. Apple announcing a launch event for September 9th, likely to get an iPhone 17. Media and analysts today getting an invite from Apple with the tagline, all dropping. Also earlier today, the information reporting that Apple has internally discussed buying AI startup Mistral, as well as the constant rumors that it may go after perplexity. Remember, Apple almost never buys companies. The last big deal it did was for the headphone company Beats. Apple investors not feeling to beat this year. Shares are down about 8%.

21:26All right, coming up, letting go of luxury. Why your college kid's housing situation may lose some of its luster, but it may save you a lot of money. You're watching Fast Money Live from the NASDAQ Market Site in Times Square. We're back right after this.

21:46hot tubs outdoor tvs podcasting studios private gyms and i'm just describing my own kids but maybe the madness is finally coming to an end that is today's property play and diana olick joining us now with more i know it sounds crazy diana but these trust me these places are real Oh, I know. I have a son who was in one. So let me just start, though, with the stats on the sector. Annual rent growth in student housing slowed to just 0.9 percent in July across 200 schools surveyed by Yardi. The average advertised asking rent fell to$905 per bed. That's down 1.4 percent from the$918 peak in March. Now, the report says it's because operators are struggling to lease remaining inventory and rents have been cooling for a while.

22:35From last October through July, rent growth averaged 2.8 percent, which was less than half the 5.7 percent seen during the same period the year before and well below the 6.9 percent seen the year before that. Now, I spoke with Robert Bronstein, CEO of Scion, one of the nation's largest owner operators of student housing. They have roughly 95 ,000 beds across 83 schools. That's over$10 billion in assets under management. He said what we're seeing is fall off at the top and the bottom. So those who were on the edge of affording student housing are dropping out and the luxury renters are also pulling back.

23:12He said students want Zoom rooms for job interviews, not golf simulators and movie theaters. Now, a separate report from Walker and Dunlop noted while luxury amenities once defined the sector, the latest trends in a shift toward functionality, convenience and affordability. Now, to learn more on this and other great plays in commercial real estate, Property Play, get the newsletter, subscribe to it, Property Play. See that QR code there or CNBC.com forward splash Property Play. And, Brian, it was a year ago this week that I was sitting on the edge of an infinity pool at the University of Georgia doing live shots on this stuff.

23:49University of Georgia. We may know somebody whose kid goes to the University of Georgia, but no names. Do any of these findings, by the way, you mentioned the South. Do any of these findings vary by type of school and also where it's located? Like, not sure you're rocking the infinity pool at Bowdoin in Maine. You know what I mean? No, you're not. And especially you're not rocking it at the small private colleges like Bowdoin in Maine. Really, where you're seeing the higher end stronger, it's in the southern, the really big schools like the University of Georgia, schools in Texas. And actually, a lot of the development and a lot of the demand is coming from those larger state schools.