More Meta & Microsoft Layoffs, $166B in Tariff Refunds, & Kevin Warsh

0:00Welcome back to the Rich Habits Radar, our Friday episode of the Rich Habits Podcast, where every Friday morning we're coming at you with the biggest headlines impacting you and your money. This episode is brought to you by VCX, the public ticker for private tech. My name is Austin Hankwitz. I'm joined by my co-host Robert Croak. And the three things sitting at the top of our Rich Habits radar this week include Kevin Warsh's confirmation hearing,$166 billion of tariff refunds, and the Strait of Hormuz turning into a combat zone once again. Don't forget, stick around to the end of this episode where we talk about Meta and Microsoft and all of their job cuts.

0:41Austin Hankwitz:And there is a lot to unpack in this episode with all of these layoffs already happening way faster than we anticipated. But let's get into our first story right now. This week was the most important day for monetary policy in 2026 so far. Kevin Warsh, President Trump's nominee to replace Jay Powell as Fed chair, sat before the Senate Banking Committee for his first confirmation hearing. It was contentious, revealing, and market-moving all at the same time because on the same day, Trump told CNBC he'd be disappointed if Warsh didn't cut interest rates immediately after being confirmed. Warsh went and told the committee, and I quote, the president never asked me to commit to interest rate cuts.

1:24He did not demand it. The president never asked me to commit to any such thing, nor would I do so. And when pressed by Elizabeth Warren on whether he'd be Trump's sock puppet, Kevin Warsh pushed back firmly, saying the central bank independence remains essential. But here's where it gets interesting for the markets, Robert. Warsh didn't just defend independence. He laid out what CNBC described as a plan for regime change at the Fed.

1:49Robert Croak:Walk us through those three specific things that stood out.

1:52Austin Hankwitz:Yeah, first, Warsh wants to redefine how the Fed measures inflation, potentially incorporating AI-driven pricing data and real-time indicators, rather than relying on lagging government statistics. Number two, he wants to dramatically reduce forward guidance, meaning the Fed would stop telling markets where rates are heading ahead of time. And that's a huge shift from where we are right now with Powell. And number three, he wants to change how the Fed communicates during crises versus normal times, saying the central bank should show up with liquidity during crises, but operate with more discipline during normal economic periods.

2:30Austin Hankwitz:So, Austin, I know that's a lot. Tell our listeners what this means for you and your money.

2:34Robert Croak:Yeah, the hearing confirmed two things, especially as a real estate portfolio. The first one is rates aren't going anywhere anytime fast. The CME Fed watch tool now shows markets pricing in no more than one rate cut all of 2026. A Reuters poll released on Wednesday, should 56 of 103 economists expect rates to stay steady through September? J.P. Morgan said this week that they expect the Fed to hold rates steady for the rest of the year before potentially hiking interest rates in early 2027. Massive repricing from where we just were in January. The second thing as it relates to your portfolio is if Worsh gets confirmed very quickly and signals a more hawkish approach to inflation, yields could get pushed higher.

3:23If the confirmation drags on, we get sort of this power vacuum at the Fed and uncertainty also ripples throughout the markets. So hoping this transition is smooth.

3:33Austin Hankwitz:But for your portfolio, this is another reason to favor quality and cash flow over speculation and hope. Remember, hope is not a plan. Businesses with strong free cash flow, pricing power, and low leverage don't need the Fed to cut rates to justify their valuation. So keep that in mind. And companies that are priced for three rate cuts remain very vulnerable. And if Worscht does get confirmed and follows through on reducing forward guidance, expect more volatility in the bond markets because traders will no longer have the Fed holding their hand on where rates are going.

4:07Robert Croak:Well, I know where we're going, and we're going to our second story here. And that is the$166 billion of tariff refunds. Oh, my gosh. So on Monday, the U.S. Customs and Border Protection launched the CAPE Portal, the Consolidated Administration and Processing of Entry Systems, through which more than 330 ,000 American importers can begin filing claims to try and recoup $166 billion in tariffs from the government that the Supreme Court ruled were collected illegally.

4:40Austin Hankwitz:And here's the backstory. On February 20th, the Supreme Court struck down President Trump's reciprocal tariffs, the ones imposed under the International Emergency Economic Powers Act on Liberation Day that happened on April 2nd, 2025. The court ruled that the IEPA was an emergency statute not designed to authorize broad-based tariffs. In March, Judge Richard Eaton of the U.S. Court of International Trade ordered the government to create a system to refund the tariffs within 90 days. And Monday's portal launch was the result of all of those efforts since this time frame.

5:16Robert Croak:Yeah, so phase one here of that CAPE system covers unliquidated entries. think imports where the tariff was assessed but not fully processed by customs. And according to CBP, refunds plus interest will be processed within 90 days of all tariff refund approvals there. So the refunds, however, go to importers. Unfortunately, they don't go to us, the people who had to pay higher prices when those tariffs were imposed.

5:42Austin Hankwitz:But CNBC reported this week that major retailers like Walmart, Target, Home Depot, and Costco are among the largest claimants. And several have signaled they will pass through at least some of the savings to the consumers in the form of price reductions in the second half of 2026.

6:00Robert Croak:I will believe it when I see it, Robert.

6:02Austin Hankwitz:True. We will see what does that mean, savings on to us. We'll see what percentage it really is.

6:08Robert Croak:Yeah, I got a feeling it's going to be very, very small. But on the same day the refund portal launched, the USTR Jameson Greer testified before the House Ways and Means Committee and confirmed that the administration is rebuilding their tariff regime on firmer legal grounds, specifically through Section 301 investigations covering 60 countries plus the EU.

6:30Austin Hankwitz:And Reuters reported this week that Greer told Mexican auto and steel worker executives their tariffs are here to stay, even through the USMCA renegotiation. The Section 301 hearings begin April 28th, with final tariff rates expected by June.

6:45Robert Croak:So, Robert, just so we're all on the same page here, here's what's going on. $166 billion is being refunded from this old, legally invalid tariff regime that the Supreme Court said, hey, can't do that. But a new set of tariffs, which are now potentially at similar rates and being constructed on legal grounds the courts are less likely to overturn, are being created right now. So the net effect for importers and consumers may be temporarily, you know, a little bit of ooh-saw. We got some prices coming down here. We're feeling good in the middle of 2026, but maybe we get a second wave of tariff-driven price increases starting late 2026, early 2027.

7:30Robert Croak:So whatever we see at Walmart or Costco or Home Depot is probably not going to stick around here, if that even means they are lowering prices. But Robert, what does this mean for people listening, their portfolios, and their money?

7:44Austin Hankwitz:I think there are two investment implications here that are easy to miss. First, the refund itself is a one-times earnings tailwind for retailers and importers. Tesla actually called this out on their Q1 earnings call Wednesday night. Their CFO mentioned one-time benefits related to tariffs that boosted automotive margins. So any company that paid tariffs over the last year has a potential claim. Watch for this to show up as margin improvement in Q2 and Q3 earnings reports across retail, consumer discretionary, and industrials.

8:17Robert Croak:And that Section 301 rebuild means that the tariff risk hasn't gone away, right? Just what we were laying out here. It's only been delayed. Companies that are best positioned are those that have those diversified supply chains, strong domestic manufacturing, and pricing power. Companies that are at risk are the ones that are heavily reliant on Chinese imports with thin margins. Think restoration hardware, right? Retail, you know, consumer electric and apparel brands, right? Lululemon. I mean, you just look at some of these stocks and they've just been decimated because of what was going on with tariffs.

8:54Robert Croak:So good call out, Robert. I appreciate that walkthrough. Walk us now through our third and final story today as it relates to the Rich Habits radar. Cannot wait to jump into this one because it is very timely.

9:06Austin Hankwitz:Yeah, the Strait of Hormuz is now a combat zone and nobody's willing to cross it. This is a story that's been escalating in the background for a couple months now, but this week it hit a tipping point that every investor needs to understand. And on Wednesday, the same day President Trump announced an indefinite extension of the sea spire, Iran's Islamic Revolutionary Guard Corps seized two commercial vessels in the Strait of Hormuz. A container ship owned by Geneva-based Mediterranean Shipping Company and a Greek-owned cargo vessel were both fired upon, boarded, and towed to Iranian waters. A third ship was also attacked off the Iranian coast and remained stranded.

9:48Austin Hankwitz:The IRGC claimed all three vessels were secretly attempting to exit the strait without authorization, and 15 Filipino crew members are confirmed aboard the sea's ships.

9:59Robert Croak:So here's why this matters so much. The Strait of Hormuz is only 21 miles wide at its narrowest point, but 20 million barrels of oil pass through it every single day. That's 25 % of all seaborne oil and 20 % of the world's liquefied natural gas. And since Iran effectively closed the strait on February 28th in retaliation for the U.S.-Israeli air campaign, right, this whole conflict. This has become the largest disruption to global energy supply since the 1970s oil crisis.

10:38Austin Hankwitz:And oil is back above$100 a barrel for the first time since early April and briefly dipping to$88 last Friday when Iran announced the strait would be completely open during the ceasefire. A Wall Street Journal survey of the world's top 10 tanker and container ship operators found that not a single one is accepting new cargo across the strait. A shipping intelligence firm reported last week only seeing 14 merchant ships crossing per day, which is roughly 10 % of this normal peacetime traffic. And after Wednesday's seizures, even that trickle is likely to stop. So there's a lot going on here and a lot to unpack.

11:20Robert Croak:Yeah. President Trump posted on Truth Social earlier this week, I think it was Thursday morning, that he's ordering the Navy to, quote, shoot and kill any boat laying mines in the strait. There is to be no hesitation, he said, adding that minesweepers are clearing the strait at a tripled up level. But the U.S. naval blockade against these vessels going to and from Iranian ports remains in place, which is exactly what caused Iran to reclose the strait last Friday in the first place. That means we're stuck in a loop. Iran says the strait can't reopen while the U.S. maintains its blockade. The U.S.

11:58Robert Croak:says the blockade stays until Iran stops mining the waterway. So lots of back and forth here. I think this is why we saw so much volatility in the markets at the tail end of this week. So Robert, what does this mean for everyone and their portfolios?

12:12Austin Hankwitz:Yeah, there is definitely a lot of gloom and headlines and problems and wars and all of that, but we have to look at how we can adjust accordingly and energy is the obvious beneficiary. And it's not just the big integrated names. U.S. shale producers with low break-even costs are printing cash at this$100 oil. The companies guided for strong free cash flow at$70 in oil are now operating with a$30 per barrel windfall. Look at domestic producers with disciplined capital allocations and shareholder return programs. They don't need the straight to reopen to justify their valuations. And if they stay closed, they're the biggest winners.

12:52Robert Croak:Yeah, the thing, too, that I think kind of goes back to what we were just talking about with the Fed is this is also a slow moving inflation shock. And that's already begun to come up now in the data. So higher oil feeds into higher transportation costs, which feed into higher consumer prices, which feed into the Fed's decision-making process. And remember what we just talked about with Warsh wanting to redefine how the Fed measures inflation. That means, and let's be super clear about this, if oil stays above$100 a barrel through summer, rate cuts out the window in 2026. And JP Morgan's forecast of rates staying steady and maybe even a rate cut is much more likely.

13:31Robert Croak:So triple digit oil makes this call even more hawkish for the Fed. And I do not like it.

13:38Austin Hankwitz:And the third point here that no one is talking about is the New York Times reported this week that energy executives and analysts say the industry will never be able to count on the straight of her muse the way it used to be, regardless of whether it reopens and when. And that's a structural shift everyone needs to keep in consideration. It means higher baseline shipping costs, higher insurance premiums, and a permanent risk baked into global energy prices. So keep an eye on energy, and we will make sure to stay ahead of this story and what it means for the future of those energy stocks and ETFs we talk about.

14:13Robert Croak:Yeah, I'm optimistic that this will all blow over. But as we think about, you know, I'm just looking at the NASDAQ this week and the S &P up and down, up and down. I mean, we were up and then we went down, you know, a percent or two and then back up and then back down. It's just we've been all over the place here. And as I'm sure audiences, they see their portfolios swing by thousands of dollars every single day. And they're like, guys, what's going on? Help me understand this stuff. So I wanted to cover this to ensure everyone's on the same page about what's causing the markets to go up, down, left, right, and in circles.

14:45Robert Croak:And, of course, keep our heads leveled, dollar cost average, and cover the most important stories for you every single week here on the Rich Habits Radar.

14:55Austin Hankwitz:Absolutely. That's why we're here every Friday morning to break these headlines down and give you guys the best information we can to give you guidance on how to respond and how to take all of these crazy headlines. So Austin, before we jump into our third story, support for the show comes from VCX, the public ticker for private tech. And for generations, American companies have moved the world forward through their ingenuity and determination. And for generations, everyday Americans could be a part of that journey through perhaps the greatest innovation of all, the U.S. stock market. And it did not matter whether you were a factory worker in Detroit or a farmer in Omaha.

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15:54Austin Hankwitz:Introducing VCX, the public ticker for private tech. VCX by Fundrise gives everyone the opportunity to invest in the next generation of innovation, including the companies leading the AI revolution, space exploration, defense tech, and so much more. So visit GetVCX.com for more information. That is GetVCX.com. And please carefully consider the investment material before investing, including objectives, risks, charges, and expenses. This and other information can be found in the fund's prospectus at GetVCX.com. This is a paid sponsorship. So Robert, let's now jump to our radar points. You've got a couple.

16:34I've got a couple. Why don't you go first?

16:36Austin Hankwitz:Sounds good, Austin. My first point today is Amazon's$25 billion investment into Anthropic. Amazon announced this week it's investing up to another$25 billion in Anthropic, the company behind the Claude AI chatbot on top of the$8 billion it's already poured in, with$5 billion going in immediately and up to$20 billion more over time. In return, Anthropic has committed to spending over$100 billion on Amazon's AWS cloud infrastructure, which is essentially another one of these circular deals where Amazon's investment comes right back as cloud revenue. And this is an arms race in its purest form. Microsoft has OpenAI, Google has Gemini and DeepMind, and Amazon is making sure it doesn't get left behind by locking in the leading independent AI lab.

17:25Austin Hankwitz:Number two for me in Radar Points is Meta lays off 8 ,000 employees in May. Meta plans to lay off 10 % of their staff or roughly 8 ,000 people in May as it seeks to streamline its operations and pay for massive investments in artificial intelligence, the company said Thursday in an internal memo. This is crazy. A lot of layoffs happening. We're trying to cover as much of it as possible. And in the memo sent to the current employee's chief people officer, Janelle Gale, said the cuts were necessary to allow the company to operate more efficiently and to offset these investments. The company also said it would cancel plans to hire for 6 ,000 open roles.