Business Rundown: The Fed's "Wait And See" Approach
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That's code CHAMPION on PrizePix to get $50 instantly when you play $5. Win or lose, you'll get $50 for just playing. Guaranteed. PrizePix. Run your game. Must be present in certain states. Visit PrizePix.com for restrictions and details. I'm Lydia Hu, and this is the Fox Business Rundown.

Friday, March 21st, 2025, President Trump has been making some big moves in his first 100 days. And like many investors and everyday Americans, we learned this week, the Fed is

is also curious to see how his policies will play out. Headlines are scaring a lot of people. They're running to one side of the boat, so to speak. The sentiment is ugly. But that's a great setup to be picking up, you know, which ones were leaders, the Nvidia, Microsoft. On Wednesday, the Federal Reserve said they're holding off on any change in its benchmark interest rate. They want more clarity on how the economy is doing and where inflation is headed.

as President Trump doubles down on his promise for more tariffs coming in April. While Fed Chair Jerome Powell said the U.S. economy remains solid, he also expects the economy to grow more slowly this year and next year. Reacting to the news Wednesday, President Trump posted on Truth Social...

the Fed would be much better off cutting rates as U.S. tariffs start to transition, ease their way into the economy. So how are investors navigating the market? Ken Mahoney is the president of Mahoney Asset Management.

So, Ken Mahoney, so great to have you on this beautiful Friday. Happy second day of spring, I think it is now, right? Yeah, spring is spring. Well, we're seeing some activity in the markets, I guess you could say. You know, stocks are mostly down for the week. We're down just about flat and NASDAQ and S&P down. It looks like tracking now for five weeks in a row. So, we've got a streak going. Choppy yesterday. And, of course, this is coming after we had the Fed rally.

meeting and decision earlier this week on Wednesday. I wanted to kind of pick up the conversation there because, you know, we heard some comments from Jay Powell as he was talking about holding rates steady right now, right? That's what we expected. But it was really interesting when he called the conversation around tariffs, called attention there and said that any inflation generated by tariffs would be transitory. Oh, my gosh. Seriously? Yeah.

Can we give the man a thesaurus? Do we not remember what happened a couple of years ago with that transitory call that led to 8.7 percent inflation rate, which led to the worst inflation in 40 years? I mean, seriously, give me a thesaurus. Use the word temporary or something like that. That's crazy. Right. It definitely sent some chills down people's spines. Yeah. Really great point. I'm sorry to jump all over that, but you know that inflation is sticky, but I

I was not expecting that. I don't think anybody was expecting that. And, you know, I think, you know, a lot of Q&A came around the sentiment because sentiment has just fallen off a cliff. Come on, let's be fair. I mean, you know, the Michigan consumer sentiment. But then again, if you look at Michigan consumer sentiment or any of these sentiment type of surveys and you look at the Nasdaq, they're one of the same, right? They're kind of like confidence and so forth. So with all this tariff talk and the uncertainty around it, you know, this is why we got this pretty, pretty big leg down. But the question and answer I thought was really interesting.

You know, they would ask about, you know, noticing this fall off the cliff. And he would say, you know, but we're not seeing that in hard numbers. And so we're going to find out whether that, hey, survey is a leading indicator and we're going to find out a couple of months in a lag that people are holding off big purchases and durable goods and those type of things because of the concern that

Or maybe he's right because he also gave an example and said, well, there's some people concerned in the survey and they go out and buy a car the next day. So it was kind of interesting how you took that because there's a lot of questions around that. Don't you notice the market? Don't you notice the sentiment numbers? And he kind of brushed it off and kind of said, but

But they haven't shown up in hard numbers yet. And we can't act on this without having hard numbers. So it's going to be a great debate, these hard numbers as they come in. Or in fact, this is just a little survey scare. This is like a market correction, a bump in the road, and we get through it. Well, how do you read it? I mean, pull back.

are healthy from time to time. There are a lot of folks that say that we are due and ripe for a correction anyway. So are you, how are you navigating the moment? Are you putting more money in? Yes. So we think underneath the headlines, and these headlines are pretty gruesome. Come on. The cross currents and, you know, everything that's going on. But you know what hasn't changed? The AI revolution. The spend. The

hundreds of billions of dollars. I mean, Amazon said they can spend 90 some billion, now they can spend 105 billion. This is on AI and data centers and Microsoft's gonna spend 90 billion and they don't get the love anymore, right? But this is our opportunity as investors is the headlines are scaring a lot of people. They're running to one side of the boat, so to speak.

The sentiment is ugly. But that's a great setup to be picking up, which once were leaders, the Nvidia, Microsoft, and Apple. And a quick example, Nvidia, historically, the 4PE trades at 35 to 40, trading at 25 now. That means revenues are going up and stock prices are going down. So as an investor, sometimes we welcome this volatility, clean it out, and then go through, by the way,

more like a dollar-cost average approach. I'm not saying jump in with two hands or two feet or whatever you want to jump in with, but a little bit at a time. But that's what creates the opportunity is these headlines. And underneath the headlines is missing all the money that's being spent. Right. Yeah. Yeah. And, you know, as we're seeing that, you know, you're right. We are seeing more investment coming, but it's also coming as we have to talk about tariffs, right? Because tariffs are kind of like the context of what's driving all this volatility right now. We're looking ahead to April 2nd.

where President Trump says he is kind of doubled down this week on the promise for reciprocal tariffs. We've heard from some other administration officials that say, listen, negotiations are ongoing, so we know how this works. Anything could really happen. But as we see this kind of ongoing negotiation, it's just still continuing to create a lot of uncertainty. So do you think that the market could get uglier from here? Are you prepared for that?

Yeah, the market can definitely get uglier with everything that's happening. Usually, the way the cycle used to work is, OK, say the word tariff, we go down 900 points. And then next time you say it goes down 450 points. And it's like a half-life each time. But that's not happening here. And this March madness that we're going through, we just heard from Nike this morning. They're saying going forward, tariffs are going to impact their earnings. And one of our biggest concerns is pre-announcements. And you

God forbid, a whole bunch of companies start saying, hey, you know, tariffs are going to eat and we're going to pre-announce sometime middle of April or first week of April after the March 31st period. So we're definitely out of those woods. There's no doubt there's a lot of CEOs and CFOs that are pulling back major decisions because they don't know the rules of engagement. And this has been a very haphazard approach. As you know, this haphazard approach is one day it's 25%.

One day it's 40%, one day it's aluminum, one day it's champagne. It's hard to keep up with. And that's why you find so many individuals all the way up to CEOs kind of pulling back a little bit because of the uncertainty because of this constant trade and tariff banter. ED HARRISON Well,

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The other side of that coin, too, though, is that, I guess a couple of things. Trump always...

says that his tariffs will encourage investment in the United States. And we continue to see more and more announcement of companies that are pouring money in to try to get around tariffs. The latest coming this morning, Johnson & Johnson, says it's going to invest $55 billion in the U.S. over the next four years.

And that's going to build manufacturing facilities and so forth and so on. You know, that might take some time to realize, but some people argue that when the markets are reading all these headlines about tariffs, it's kind of looking past that long-term big picture investment.

And it's also looking past, you know, other parts of Trump's agenda like oil and gas. You know, his his goal is use tariffs to generate or to encourage investment.

And also unleash oil and gas production in the United States, that that is what the path forward is, that tariffs are not scary. They're going to help us, you know, build from here. Great, great jobs. Do you agree? Do you think the markets are kind of ignoring some of the other points, the finer points of Trump's agenda and just really only focusing on tariffs?

I think so. Look, there's a lot of countries that are now sending money into the USA. And, you know, you look at what Apple, Apple's, you know, Tim Cook was there at the inauguration, of course, with kind of the Mount Rushmore of the technology titans that were there. And him and Apple is going to invest up to $500 billion here in the U.S. Mm-hmm.

And again, now part of that supply chain, some of that is not dealing with the tariffs and following the leader, so to speak. But no doubt, there's a lot of supply chains that I think a lot of CEOs said, I wish we didn't have to have all those challenges. I wish we had more manufacturing here. And as far as oil, yes, if we can kind of increase oil supply, that would bring down prices. Remember, when we have oil prices that went up, you know, $100 and something a barrel, you know, that's a vicious cycle we get ourselves into, right? The wholesalers, manufacturers.

They pass it on to the producers. The producers pass it on to the consumers. And so just the opposite is true. If we can get lower oil prices, then we can start seeing the CPI come lower. The Fed can then

breathe a little bit easier, it can cut rates. So we get it, but there's a lag right now and everything is so instantaneous. And 80% of the trading is not from you and me, it's that the algorithms, they pick up the headline that says, tariff fight or whatever,

zoom in and that picks up all the computers and they all go together. So that's what's kind of going on at the moment. Extra volatility, like a rubber band being very elastic around this. But yeah, there actually are some good things about tariffs. And we want more of a level playing field. It's just going to take time to get that level playing field as well. You're so right about the oil prices and how they are such a big deal for the economy and ultimately what the American consumer pays, because it's not just gas at the pump.

Oil is gas for farmers, which is food production. Right, feeding oil, everything. It's everything. And right now, you know, our crude prices are trading at about $72 a barrel. And the issue that's tricky about oil is...

is that you want gas prices to be low for the American consumer. And of course, the administration say that's a win. When we unleash oil and gas, you know, then prices are going to drop and that's going to be great for the everyday American. But the other side of that, though, is that if they drop too low...

the argument is always what's the incentive to produce it then, right? Like what's the- Right, you want to go in there and it costs you $60 to bring out a barrel of oil and the spa price is 55. You know, they kind of shut down at that point, you know? Yeah.

The agenda has always been about America first, and that kind of starts with and ends with oil. And should we be in a position to have to, you know, worry about some people in the Middle East who hate our guts anyway and import from them? You know, he thinks the Biden administration was...

way wrong in all this and it's going to take some cleanup to do, but no doubt we could be more independent. Some say isolation is, I'm not sure about that, but definitely be more independent from OPEC and independent from other areas when we have our own oil on their own feet and

And that could bring it down to the level of threats and bring down a level. Remember, a lot of wars in this country were caused by oil. So this is not just oil prices going lower to help our consumers, businesses, as we mentioned. This is part of the agenda to be independent and not be so dependent on those who can't stand us in the first place. And it's such a good point because just this week, you know, the administration's announcing plans to open up Alaska for...

for more leases for drilling and building an LNG pipeline as well. So to your point, I mean, it sounds like you would agree that's a great move. I mean, there's some folks on the other side of the aisle that are really concerned about this, but that's a real key to making us independent so we can control, have more control over our supply.

to meet demand. Yeah. I mean, you think back in the 1970s, the Carter and the oil embargoes, and basically America was held hostage. I know that goes back a long time ago, but there's a lot of people who lived through that and saw that. And we don't want that. We want to have and be independent from the Middle East and not get into conflicts because of oil. I mean, we may have chip wars going on. That's all the story to itself. But to have oil wars makes no sense when someone supplies on their own two feet.

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Speaking of kind of having control over oil, I want to transition into having control over cryptocurrency because the White House just created with an executive order signed by the president, a strategic crypto reserve fund.

I guess just off the bat, you know, it's going to hold Bitcoin and a few other cryptocurrencies. What are your thoughts about that? It's kind of mixed. There's just so many things are happening. Sometimes I wish he would just focus what's on his plate instead of, you know, we're looking at Panama, grasslands, Gaza. But again, you know, one thing you have to give the president credit for, whether you like him a lot, when he campaigns, that's what he executes on. With Trump 1.0,

the things that he campaigned on, there are the priorities that he went after. So I see what he's doing here. It was part of the campaign to kind of strip away some of the red tape and even worse on the Biden administration. And this past week, the White House Digital Assets Summit. I just don't think we should go all in though. You know, I think, you know, if we're going to have a sovereign fund, we should have other assets other than the digital assets.

Again, it's one thing for America to take the lead, but it's also hard on the other side, I believe, because crypto is so volatile. You know, we also don't want to lose, you know, $800 billion on a bad trade by buying crypto and buying Bitcoin in a sovereign fund portfolio. But I get it. I get that we want to be leaders in everything. If it's going to run through cryptos, well, we need to be cryptos. If it's oil, whatever it is, you know, this president wants to make America first. And this lines up with that agenda.

Well, for now, the Reserve is going to hold Bitcoin and other cryptos. New purchases can only be made for Bitcoin.

And it's the other cryptocurrencies, which include things like Ethereum, XRP. It's just going to hold what's been seized through, you know, DOJ actions or FBI actions or things like that. So no new money deployed for these other cryptocurrencies. But you're right. It is incredibly volatile. Some people say setting up this reserve will kind of take away even from the dollar.

But on the other hand, the president wants to be the crypto capital of the world, the United States. He doesn't want another country to take that from us. So he says this is a big move in kind of establishing the fact that we're taking the lead. Are you invested in crypto? I am not. I am not. I guess the problem I have with it, I always thought the reason why you wouldn't want Bitcoin is that you can transfer it. Like, well, you could do that with Zelle. I could do that with PayPal. And so basically, sometimes I feel the reason why I would buy crypto is hope that someone buys it at a higher price.

I know that sounds kind of cynical. I said, OK, I'll tell you the day where my wallet, I can go to Best Buy and check out and use it as a currency, then I'm on board. But look, if there's a way that we could actually strengthen the US dollar and be crypto leaders, that's great.

But again, I want to be very cautious here. I don't want crypto to overtake the U.S. dollar, whether through efforts or other means. So I think the priority should be the U.S. dollar and strengthening that. Secondary could be different tokens and coins and that type of stuff. But I want to make sure the administration, again, has its sight on the dollar being the world currency and not necessarily Bitcoin, because I think actually that would put us in the wrong direction.

Ken Mahoney, so great to chat with you on this Friday. Yes, it's a great Friday, yeah. Have a great weekend, and we'll talk to you again really soon. Great, thank you. Fox News Audio presents the Fox Nation Investigates podcast, Evil Next Door. Exploring the life and crimes of five serial predators from across the United States. Listen and follow now at foxtruecrime.com or wherever you get your favorite podcasts.