Why Trump’s War Week Didn’t Break Markets - Prof G Markets Recap
Podcast: Prof G Markets
Published: 2026-01-19
Duration: 1 hr 19 min
Guests: Ed Elson
Summary
President Trump's investigation into Jerome Powell aims to sideline him, while market dynamics in metals and AI are reshaping economic landscapes. Despite geopolitical instability, the markets remain resilient.
What Happened
Scott Galloway and Ed Elson dive into the political maneuvering behind President Trump's investigation of Federal Reserve Chair Jerome Powell. Galloway suggests that Trump's goal is to sideline Powell entirely, not just remove him as Fed chair, due to Powell's independent handling of interest rates and inflation control. Powell's efforts are compared to 'threading a needle in space,' highlighting his economic acumen and the public's surprising support, including from the Reddit community and meme stock traders, who view him as a hero against Trump's actions.
The episode also explores the dramatic rise in metal prices amid Trump's geopolitical moves on Venezuela, Greenland, and Iran. Metals like copper, gold, and silver have seen substantial gains, driven by geopolitical instability and their role as risk-off assets. Galloway notes that historically, metals perform well during times of danger, as demonstrated by the 36% increase in copper, 72% in gold, and 187% in silver in 2026.
In the context of Venezuela, the discussion highlights the complexities of oil economics, emphasizing that controlling the flow of oil is more influential than ownership. This is underscored by the fact that Venezuela's oil costs exceed its selling price, making it a strategic geopolitical asset rather than a straightforward economic one.
The episode also examines AI's impact on market dynamics, with notable developments like the Apple-Google partnership leveraging Google's AI model, Gemini. This partnership has boosted Google's market cap to $4 trillion, showcasing the intense competition in the AI space.
Anthropic's launch of Claude Cowork, a consumer-focused coding agent, is generating significant buzz and poses a strong challenge to OpenAI. While ChatGPT remains dominant among consumers, Anthropic is gaining traction in enterprise deals, and Apple's strategic moves are positioning it as a key player in the AI race.
The hosts discuss the implications of China's AI dumping strategy, offering low-cost LLMs to achieve technical parity. This tactic shifts the competitive landscape, with Apple leveraging its iOS user base for AI market negotiations, potentially paying Google a billion dollars for AI model access instead of using ChatGPT for free.
Lastly, the impact of AI on the workforce is considered, with automation increasingly taking over entry-level tasks like email management and document creation. This shift prompts a reevaluation of how companies approach talent development and operational efficiency.
Key Insights
- President Trump's geopolitical actions have led to a significant increase in metal prices, with copper rising by 36%, gold by 72%, and silver by 187% in 2026, as these metals are seen as safe-haven assets during times of instability.
- Venezuela's oil industry operates at a loss, with production costs exceeding sale prices, making the control of oil flow a more strategic geopolitical asset than mere ownership.
- The partnership between Apple and Google to utilize Google's AI model, Gemini, has propelled Google's market capitalization to $4 trillion, highlighting the competitive nature of the AI sector.
- Anthropic's introduction of Claude Cowork, a consumer-focused coding agent, is challenging OpenAI's dominance in the enterprise AI market, while Apple's strategic positioning in AI negotiations involves potentially paying Google for model access rather than using ChatGPT for free.