Squawk Pod Episode Summary

Podcast: Squawk Pod by CNBC
Episode: A Fed Chair & Treasury Secretary: Janet Yellen
Air Date: August 8, 2025
Host: Andrew Ross Sorkin
Guest: Janet Yellen (Former Fed Chair & Treasury Secretary)
Key Themes: The politicization of economic data, tariffs, interest rate policy, financial sector controversies, and the independence of the Federal Reserve.

Episode Overview

This special episode of Squawk Pod features an extended interview with Janet Yellen, the only person to have served as both U.S. Treasury Secretary and Federal Reserve Chair. Broadcasting from the Aspen Economic Strategy Group, Yellen discusses the dramatic recent developments: political interference in economic institutions by President Trump, the evolution and effects of tariffs, prospects for interest rate policy, and concerns about the future independence of key financial regulators. The episode dives into market and economic reactions to these changes, drawing on Yellen’s unparalleled experience.

Key Discussion Points & Insights

Politicization of Economic Data and Institutions

• Firing of Bureau of Labor Statistics Commissioner (04:05)

  • Yellen Reaction: Strongly condemns the firing, explaining,

    "I was appalled. Our statistical agencies have set the gold standard...never, to the best of my knowledge, been subject to political manipulation."
    (Janet Yellen, 04:05)

  • She warns that politicizing economic data undermines trust not just in the numbers, but in the entire system that businesses, investors, and households depend on.

• Market Response (05:03)

  • Yellen is surprised by the lack of immediate market reaction, attributing it to market participants’ confidence in built-in controls.
  • She cautions that true politicization of statistics would prompt a "very significant market reaction."
    (Janet Yellen, 05:25)

• Modernizing Government Data Collection (07:11)

  • Yellen addresses frustrations with data accuracy and revision, saying the tradeoff is between speed and reliability, and notes agencies are underfunded.
  • She emphasizes,

    "There's nothing that has the rigor, the national sample, the controls...It’s irreplaceable. We should be investing in it."
    (Janet Yellen, 07:11)

Tariffs and Their Economic Impact

• Scale of Tariffs (08:18, 09:19)

  • Yellen highlights the real and impending increase in tariffs, comparing current moves to protectionism not seen since the 1930s.
  • She projects a return to average tariff levels of 15–20% and warns these are "very meaningful" and "really a tax increase," increasing costs for Americans.

    "We're now approaching $30 billion a month of tariff revenue. This is not all going to be borne by corporations. Americans are going to see..."
    (Janet Yellen, 09:19)

• Who Bears the Cost? (10:21)

  • Yellen clarifies that foreign exporters are unlikely to lower their prices to absorb tariffs. Instead, costs will largely fall on American businesses and, ultimately, consumers.

• Price Increases and Corporate Response (11:36)

  • Explains why companies have yet to raise prices: uncertainty about the permanence of tariffs and existing inventories.
  • Predicts as inventories run down and legal uncertainties clear up, prices will rise for American consumers.

Trump’s Take on Trade Deals & Yellen’s Critique

• President Trump’s Claim of "Greatest Trade Deals" (12:54)

  • Trump touts his approach to renegotiating trade to protect the U.S.

    "We made the greatest trade deals in the history of our country. We had to because we were being ripped off by the world."
    (Donald Trump, 12:54)

• Yellen’s Skepticism About Long-term Effects (13:25)

  • She doubts these deals will translate into major capital investments in the U.S., calling them "agreements in principle that really don’t have any teeth."

Banking Sector Controversies

• Allegations of Political Discrimination by Major Banks (14:29)

  • Trump alleges banks discriminated against conservatives, including himself.

    "I had hundreds of accounts. And he said, we can't do it. No, we can't do it."
    (Donald Trump, 15:41)

• Yellen’s Perspective (15:48)

  • She points to banks’ concerns about reputational risk, anti-money laundering laws, and federal regulations, especially with controversial clients.
  • Cites similar challenges facing legal but federally-restricted businesses, like marijuana sellers.

Interest Rate Policy and Economic Outlook

• Pressure on the Fed (17:25, 18:33)

  • Sorkin probes whether Trump’s push for rate cuts is justified.
  • Yellen concedes that "some rate cut going forward" may now be more likely due to "meaningful slowing of growth and a stalling out in the labor market."

    "I think likely, some adjustments of the funds rate are more likely in light of the data."
    (Janet Yellen, 18:33)

• Market Expectations and Financial Conditions (20:05)

  • Yellen warns of the risks of overtly political appointments at the Fed, noting that Trump’s stated reason for wanting lower rates—reducing U.S. debt costs—is not appropriate for independent central banks.

• Prospective Fed Chair Candidates (21:52)

  • While avoiding comment on specific names, Yellen notes that making the Fed Chair appointment overtly political undermines the future Chair’s credibility.

    "By making the choice so political, I think President Trump is creating a problem for whoever is tapped to fill this job."
    (Janet Yellen, 22:08)

Notable Quotes & Memorable Moments

• On Politicization:

  "To me, this was a temper tantrum being thrown by a president who doesn’t like what the statistics say about the performance of the economy."
  (Janet Yellen, 04:49)

• On the Irreplaceability of Government Data:

  "There’s nothing that has the rigor...It’s irreplaceable. We should be investing in it."
  (Janet Yellen, 07:11)

• On Tariffs:

  "We're likely to end up with average tariff levels somewhere in the 15 to 20% range, which is really going back to...the 1930s. And these are very meaningful."
  (Janet Yellen, 08:18)

• On Fed Independence:

  "He’s suggesting tying monetary policy to helping the Treasury pay interest on the debt, which is an argument that is really out of bounds in terms of what independent central banks...focus on."
  (Janet Yellen, 20:20)

• On Future Fed Leadership:

  "That person will have to...convince the markets that, like past Fed chairs, they’re trying to independently assess the data and make policy to achieve the dual mandate."
  (Janet Yellen, 22:08)

Timestamps for Key Segments

• [04:05] Yellen’s reaction to BLS firing and politicization of statistics
• [07:11] Modernization and funding of statistical agencies
• [08:18] Tariffs' historic scale and impact
• [10:21] Who bears tariff costs?
• [11:36] Why prices haven’t risen yet
• [13:25] Yellen critiques Trump’s trade deals
• [15:48] Yellen on banking sector discrimination, risk, and legality
• [18:33] Likelihood of rate cuts this year and economic context
• [20:05] Effect of Fed leadership politics on market expectations
• [22:08] Importance of Fed independence and risks of political appointments

Summary for Non-Listeners

This episode sheds light on a pivotal moment in U.S. economic policy, with Janet Yellen offering candid, deeply informed insights. She worries about increasing political interference in fundamental economic agencies and warns of the long-term costs of higher tariffs and undermined institutions. Yellen also discusses interest rates, weighs in on the complex dynamics between political leaders and financial regulators, and underscores the importance of data integrity and central bank independence. Her clear, direct language makes the stakes—both economic and political—vivid and urgent for anyone who cares about the future of the American economy.