A Stake in Intel & Chicago Fed’s Austan Goolsbee: “A Note of Unease” 8/15/25

Summary

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Squawk Pod: A Stake in Intel & Chicago Fed’s Austan Goolsbee — “A Note of Unease”

Episode Date: August 15, 2025
Host(s): Joe Kernen, Andrew Ross Sorkin, CNBC Team
Main Guests: Austan Goolsbee (President, Chicago Fed), Steve Liesman, Rick Santelli, Eamon Javers, Katie Kramer (Producer/Host)

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Episode Overview

This episode unpacks two big economic headlines:

• The potential for direct US government investment in Intel (following President Trump’s reversal regarding its CEO) and broader implications for US industrial policy.
• Inflation signals in the latest data and insights on how tariffs and volatile price indexes may influence Fed thinking, as explained by Chicago Federal Reserve President Austan Goolsbee (“a note of unease”).

Throughout, hosts Joe Kernen and Andrew Ross Sorkin engage in sharp debate, joined by senior reporters and guests offering historical context, critical data interpretation, and candid perspective on policy crossroads.

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Key Discussion Points & Insights

1. Inflation, Tariffs, and Who Bears the Burden (03:05 — 06:00)

• Wholesale prices surged in July, with the Producer Price Index (PPI) rising 0.9% — the largest jump since March 2022.
• Tariffs’ impact: Companies are absorbing increased costs rather than passing them to consumers, but this is seen as unsustainable.
  • Joe Kernan: “They can't do that forever.” (03:46)
  • Andrew Ross Sorkin: “That's why it's going to eventually hit [consumers].” (04:01)
• Core worry: Flat or declining real wages, despite a strong stock market, are fueling public discontent even as headline macro numbers look good.
  • Joe Kernan: “Their purchasing power didn't go up, their real wages were down...By the end of the administration...you still were making less.” (04:29)

2. Talk of US Government Taking a Stake in Intel (08:15 — 18:30)

• Breaking news: Reports (Bloomberg, WSJ) say the White House is considering direct investment in Intel in exchange for equity, days after previously calling for the CEO's removal.
  • Katie Kramer: “We don’t know exactly what happened in that meeting, but something happened to turn the president’s mind around in a big way on Lipp [Intel CEO] and Intel.” (10:10)
  • Andrew Ross Sorkin challenges: “What kind of taxpayer money are we giving to Intel? Is Intel giving a stake...to the taxpayer as a present?” (10:40)
• Historical context: US government equity stakes are rare (banks in 2008, automakers, Fannie & Freddie) and normally associated with existential crises — not industrial policy.
  • Andrew Ross Sorkin: “In each of those cases...the situation was viewed as existential. Right. These companies were going to fail...” (12:18)
• Shift in rationale: The Intel case is about strategic competition with China, not corporate rescue.
  • Joe Kernan: “It's not, it's not for Intel, it's for...our ability to compete in very important security issues in the future against China.” (13:09)
• Potential precedent: Moves like this, and similar ones with US Steel, Nvidia, and AMD, raise debate over whether the US is creeping toward “state champions” and industrial policy models akin to Europe or China.
  • Andrew Ross Sorkin: “We have long denounced national champions...when other countries have taken these golden shares.” (15:45)
  • Katie Kramer: “This is getting closer to...state champions and state-sponsored capitalism if it’s a slip in a way that we haven’t seen in this country before.” (17:21)
• Skepticism and Acceptance:
  • Joe Kernan: “I'm not immediately going to say that the world is ending because we're turning into China...industrial [policy].” (18:46)
  • Andrew Ross Sorkin: “We are turning into China.” (18:59)

3. The Central Bank's View: Inflation and Tariff Impact — Interview with Fed President Austan Goolsbee (19:42 — 41:37)

Inflation Signals and "A Note of Unease"

• Data rundown: Mixed inflation reports, with CPI and PPI recently “kicking up” in less transitory categories, especially services.
  • Austan Goolsbee: “We put in a note of unease...with the inflation kicking up and kicking up in categories that are not obviously going to be transitory.” (19:42, expanded at 28:05)
• Tariffs as stagflationary risk:
  • Goolsbee: “The theory that tariffs are a one time price increase, that's true for one and done tariffs and these haven't been won or done...Is this going to be a persistent inflation shock...stagflationary...that’s the worst thing the central bank has to think through...” (30:43)
• Import price data: U.S. companies appear to be absorbing costs, as prices on finished imported goods rise, indicating foreign exporters aren't undercutting prices to offset tariffs.
  • Steve Liesman: “At least in the data, we cannot find the idea that foreign exporters are absorbing this price, at least not now.” (03:21 & 26:25)
• Fed outlook: Goolsbee is cautious, not ready to signal imminent rate cuts unless inflation settles convincingly lower.
  • Goolsbee: “Let's not overreact to one month of import price data for sure. Let's not overreact to one month of CPI or PPI inflation, but it's at least an area of concern.” (29:17)
  • Goolsbee: “If we keep getting inflation reports like the ones we had, the first two of these four...I would be very comfortable that...the dust is out of the air...” (33:55)
  • Goolsbee, on latest data: “That makes me a little uneasy because that's very unlikely to be caused by tariffs. So I'm hoping that was a blip. If that wasn't a blip, then that's an area of concern...” (37:11)
• Real Wages and Politics: Acknowledges that stagnant or declining real wages are a major public concern and political vulnerability, but reiterates he’s speaking as a central banker, not a political analyst. (34:51, 35:40)
• Labor market lens: Goolsbee suggests watching employment ratios and rates due to the unpredictability introduced by immigration and population changes, not just monthly payroll gains.
  • Goolsbee: “Those ratios and rates were a little bit better indicator of business cycle. So the hiring rate, the layoff rate, the job openings rate, and the unemployment rate, those are kind of the four horsemen...” (39:01)

4. Lighter Moments and Notable Quotes

• Debate over industrial strategy:

  • Andrew Ross Sorkin (re: US government stakes): “We have been trying...to export our brand of free market capitalism to other countries. We have long denounced national champions...” (15:45)

• Squawk Box banter:

  • Joe Kernan: “I just defer to Mr. Market most of the time. You know what? Mr. Market doesn't like August and it doesn't like September.” (06:02)
  • Andrew Ross Sorkin, quipping about translators for Trump and Putin: “I would just bring Gemini with me.” (07:09)

• Austan Goolsbee and the “data dog” approach:

  • Goolsbee: “One of the main rules of the data dogs is don't be too choosy about what you sniff, you know, whatever hits the floor.” (39:01)

• Hair jokes between hosts and Goolsbee:

  • Joe Kernan (on Fed chair style): “Could you ever foresee a Fed chairman with hair like Axl Rose? ...Is that in the realm of possibility?” (40:31)
  • Austan Goolsbee: “You think they need to be bald? What is your position? I like bald.” (40:53)

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Timestamps for Key Segments

• Tariffs and inflation Q&A: 03:05 – 06:00
• US-Govt/Intel stake report: 08:15 – 18:30
• Fed and Goolsbee interview: 19:42 – 41:37
  • Goolsbee: “A note of unease” — 19:42, 28:05, 29:17, 30:43
  • Service inflation concern — 37:11
  • Labor market indicators — 39:01
• Squawk banter/closing: 41:43 – end

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Memorable Quotes (with Speaker & Timestamps)

• Joe Kernan, on tariffs: “They can't do that forever.” (03:46)
• Andrew Ross Sorkin: “What kind of taxpayer money are we giving to Intel? Is Intel giving a stake in Intel to the taxpayer as a present?” (10:40)
• Katie Kramer (re: White House turning around on Intel): “We don’t know exactly what happened in that meeting, but something happened to turn the president’s mind around in a big way...”(10:10)
• Andrew Ross Sorkin: “We have long denounced national champions. When other countries have taken these golden shares and golden stakes, we've said that's a bad idea.” (15:45)
• Katie Kramer, on shifting US policy: “This is getting closer to...state champions and state sponsored capitalism if it's a slip in a way that we haven't seen in this country before.” (17:21)
• Austan Goolsbee: “We put in a note of unease, I’d say, in the last CPI and now PPI, with the inflation kicking up and kicking up in categories that are not obviously going to be transitory.” (19:42)
• Steve Liesman (on tariffs): “At least in the data, we cannot find the idea that foreign exporters are absorbing this price, at least not now.” (03:21, 26:25)
• Goolsbee (re: the labor market): “Those ratios and rates were a little bit better indicator of business cycle...the four horsemen of justice in this thing.” (39:01)

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Tone and Style

• Energetic, lively debate — with sharp, occasionally irreverent exchanges.
• Clear division between raw data interpretation and policy implications.
• Historical anchoring — frequent references to past crises and interventions.
• Touches of humor and personality — evident in banter between Joe and Andrew, and light moments with Goolsbee.
• Direct quotes and plain language — “data dog” analogies, and persistent appeals for clarity in economic storylines.

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For Those Who Missed the Episode

This episode is essential listening for anyone following:

• The evolving playbook of US industrial policy and the blurring line between strategic investment and free-market doctrine.
• The risks and complexities of interpreting inflation prints in a tariff-heavy, election-year environment.
• How Fed officials are weighing persistent price shocks, real wage stagnation, and the potential for stagflation.

Goolsbee’s “note of unease,” alongside the hosts’ cagey acceptance of new government moves, underscores this uncertain moment — one in which economic orthodoxy, politics, and global rivalry intersect more than ever.

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Transcript

[Andrew Ross Sorkin]

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[Schwab Market Update Announcer]

This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and [e-mail] MarketUpdatePodcast or find Schwab Market Update. Wherever you get your podcasts.

[Katie Kramer]

Bring in show music please.

[Squawk Pod Host]

Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod, where does the true cost of inflation go?

[Joe Kernan]

Wall street has not reacted badly to.

[Andrew Ross Sorkin]

The tariffs yet, and the question is, should they?

[Squawk Pod Host]

We go behind the numbers with economics reporter Steve Leesman.

[Steve Liesman]

At least in the data, we cannot find the idea that foreign exporters are absorbing this price, at least not now.

[Squawk Pod Host]

The latest data suggesting that companies are still bearing the brunt of tariff uncertainty. When does it hit consumers? We talk exclusively to Chicago Federal Reserve Bank President Austan Goolsbee, who is sounding a note of caution.

[Austan Goolsbee]

Let's not overreact to one month of CPI or PPI inflation, but it's at least an area of concern.

[Squawk Pod Host]

Plus the surprising news that the US Government is considering taking an ownership stake in intel days after President Trump wanted the CEO fired. Our Eamonn Javers reports.

[Katie Kramer]

We don't know exactly what happened in that meeting, but something happened to turn the president's mind around in a big way on Lipp, Bhutan and Intel.

[Squawk Pod Host]

But can Uncle Sam really pick winners and losers?

[Andrew Ross Sorkin]

We have been trying, maybe you could argue unsuccessfully, but I think relatively successful over the last hundred years to export our brand of free market capitalism to other countries. We have long denounced national champions. When other countries have taken these golden shares and golden stakes, we've said that's a bad idea.

[Joe Kernan]

It's not going to open up the floodgates. I tried. I had a lighter on my head and I kept going and I couldn't get it going.

[Squawk Pod Host]

It is Friday, August 15, 2025. Squawk Pod begins right now.

[Austan Goolsbee]

Stand Andre by in 3, 2, 1, 2. Andrew.

[Andrew Ross Sorkin]

Good morning. Welcome to Squawk Box right here on CNBC. We're live at the NASDAQ Market site in Times Square. I'm Andrew Ross Sorkin along with Joe Kernan. Becky is off on this summer Friday. Take a look at US Equity futures.

[Squawk Pod Host]

First up today on the podcast, the US stock markets on track for a winning week in spite of a stumble. Thursday mixed day.

[Andrew Ross Sorkin]

It's been quite a ride even though.

[Joe Kernan]

We'Re not going to finish on either.

[Andrew Ross Sorkin]

Side of flat most stocks down. But the market met managed to hang.

[Squawk Pod Host]

In there when a hotter than expected producer price index saw wholesale prices had risen in July, a 0.9% jump that was the biggest since March of 2022. Now this could indicate that sticky inflation remains. Companies have been bearing the cost of potential tariffs or the actual levies themselves and not passing that on to consumers yet. Is that about to change?

[Joe Kernan]

You know, the Journal has a great I they make, they make me think about a lot of things. I'll tell you what I'm thinking. So the Journal's right. We now know who's paying for tariffs. CPI companies are eating a lot of. Yes, so far they're eating a lot. They can't do that forever.

[Andrew Ross Sorkin]

Correct. And that's why it's going to eventually.

[Joe Kernan]

Hit the scary thing and the Journal points it out is that the worst thing about inflation or even one time cost increases is that it hurt. It's hard to have real wages increase. Correct. And it's been anemic now 1%.1% in July, zero in June. The point four in May and March might have but that's how they eat it.

[Andrew Ross Sorkin]

That's one of the ways they eat.

[Joe Kernan]

That's the way they eat it.

[Andrew Ross Sorkin]

But and that's the way we read.

[Joe Kernan]

That people felt crappy during the Biden administration when everything seemed, you know, stock market was at high, things seemed like.

[Andrew Ross Sorkin]

They were going well.

[Joe Kernan]

Their purchasing power didn't go up, their real wages were down. And we mentioned that again and again and again. They finally turned up towards the end of the administration. But no one by the end of the administration you still were making less and weekly real wages and you were at the beginning of the administration. So it's, it's an issue. But what bugged me about this Andrew, was that perhaps this is one reason Wall street reacted badly to the producer price news. The S and P was up to a new high 2 points yesterday. The Dow finished down 11. The yield curve at this point, remember those numbers we were, we were worried about four and a half on the 10 year we were worried about five I think on the 30 year and we were worried about there were all those, those roundup, we're still well, well below all those levels. We're 429 on the.

[Andrew Ross Sorkin]

Sure. But.

[Joe Kernan]

Well, I'm just saying Wall street has not reacted badly to the tariffs yet. We're at new highs. The bond market is not ready.

[Austan Goolsbee]

Correct.

[Andrew Ross Sorkin]

And the question is should they still could. That is the question.

[Joe Kernan]

We always say that it and I always feel uncomfortable thinking that the market doesn't know what it's doing. I just, I think at first, I.

[Andrew Ross Sorkin]

Think we've been in a number of situations, you and I, over the years where the market has been not correct.

[Joe Kernan]

I think there's been many more times where you thought it shouldn't be doing what it's doing and it continue to do it and you finally just threw in the towel. I think that's, I think there's a.

[Andrew Ross Sorkin]

Couple of those times. I don't disagree. I think that's a couple of those.

[Joe Kernan]

I just defer to Mr. Market most of the time. You know what? Mr. Market doesn't like August and it doesn't like September. So there's certainly a.

[Andrew Ross Sorkin]

It is, it doesn't like October either.

[Joe Kernan]

Because we bottom in October we go August and September and then we have the horrible day where there's like a, there's been a lot of bottoms made in October. Our top story this morning and I oh yeah. And then we'll get to the intel because I'm having trouble getting all agitated about this. I don't know whether you are but. President Trump is set to meet Russian President Vladimir Putin later today in Alaska. It's going to be Putin's first visit to a western country since he and his country invaded Ukraine in 2022, his first trip to the US in a decade. The two leaders will discuss the Ukraine war at a military base in Anchorage. It's expected to be a one on one gathering with the Kremlin saying interpreters will also be present, which is would be necessary. I think it's a good thing. You're going to get nowhere if there's no interpreter. If Putin's speaking Russian without the interpreter. Yeah. And Trump speaking, you get nowhere. Right. I think it's a great idea.

[Andrew Ross Sorkin]

I would just bring Gemini with me.

[Joe Kernan]

A joint. Really? You picked Gemini this time Translation oh really?

[Andrew Ross Sorkin]

Fantastic. Really real time translation so you got.

[Joe Kernan]

There'S like six of them.

[Andrew Ross Sorkin]

You got to pick your poison for a specific.

[Joe Kernan]

I said the other day, you can't.

[Andrew Ross Sorkin]

Really say pick your poison lemma, because.

[Joe Kernan]

I just like to say lemma. But I don't know which one's best you do. A joint press conference may be on the agenda. It's unclear though, either way, President Trump said he's going to talk to the press after meeting Putin. President Trump says more important than the sit down with Putin would be another meeting which also includes Ukraine's President, Volodymyr Zelensky. The president suggested that that could happen before he leaves Alaska, but Russia has not agreed to that yet. Trump has warned very severe consequences, in his words, if Russia, if Putin does not agree to end the war or get some type of ceasefire or at least to start planning an end. Though he has publicly downplayed the chances of an immediate ceasefire.

[Andrew Ross Sorkin]

Let's talk about this corporate news. I know you have views on it. We'll bat it around in a moment. I want to get Damon Javers first and then we'll talk about, I'm sure.

[Joe Kernan]

Eamon's agitated hold on the Trump administration.

[Andrew Ross Sorkin]

Reportedly considering taking a step stake in Intel. Shares of the chip giant jumping on that news. Amens in Washington right now. That's Amy Javers, of course, the one and only. And we want to get his take and maybe some of the details about where things stand and then we can all battle it around together. Go for it.

[Katie Kramer]

Yeah. Bloomberg first reported this news, Andrew, and now the Wall Street Journal's got it too, which is that according to those outlets, the White House is considering taking an ownership stake in intel in exchange for an investment the size of that investment. We don't quite have that information and we don't have the information of how much of a stake they will take. But here's the statement from the White House. They say discussion about hypothetical deals should be regarded as speculation, they say, unless officially announced by the administration. So the White House downplaying this, but you'll note that's a no comment, Andrew. It is not a denial and certainly doesn't say that that would be an inappropriate thing to do for, for its part, intel also out with a statement. Intel's statement similarly also talks about speculation. They say intel is deeply committed to supporting President Trump's efforts to strengthen US Technology and manufacturing leadership. We look forward to continuing to work with the Trump administration to advance these shared priorities. But we are not going to comment on rumors and speculation. So no comments around the horn from the key players here. We know that the CEO of Intel met with President Trump on Monday at the White House. The president had been calling for his ouster before that said he was hopelessly conflicted because of his business ties in China. Lipp Bhutan meets with the President on Monday. One on one. After that meeting, the President posts on social media and says actually he's got a fascinating story, he's got some clever ideas and we're going to be working together to develop those ideas in the coming weeks. So we don't know exactly what happened in that meeting, Andrew, but something happened to turn the President's mind around in a big way on Lipputan and Intel. And now we have this reporting from Bloomberg and the Wall Street Journal saying that part of what that might be is this idea of the US Government taking a stake in the company.

[Andrew Ross Sorkin]

And the question that I have about taking the stake in the company is what is the U.S. government going to be? Well, I have about 100 questions about the implications of it, but.

[Steve Liesman]

Right.

[Andrew Ross Sorkin]

The idea that we are taking a stake, what, what does that actually mean? What kind of taxpayer money are we giving to Intel? Is intel giving a stake in intel to the taxpayer as a present?

[Joe Kernan]

We're already giving them a lot of taxpayer.

[Andrew Ross Sorkin]

You know, of course I do the reporting from Bloomberg, what exactly we talked about.

[Katie Kramer]

Bloomberg is. Yeah, I mean again, we can't match this as of right now, but what Bloomberg has reported is that this would be a US Government investment of dollars in exchange for a stake. Now presumably that's an equity stake, presumably that shares. We don't know for sure how it would be structured and we don't know how much money. The idea being that this would kick start investment in plants in the US to build chips. That's the President's goal here. But as you say, Andrew, this is a company that's gotten a lot of money from the US Government in the Biden administration. It was nothing, a ton of money.

[Andrew Ross Sorkin]

So Amy, let's talk about this though.

[Katie Kramer]

And the company is, what's the difference this time around? Right.

[Andrew Ross Sorkin]

The companies in America where the, where the taxpayer, the government has taken actual stakes in businesses, I think I can count them for the most part on one hand. Obviously there were the banks post 2008 crisis for a period of time, but with the plan being, and the proviso being that they would be out and they were within this case, they were within about a year.

[Joe Kernan]

Automakers, we made money. Fannie and Freddie.

[Andrew Ross Sorkin]

We had General Motors and we had Fannie and Freddie.

[Joe Kernan]

Fannie and Freddie.

[Andrew Ross Sorkin]

Fannie and Freddie, which still, which we still own.

[Joe Kernan]

Right.

[Andrew Ross Sorkin]

And anybody else, which is a whole.

[Katie Kramer]

Other issue off the top of my head, I can't think of any. And in each of those cases, you know, the, the situation was viewed as existential. Right. These companies were going to fail and to borrow a term from your book, they were too big to fail.

[Andrew Ross Sorkin]

Right.

[Katie Kramer]

And the US Government couldn't allow that to happen and so stepped in and made a massive taxpayer investment. And that has for the large part worked out. You know, with the exception of Fannie and Freddie, which the US Government doesn't seem to be able to figure out how to ipo. There's some speculation that that IPO might be coming under Trump too now. But the idea is that these companies are in an existential dire crisis and the US Government has no other recourse other than now.

[Joe Kernan]

It's now it's both parties.

[Katie Kramer]

The approach has been we won't do this unless we absolutely have to, because we don't.

[Joe Kernan]

Now it's a security thing. Now it's a, it's not, it's not for intel, it's for. We want the press, we want those strategic metals. So we're doing it with that company. This is about China and it's about an existential threat, not to the companies, but to our ability to compete in very important security issues in the future against China. I didn't realize that they almost did it. William Barr wanted to do it with telecom companies to compete with Huawei in the first Trump administration, but it never went forward. So it's been considered before. I mean it appeals to me a little bit more than just grants. If you take care of childcare, we'll give you a bunch of money at intel and we get nothing for it. Here's the other thing and you wonder about are people scared or are CEOs afraid to push back? I think at this point it's like it's fighting city hall. It's like if you can't beat him, joining this president is going to do these things. And I think you almost get inured to, to it at some point and you don't know whether this is going to be a good thing or a successful thing or not.

[Andrew Ross Sorkin]

So there's two.

[Joe Kernan]

They give him the benefit of the doubt because they can't stop him. He's president.

[Katie Kramer]

Well, two other, two other examples just from this year, guys, that's a low bar. One is the same share with US Steel.

[Joe Kernan]

Right.

[Katie Kramer]

The golden share with US Steel and the 15% deal with Nvidia and AMD. Right. So let's just talk about revenue stream.

[Andrew Ross Sorkin]

From those companies and here's the distinction in those, in those cases and this new intel deal, which is these are effectively long term investments which is a very different approach. Right. The others were rescues. Right. And by the way, there were rescues with the proviso that the, at least the stated plan, even with Fannie and Freddie back in the day, was actually that the government was going to be in and they were going to be out. The plan wasn't we're in and we're here forever. I would imagine this investment with intel, as it appears with some of these other arrangements, is a much longer term arrangement that probably has implications, by the way, for the entire industry, Joe. So I don't know where you, where you sit there. The other piece of this though, that to me is the, the longer term thing. And I know you may think, first of all, this CEO is, it appears, is doing this under duress because he might be losing his job otherwise. So let's just.

[Joe Kernan]

But that intel is, it's a mess, somewhat an existential. And we need. You've mentioned maybe they build the foundries and you said, wow, it's important. They're the one company that does have the foundries, maybe would want them to.

[Andrew Ross Sorkin]

You might. What I don't know is whether there's a long term, decades long implication for how other countries are going to do business or not do business in the United States in the future. We have been trying, maybe you could argue unsuccessfully, but I think relatively successful over the last hundred years to export our brand of free market capitalism to other countries. We have long denounced national champions. When other countries have taken these golden shares and golden stakes, we've said that's a bad idea and we have tried so desperately to create a system in the world.

[Joe Kernan]

It's not going to open up the floodgates.

[Andrew Ross Sorkin]

I tried and I had a lighter.

[Joe Kernan]

On my head and I kept going and it couldn't get it going. I could not.

[Andrew Ross Sorkin]

I know.

[Joe Kernan]

Yours is so tender, it's so dry and so ready that a spark from lightning. And yours is. I couldn't, I can't get agitated. Are you agitated?

[Andrew Ross Sorkin]

I'm not agitated.

[Joe Kernan]

But you're playing out all the downsides.

[Andrew Ross Sorkin]

When that's the job. The job is to say there's upsides. Let's talk about the upside and let's talk about the downsides. Why are we not allowed to talk about both of these things?

[Joe Kernan]

But I just all of a sudden.

[Andrew Ross Sorkin]

Because instinctively you only talk about what you think of is everything is good, everything is great.

[Joe Kernan]

Eamon all of a sudden, by the.

[Andrew Ross Sorkin]

Way, in the last administration any, if, if Biden had done this, your hair would have been there. Would have been an explosion.

[Joe Kernan]

It was consistent. It was, it wasn't. This isn't the same thing though. This isn't the, this isn't giving it away. If you have union workers and childcare.

[Andrew Ross Sorkin]

And DEI to hire enough Eamon Javers break in here and tell us what you think.

[Joe Kernan]

Amen's fine.

[Katie Kramer]

Look, he looks, yeah, look, I mean, it's not my job to think one thing or another, but you got to put it in context, right? And this is, Joe, this is getting closer to sort of state champions and state sponsored capitalism if it's a slip in a way that we haven't seen in this country before. And so you debate whether that's a good idea or not.

[Joe Kernan]

Right?

[Katie Kramer]

We can't, you know, look, I talked to folks in the White House earlier this week about whether the idea of Nvidia 15% stake was a one off.

[Joe Kernan]

That's an export tax.

[Katie Kramer]

And the initial reporting I got from the White House was, yeah, this is a one off. That's, it's just, it's artificial intelligence, it's chips. We're not envisioning doing this in a more broad way. Two days later we had the Secretary of the treasury come out and say, actually, you know what, we view this as a model and we think, you know, this could work in other industries, in other cases. So, you know, these things have a way of taking a life of their own. And once people see in the government, see the revenue coming in, it's hard to let go of that.

[Joe Kernan]

You could, okay, right now it's the strategic metals, it's steel, it's chips, it's in video, by the way, I get.

[Andrew Ross Sorkin]

It, saying that this is, you know, the end of the world. I just want to be clear.

[Joe Kernan]

I don't think it's a slippery slope. I don't think all of a sudden you can extrapolate that we're going to have that the government's going to have a stake in every, you know, in tapestry to make decent.

[Andrew Ross Sorkin]

The last 15 years I've known you, everything's a slippery slope. If we go this way, it's a slippery slope.

[Joe Kernan]

Just, you got to deal with it. I told you, I'm getting inured to it. These are out of the box ways to think about things. And I'm not immediately going to say that the world is ending because we're turning into China. State sponsored industrial.

[Andrew Ross Sorkin]

We are turning into China.

[Joe Kernan]

Well, we were well on our way in a much worse way from before when I didn't hear a peep out of you okay.

[Andrew Ross Sorkin]

Eamon Javers, thank you for waking us up this Friday morning. Summer for, for summer Fridays here we.

[Joe Kernan]

See more hair today. He's got more hair. I don't see any that, you know, it smells when it burns and it's horrible. Terrible.

[Andrew Ross Sorkin]

It looks good. He looks handsome.

[Joe Kernan]

It does.

[Katie Kramer]

He's will be next.

[Squawk Pod Host]

Coming up next on Squawk Pod. Like the central bank, we love a data dump. The numbers that tell us what could be going on in the economy. And we're bringing a decision maker into this conversation. Conversation. Chicago Fed President Austan Goolsbee.

[Austan Goolsbee]

We put in a note of unease, I'd say in the last CPI and now ppi with the inflation kicking up and kicking up in categories that are not obviously going to be transitory.

[Squawk Pod Host]

What the numbers signal for the next Fed decision in late September and what they could tell us about America's inflation picture. CNBC's Rick Snow and Telly is keeping an eye on investors.

[Rick Santelli]

The most interesting feature about them CPI and PPI is the market response.

[Squawk Pod Host]

Back after this. Did you know that skin care can.

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[Squawk Pod Host]

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[Andrew Ross Sorkin]

You're watching Squawkbox on cnbc. I'm Andrew Ossorkin along with Joe Kernan. Look how you just sort of gave a little look to the camera. See?

[Joe Kernan]

Look. Did I?

[Andrew Ross Sorkin]

Yeah, right there. I saw that.

[Joe Kernan]

There is that come hither. I don't do that.

[Andrew Ross Sorkin]

I don't know what that look was.

[Joe Kernan]

It doesn't work for me my entire life.

[Andrew Ross Sorkin]

I'm not sure what you're doing there.

[Joe Kernan]

Retail sales usually important, but import, imports. Steve's very excited. Rick Santelli standing by at the CME in Chicago. Could anything change? Could we have a whole new view on everything based on imports today? Rick probably not right now.

[Rick Santelli]

You know, it's hard to tell. These numbers the last couple of days. The most interesting feature about them CPI and PPE is the market response. We could spend a lot of time digging into data and looking at how strange some of it is, but the market defined it real well.

[Austan Goolsbee]

Here we go.

[Rick Santelli]

It's hitting the wires. Retail sales. This is for the month of July. It's the advance. It's going to change in a couple of weeks. Headline number expected up 610 comes in darn close. Up half of 1%. A path 1% compares pretty good with the up 6. 10 in the rearview mirror, which hasn't been revised yet. And the up 610 was the second best number of the year. 1.5 is the high water mark in March of this year. If we strip out autos, it actually still retains a good chunk of that growth. Up 3 10. And that's exactly as expected.

[Joe Kernan]

Expected.

[Rick Santelli]

It follows up 5 10. Don't see revision yet. Ex autos and gas. It holds up okay. It's losing a little bit of steam. Up 210 now 210 x autos and gas. That would be the lightest since it was unchanged in May. So not bad numbers. Revisions starting to come in. I'll get to those momentarily. The core retail sales or control group coming in at Nice. Half of 1% better than expected. Half 1% is what the rearview mirror was. But we'll get to revisions in a second. Here we go on the revisions. So the numbers are pretty good with respect to the advanced July. Look at the rearview mirror. Headline now moves from 0.6 to 9 10. Ex autos from half of a percent to up 8 10. Ex autos and gas from up 610 to up 8 10. And that control number moves all the way up to 810 from up half of 1%. These are solid growth numbers. Now let's go to import prices, shall we? Import prices. These Are all July. If we look at the headline number up 4 10. Okay Joe, that's definitely warmer than expected. Up 4 10. Well that would be the high water mark of the year. That would be the high water mark going all the way back to tax time of 2024, April of 2024. So we see import prices under a bit of pressure and if we strip out petroleum they're still on the high side. Up 3 10. Up 310 equals the high water mark of the year in April. And you're going back to April of last year to find a higher level at up 6/10. Now if we take a year over year perspective, those were month over month, year over year perspective on import prices. Down 2 10, down 210 which means 1, 2, 3. This is the third down 210 in a row. Okay, switch gears to export prices. Export prices up 110 on a month over month. Headline on a year over year. They are up 2.2 year over year, up 2.2. Where does that come? Well, May was 1.9, last month was 2.6. Fits right in there. We are seeing some revisions on some of these import export prices they're going negative. So we see -1 10 now on import price month over month. That was originally up 11 10. We have one category left folks. Empire manufacturing comes in powerful. 11.9 we're expecting unchanged 11.9 would be the second highest of the year outside of March when it was 20. The market defines all this better than any single human can. Interest rates have moved up a bit. We are 429 and a 10 now we're at 430. How does 430 compare? 430 is up 2 on the session, it's up 3 on the week. And we want to pay very close attention to what's going on in the pre opening equities. They haven't been phased much. Still a powerful opening expected in the Dow Jones Industrial Average. Joe and the gang. Back to you.

[Joe Kernan]

All right, very good, Rick. Seemed a little continued upward movement in the 10 years. Steve Liesman joins us now with more.

[Steve Liesman]

Did he take a breath when he did that?

[Joe Kernan]

No, he doesn't do that. Did this live up to your expectations?

[Steve Liesman]

I'm excited by this. I think the retail numbers are good. That's the most important thing to me. But I don't know how much of this is going to be inflation. How much, how much? You have sort of tariff inflation in here. What is interesting is to see that this number may be help GDP forecast. We came in with the Atlanta Fed tracking at two and a half. CNBC Fed survey at one and a quarter. That's the forecast versus the tracking bit of a boost of gasoline station sales. And the key about this big question, who's paying the tariffs? If import prices are up, it means that they're not paying it overseas. And I would look at one particular category. I just want to find it again. Finished goods Prices for major, finished good import categories were mostly up in July. Import prices for consumer goods increased 0.4% in July. So at least in the data we cannot find the idea that foreign exporters are absorbing this price, at least not now. And maybe actually they have somehow used this opportunity to increase prices a little more. Forget my analysis. Let's get some real expert analysis. Joining us now, Chicago Fed President Austan Goolsbee. Austin, thanks for joining us this morning. We have.

[Austan Goolsbee]

Morning Steve, how are you?

[Steve Liesman]

We've now had three of the four inflation reports we get in this nation. The most important coming the end of this month, pce, but we can kind of calculate that. Take a step back. We know you don't react to any single inflation report or any single report. Give us your picture right now or your sense right now, Austin, of the inflation story in this country right now.

[Austan Goolsbee]

Well, it's been a little mixed. It feels like the first two of the four came in quite mild and we were feeling good. And I was saying here and elsewhere, if we get a several reports like that, I'm going to feel comfortable that we're still on the golden path and things be OK for rates that come down. We put in a note of unease, I'd say in the last CPI and now ppi, with the inflation kicking up and kicking up in categories that are not obviously going to be transitory, which is to say the services inflation look to be turning up. So I feel like we still need another one at least to figure out if we're, if we're still on the golden path.

[Steve Liesman]

Were you looking, as I was this morning into those import prices to see if there were the exporters were absorbing some of this and, and now you don't see it. What is your sense of this, of this number this morning? Usually, I don't know, 23 years of doing this on TV, I maybe talked about import prices one or two times before, but now it's kind of important, right?

[Austan Goolsbee]

Yeah, look, we're, we're out sniffing in all sorts of places that, that are not normal to have to sniff. The thing about import prices to remember is they don't include the tariffs, in most of those cases the tariffs will be on top of it. So if the, if the foreign is absorbing, if the foreign exporters to the United States are absorbing the cost, those prices should be going down. If those prices go up and then you add the tariffs on top of it, that's a little bit the scenario, that's the unease scenario where, oh, the costs are going up and now we're in the business of trying to figure out, well, how long are those price increases going to last? Let's not overreact to one month of import price data for sure. Let's not overreact to one month of CPI or PPI inflation. But it's, it's at least an area of concern.

[Steve Liesman]

Austin, when it comes to rates, you've been maybe, what do they say? St. Augustine said, oh Lord, let me be chased, but not today. Your attitude has been, I thought you.

[Austan Goolsbee]

Were going to say brilliant and prudent. Steve, what do we have?

[Steve Liesman]

Yes sir. And Chase. But, but, but the thing is that you've talked about rates will come down over time, but you've been a little bit circumspect about the time over which they should come down. Could you give us your sense of that right now?

[Austan Goolsbee]

Well, I was pretty specific of the time frame in the run up to April 2nd and then I thought over the year they could come down a lot because we were at pretty much full employment and inflation was headed to 2%. And that's the thing that the FOMC by law is supposed to be looking at. What's happened is we've added a lot of uncertainty and we've added a lot of dirt in the air, which much of it has come from tariffs. And the tariffs, the theory that tariffs are a one time price increase, that's true for one and done tariffs and these haven't been won or done. And so we're trying to grapple with this idea of is this going to be a persistent inflation shock, is this going to be stagflationary in direction, which is to say it's going to be driving down employment at the same time it's driving up prices. That's the worst thing the central bank has to, has to think through because there's not an obvious playbook. You got to sort of weigh off which of these is a bigger miss and how long is the bigger miss going to last. So you can't answer the question when will we know that we're back or still on the path that we were on before April 2 without answering the question, is this going to be the end of the stagflationary shocks or are we going to keep getting new policy administrations?

[Steve Liesman]

So when you say that and you talk about this, it sounds like you need some time at the least. And if you could, when you respond to that, also answer this question. How much does the Fed stance about policy play a role in figuring out whether or not tariffs become a wider spread problem?

[Austan Goolsbee]

Okay, you know the rules. I'm not allowed to speak for the Fed or anybody else on the committee. I just talk about how I think about that. I think the partly the conventional wisdom for how should a central bank respond to a stagflationary shock, which I think of tariffs as having a heavy stagflationary component. You the primary effect. The Fed can't pump oil. The Fed can't adjust the supply side, but it can try to prevent the secondary impacts which could be wage price spirals. Or if you start thinking about the secondary impacts of tariffs on parts, components, supplies and intermediate goods. Now it's a little more complicated than the Econ101 version because now the tariff isn't just staying in its lane, it's going to be raising the cost of production for domestic manufacturing and others. And that a lot of times, certainly during COVID and post, Covid took time to wind its way through the economy. So I do think we're going to be in the business of trying to figure out which part of these price increases are we ignoring because we think they're transitory and which ones are we responding to. Now that doesn't mean that it, that we have to hold forever or for as long as it takes for the prices to come back down. It all depends on the data. And what's the economic outlook if we keep getting inflation reports like the ones we had, the first two of these four that you mentioned, I would be very comfortable that, hey, the dust is out of the air. It looks like we're still where we were, which is a strong economy with inflation coming back down. In that circumstance, I think it's totally fine. It's expected. It's the right thing to do to just bring the rates down to where we think they're going to settle. We just, we, we got to get some clarity from the numbers.

[Joe Kernan]

One thing we all hope for, no matter who we are, is that real wages go up or weekly real wages keep going up. I mean, what else? Why else are we doing anything in this country? Austin? Right. And it's been pointed out, you know, the Biden administration had a problem for the first couple, two or three years because of the inflation rate. And that was constantly harped on by critics that real wages, weekly wages haven't grown now. They're kind of stagnant again. And what you just, what you just described, I would imagine if the labor market weakens, you're not going to see people asking for more money. And if inflation comes back, then we could be stuck in the muck again. And that's, that's a, that spells doom for, for current administrations when people feel like they're, they have less buying power than when they started.

[Austan Goolsbee]

There's two parts to that. The political part. I joined the swear sworn member of Federal Reserve. I'm out of that, that part of the business. But you're an expert on it. Joe, I don't know what means doom. I do know that's a mess. That's the mess of something moving in a stagflationary direction is no one's happy and they shouldn't be happy. Prices going up, wages going up less than prices, incomes falling, but not getting any relief on the inflation side, that's what we want to avoid. We're going to have to see where we are. I still think underneath all of this, we were in a strong position on the economy going into April, and there are still a lot of strengths in the economy. So if we can, if we can assure ourselves or get a hint for this meeting or the meetings this fall that we aren't on an inflationary spiral that looks to be persistent. I still think it makes sense, given the strength of the economy, to move rates more back to where we think they're going to settle.

[Steve Liesman]

Austin, I want to be clear about what you were saying. I want to make sure you finish the thought. You said if we get inflation reports like we got earlier, and by earlier I think you meant before the ones this week, then, then you'd be fine to let. But the ones this week, I just want to be clear, are they giving you pause about reducing rates?

[Austan Goolsbee]

They're in the space. You know, I don't like tying my hands before a meeting, especially at a. The hardest thing the central bank has to do, as I always say, is get the timing right at moments of transition. So I want to get all the data we can and I want to hear from my colleagues. It seems like people have some different views about what's happening, but the fact that services inflation for the, for the single month was coming in at a rate we haven't seen in a long time, very High services, inflation in that new data, that makes me a little uneasy because that's very unlikely to be caused by tariffs. So I'm hoping that was a blip. If that wasn't a blip, then that's an area of concern and we're going to. We're going to have to grapple with that.

[Steve Liesman]

Austin, I want to have a conversation, a quick conversation like we used to have when you were just a professor, and we'd meet at the American Economic Association Annual conference, because one thing we don't talk about is what's happening on the employment side of the mandate. And you started to talk about this and some of your colleagues have as well, which is, where's the break even anymore? Given what's happening in immigration and with deportations and what's happening with the labor force, we used to say, oh, 100,000 is break even for the unemployment rate.

[Austan Goolsbee]

Right.

[Steve Liesman]

But now if we did 50, would that cause you alarm as a Fed, as a Fed president, that the employment market is weakening or when we do, we need to move? I guess my question is from thinking about the levels of employment to thinking about ratios of employment because of all the changes happening on the labor force side.

[Austan Goolsbee]

Look, I think a little bit, yes, you know, as I say, I just try to be a data dog. And one of the main rules of the data dogs is don't be too choosy about what you sniff, you know, whatever hits the floor. And we had a moment, we've had long moments where the headline jobs created number is the tent pole number that everybody wants to look at as an indicator of where we are in a business cycle. We saw in 23 and 24, when you have uncertainties about population growth, especially the coming from immigration. But where you have those kind of uncertainties, you can get way off from where you think the break even is. And we had that in 24. We're coming in 150, 170, 190,000amonth. And we thought the break even was 85,000 at Chicago Fed. But that wasn't a sign that the economy was overheating. It was a sign that we were getting the population growth rate rate wrong. We're in that environment now and immigration is going down. Let's just be careful about over indexing on that monthly payroll. And, and my intuition is exactly what you said. Those ratios and rates were a little bit better indicator of business cycle. So the hiring rate, the layoff rate, the job openings rate, and the unemployment rate, those are kind of the four horsemen of justice in this thing.

[Joe Kernan]

Harkening back something we talked about earlier on the show also, would you. Could you ever foresee a Fed chairman with hair like Axl Rose with like, a David Zervos type ponytail? Is that in the realm of possib? Is that in the realm of possibility? And not just because, I don't know.

[Austan Goolsbee]

You think they need to be bald? What is your position?

[Joe Kernan]

It.

[Austan Goolsbee]

I like. I like bald.

[Joe Kernan]

As opposed to bald.

[Steve Liesman]

Yeah, I had a minute left for.

[Austan Goolsbee]

I'm not sure.

[Joe Kernan]

I'm not an anti.

[Austan Goolsbee]

I heard that there used to be. In the Fed building, there used to be a barber.

[Joe Kernan]

Yeah, yeah, yeah. No, if he cuts it now, then he really wants it, right? Servos.

[Andrew Ross Sorkin]

He comes on.

[Joe Kernan]

Yeah. If he suddenly comes on and he's high and tight, you know, like, shave the beard.

[Steve Liesman]

To Austin, thank you very much.

[Andrew Ross Sorkin]

Appreciate it.

[Joe Kernan]

Yeah.

[Austan Goolsbee]

Great to see you.

[Steve Liesman]

Please come again. It's a pleasure and a privilege to have you come on from time to time.

[Joe Kernan]

Thank you, Mr. President. Walk us through these difficult times, Mr. President. Happy birthday, Mr. President. No, it's not.

[Andrew Ross Sorkin]

Thank you, Austin.

[Squawk Pod Host]

We'll be right back.

[Steve Liesman]

Welcome back to Listen to youo Heart.

[Joe Kernan]

I'm Jerry.

[Rick Santelli]

And I'm Jerry's Heart.

[Joe Kernan]

Today's topic, Repatha Evoloki MAP Heart.

[Austan Goolsbee]

Why'd you pick this one?

[Katie Kramer]

Well, Jerry, for people who have had.

[Joe Kernan]

A heart attack like us, diet and.

[Schwab Market Update Announcer]

Exercise might not be enough to lower.

[Rick Santelli]

The risk of another one.

[Joe Kernan]

Okay.

[Rick Santelli]

To help know if we're at risk.

[Schwab Market Update Announcer]

We should be getting our LDL C.

[Rick Santelli]

Our bad cholesterol checked, and talking to our doctor.

[Joe Kernan]

I'm listening.

[Schwab Market Update Announcer]

And if it's still too high, Repatha can be added to a statin to lower our LDL C and our heart attack risk.

[Joe Kernan]

Hmm.

[Katie Kramer]

Guess it's time to ask about Repatha.

[Squawk Pod Host]

Do not take Repatha if you're allergic to it. Serious allergic reactions can occur. Get medical help right away. If you have trouble breathing or swallowing. Swelling of the face, lips, tongue, throat or arms. Common side effects include runny nose, sore throat, common cold symptoms, flu or flu like symptoms, back pain, high blood sugar and redness. Pain or bruising at the injection site.

[Austan Goolsbee]

Listen to your heart.

[Joe Kernan]

Ask your doctor about Repatha.

[Schwab Market Update Announcer]

Learn [e-mail] or call 1-844-repatha this episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Landsford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and [e-mail] MarketUpdatePodcast or find Schwab Market Update wherever you get your podcasts.

[Squawk Pod Host]

And we're back in the Office a couple of days a week.

[Andrew Ross Sorkin]

Here's Andrew welcome back to Squawk Box. This morning, Microsoft getting ready to implement a post pandemic return to office policy with guidance possible in the next few weeks. That's according to a new report from the Verge, which says starting in January, so we're Talking January of 2026, Microsoft will call any employee who works within 50 miles of the company's Redmond, Washington campus into the office. You ready for this? Drum roll, folks. Three days a week. That's. That's the deal. Three days a week. The report says that some employees will have to come back five days a week, but exceptions will be considered. Microsoft relatively late to the game, relatively late to the return to the office push. Amazon and Google have already instituted back to work policies, so we will see what's going on in Redmond, Washington. And Joe, I should say while I'm talking to you, the reader, I mean.

[Joe Kernan]

The viewer, what did you say, though? You said, can some there's a fly.

[Andrew Ross Sorkin]

That'S going around the studio. Boom. And you missed it. And the whole time, because I couldn't do it while the whole time I'm speaking, you have this newspaper up as.

[Joe Kernan]

You'Re about to do it. I didn't want to do it because it would have been disruptive for you.

[Andrew Ross Sorkin]

To be speaking to the audience.

[Joe Kernan]

Right? It would have been disruptive and it might be disruptive. I'll get him next time. Coming up. I'm afraid to do that because there will be someone out there, some bug friendly person that thinks there should be a way to capture the fly and release it. There will be, I guarantee you. The only thing like you can't say dead cat bounce. You gotta say dead rock bounce. You can't even say dead roach bounce because there are roach fans. Not that kind.

[Steve Liesman]

Of.

[Squawk Pod Host]

That is Squawk Pod for today and for the week it's Friday. Finally, Squawkbox is hosted by Joe Kernan, Becky Quick and Andrew Ross Sorkin. Tune in weekday mornings on CNBC at 6 Eastern. Get the best of our TV show right into your ears when you follow Squawkpod. Wherever you get your podcasts, we'll meet you right back here on Monday. Have a good weekend.

[Katie Kramer]

We are clear. Thanks guys.

[Joe Kernan]

Foreign.

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