Alan Greenspan’s Legacy: Mohamed El-Erian & Walter Isaacson 6/22/26

Summary

Squawk Pod – “Alan Greenspan’s Legacy: Mohamed El-Erian & Walter Isaacson”

Date: June 22, 2026
Host: CNBC (Joe Kernen, Becky Quick)
Featured Guests: Mohamed El-Erian, Walter Isaacson

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Episode Overview

This episode marks the passing of Alan Greenspan, legendary former Federal Reserve Chair, at age 100. The hosts and guests, including Mohamed El-Erian and biographer Walter Isaacson, reflect on Greenspan’s complicated, influential legacy and discuss wider financial headlines: the ongoing U.S.-Iran negotiations, UK political changes, Toy Story 5’s box office success, and the much-anticipated SpaceX IPO and the rise of Elon Musk as the world’s first trillionaire.

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Key Discussion Points & Insights

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Remembering Alan Greenspan: His Legacy and Impact

[01:02, 17:57, 33:05]

• Living Legend: Greenspan served as Fed Chair for 20 years, across five terms and four administrations.

  • Mohamed El-Erian (01:21): “Think of it. He served 20 years, five terms, four administrations… He was the Fed at its best because he had that command of details and was willing to look forward and say, you know what? I’m going to let this economy run. And he unleashed an enormous productivity gain.”

• Intellectual Approach: Greenspan was known for detail orientation, data obsession, and his sometimes cryptic communication style.

  • Joe Kernen (17:57): “This is a famous Greenspan quote. Everyone knows this. ‘I know you believe you understand what you think I said, but I’m not sure that you realize that what you heard is not what I meant.’”

• Self-Reflection & Mistakes: Even after the financial crisis, Greenspan acknowledged that he underestimated risk-taking in the financial system but was recognized for his productivity “bet.”

  • Mohamed El-Erian (19:17): “…as he admitted himself in front of Congress as things he underestimated, including excessive risk taking, but he will be remembered for taking a massive productivity bet…”

• Story & Human Side: Walter Isaacson remarks on Greenspan's hidden talents and humor.

  • Walter Isaacson (33:27): “He was a great clarinetist… The thing about Alan Greenspan is he was always data driven. We’re not all that data driven these days.”
  • Walter Isaacson (34:43): “He also had a wry sense of humor. He could get along with people. And it was an earlier time… he was able to work well and try to figure out how do you steer the economy based on data… not about politics, it's about the data.”

• Notable Quote:

  • Walter Isaacson (34:19): “Now, with satellites and AI, we're going to take Alan Greenspan's talents and kick them up to orders of magnitude.”

Timestamps:

• Announcement: [14:45]
• El-Erian on Greenspan: [18:30] – [19:52]
• Isaacson on Greenspan’s legacy: [33:24] – [35:51]

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Modern Federal Reserve & Monetary Policy

[20:11]

• Fed Evolution & Critique:

  • El-Erian welcomes new Fed reform efforts, highlighting five needed areas including inflation targeting, communication, forecasting, and compliance.
    • “No one can ignore the fact that they’ve missed their inflation target for 63 straight months. …Communication has been confused. ... Forecasting ... [internal] compliance culture. … This is a Fed that needs reforms.” (Mohamed El-Erian, 20:52)

• Changing of the Guard:

  • Discussion of new Fed chair's openness to reform, use of external experts, and moving away from opaque tools like the “dot plot.”
  • A focus on “letting the economy run”—a Greenspan hallmark—returns to the foreground.

• Interest Rates & Outlook:

  • El-Erian predicts no rate changes for the remainder of the year given current economic indicators.
    • “I’m confident that based on what we know today, the Fed will leave rates unchanged for this year. That’s what I’m confident.” (El-Erian, 23:17)

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U.S.–Iran Talks: Progress Amid Rhetoric

[03:32 – 12:17]

• Recent Developments:

  • U.S. and Iran held intense negotiations in Lucerne, Switzerland, under continued threats from President Trump, who publicly threatened renewed military action if Iran doesn’t curb proxy activity (notably Hezbollah).

• Diplomatic Nuance:

  • Despite bellicose rhetoric, back-channel negotiations appear to be progressing, with a 60-day roadmap and creation of a high-level oversight committee.

• Geopolitical Dynamics:

  • The guests note how both Iran and the U.S. are navigating a complex relationship with Israel and considerable internal political division.
  • Notable Quote (Eamon Javers, 06:31): “There’s an old saying in diplomacy, Joe, that talking is better than shooting… at least you’re around a table somewhere in the world hashing it over and not fighting.”

• Historical Perspective:

  • Javers contextualizes the limits of bombing as policy.
    • (10:35) “History has shown that air power alone is just not enough to win wars when you’re fighting against a culturally and politically cohesive group…”

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SpaceX IPO & Elon Musk: World’s First Trillionaire

[28:33 – 35:56]

• Landmark IPO:

  • SpaceX’s shares surge 32% in the first week, making Musk the first ever trillionaire.
  • Walter Isaacson (29:15): “People are saying, oh, it’s just hype or something. He’s put 10,000 satellites into orbit. …This isn’t just a high valuation for a company though. This is what now the third most valuable company on the planet?”

• Why SpaceX Excites:

  • Isaacson emphasizes that unlike “vaporware,” SpaceX delivers real, tangible value and dominates in payload-to-orbit.
    • “More than 90% of all tonnage gone to orbit in the past couple of years has come from SpaceX.” (31:28)
    • “He’s able to get things built well and get them built quickly.” (29:15)

• Musk's Next Moves:

  • Isaacson predicts an eventual Tesla-SpaceX merger for operational and AI synergy.
    • “I think there will be a Tesla SpaceX merger buyout, because it makes sense. They're both basically companies making real world things that are driven by AI.” (32:00)
  • Musk views his wealth as “points in a game”—keeps capital deployed in his ventures.

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Other Financial Headlines

• UK Politics: Prime Minister Keir Starmer steps down, with Andy Burnham a leading successor (12:33 – 13:40).
• Culture:
  • Toy Story 5 earns $160 million—biggest box office since 2019 (13:40 – 14:22).

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Memorable Quotes (With Timestamps)

• Mohamed El-Erian (18:30): “I don’t think anybody comes close to [Greenspan] when it comes to his dedication to public service, his incredible command of details…”
• Walter Isaacson (29:15): “He’s put 10,000 satellites into orbit…This is something where even a company like Anthropic is paying him $1.25 billion a month in order to create data centers.”
• Eamon Javers (06:31): “There’s an old saying in diplomacy, Joe, that talking is better than shooting.”
• Walter Isaacson (34:43): “It was a time in which it wasn’t totally politicized…No, it’s not about politics, it’s about the data.”

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Timestamps for Key Segments

| Segment | Timestamps | |----------------------------------------|----------------------| | Greenspan’s passing & legacy | 14:45, 18:30, 33:05 | | US–Iran negotiations | 03:32 – 12:17 | | Fed reform & monetary policy | 20:11 – 24:54 | | SpaceX IPO & Musk as trillionaire | 28:33 – 35:56 | | Toy Story 5 / Box office record | 13:40 – 14:22 | | UK Prime Minister resignation | 12:33 – 13:40 |

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Tone & Style

True to Squawk Pod, the episode mixes sharp analysis with conversational, sometimes humorous banter (“I love movies. I love rocket ships…”), but displays deep respect for the episode’s central figure—Greenspan—and keen optimism and realism regarding today's economic, technological, and geopolitical currents.

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Summary Takeaway

This episode offers a rich, multifaceted discussion on Alan Greenspan’s enduring legacy in U.S. monetary policy, the evolution of the Federal Reserve, and the ever-changing landscape of geopolitics and technology. Interspersed with market milestones and personal anecdotes, it distills how giants—whether in finance or in innovation—shape the world we live in.

Transcript

[Joe Kernen]

At Venture Global, we think about what can be done, not what's usually done through innovation. Venture Global is not only building some of the largest energy facilities in the world right here in the United States, but delivering American energy at a fraction of the cost in a fraction of the time.

[Mohamed El-Erian]

So while others are busy talking, we're busy building.

[Joe Kernen]

That's Venture Global. That's unstoppable.

[Mohamed El-Erian]

Energy

[David Faber]

Trading at Schwab is now powered by Ameritrade, bringing you an expanding library of education with even more ways to sharpen your trading skills. Access new online courses, insightful webcasts, articles, engaging videos, and more, all curated just for traders. Plus guided learning paths with content designed to fit your unique interests. And no sifting to find exactly what you need so you can spend your time learning to trade brilliantly. Learn [e-mail] trading bring in show music, please.

[Katie Kramer]

Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod, the financial world remembers a giant of American economics. Alan Greenspan has died at age 100. Chairman of the Federal Reserve reappointed time and again. Greenspan's legacy is enormous. Mohamed El Arian joins us.

[Mohamed El-Erian]

Think of it. He served 20 years, five terms, four

[Katie Kramer]

administration, his career in jazz and economics, and the mark he left on American business.

[Mohamed El-Erian]

He was the Fed at its best because he had that command of details and was willing to look forward and say, you know what? I'm going to let this economy run. And he unleashed an enormous productivity gain.

[Katie Kramer]

Then Walter Isaacson on Elon Musk, over a week out from SpaceX's IPO. What's next for the world's first trillionaire?

[Walter Isaacson]

I think there will be a Tesla SpaceX merger buyer because it makes sense. They're both basically companies making real world things that are driven by AI.

[Katie Kramer]

Plus, Toy Story 5 has notched the biggest box office weekend of the year. UK Prime Minister Keir Starmer is stepping down. And more talks between the US And Iran, led by Vice President Vance in Switzerland.

[Joe Kernen]

It's just tough to sift through all the rhetoric from both sides to find out where things really are.

[Eamon Javers]

There's an old saying in diplomacy, Joe, that talking is better than shooting.

[Katie Kramer]

It is Monday, June 22nd. Squawk Pod begins right now.

[Mohamed El-Erian]

Stand Becky by in three, two, one. Fewer, please.

[Becky Quick]

Good morning, everybody. Welcome to Squawk Box right here on cnbc. We are live from the NASDAQ market site in Times Square. I'm Becky Quick along with Joe Kernan. Andrew is off today. And yes, it was a beautiful sunrise this morning. On the way in. And all I could think about is the days are getting shorter from here back to the dreary, dreary, dark days of winter. Already on my mind because this is what you think when you get up early in the morning. Right. All of you who are up early with us in this part of the world know exactly what we're talking about.

[Joe Kernen]

Yep. It is.

[Becky Quick]

It's beautiful hour.

[Joe Kernen]

Beautiful. It was beautiful all weekend. It was a good Father's Day.

[Walter Isaacson]

Yeah, it was.

[Becky Quick]

Oh, happy Father's Day.

[Joe Kernen]

Thank you.

[Eamon Javers]

You too.

[Becky Quick]

Happy Father's Day.

[Joe Kernen]

Go Matt.

[Becky Quick]

Go Matt. Yeah, yeah, it's beautiful. Beautiful days of summer. And for those of us who've been

[Joe Kernen]

doing for everyone was home.

[Becky Quick]

Let this last.

[Joe Kernen]

Blake got home. Yeah, it's really nice.

[David Faber]

Yeah.

[Eamon Javers]

Good.

[Becky Quick]

I'm glad you got to see all of your children, Blake's corgi and your grandpuppies.

[Joe Kernen]

Yeah. And the grandpuppy. That's right. Some signs of progress at U. S. Iran at the talks in Switzerland, though, President Trump threatened the country again over the long weekend and said that the US Might impose its own tolls on the ships in the Strait of Hormuz. And CBC's Eamon Javors joins us now with the latest. Good morning, Eamon.

[Eamon Javers]

Yeah, good morning to you, Joe. It was a tense weekend of negotiations between the United States and Iran over the weekend, along with delegations from Qatar and Pakistan. In Lucerne, Switzerland this weekend, Vice President vance led the U.S. delegation on site as President Trump huddled with advisors at Camp David through the weekend. President Trump at various points Sunday threatened to relaunch hostilities against the Iranians, telling Fox News that if the Iranians don't cut a deal, he will blow the s out of them. And also threatening to take over the Strait of Hormuz by military force and charge tolls on that waterway, which is something that the US Military was unable to do during the war. Now on social media, the president said Sunday Iran must immediately stop their highly paid proxies in Lebanon from causing trouble in if they don't, we'll hit Iran very hard again, just like we did last week, only harder. Now it was unclear if any progress was made on the diplomatic front in the weekend. A senior US Diplomat engaged in the negotiations said, we had robust discussions on all elements of the nuclear deal. And as of 1am Swiss time, negotiations were still ongoing last night. And at that time, officials said they expected them to go through the nighttime hours and conclude at some point today. Now we just within the past hour or so, guys have Gotten a statement now from the prime Minister of Pakistan on social media and he says the discussions have concluded they were held in a positive and constructive atmosphere and yielded encouraging progress, including agreement on a roadmap toward a final deal within 60 days, the establishment of a high level committee to provide political oversight, and the commencement of what he's calling further technical talks. So talks have concluded, but talks are ongoing, the threats continue, the tension is very high, and we'll see where all of this can lead. Guys, back over to you.

[Joe Kernen]

Stay tuned. Which is probably the operative term for the last, I don't know, at least month we've tried to find a way out of this. Obviously an off ramp looks like it's progressing, though. Eamon, I don't know what the chances are for a renewed round of, you know, of shooting on both sides of things. Hopefully that's not in the cards at this point. And it's just tough to sift through all the rhetoric from both sides to find out where things really are.

[Eamon Javers]

It is. You know, there's an old saying in diplomacy, Joe, that talking is better than shooting. And even if the talking is extremely tedious and progress seems like it's not being made, at least you're around a table somewhere in the world hashing it over and not fighting. That said, the president was in a pretty bellicose mood over the weekend. I mean, he was continuing to threaten the Iranians time and time again. And it seemed as if at one point to me the Iranians were really trying to draw, drive a wedge between the US And Israel here, you know, leveraging the continued strikes in Lebanon as their vector to control the Strait of Hormuz and to control the tenor of these negotiations. And that's something that the president has been willing to do, is to signal that there is a divide between the United States and Israel. He's not happy with Bibi Netanyahu and he is willing to cut a deal that maybe the Israelis don't want to cut yet. And I think that gives the Iranians a little bit of leverage in terms of exploiting that gap in the relationship. I think that's what we were seeing play out over the weekend. But it's, you know, we're just going to have to wait and see because as you say, there's a lot of rhetoric from a lot of sides here and it's often difficult to piece through what's actually happening behind the scenes.

[Joe Kernen]

I mean, there is a, you look at the schism in this country on how we, on what our foreign policy concerning Israel should really be and it's a divided country in the Journal today. You know, their op ed writers are totally with Israel. What are we going to, you know, we're going to threaten to cut off arms like Biden, the Biden administration, it's our, it's our best ally in the Middle East. What are we doing? We're now we're criticizing Israel instead of Iran. Then you've got other people, you know, on different sides of the aisle that are like Israel's controlling. This is the only reason we got involved. You know, Netanyahu's in charge and, you know, he's leading Trump around by the, it's just, it's like this, how wide this schism is on public opinion, on what we should be doing. I guess once again, somewhere in the middle is where we're going to end up.

[Becky Quick]

Well, look, Trump did push back over the weekend. I'm sorry, Becky, go ahead, go ahead, answer that first.

[Eamon Javers]

Ammon Well, I was just going to say, I mean, you look at the, it's shaky political footing as Joe points out to be launching a war in the first place. And then you see, you know, this division here where JD Vance is out there criticizing members of the Israeli cabinet who've been criticizing Trump and saying, hey, look, we're basically your only ally in the world left, and so you shouldn't be criticizing us at all. I mean, there's some real bristling on the US Side from complaints from the Israeli side about the US Willingness to cut a deal here. But all of that was knowable at the time that we launched the war, right? I mean, the political foundation in the United States, the strategic value of the Strait of Hormuz and the difficulty of opening that, all of that had been war gamed for years, if not decades. You know, all of the factors we're seeing playing out now were, you know, available and visible at the beginning of the war, the day before the war. So this is a situation that the president has gotten himself into. It's going to be really difficult to extract himself. And I think it's going to come with a political cost. And we'll just have to see how much that political cost ends up being.

[Becky Quick]

Look, you pointed out that Iran is trying to play on that schism between the United States and Israel. The president said over the weekend, President Trump, that he would bomb Iran if they didn't get a hold of their proxies, particularly Hezbollah, and rein them back in. And I think that's the big question. Is Iran going to Continue to say one thing and then use Hezbollah to kind of irritate and go after the Israelis on their flank. I mean, that's how you can see the potential for any of this working or not working is through that access.

[Joe Kernen]

Yeah.

[Eamon Javers]

I mean, and look, the solution of bombing Iran, you know, the President said himself that, you know, you can't. Can just continue to bomb. You're not going to ultimately affect the outcome here. And history has shown that air power alone is just not enough to win wars when you're fighting against a culturally and politically cohesive group. Right. I mean, think of the Battle of Britain. Right. And the Nazi bombing of London. That was not enough to bring Britain to its knees, even though the Nazis were convinced that it would be. The US Bombing campaign in Vietnam didn't bring the Viet Cong to their knees, even though we dropped more bombs in Vietnam than we did in all of World War II. Right. I mean, there is a history of bombing campaigns that the people doing the bombing think are going to change the minds of those people receiving the bombing and actually having the opposite effect. It tends to create a rally around the flag effect and brings that population tighter together. And that might be what we're seeing play out in Iran as well.

[Becky Quick]

I don't know that this population supports that regime.

[Eamon Javers]

Well, that's a good question. Right. And we don't entirely know. I mean, this war began with an effort by the United States and Israel to create a popular uprising in Iran against the regime. And either there wasn't the political will there for that, or there wasn't the capacity among people who don't support the regime to do it, given lack of access to weapons.

[Becky Quick]

I was going to say they don't have the ability, all those things, ability. I mean, they were slaughtered when they rose up. They don't have the ability to push back against it.

[Eamon Javers]

Right. So, I mean, President Trump has said at different times, you know, more bombing is not going to help, or I'm going to resort to more bombing. And so you can kind of see how that's going to play out.

[Becky Quick]

All right, Eamon, thank you. Obviously, we'll be talking to you a lot as these talks continue. In the meantime, internationally, United Kingdom Prime Minister Keir Starmer is stepping down. He made that announcement earlier this morning.

[Mohamed El-Erian]

Every decision I've taken has been about putting the country I love first.

[Eamon Javers]

That is why I will resign as

[Mohamed El-Erian]

leader of the Labour Party. I have spoken to His Majesty the King this morning to inform him of my decision. I will ask the National Executive Committee of the Labour Party to set out a timetable, with nominations opening on 9 July and completed by the summer recess.

[Becky Quick]

Starmer said that he will stay on as prime minister until his successor is in place. That could be mid July if there's only one candidate in the leadership contest, or September if it turns out to be a contested race. Traders on Calce give andy Burnham a 95% chance of becoming the next prime minister. Burnham served as a member of Parliament for a decade and a half before becoming mayor of Manchester in 2017. He won a seat in Parliament last Thursday in a special election and just moments ago he announced that he is putting himself forward in his words for prime minister.

[Joe Kernen]

Toy Story 5 scoring the biggest box office opening of the year. The fifth installment, hence Toy Story 5 in Pixar's series earned $160 million in domestic weekend receipts. We'd never say anything. It added another $152 million overseas. This was the best debut for a Toy Story film ever. The previous record was held by Toy Story 4, which was the fourth release and that was released seven years ago and earned $120 million in its opening weekend. Citing industry data, the Wall Street Journal says domestic box office receipts are at their highest level for this time of year since 2019. And that story made the front page of the Wall Street Journal.

[Becky Quick]

Big deal.

[Joe Kernen]

Yeah. I love movies. I love rocket ships like Faber.

[Becky Quick]

That's exactly what I thought is true.

[Walter Isaacson]

I love movies.

[Becky Quick]

We've been sitting here.

[Joe Kernen]

David loves rockets too long.

[David Faber]

David Rock.

[Joe Kernen]

Yeah.

[Becky Quick]

David Faber wrote a blog 20 years

[Joe Kernen]

ago, 20 years ago because they were

[Becky Quick]

making us write blogs.

[David Faber]

I like rocket.

[Becky Quick]

I like rocket.

[Katie Kramer]

Shit.

[Joe Kernen]

He can't live that down. I know he wishes he hadn't. I think at this point he just

[Becky Quick]

wishes he hadn't shown you.

[Joe Kernen]

You and me. This just breaking now. Alan Greenspan has died. He steered monetary policy in for five terms as Federal Reserve chairman. He survived by his wife of 29 years, NBC News correspondent Andrea Mitchell. In a statement she said Allen passed away at our home this morning at the age of 100, 100 from complications of Parkinson's disease. She went on to say he was a giant of a man and we can. We can confirm that. Who helped shape the US economy for decades under presidents of both parties. He was always honest in acknowledging his mistakes. She said to me though he was my husband who shaped my life from our very first date in 1984. He had a rational exuberance for baseball, the Washington Commanders, tennis, golf and music, especially jazz. And he will be remembered for his brilliance and his kindness and being his life partner was the joy of of my life. We could spend the next three hours talking about everything involving Alan Greenspan from, you know, when he was appointed he worked under Arthur Burns, he was sort of a colleague of Ayn Rand and paid a tribute to her. We're going to talk more obviously about this, but Alan Greenspan at the ripe old age of 100 are finally passing today and he will be missed.

[Katie Kramer]

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[Mohamed El-Erian]

Never bet against American Grit or American Energy through innovation. Venture Global is not only building some of the largest energy facilities in the world right here in the United States,

[Joe Kernen]

but delivering American energy at a fraction of the cost in a fraction of the time. So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable.

[Katie Kramer]

Energy

[David Faber]

trading at Schwab is now powered by Ameritrade, bringing you an expanding library of education with even more ways to sharpen your trading skills. Access new online courses, insightful webcasts, articles, engaging videos and more, all curated just for traders. Plus guided learning paths with content designed to fit your unique interests. And no sifting to find exactly what you need so you can spend your time learning to trade brilliantly. Learn [e-mail] trading

[Katie Kramer]

welcome back to Squawk Pod from CNBC Today with Joe Kernan and Becky Quick. Here's Joe.

[Joe Kernen]

Join us now. Mohamed El Erian Alianza, Chief economic advisor and Wharton professor, who. You've coined some terms too, Mohamed. You like to look around corners and you like new normals and you like multi speed economies. I remember them all over the years. I've never heard you say this, but there's times when I think you should have. This is a famous Greenspan quote. Everyone knows this. I know you believe you understand what you think I said, but I'm not sure that you realize that what you heard is not what I meant. You remember that one?

[Mohamed El-Erian]

I remember that one. It was in Congress. It was epic. Alan Greenspan. Epic Alan Greenspan. And it shows you how much Fed communication has evolved. Look, I don't think Anybody comes close to him when it comes to his dedication to public service, his incredible command of details. I've sat with him over the years. Incredible command of details and this ability to pivot the Fed from defense to offense. Never underestimate how difficult that is. And that was him. And he did all that with enormous intellectual curiosity.

[Joe Kernen]

And his stature was, I guess Volker had stature, but I think Greenspan almost eclipsed Volcker just in terms of. I mean, he lived to be 100 as well, but he was a true institution.

[Mohamed El-Erian]

He was. I mean, think of it. He served 20 years, five terms, four administration, four administrations. I mean, it was incredible. And now, you know, as he admitted himself in front of Congress as things he underestimated, including excessive risk taking, but he will be remembered for taking a massive productivity bet. And he was the Fed at its best because he had that command of details and was willing to look forward and say, you know what? I'm going to let this economy run. And he unleashed an enormous productivity gain.

[Joe Kernen]

And here we are.

[Mohamed El-Erian]

And here we are. I mean, the Fed has changed quite a bit since. But.

[Joe Kernen]

But the whole product, this whole thing that you just mentioned is back in focus with the new Fed chair and whether he's going to try to orchestrate the same thing or at least thinks the same way about productivity running hot.

[Mohamed El-Erian]

And, you know, I was very much hoping that he would get that disappointment. And I love the fact that at his very first press conference he said, here are five things we need to reform about the Fed. And I'm putting in place not just a working group to look at them, but I'm going to use outside experts, something that the bank of England does all the time and something that this insular Fed has refused to do. And I love this breath of fresh air that has come into an institution that needs reform.

[Joe Kernen]

What were your main complaints about the Fed for the last. How far back would you say your complaints go to? Who? When?

[David Faber]

Who?

[Mohamed El-Erian]

The last. The last six or seven years.

[Joe Kernen]

Six or seven years? Yes.

[Mohamed El-Erian]

I mean, first, no one can ignore the fact that they've missed their inflation target for 63 straight months. And we're going to get the PC on this week, on Wednesday, and again, we may well get a 4% handle on the PC.

[Becky Quick]

Secondly, and that's an argument for raising rates. And I don't think Kevin Wash is going to.

[Mohamed El-Erian]

I'll come back to that. Okay, because there's a real question, how stale is that data, given what has happened to oil prices? The second issue is communication. It has been Confused. It has been confusing. The third issue is forecasting, and the fourth issue is the internal compliance culture. Five Fed officials, senior federal officials, having to resign due to unproven allegations of financial irregularities. If you look at this Fed and just abstract, away from the important issue of independence, this is a Fed that needs reforms. And on day one, his first press conference, the new chair came in and said, here are the five areas, and they are the five areas that need reforms.

[Joe Kernen]

So when you heard, I mean, focus, not a focus group, but task force, what are they? So you think that's a good idea? I guess he just can't, you know, slash and burn. You need to set these things up and, you know, move forward with changes in an orderly manner. Is that the reason? Because a lot of times you hear governments setting up, you know, and it's like, oh, God, not this again. Right?

[Mohamed El-Erian]

No, I think you need it for two reasons. One is there are really tricky analytical issues that need to be looked at.

[Joe Kernen]

You need to know how to measure inflation.

[Mohamed El-Erian]

You need to know how to measure inflation. You need to understand the sources and uses of funds. I mean, the five areas are complex and they've been brushed aside, brushed aside by this awful phrase, we data dependent. As if the data is going to determine where we are in 12 to 18 months. And then the second issue is you need to get buy in. You know, a new Fed chair comes in, he or she needs time to assert themselves on a committee. He's got 18 other people. You know, it was incredibly brave to come in and say, I'm not submitting dots, because I believe that this exercise has outlived its usefulness. And I agree with that.

[Joe Kernen]

What do you think is going to be, given the end result, given where oil prices are now, the way the economy's acting right now, are you confident that the next move is not a hike?

[Mohamed El-Erian]

So, and this comes to you, Becky. I'm confident that based on what we know today, the Fed will leave rates unchanged for this year. That's what I'm confident.

[Becky Quick]

They won't lower, they won't hike.

[Mohamed El-Erian]

They won't lower. They won't hike. They won't lower because the economy is doing well. They won't hike because part of this inflation is going to pass through the system.

[Becky Quick]

Just back to that idea of being critical because the inflation's missed its target for 63 months running. When's the time where you have to say, hey, enough is enough, and go volcker, where you just drive inflation out by raising rates?

[Mohamed El-Erian]

So I think the new Fed Chair tried to make that very clear. The last, also the last sentence of this incredibly shortened and refreshing statement that came out was that commitment to bring back inflation. You know for what?

[Becky Quick]

To get rid of inflation.

[Mohamed El-Erian]

To, to bring it down.

[Becky Quick]

Down inflation.

[Mohamed El-Erian]

You know, there's going to be a

[Becky Quick]

lot of debate when I said Volcker, Volcker had a horrific inflationary picture to deal with. This is not the same.

[Mohamed El-Erian]

He came in with 16% inflation. And I think a very interesting comment that he kept on saying that the press didn't, didn't catch on to is I'm looking at the left hand of the decimal point. He kept on saying that. I think in general, Becky, what I found disappointing but not surprising is that the market mostly tried to interpret what happened last Wednesday using a Powell era playbook. They don't understand as yet. It's going to take one or two FOMC meeting to realize this is a fundamentally different Fed.

[Joe Kernen]

The Elon Musk said something recently. I'm trying to see exactly what he said about the prediction about the size of the economy in the next.

[Mohamed El-Erian]

Oh, enormous, he said like a factor of 10 or 100. I can't remember.

[Joe Kernen]

Impossible to. I don't know what kind of GDP it would imply. But let's say that just in terms of the direction he's right, maybe not the magnitude seen Tom Lee say we're going to have the best two and a half years of stock market performance in recent memory. Are you bullish right now?

[Mohamed El-Erian]

I am bullish on the economy if we don't trip ourselves up. If we don't trip ourselves up, we've got a massive productivity gain in our immediate future. We are outshining other economies. We will attract a tremendous amount of capital from the rest of the world and we can have an enormously beneficial run on the economic front. By the way, when you looked at your phone, I thought you were going to look at the Mets and I got really worried. So thank you for not doing that.

[Joe Kernen]

I'm not looking at the Mets or the Reds.

[Mohamed El-Erian]

Well, you destroyed us last week, but you should congratulate me. Egypt had its first World cup win ever. And if it wasn't for this show, I would have been able to watch

[Joe Kernen]

it till the end so that you can't win. 0. 0. So they scored a goal.

[Mohamed El-Erian]

3 1.

[Joe Kernen]

Oh my God.

[Becky Quick]

Congratulations.

[Mohamed El-Erian]

Yes. It's the first win in four.

[Joe Kernen]

That's a bonanza. So you didn't say anything about the stock market. You said you like the economy. Stock market's tougher.

[Mohamed El-Erian]

The stock market is tougher because we've had such a great run.

[Joe Kernen]

We have.

[Mohamed El-Erian]

And it's been a concentrated run. So it's tougher. It's tougher than the economy. I think the economy is very clear to me if we don't trip ourselves up.

[Joe Kernen]

Okay, Mohammed, thank you.

[Mohamed El-Erian]

Thanks for having me.

[Katie Kramer]

Up next on Squawk Pod, newest trillionaire Elon Musk's biographer, Walter Isaacson on the massive SpaceX IPO. Yep, we're still talking about it.

[Walter Isaacson]

With that money he's been able to raise, he's able to get things built well and get them built quickly.

[Katie Kramer]

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[Joe Kernen]

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[Mohamed El-Erian]

So while others are busy talking, we're busy building.

[Joe Kernen]

That's Venture Global. That's unstoppable.

[Katie Kramer]

Energy

[David Faber]

trading at Schwab is now powered by Ameritrade, bringing you an expanding library of education with even more ways to sharpen your trading skills, access new online courses, insightful webcasts, articles, engaging videos and more, all curated just for traders. Plus guided learning paths with content designed to fit your unique interests. And no sifting to find exactly what you need so you can spend your time learning to trade brilliantly. Learn [e-mail] trading

[Katie Kramer]

this is Squawk Pod

[Mohamed El-Erian]

up and Becky Q.

[Becky Quick]

You are watching Squawk Box right here on cnbc. Hi, I'm Becky Quick along with Joe Kernan. Believe it or not, it's only been a little over a week since Space X has begun publicly trading. Those shares are up by about 32% in that period of time. Joining us right now to talk about the company and the growing wealth of Elon Musk is Musk biographer Walter Isaacson. He's an advisory partner with Perela Weinberg, a Tulane University professor, and of course, a CNBC contributor as well. And Walter, this has been something to see. You've known this man for a very long time, you're his biographer, you've put all this together. What do you think of the Space X ipo?

[Walter Isaacson]

Well, I think it shows that he has a real product. People are saying, oh, it's just type or something. He's put 10,000 satellites into orbit. He's able to have the heaviest, biggest rocket ever made get up into space. He's able to bring astronauts down and back. And he's been able to consolidate this into a company that also includes, you know, everything from X AI to data stations in outer space. So a lot of times you see vaporware or weird things getting high valuations. This is something where even a company like Anthropic is paying him $1.25 billion a month in order to create data centers. Because with that money he's been able to raise, he's able to get things built well and get them built quickly.

[Becky Quick]

Yeah, this isn't just a high valuation for a company though. This is what now the third most valuable company on the planet?

[Walter Isaacson]

Well, it also, there is some of the aura around it, there's some emotionalism, but you've been involved in markets for a long time, Becky. You realize sometimes people get excited, but it's being excited about what the future could bring come along all the time, especially in Elon Musk's world. Who would have thought that there would be a market for putting a data centers in low earth orbit or for that matter of creating landers to get to the moon, or for that matter having direct Internet and cell connections from low earth orbit satellites. These are all things that as he was creating SpaceX they came along. I suspect people think other things may come along. Who knows, you know, mining of miracles, minerals in space. So, you know, that would be a miracle. Yeah, miracles. But yeah, in this era in which so much is happening with AI, we don't know what the future is. This is something that's pretty real. These are real satellites and real rockets. And you notice, you know, other companies aren't able to to get things into orbit this way. More than 90% of all tonnage gone to orbit in the past couple of years has come from SpaceX.

[Becky Quick]

That is pretty incredible. You know, people wonder what he's going to do with the money. He's now the first trillionaire on the planet. He pretty quickly exercised options that brought him to a 20% voting stake in Tesla and that has people wondering if the SpaceX Tesla combination will happen sooner rather than later.

[Walter Isaacson]

Yeah, I think there will be a Tesla Space X You know, merger buyout, because it makes sense. They're both basically companies making real world things that are driven by AI and keeping track of which engineers are working on which projects in which place doesn't make a whole lot of sense. I think that he keep money deployed in his companies. He wants control of his companies. And the trillion dollars isn't a trillion dollars that he's using as money for himself. It's almost like in his head, he's an avatar in a game. And these are points. But more importantly there it's money being deployed in these companies. He's not taking them out of these companies. And that's why that's, you know, so this is money on paper. Eventually, if he takes that money out and puts it in the bank and starts buying houses, I hope he'll find something useful to do with it as well.

[Becky Quick]

Walter, you are the biographer of all biographers. Everybody from Elon Musk to Steve Jobs to Ben Franklin to Leonardo da Vinci, Einstein. I mean, you've watched them all. And today we got news about the loss of another financial great, and that's Alan Greenspan. What did you think?

[Walter Isaacson]

Oh, man, what a man.

[Becky Quick]

He was legacy.

[Walter Isaacson]

Yeah, and his legacy will be a lot better than, you know, some people tagged him after the financial crisis. Let me tell a really quick story. You know, he was a great clarinetist. And in the mid-1940s, he played clarinet down in my hometown of New Orleans at the Blue Room of the Roosevelt. And my father, when he came back From World War II, he got married in that room with Alan Greenspan as a clarinetist. The thing about Alan Greenspan is he was always data driven. We're not all that data driven these days. But when you talk to him, he could tell you how many trucks were going into warehouses at Walmart each day and it would help him figure out financial metrics. Now, with satellites and AI, we're going to take Alan Greenspan's talents and kick him up to orders of magnitude.

[Becky Quick]

Yeah, a giant. We've called him that time and time again today. And someone who we called the maestro, who was capable of orchestrating what was happening in the economy and beyond. But I think it's hard to really get your head around what a huge impact he had on central banks and the economy of this nation.

[Walter Isaacson]

He also had a wry sense of humor. He could get along with people. And it was an earlier time. I mean, he was 100 years old. It was a time in which it wasn't totally politicized. And even though he was a Republican. He was able to work well and try to figure out how do you steer the economy based on data, based on evidence, based on and I'm hoping Kevin Walsh and others will take some lessons from saying no, it's not about politics, it's about the data. And we can help keep both inflation under control, but unemployment down.

[Becky Quick]

He played at your father, at your parents wedding.

[Walter Isaacson]

He played in the 1944, 1945. He played clarinet in the Blue Room of the Roosevelt Hotel in New Orleans. And he used to love telling those stories, including walking out of the Roosevelt, going to the levee and realizing that the river was higher than the levee. And that didn't make much sense to him. My parents didn't know who he was when they got married, but he was in the band.

[Becky Quick]

Oh, man, Walter, that, that's incredible. Thank you very much for joining us this morning.

[Walter Isaacson]

Becky, great being with you.

[Becky Quick]

It's great to see you.

[Katie Kramer]

And that is Squawk Pod for today. Thanks for listening. Thanks for starting your week with us here on the podcast. Squawk Podcast is hosted by Joe Kernan, Becky Quick and Andrew Ross Sorkin. Tune in weekday mornings on CNBC at 6 Eastern or get the best of our TV show right into your ears when you follow Squawkpod. Wherever you get your podcasts, have a great Monday. We'll meet you right back here tomorrow.

[Eamon Javers]

We are clear. Thanks, guys.

[Mohamed El-Erian]

Foreign

[David Faber]

at Schwab is now powered by Ameritrade, bringing you an expanding library of education with even more ways to sharpen your trading skills. Access new online courses, insightful webcasts, articles, engaging videos and more, all curated just for traders. Plus guided learning paths with content designed to fit your unique interests. And no sifting to find exactly what you need so you can spend your time learning to trade brilliantly. Learn [e-mail] trading.