David Rubenstein, the FOMC, & Saving Spirit Airlines 4/29/26

Summary

Squawk Pod Episode Summary: “David Rubenstein, the FOMC, & Saving Spirit Airlines” (April 29, 2026)

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Episode Overview

On this episode of Squawk Pod, the CNBC “Squawk Box” team (Becky Quick, Joe Kernan, Andrew Ross Sorkin) explores three headline stories:

• The legacy of Jay Powell as he presides over his last FOMC as Fed Chair, and the outlook for likely successor Kevin Warsh, with deep insight from Carlyle Group’s David Rubenstein.
• The United Arab Emirates’ historic exit from OPEC, plus implications for global oil and US-Middle East relations, reported live from Dubai by CNBC’s Dan Murphy.
• A spirited debate over whether Spirit Airlines deserves government rescue, featuring Sarah Nelson (Association of Flight Attendants) and Joel Griffith (Advancing American Freedom).

The episode dives into economic policy, geopolitics, and labor issues with trademark banter and pointed exchanges.

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Key Segments & Insights

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1. Elon Musk vs. OpenAI Lawsuit (03:06 - 05:25)

Summary:

• Elon Musk testified in his lawsuit against OpenAI, claiming breach of their original nonprofit mission.
• Discussion: Is the lawsuit motivated by competitive interests or true principle?
• Reflections on the larger AI landscape: rapid growth, potential shakeouts, and the risk of commoditization among leading AI firms.

Memorable Quote:

"He also covered his predictions for AI, saying it would make the world more prosperous or kill everyone." — Andrew Ross Sorkin (03:16)

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2. UAE Leaves OPEC – Oil Geopolitics (06:32 - 12:27)

Report by Dan Murphy from Abu Dhabi:

• The UAE ends 57 years in OPEC, driven by longstanding output quota frustrations and shifting regional dynamics post-Iran war.
• UAE Energy Minister denies it’s a political break from Saudi Arabia, but analysts see a pivot to Washington and a more independent path.
• Oil market implications: Prices reacted, but focus remains on the Strait of Hormuz blockade and global supply anxieties.
• The UAE seeks a post-oil, diversified future, less tethered to high oil prices than Saudi Arabia.

Memorable Quote:

“The UAE has basically outgrown the optics of OPEC as well and is better off alone as an indispensable partner for Washington rather than a constrained member of a ‘cartel’.” — Dan Murphy (01:54 & 08:13)

Additional Insights:

• OPEC’s sway over the oil market has diminished as US production has soared (from 5M to 13.2M barrels/day in 16 years).
• UAE’s exit underscores the region’s changing alliances and ambitions.

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3. Starbucks Earnings & The Consumer (12:30 - 13:43)

Quick Take:

• Starbucks beats estimates, raises its outlook, unaffected so far by higher fuel prices.
• CEO Brian Nicholls’ retail pedigree highlighted, connecting past “turnaround” success at Taco Bell and Chipotle.

Banter:

“There’s two kinds of people in the world. Taco Bell people.” — Joe Kernan (13:34)

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4. The Fed’s Future: David Rubenstein on Jay Powell’s Legacy (14:49 - 28:33)

Powell’s Transparent Fed (16:28 - 19:22)

• Jay Powell's innovation: 65 press conferences—replacing decades of traditional Fed opacity.
• Managed COVID-19 fallout, unprecedented stimulus, and 40-year-high inflation without a major recession.
• Maintained composure despite years of criticism from President Trump.

Quote:

“Jay Powell has brought transparency to the Fed and I think that’s a good thing. ... I think the country owes him a lot of gratitude...” — David Rubenstein (17:17)

Inflation, Inequality, and Hindsight (19:22 - 22:49)

• Andrew Ross Sorkin raises issues of stimulus-driven wage declines and historic inequality.
• Debate: Was the Fed too late to act on inflation? Did the “transitory” error hurt credibility?

Quote:

“No Fed chairman is perfect. But I think he did a pretty good job and he bit his tongue for much of the time... all of us would have had a tough time...” — David Rubenstein (21:55)

Powell’s Legal Uncertainty and Succession (22:49 - 26:51)

• Discussion of Powell’s potential resignation in light of Justice Department probes—would need legal assurances.
• Critique of holding Fed seat as “leverage” and impact of DC cost overruns (“not Powell’s fault”).
• Kevin Warsh likely next chair: “talented, lawyer not economist,” rate cuts unlikely amid global uncertainty.

Quote:

“Getting a Fed funds cut rate now is not going to be easy. ... Everybody would like lower rates, but I wouldn’t expect it would happen overnight.” — David Rubenstein (26:38)

Interlude – Orioles Baseball Banter (26:51 - 28:33)

• Light moment: Rubenstein discusses his Baltimore Orioles Fandom, and pokes fun at the hosts.

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5. Should the Government Save Spirit Airlines? (28:35 - 43:48)

The Case for a Bailout: Sarah Nelson (32:13 - 33:38)

• Spirit’s uniqueness: Recovery stunted by engine recalls, failed JetBlue merger, war-driven fuel spike.
• Government role: “Bridge” support needed to save 19,000 jobs, maintain market competition and connectivity for small cities.

Quote:

“This is a unique moment in time where we have real life people who are on the verge of losing health care, losing their jobs, and a ripple effect across the economy.” — Sarah Nelson (32:53)

Against a Bailout: Joel Griffith (33:57 - 35:18, 41:51 - 43:12)

• Argues Spirit’s bankruptcy would not harm the broader economy or air travel—routes and planes would be absorbed by others.
• Attributes failure to longstanding mismanagement, not just recent events.
• Criticizes union contracts for raising costs.
• Warns against “another Amtrak of the skies.”

Quote:

“The disappearance of Spirit Air, if it were to fail, this is not going to impact the broader economy... We have 84 other airlines to choose from.” — Joel Griffith (34:07)

Philosophical, Economic, & Policy Debates (36:46 - 41:22)

• Sorkin presses Nelson: Is the airline industry a government utility or free-market business?
• Nelson: Air travel is the “backbone of the economy” but not a special class.
• Sorkin: If airlines are so essential, they should be regulated as utilities, and employees be government workers.
• Nelson: Investing in airlines is investing in Americans, but “not a special class.”
• Sharp disagreement over cause of Spirit’s troubles: labor vs. management, structural vs. circumstantial.

Notable Exchange:

“I understand the importance of airlines, but again, it's wild to me that somehow you believe that your team of people is a special class relative to every other American.” — Andrew Ross Sorkin (41:09)

Final Jabs and Wrap-Up

• Griffith: Warns bailout would benefit unions and hedge funds, not workers or travelers.
• Nelson: Disputes union cost impact, cites real-world layoffs and lost health care as core threat.
• Joe Kernan presses to give both guests the last word.
• Andrew Ross Sorkin’s quip on language: “I would like to propose uniquity. ... Isn't uniquity better than uniqueness?” (43:58)

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Notable Quotes (by Timestamp)

• “Jay Powell has brought transparency to the Fed and I think that’s a good thing.” — David Rubenstein (17:17)
• “The UAE has basically outgrown the optics of OPEC as well and is better off alone as an indispensable partner for Washington...” — Dan Murphy (01:54/08:13)
• “This is a unique moment in time where we have real life people who are on the verge of losing health care, losing their jobs...” — Sarah Nelson (32:53)
• “The disappearance of Spirit Air, if it were to fail, this is not going to impact the broader economy... Spirit Air only has around 3% of all domestic flights...” — Joel Griffith (34:07)
• “If airlines are so important ..., then you should be arguing and lobbying for them to become government utilities. ... And you should be a government employee.” — Andrew Ross Sorkin (41:12)

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Important Timestamps

• 03:06: Musk vs. OpenAI lawsuit overview
• 06:32: UAE’s exit from OPEC explained
• 14:49: David Rubenstein joins on FOMC, Powell legacy
• 28:35: Spirit Airlines: bailout debate overview
• 32:13: Sarah Nelson argues for government support
• 33:57: Joel Griffith argues against government support
• 36:46: Philosophical debate on industry utility/free-market status
• 41:51: Union/labor contracts debate
• 43:58: Andrew Ross Sorkin’s “uniquity” linguistic riff

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Episode Tone and Takeaways

• The episode maintains CNBC’s balance of deep financial analysis and lively, sometimes irreverent, conversation.
• Special attention is paid to nuance in Fed policy legacy, the shifting global oil order, and the tricky politics and economics of government intervention in failing companies.
• The contrasting perspectives—policy insider, financial commentator, labor leader, and free market advocate—capture the complexity behind today’s front-page business news.

Summary for the Time-Strapped:
If you want the pulse on the Fed’s transition, OPEC’s unraveling, and the latest in the rescue vs. let-die debate raging through the US airline industry, this Squawk Pod hits all the notes. Jay Powell’s tenure is praised but not without sharp critique. The UAE’s OPEC exit signals seismic global energy shifts. And the fate of Spirit Airlines becomes a flashpoint for big questions about markets, government, and American workers.

Transcript

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[Andrew Ross Sorkin]

Bring in show music please.

[Becky Quick]

This is Squawk Pod and I'm CNBC producer Cameron Costa on today's episode. Jay Powell's last FOMC meeting as Fed Chair is today Carlyle co founder David Rubenstein on Powell's legacy and the policies of his likely successor, Kevin Warsh. He can dream big, but there's a war on.

[David Rubenstein]

I think he will recognize that getting a fed funds cut cut rate now is not going to be easy. As Kevin War said in his testimony, he would like to, you know, lower rates. Everybody would like lower rates but I don't wouldn't expect it would happen overnight.

[Becky Quick]

And the major shift in the Middle East. CNBC's Dan Murphy reports on the UAE's epic OPEC departure straight from Dubai.

[Dan Murphy]

This is a country that's looking to a post oil future.

[Becky Quick]

Is it a break with Saudi Arabia or simply an economic evolution?

[Dan Murphy]

The UAE has basically outgrown the optics of OPEC as well and is better off alone as an indispensable partner for Washington rather than a constrained member of a quote unquote cartel.

[Becky Quick]

And finally, a spirited debate about Spirit

[Sarah Nelson]

Airlines that is 19,000 people between the direct employees and the contractors who will suddenly be out of work, out of their health care, people who are getting ready to have babies are in the middle of cancer treatments and everything else. So we need to think about how we're supporting the American People association of

[Becky Quick]

Flight Attendants International President Sarah Nelson and Joel Griffith from the think tank Advancing American Freedom.

[Joel Griffith]

This is not due to the current situation in Iran with higher fuel prices. This has been longtime mismanagement and a long time accumulation of debt.

[Becky Quick]

It's Wednesday, April 29th, 2026 and Squawkpod begins right now.

[David Rubenstein]

Stand Becky by in three, two, one.

[Joe Kernan]

Good morning, everybody. Welcome to Squawk Box right here on cnbc. We are live from the NASDAQ marketsite in Times Square. I'm Becky Quick along with Joe Kernan and Andrew Ross Sorkin.

[Andrew Ross Sorkin]

Meantime, Elon Musk expected to return to the witness stand today in the billionaire's case against Sam Altman and OpenAI must was the first witness called in the case to testify yesterday at that federal courthouse in Oakland, California. He's seeking to hold OpenAI responsible for what he says is the company going back on a vow to remain a nonprofit. On the witness stand yesterday, Musk claimed that he played a pivotal role in the founding of OpenAI, motivated by what he said was a desire to serve as a counterweight to Google. He also covered his predictions for AI saying it would make the world more prosperous or kill everyone. OpenAI has characterized Musk's lawsuit as a baseless harassment campaign by somebody who's a competitor. And we're going to see whether how much that part of the argument works

[Joe Kernan]

or it could be both.

[Andrew Ross Sorkin]

You could be both. You could be both. But but it's an interesting it so much of the of the defense has been about that the person prosecuting is prosecuting based on being a competitor, not based on the underlying marriage, which is going to be very interesting.

[Joe Kernan]

The judge stripped out so many how

[Andrew Ross Sorkin]

the jury but how the jury thinks about them.

[Joe Kernan]

But I think the judge takes what the jury says into consideration but then gets to do what she wants to do.

[Andrew Ross Sorkin]

Yes, it's an advisory decision and she

[Joe Kernan]

threw out a lot of the complaints. I think there were 26. It's gotten whittled down to two. So this is really very focused on whether a nonprofit can convert into a profitable enterprise over the objections of one of the co founders, one of the founders who gave them the startup money

[Andrew Ross Sorkin]

the seed money with yesterday was definitely open a day that that's for sure. With all the stuff swirling around it.

[David Rubenstein]

Yeah.

[Andrew Ross Sorkin]

Three steps forward, two steps back. But that was not great. I mean are there any doubts, is there, should there be doubts about how bullish everyone is on on AI based on yesterday or is it just growing pains? Maybe it's just growing pains.

I'm more on the growing pains at the moment camp only because the anthropic numbers are so wild.

Right.

And the Gemini numbers are so wild. But so the amount of compute that you're still going to need.

Right.

Seems pretty in the money will be there for, you know, who wants in the money? If you look at the revenue growth of anthropic, the money should be there.

Who's going to get. There's going to be shakeouts though, right? There's going to be all sorts. We just. How many. How many real competitor and they do different things, but how many real competitors?

The question is whether you think they're all commodities. I mean the other thing is are they. Are there be a top close to each?

Will it be a top five? Will they be a top ten? Will they be a top two?

[Joe Kernan]

The commodities commoditization is really interesting.

[Andrew Ross Sorkin]

Two or three of these, only two or three because they're all the same. I mean that's the thing.

[Joe Kernan]

Streaming services, right? How many do you have?

[Andrew Ross Sorkin]

What can you tell me about Spark Mute, whatever the hell that is? Have you looked at that yet? This new meta one that is like horizontal across all. It appealed to me because it supposedly is personal health is what it's like an agentic personal health mana. It's going to do everything for me, you know, you'll see. You know, I know you think you're gonna live forever. You're immortal, actually. It'll be great for you with all your or.

I hope so. But I don't think I'm living forever and I'm not sure I want to.

[Joe Kernan]

The United Arab Emirates shocking the energy world announcing that it will pull out of OPEC after decades with the oil cartel. CNBC's Dan Murphy joins us live from Abu Dhabi. And Dan, we got this news about 23 hours ago. Maybe a lot of scuttlebutts since then trying to figure out if this is retaliation because they're upset with not having been better defended by the other Gulf states during this war, or if this is a move that's been long in the making and this just happens to be good timing because you're less likely to crater the oil market when we've seen so much supply that's been pulled off because of what's happening with the war in the Middle East.

[Dan Murphy]

Becky, good morning to you. Well, we are following all the angles here, and this is historic for the region and for the Arab oil producers. The UAE is out of OPEC after 57 years. This is a major break, but it's not necessarily a big surprise. We know the UAE has had long held reservations about its own output quotas. And the Iran war has also really changed the regional calculus, the security relationships and the energy architecture as well. I spoke with the UAE Energy Minister, Suhel Al Mazrui, as the news broke and I asked the question that everyone is asking right now, is this a break with Saudi Arabia? Here's how he responded.

[Jennifer Garner]

This has nothing to do with any

[Sarah Nelson]

of our brothers or friends within the group. We've been working together for years and years. We have the highest respect for the Saudis. It's a pure policy change. But the timing, as I said, was taken into consideration.

[Dan Murphy]

The UAE energy minister there. And while he says this is about policy, not about politics, it's also fair to say that the uae, UAE has watched Saudi Arabia dominate the group's agenda for many years now and has ultimately now concluded that independence, not solidarity, is the way forward. Analysts have also told me today that the UAE has basically outgrown the optics of OPEC as well and is better off alone as an indispensable partner for Washington rather than a constraint member of a quote, unquote cartel that also includes Iran and Russia. And take a look at how prices have reacted here. You can see on screen WTI holding a bolt. $100 a barrel, Brent, just below 115. We saw prices initially moving lower on the headline but have since shot up. The conventional thinking is that when the Strait eventually reopens, the UAE is going to be a free agent ready to flood the market. But we've seen prices move higher because of course the bigger focus right now remains on the Strait of Hormuz. Which brings us to Washington. The Wall Street Journal also reporting this morning that Trump has told aides to prepare for what could be an extended, potentially indefinite blockade. The White House believing this economic squeeze is working and Iran is running out of places to store its unsold oil. But the President also made his mood pretty clear this morning on Truth Social saying, quote, Iran can't get their act together. They don't know how to sign a non nuclear deal and they better get smart soon. And of course, that post also came with this image of Trump holding a gun, explosions behind him and the words no more Mr. Nice Guy. We'll see exactly what that means over the coming hours and days. Back over to you.

[Andrew Ross Sorkin]

This is not good for opa. This could be it eventually. It almost seems like some of the bad actors get, you know, they don't have to pay attention to the quotas. Some of the, you know, the, the actors that feel like they've played by the rules and lowered their, their cost of production and they're ready to go and they can't. And I think they feel, you know, like they're treated Unfairly. The other thing, there's this perception Saudi

[Joe Kernan]

Arabia has been able to keep everybody from getting bigger over time.

[Andrew Ross Sorkin]

Getting bigger.

Right, but those are the two swing producers. But Dan, everybody thinks the United States is losing influence in the Mid East. You just said this is UAE getting even closer to the United States. And that's not the only country. The actual action of some of the countries sort of doesn't say that, that they're, they're distancing themselves more from the US at this point.

[Dan Murphy]

That's true. And we have heard from senior Emirati officials who have suggested that the regional backdrop, this conflict is only going to push the UAE closer towards Washington and indeed closer towards Israel as well. That's also been reflected in some of the commentary that we're hearing from analysts today in the aftermath of this decision to have the UAE essentially pull out of opec. And while the Minister suggested this isn't necessarily a break with the UAE's regional allies like Saudi Arabia for example, it also just reflects the growing sophistication of this economy. This is a country that's looking to a post oil future. It's a sophisticated international investor, it attracts top talent from around the world. And really they see this OPEC influence as looking a little dated now given the fact that they're also pivoting towards increased diversification. This country no longer needs to have really high oil prices in order to outperform. That is unlike Saudi Arabia for example, where the break even is still near the triple digit handle. And that country requires higher prices in order to continue the economic diversification drive.

[Andrew Ross Sorkin]

And as much as we're producing here, it's just much less. OPEC doesn't have the juice that it once had. It point out in the Journal January 2010 the US was producing 5 million barrels a day, 13.2 million now a day in January. It's just, it's a totally different world than it was when they could choke everything off. Anyway, Dan, thank you or thank you. We can both thank him.

[Joe Kernan]

Dan, thank you.

[Andrew Ross Sorkin]

Thank you.

Meantime, take a look at this shares of Starbucks, they are higher. Following solid quarterly results. The company raising its full year outlook for earnings and same store sales. US and global comps are now expected to increase at least 5%. That's up from a previous projection of 3%. And CEO Brian Nicholls saying company has not seen higher gas prices alter the behavior yet. This is interesting of Starbucks customers but he does acknowledge the Starbucks is forecast now. That hike was cautious relative to its outperformance in that second quarter.

[Joe Kernan]

This is the turn in the turn.

[Andrew Ross Sorkin]

This is the turn of the turnaround.

This is like the.

Probably took a little longer than they were hoping for, but it's starting to turn.

Used to be Howard Schultz executed turnaround. Yep.

[Joe Kernan]

Yeah.

[Andrew Ross Sorkin]

This guy knows customers. Wasn't he Taco Bell, Chipotle. Oh, Chipotle. Oh, See, but I thought he. But then the Chipotle. Didn't the Taco Bell go to Chipotle? One of them. I'm thinking about it personally because I was hoping Chipotle would become more like Taco Bell. A lot of people. There's two kinds of people in the world. Taco Bell people.

[Joe Kernan]

Yeah. He was Taco Bell from 2015 to 2018.

[Andrew Ross Sorkin]

Yeah.

[Joe Kernan]

And then he went to Chipotle.

[Andrew Ross Sorkin]

You forgot that.

[Joe Kernan]

Sorry. It was vaguely out there, but yeah,

[Andrew Ross Sorkin]

all comes back to Taco Bell.

[David Rubenstein]

Cheese will be next.

[Becky Quick]

Coming up on Squawk Pod, it's Fed Day. Carlisle co founder and chairman David Rubenstein joins us ahead of Chair Powell's last press conference. His likely successor, Kevin Warsh, is waiting in the wings. But Powell has a legacy way beyond the drama of his last years.

[David Rubenstein]

After the press conference today, that will be the 65th press conference that Jay Powell has had. And so he's revolutionized the way Fed chairs communicate with the public. Historically, Fed chairs did not talk after FOMC meetings.

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[David Rubenstein]

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[Becky Quick]

Welcome back to Squawk Pod. Here's Becky Quick.

[Joe Kernan]

It is Fed decision day. Believe it or not, the central bank widely expected to leave rates unchanged. It is though expected to be Chairman Jay Powell's last news conference and that's why more people would be paying attention to this than normal. Joining us right now is David Rubenstein. He is the co founder and co chairman of the Carlyle Group. And David, let's first of all welcome. It's good to see you.

[David Rubenstein]

My pleasure.

[Joe Kernan]

Let's talk a little bit about what we might expect today. Again, this might not be something that too many people were interested in because they're not going to do anything with rates. We expect them to leave it unchanged. But we don't know exactly what Chairman Powell is going to say at his last meeting or if he'll be stepping down from the Fed or deciding decide to stay on a little longer. And that might be the biggest reason people will be paying attention. What do you expect to hear? What's your anticipation here?

[David Rubenstein]

I don't have any inside information, but I'll give you my guess after the press conference today. That will be the 65th press conference that Jay Powell has had. And so he's revolutionized the way Fed Chair chairs communicate with the public. Historically, Fed chairs did not talk after FOMC meetings. Alan Greenspan never had a press conference after an FOMO FOMC meeting and nor did Paul Volcker. And so you had to guess a little bit about what the Fed was doing. Jay Powell has brought transparency to the Fed and I think that's a good thing. He's obviously had to struggle with the President of the United States criticizing him for for many years, but he's Overcome that in my view today I don't expect that the Fed is going to have any rate cuts. During Jay Powell's turn tenure as Fed chair he's had 15 rate increases and 12 rate decreases. So more or less about even. But what he had to deal with was one of the hardest problems any Fed chairs ever had. When he became Fed Chair not long thereafter we went into Covid and as a result the Trump administration and the Biden administration injected about $5 trillion into the economy with no corresponding tax increases. That obviously produced inflation which went as high as 9%. Jay Powell had to engineer a situation where we did not go into a recession but also had to deal with high inflation. And fortunately we did not really go into a real recession. There was a technical recession, but generally we didn't have a recession during his eight and third years as Fed chair. So I think he deserves credit for engineering that and for being transparent and also for not, I would say getting into a fight with President Trump. Obviously many of us would probably say it's difficult to have a president states criticize you and not respond. But I think he basically did not respond to that and bit his tongue for most of the time he was Fed Chair. So on the whole I think the country owes him a lot of gratitude for doing a good job in engineering the post Covid inflationary situation in the United States.

[Andrew Ross Sorkin]

David I guess just on the other side I'd, I'd say I just keep coming back to, and I know that there's, there's, there's, there's different ways, different people to blame for the inflation and the 5 trillion. I think, you know, a lot of it was not necessary the last 3 and a half trillion which came later in the Biden administration. But as a result of those 40 year highs in inflation, real wages dropped during that four year period when Biden was president. The other thing, the balance sheet expansion that we saw from the, from that a lot of people would say that was very good for people that owned assets and you can see what happened to the owners of things when you expand the balance sheet like that and dump so much money. We've got the worst income inequality in the history of the world. A lot of people say that that's totally due to the profit profligacy. This is another word of the Fed which enabled Congress to overspend as well. So I mean there's plenty of, of negatives that I can find. No one wants to have less wages in a four year period than when, when, when they began.

[David Rubenstein]

David I agree, but what would you like to do if you had been the Fed chair and you saw Covid coming in and, and the government of the United states is spending $5 trillion, what would you do to respond to that?

[Andrew Ross Sorkin]

Well, they were, the critique would be they responded too late in terms of raising rates, in terms of raising. They were involved in all kinds of climate change. They were involved in all kinds of things, but never once, you know, weighed in on, on all the money that was, that was being spent on all the infrastructure.

[Joe Kernan]

Although Joe, I will say at the

[Andrew Ross Sorkin]

time, Green New Deal. Green New deal and all that Chairman is, I'm just saying that I'm just playing devil's advocate.

[Sarah Nelson]

Yeah.

[David Rubenstein]

The Fed Chairman does not decide what Congress does or the administration. Remember, the Fed Chairman is the chairman of the fomc. He doesn't make all these decisions by himself. And so you have a lot of people on the FOMC making these decisions. These weren't narrowly decided. They were generally unanimous.

[Joe Kernan]

Yeah, there's, it's always easy to go back and criticize and critique. But the biggest issue he's going to have to. And by the way, I, I'm a fan of what Chairman Powell did over this time too. But the biggest critique is always going to be waiting so long to deal with that inflation. Thinking that it was going to be transitory. Yes. That's a phrase you don't forget.

[David Rubenstein]

I think Janet Yellen and Jay Powell both said in March of 2021 that the inflation that was high then 8 went peaked at 8 to 9% was transitory. Later they admitted that that was probably not the best word. I think that was probably something they would all regret. It wasn't transitory. It turned out to be more enduring. However, they did do something about it and the result is that our economy went pretty well. We did not have a real recession during that eight year period of time. Jay Powell has been, I think the fourth or fifth longest serving Fed chair and never had a recession during his period of time. So I think he deserves some credit for that. And I think dealing with the problems he had at the White House was, was not easy to deal with either. So on the whole, I would give him pretty high marks. I say no perfect, no Fed chairman is perfect. But I think he did a pretty good job and he bit his tongue for much of the time and I think all of us would have had a tough time biting our tongue. If you're going criticized daily by the President, states.

[Joe Kernan]

Right. Grace under fire is certainly a phrase that I would associate with Jay Powell and how he's dealt with all of it. The question now becomes, ok, the, the, the Attorney General has. That case has been taken away for now. It's going to be referred to within the Senate. They're going to be investigating it there through their own committees on this. You know, Powell has said that he was not going to step down if it still looked like he was in danger of this criminal prosecution. Do you think that he should stay on the Fed because his term's not up until 2028, or do you think that he should step down at this point since this concession has been made?

[David Rubenstein]

Well, he'll have to make that decision, obviously, yes. Yesterday James Comey was indicted after about a year of nobody talking about his being indicted. So you never know exactly what's going to happen out of the Justice Department for sure. But I think that probably Jay Powell's lawyers, and I'm not one of them, of course, would probably say they would want something in writing that indicates he's not being subject to another potential indictment. Because, you know, just saying that in a leak that they're not going to investigate him any further unless new information comes up probably would not be in his lawyer's views enough. But again, I'm not his lawyer and he may have a different view than I do. I'm just saying that if we're my situation, I'd like to have something in writing that would make me feel I can go about my life and not have to worry about a federal indictment. And I would say on cost, I can understand that.

[Joe Kernan]

But then you get to the position where you're holding onto this seat as leverage that you feel like you've lost it. I mean, maybe it's the prudent thing to do given what we've seen with Comey and others. But is it a trade like, okay, I agree to, I'll step down and kind of go my own way with things if you'll agree to stop harassing me. Is that basically what the trade is?

[David Rubenstein]

Well, I think that stepping down basically would enable Jay to basically go back about his life and go back to a more normal life without having security around him all the time and having agents follow everything he does. And I'm sure he'd be happy to go back to that, but I think he'd like for the comfort of his family and his own well being to know that he's not being subject to a federal indictment. I don't see a lot of interest in a federal indictment by members of Congress against Jay Powell. Jay Powell theoretically wasn't as honest as some people might say he should have been about the cost overruns. But the cost overruns were not something he had any control over. There are always cost overruns in Washington D.C. the ballroom being built was supposed to cost $100 million. Now it's costing $400 million. The costs in Washington are always exceeding what people project. How do you know what, what the building is going to cost in terms of the Federal Reserve? You had a lot of asbestos that had to be dealt with yet high water plane that have be dealt with yet contamination. So it wasn't Jay Powell's fault that the cost was higher than people projected, in my view.

[Joe Kernan]

Yeah. And it did happen at a time where construction costs everywhere were rising because of COVID and the inflationary impact that came along with that, which the biggest

[David Rubenstein]

challenge going forward is the new Federal Reserve chair, presumably. Kevin Wash is a very talented person. He's smart, he's like Jay Powell. He's trained as a lawyer, not as an economist. But he has been on the Fed before. And when we have Fed chairs who come back to the Fed, as Ben Bernanke did, I generally think they do a good job. And he has a lot of experience. He's well respected in the, in the Federal Reserve community. But I think he will recognize that getting a fed funds cut rate now is not going to be easy. I don't think anybody in the financial markets is expecting a big cut in fed funds rates in the near term because as long as the war is on, we don't know what the inflationary impact is going to be. So I suspect as, as Kevin Ward said in his testimony, he would like to, you know, lower rates. Everybody would like lower rates, but I don't wouldn't expect it would happen overnight.

[Andrew Ross Sorkin]

David, I'm seeing glimmers of hope in the orioles. You're only one game below.500. Are you going like, will you go to every game the Orioles? Will you be going? Will you go down tonight at635?

[David Rubenstein]

I can't go to every game. I like to go to the games when I think we're going to win. Now look, we won last night.

[Andrew Ross Sorkin]

I know you did.

[David Rubenstein]

Houston, you know, look, I go in and give them a pep talk from time to time, but I don't think they listen. I'm an old guy and they're all young and so I'm not sure they're thinking that I know very much about baseball. But the Orioles are doing reasonably well. We're one game under.500 now. And Joe, whenever you want to come to a game, please let me know. I'll let you go into the cage and see what you can do. At your age,

[Andrew Ross Sorkin]

I was invited by. By someone that you know, near and dear, who I think has a lot of influence over you. So I already had an invite to come down.

[David Rubenstein]

Okay, well, let me just extend it and say please come any time you'd like. The players would like to meet you. I know most of the players are watching this show all the time.

[Andrew Ross Sorkin]

How about when the Reds come to town? The Reds are in first place.

[David Rubenstein]

Well, we're going to go to first.

[Andrew Ross Sorkin]

Well, Reds come to town. I'll come down and sit with you and another important person.

[David Rubenstein]

Please let me know when you can come. We were all waiting for you and we know you can bring us some good luck. I know you're not really an Orioles fan, but maybe we can convert you.

[Joe Kernan]

And Joe's got the curse. Any team he likes tends to lose.

[Andrew Ross Sorkin]

That's not true.

[Joe Kernan]

You're doing.

[Andrew Ross Sorkin]

That's football.

[Joe Kernan]

Bring him.

[Andrew Ross Sorkin]

That's football.

[Joe Kernan]

That might be Redskins.

[Andrew Ross Sorkin]

That might be.

[David Rubenstein]

The invitation extends to. To all of you, Any of you who are any of you on the show. Okay.

[Andrew Ross Sorkin]

Okay.

[Joe Kernan]

David, thank you and thanks for being with us this morning.

[David Rubenstein]

Thank you.

[Becky Quick]

Next on Squawk Pod, a lively debate over whether the government should let Spirit Airlines just die. Joel Griffith from Advancing American Freedom says that's the way the market goes.

[Joel Griffith]

The disappearance of Spirit Air, if it were to fail, this is not going to impact the broader economy. Of course. Spirit Air only has around 3% of all domestic flights with 84 other airlines to choose from.

[Becky Quick]

But international president of the Flight Attendants Association, Sarah Nelson has her own members in mind.

[Sarah Nelson]

There is a responsibility by the government to look out, sure, for the markets, but also to look out for the American people. There's a bigger responsibility here.

[Becky Quick]

We'll be right back.

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[Sarah Nelson]

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[Andrew Ross Sorkin]

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[Jennifer Garner]

Men are struggling with their mental health at some of the highest rates we've ever seen, but most aren't getting the support they need. And, and that needs to change. I'm Dr. Guy Winch, your host for season three of the Visibility Gap, presented by Cigna Healthcare. This season we're focusing on men's mental health, bringing together real stories and expert insight to explore the pressures men face every day and why opening up can feel so difficult. Join us for the new season wherever you stream your podcasts.

[Becky Quick]

This is Squawkpod up and Becky Q.

[Joe Kernan]

You're watching Squawk Box right here on cnbc. I'm Becky Kwek along with Joe Kernan and Andrew Ross Sorkin. Our next guest will weigh in with the pros and cons of a potential half billion dollar federal rescue of Spirit Airlines. President Trump actually mentioned the idea in an interview on Squawk Box last week.

[David Rubenstein]

I don't like it.

[Andrew Ross Sorkin]

No, I don't mind mergers.

[David Rubenstein]

I think I'd love somebody to buy Spirit as an example.

[Andrew Ross Sorkin]

You know, Spirit's in trouble and I'd love somebody to buy spirit. It's 14,000 jobs and maybe the federal

[David Rubenstein]

government should help that one out.

[Andrew Ross Sorkin]

You know, I tell my people, but

[David Rubenstein]

with American, it's doing fine and United is doing very well. I know the United people, they're doing very well. I don't like having them merge. It's just like all of these aerospace,

[Andrew Ross Sorkin]

defense companies and aerospace.

[Joe Kernan]

Joining us now is Sarah Nelson. She is the international president of the association of Flight Attendants, which last week put out a letter supporting supporting the idea of government help for Spirit, also advancing American freedom. Senior fellow Joel Griffith. And folks, welcome to both of you. Look, President Trump said last week here that he would love to see somebody else buy Spirit, but if not, maybe the federal government should get involved with this. Sarah, you put out a letter of support. Why would you like to see government support here? Just jobs?

[Sarah Nelson]

Well, this is definitely about jobs, but this is also about a unique moment in the industry. So Spirit has been recovering from COVID ever since and had 40 airplanes set on the ground because of the problems with the recall of the Pratt and Whitney engines. And then here we are. What they tried to do was merge with another airline with JetBlue, in order to fix their financial situation, and that was called off. Here we are now in this situation where we have a brand new CEO who is taking Spirit to a new place to be able to restructure. And in the middle of that restructuring, we had the Iran war start where fuel prices spiked. So this is a unique scenario where the rest of the industry is cutting capacity. No one's going to be interested in buying an airline while they're cutting capacity. We need to bridge this to a place where we can get to a place of a merger or Spirit being able to exit bankruptcy and exist alone and keep the service in markets that really need it. There are some airports that are going to lose service completely. A lot of people will lose choice. Spirit keeps airfares low and that competition is important. And this is a unique moment in time where we have real life people who are on the verge of losing health care, losing their jobs, and a ripple effect across the economy, including the communities that will lose the hospitality and other investments in their communities. So this is a good way to invest in the American people. And I think that that is the definition of freedom, actually.

[Joe Kernan]

Hey, Joe, let's talk a little bit about the timing on this, because you can certainly argue that the financial crisis was a unique moment in time. Covid, obviously a unique moment in time. We're five years past that, though. Does this rise, you think, to the level of. Of a unique moment in time that the government needs to step in and help out?

[Joel Griffith]

No, this is not a unique moment in time. In fact, the only way this is unique is that we have a Republican presidential administration threatening to nationalize an airline. And look, the Biden administration was wrong to kill the merger between JetBlue and Spirit that killed nearly $30 billion worth of shareholder value. But the solution of this is not now to nationalize or bail out Spirit. The disappearance of Spirit Air, if it were to fail, this is not going to impact the broader economy. Of course, Spirit Air only has around 3% of all domestic flights. We have 84 other airlines to choose from. And if Spirit Air were to go bankrupt, it's not as if the aircraft disappear or the routes disappear. Those aircraft, if it's not in a merger, will be sold to other airlines, including Frontier and Allegiant and guess what? All of those routes, other airlines will have the opportunity to absorb those connections. This will not be a disaster for air travel. And as someone who enjoys flying Spirit, this is an unfortunate situation, but it's been a long time coming. Spirit Airlines has been losing money each and every year since 2020, 20. They lose nearly 12 cents for every dollar of revenue. This is not due to the current situation in Iran with higher fuel prices. This has been longtime mismanagement and a long time accumulation of debt.

[Joe Kernan]

Hey, Sarah. Even the Washington Post editorial board, which isn't normally seen as a far right editorial board, published a piece this week saying America doesn't need another Amtrak of the skies. They say Americans would be better off if the federal government just lit that money on fire. That the Spirit's failure poses no systemic risk to air travel. The administration has no business picking winners and losers in a competitive. In a competitive industry.

[Sarah Nelson]

Becky, I do want to clear up one thing. This is not about the government running Spirit Airlines. This is about making Spirit, making it possible for Spirit to continue to operate until it can operate on its own or be able to be strong enough to be merging with another airline. The idea that people are going to pick up Spirit and all of its assets and its employees and keep the obligations to them is just not correct. What we're talking about here is simply riding it out through a period of time where Spirit will not be able to exist. We're talking about days here where people are going to lose the tickets that they bought. They're going to lose that affordability. Fort Lauderdale, 27% of the market in Fort Lauderdale is spiritual. There is in the Arnold Palmer Regional Airport, which provides service for people in western Pennsylvania, Ohio and West Virginia. That would go away completely. Atlantic City go away. We're talking about an immediate harm here that can be staved off. And these are real people who are going to lose their jobs. It's actually nice.

[Andrew Ross Sorkin]

Can I ask a separate question?

[Sarah Nelson]

Yes, absolutely, Andrew, just one second. 19,000 people between the direct employees and the contractors who will suddenly be out of work, out of their health care, people who are getting ready to have babies, are in the middle of cancer treatments and everything else. So we need to think about how we're supporting the American people, those who are buying the tickets and those who are working at Spirit Airlines right now.

[Andrew Ross Sorkin]

Sarah, you and I have had vigorous debates over the years, especially during the pandemic, about the bailouts of the airline industry. And. And I had some sympathy, not a lot of sympathy, but some sympathy for Those bailouts during that period, given the uniqueness of that moment, my question to you is, do you believe that airlines are ultimately government utilities to some degree? Because if they are, then they should be managed in a very, very different way.

[Sarah Nelson]

Well, what I do believe is that the airline industry is the backbone of the economy and the idea of deregulation was to create competition. But what we've seen is a consolidation of power. The idea that it's going to be a Frontier that's going to pick up the pieces of Spirit when Frontier is also struggling is just not correct.

[Andrew Ross Sorkin]

You support, you supported, you supported the merger of JetBlue and Spirit.

[Sarah Nelson]

Say that again.

[Andrew Ross Sorkin]

You supported the merger of JetBlue and Spirit, and now you're telling me consolidation is too much?

[Sarah Nelson]

No, absolutely, Andrew, because what we said with JetBlue and Spirit was that the JetBlue Spirit merger was the anti merger merger. It was going to actually give an opportunity to compete with the big Three and inject more competition into the airline industry. So that, that is our argument with the, with the merger of JetBlue and Spirit. And we would have liked to have seen that happen because we believe it would have created more competitive advantage for the American people.

[Andrew Ross Sorkin]

But Sarah, don't you think either you have to decide that this is a utility, you're in a utility business, in which case they should be regulated completely and utterly like utilities and, and treated as such, or they're competitive business. And by the way, some of these routes you're talking about could ultimately get picked up by other airlines.

[Sarah Nelson]

I mean, and in the meantime, people are going to get hurt. So they're not going to get to their graduations, they're not going to get to their families, they're not going to get to their people who are hurting.

[Andrew Ross Sorkin]

There are many, I don't disagree, but

[Sarah Nelson]

they've flown on Spirit for the first, flown for the first time they were able to afford it.

[Andrew Ross Sorkin]

On airline. Do you think that the airline industry is, is a special class of people that work there relative to every other industry in the, in the country? So any other time a company is about to go out of business, the government's supposed to step in to help them? I mean, that's, that's why this is as complicated as it is.

[Sarah Nelson]

What I believe, Andrew, is that the airline industry touches every other industry and touches every single community. And so investing in the airline industry is investing in the American people.

[Andrew Ross Sorkin]

But then they should be treated as utilities and then you should all be government employees and we can have a

[Sarah Nelson]

different conversation and and where we are right now is that it is a competitive market. But this is a moment in time where this has been disrupted in a major way by decisions of the government, both administrations. And so it's time to step in and make sure that they can be propped up, not lose those tickets for people who are able to travel and, and invest in the American people. This is going to hurt the economy at just the wrong time. And so it's not just about Spirit Airlines. This really is about how this is going to impact. Impact the American.

[Andrew Ross Sorkin]

I just think it's really great to see you and President Trump on the same page.

[Sarah Nelson]

Joe.

[Andrew Ross Sorkin]

I love you. That's what really warms the cockles of my soul. Is it? And mad at the Bidens for Biden administration for not letting the merger go through. Well, listen, this is good.

[Sarah Nelson]

There's a responsibility by the government to look out, sure, for the markets, but also to look out for the American people. There's a bigger responsibility here. And so I agree that it's time to invest in Spirit. In this way, there will be a return to the American people. And the government is not going to run this airline. That is not a good idea. I agree with Joel on that, Maguser. But we have a great CEO who

[Andrew Ross Sorkin]

can never say, I can't.

You know, Magasera, I never thought.

[Joe Kernan]

I don't have another word.

[Andrew Ross Sorkin]

I just want to. I just need to say to Sarah, Sarah, you know, when Microsoft lays off 10% of its workforce or you hear about 10,000 employees, I mean, it's just, it's wild to me that we're having. I understand the importance of airlines, but again, it's wild to me that somehow you believe that your team of people is a special class relative to every other American. And if you believe that these airlines are so important in terms of travel, which it is, then I think you should be arguing and lobbying for them to become government utilities. And you should be a government employee. And that's what it should be.

[Sarah Nelson]

To be clear, I don't think that airline employees are a special class. I don't think that those layoffs at Microsoft should have happened either. We need to be investing in the American people. That's how we grow a strong economy. And so this isn't just. This is about the immediate issue at Spirit. We will not be able to put this back together.

[Joe Kernan]

Sarah, I gotta let Joel have another word. They've been trying to wrap us for three minutes and Joel has only gotten one. Joel has only gotten to talk once. So let's Let Joel say something before we have to go because we're way over time.

[Andrew Ross Sorkin]

Joel, thank you.

Thank you, Becky.

[Joel Griffith]

Let's keep a few big things in mind here. First of all, Sarah's union has been part of the problem. The labor contracts have been negotiated at Spirit have not been in the best interest of Spirit employees or the company. That's because those contracts have.

[Sarah Nelson]

Employees have taken concessions. They've taken concessions.

[Joel Griffith]

If I, if, if, if I can finish one second here. The new contracts that wanted to replace increased labor costs at Spirit to be more on par with some of the higher cost airlines like Delta and more importantly, diminish the flexibility of those labor arrangements. That's part of the reason why Spirit has not been able to bounce back post Covid. But this is not a situation for one more second here. We also need to keep in mind Spirit only has about 4% of the total market share for domestic flights. This is not going to impact most, most flyers. Those routes can be absorbed. And this underscores that. This is not just the bailout of the hedge funds that bought up spirit debt at 40 cents on the dollar. They're going to double and triple their money. This is also a bailout of the union leaders at Spirit who have run Spirit into the ground. And sure, they don't want those contracts to.

[Sarah Nelson]

This is about, this is the truth about union leaders. Spirit employees make on average about 30 to 40% less than those mainline carriers. So what your argument is just simply not true.

[Joel Griffith]

That shows up in the financial statements each and every quarter, unfortunately.

[Sarah Nelson]

Okay. As a percentage of what Spirit is paying to all of its employees and all of the revenue. But those, those employees are making way less than the other mainline carriers. And that is competitive. The labor costs are competitive. What we're talking about here is the cost. Rising costs in fuel and the disruption of Pratt Whitney and the fact that Spirit needs the opportunity to adjust to the new market here where people want a range of choice, not just the low cost carrier. And they need to be able to.

[Joe Kernan]

I'm sorry, we have to end this conversation today. I'm sorry. I can't let it keep going on and on. Sarah, Joel, I want to thank you both for being here today. I appreciate the conversation.

[Andrew Ross Sorkin]

Andrew, you know you used the word uniqueness. I would like to propose uniquity. I just think it's. And I looked it up. It's not a word, but it was a word back in the 16th century in text and it didn't gain enough usage. But isn't uniquity better than uniqueness. I just think it has a good sound to it. I'm asking the oed. It's like, remember Sarah. Sarah Palin had some. Some good ones. Remember? What was that?

[Joe Kernan]

Oh, mis.

[Andrew Ross Sorkin]

You can talk to. To Webster's about that.

I want to talk to the O. The. The Oxford English Dictionary. Refudiate.

[Joe Kernan]

Yeah, refute.

[Andrew Ross Sorkin]

Refudiate should be a word. Iniquity.

[Becky Quick]

That does it for Squawk Pod today. Thank you for listening. Today and every other day, Squawk Box is hosted by Joe Kernan, Becky Quick, and Andrew Ross Sorkin. You can catch all three live weekday mornings on CNBC from 6am Eastern all the way until 9. You can always get the best bits of that TV show right into your ears here on Squawk Pod as long as you follow us wherever you're listening now. We'll meet you right back here tomorrow. Have a great day.

[David Rubenstein]

We are clear.

[Andrew Ross Sorkin]

Thanks, guys.

[Jennifer Garner]

Men are struggling with their mental health at some of the highest rates we've ever seen. But most aren't getting the support they need, and that needs to change. I'm Dr. Guy Winch, your host for season three of the Visibility Gap, presented by Cigna Healthcare. This season, we're focusing on men's mental health, bringing together real stories and expert insight to explore the pressures men face every day and why opening up can feel so difficult. Join us for the new season wherever you stream your podcasts.