Inflation, Fed Independence, & Iran 1/15/26

Summary

Podcast Summary: Squawk Pod – "Inflation, Fed Independence, & Iran"

Date: January 15, 2026
Hosts: Joe Kernan, Becky Quick, Andrew Ross Sorkin
Key Guests:

• Steve Liesman (CNBC Senior Economics Reporter)
• Dan Senor (Host, "Call Me Back" Podcast; former White House advisor)
• Austan Goolsbee (President, Federal Reserve Bank of Chicago)

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Overview

This episode of Squawk Pod tackles three major themes: the ongoing protests and regime instability in Iran, high-stakes debates over Federal Reserve independence amid political pressure and investigations, and the U.S. economy's battle with inflation and interest rates. The hosts, joined by key policy insiders, provide real-time analysis, data, and explicit context around the risks and decision points facing America and its institutions.

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1. Tensions and Protests in Iran

Segment: [01:03]–[02:10], [18:28]–[28:04]

Key Points

• Escalating unrest: Violent protests have erupted in Iran, and the U.S. is openly weighing military options amidst these crackdowns.
• Potential for regime change: Dan Senor suggests the Iranian regime is at its weakest point in decades, with "levels of protests against the government like we have now" being unprecedented ([20:29]).
• U.S. response: There is debate about the right strategy—ranging from support for protestors to the possibility of U.S. military involvement.
• Historical echoes: The conversation draws comparisons to other regime changes (Soviet Union, Iraq), and explores what might realistically trigger a collapse in Tehran.

Notable Quotes

• Joe Kernan: "The lives that will be changed if the regime falls in Iran is extraordinary. You're talking about tens of millions of people's lives that we not only think they want to change, they're on the streets and they are risking their lives every day for that change." ([27:12])
• Dan Senor: “The regime does have these security forces that they've been investing in and those have staying power, which means you've got to hit the security forces. Security forces will… this is not the Soviet Union in 1989 or 1990 or 1980, 1991.” ([22:11])
• On U.S. Policy: "Trump has never been an isolationist. He has never saw a paradox between American power and America First. That you can use American power abroad. And that is actually an America First interest." – Dan Senor ([23:32])

Timestamps

• [18:28] Interview with Dan Senor on Iran’s protests and possible U.S. action.
• [20:29] Discussion of regime vulnerability and history of Iran's protests.
• [22:11] Debate on security forces and parallels to the collapse of the Soviet Union.
• [23:32] Differences in Trump’s foreign policy doctrine.

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2. Federal Reserve Independence & Political Pressure

Segment: [01:27]–[17:11], [28:30]–[45:41]

Key Points

• Political meddling: President Trump is publicly mulling the replacement of Fed Chair Jay Powell amid a criminal probe—a move raising alarms about central bank independence.
• Market and policy impact: Markets have adjusted, largely removing the possibility of a final Powell rate cut, and handicapping the odds of potential successors (Kevin Hassett vs. Kevin Warsh), with Warsh perceived as more hawkish.
• Public understanding: The hosts note that issues of Fed independence, once esoteric, are now mainstream concerns: "A couple of years ago... you said you think the Fed should stay independent, they’d say, what? Feds? Now, I'm sure people have an opinion." – Becky Quick ([01:41], [05:36])
• Broad pushback: Current and former central bankers, as well as business icons like Bank of America CEO Brian Moynihan, express support for keeping the Fed free from direct political influence.

Notable Quotes

• Steve Liesman: "This is reinforcing central bank independence...you now have central banks around the world writing letters. You now have former treasury secretaries signing letters." ([04:39])
• Austan Goolsbee: "There have been countries that had criminal investigations of their central banks, but those countries are Zimbabwe and Russia and Turkey and a bunch of places that you would not characterize as advanced economies." ([28:50], [40:50])
• Austan Goolsbee: "You're going to get inflation come roaring back if you try to take away the independence of the central bank." ([02:27], [40:50])
• Andrew Ross Sorkin: "[If] you believe that agencies should be held accountable, the question is how you go about it... hearings, audits, or a criminal investigation, which has all sorts of other implications." ([07:19], [43:21])

Timestamps

• [04:39] Fed independence debate and its global reverberations.
• [05:36], [11:11], [13:41] Public resistance to undermining the Fed, analysis of potential new chairs.
• [28:30], [40:50] Goolsbee discusses the risks to U.S. credibility and inflation if Fed independence is lost.
• [43:21] Accountability vs. interference: balancing oversight and autonomy.

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3. The Inflation Battle: What’s Next for Rates?

Segment: [02:10], [11:32]–[18:25], [30:40]–[45:41]

Key Points

• Progress and caution: Inflation is slowly coming back towards the Fed's 2% target, but Goolsbee stresses that not all danger is past—particularly in 'non-housing services' inflation ([35:20]).
• Labour market resilience: Unemployment claims are at historic lows, with the job market described as "cooling at a slow rate" rather than collapsing ([32:38]).
• Path for rate cuts: Fed officials, including Goolsbee, expect rates to decline later in the year, conditional on more convincing evidence that inflation is tamed.
• Criticisms and defense: The Powell Fed is simultaneously blamed for moving too slow to tamp inflation and praised for avoiding a financial crisis in the pandemic’s wake.
• Credit market debate: Moynihan (BofA) warns that a hard cap on credit card rates, as proposed by President Trump, would dramatically limit credit access.

Notable Quotes

• Austan Goolsbee: "We've been five years fighting to get inflation on a path back to 2% and we've made some progress, but we, we need that. And if we get that, I think rates can come down." ([02:10], [36:48])
• Steve Liesman: "Policy in context. When did you want the Fed to reverse course? In the middle of the pandemic...? Everybody is brilliant looking back." ([14:49])
• Austan Goolsbee (on Powell): "We had an epic crisis...there was no financial crisis. We had the Silicon Valley Bank collapse—it did not turn into a financial crisis. Inflation fell the most...it has ever fallen in a single year...and there was no recession. That's never happened before." ([38:02])
• Becky Quick (on credit caps): "A cap on rates would lead to a dramatic pullback in credit availability—probably not a great thing anyway." ([11:05])

Timestamps

• [30:40]–[32:38] Jobless claims and real-time labor data: sub-200,000 claims referenced as “Beatles era” lows.
• [32:38]–[35:20] Goolsbee’s analysis of continued labor strength and his expectations of future rate cuts.
• [35:20]–[36:48] What’s left to fix in inflation—services, health care, other sticky categories.
• [38:02]–[40:10] The Powell debate—first-ballot “hall of famer” or source of mistakes?

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Additional Memorable Moments

• Public engagement with Fed issues: “A couple of years ago…if you were riding in an Uber…you said you think the Fed should stay independent, they’d say, what? Feds? Now, I’m sure people have an opinion.” – Becky Quick ([05:36])
• The role of “the adult in the room”: Discussion around Scott Bessen’s influence in the Trump White House ([08:18]).
• Media humor: Light jabs at “Baghdad Bob” when discussing Iranian government messaging ([03:12]).

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Key Takeaways

• Iran’s unrest could reshape the region, but U.S. intervention remains a high-stakes and divisive question.
• The independence of the Federal Reserve is being tested as never before; loss of this independence could threaten both U.S. financial credibility and price stability.
• Despite past mistakes around inflation and monetary stimulus, current Fed officials defend the institution’s performance and urge patience as the economy normalizes.
• Labor market data remains historically strong, supporting optimism for a possible “soft landing.”
• Economic literacy around central banking and interest rates is spreading beyond experts to the general public, making Fed policy a mainstream concern.

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For listeners seeking clarity on current economic crosswinds—from Middle East risk to U.S. monetary sovereignty—this episode provides candid insight, expert perspective, and trenchant debate, all delivered in the signature Squawk Box style.

Transcript

[Austan Goolsbee]

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

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[Andrew Ross Sorkin]

Sometimes AT&T business Wireless connecting changes everything.

[Joe Kernan]

Bring in show music please.

[Cameron Costa]

This is Squawkpod and I'm CNBC producer Cameron Costa. On today's episode, deadly protests in Iran and a potential attack from the U.S. dan Senor of the Call Me Back podcast on the high stakes in the region.

[Joe Kernan]

The lives that will be changed if the regime falls in Iran is extraordinary. You're talking about tens of millions of.

[Cameron Costa]

People'S lives and the President versus the Federal Reserve, the latest in President Trump's quest to replace current chair Jay Powell and have a greater say in the work of the central bank.

[Becky Quick]

A couple of years ago, if you were riding in an Uber or cab and you said you think the Fed should stay independent, they'd say, what? Fed Feds? Now I'm sure people have an opinion.

[Cameron Costa]

Our Steve Liesman walks us through the numbers behind the debate.

[Steve Liesman]

It's policy in context. When did you want the Fed to reverse course? In the middle of the pandemic.

[Cameron Costa]

And we talked to a voting member of the Fed's key rate setting committee, Chicago Fed President Austan Goolsbee.

[Austan Goolsbee]

We've been five years fighting to get inflation on a path back to 2% and we've made some progress, but we, we need that. And if we get that, I think rates can come down.

[Cameron Costa]

Plus how the criminal investigation into Fed chair Jay Powell plays into all of it.

[Austan Goolsbee]

You're going to get inflation come roaring back if you try to take away the independence of the central bank.

[Cameron Costa]

It's Thursday, January 15, 2026, and Squawk Pod begins right now.

[Joe Kernan]

Stand Andrew by in 3, 2, 1.

[Andrew Ross Sorkin]

Q. Andrew, good morning. Welcome to Squawk Box right here on cnbc. We are live at the NASDAQ market site in times Square. It is just the boys this morning. I'm Andrew Ossorkin along with Joe Kernan. Becky is off today.

[Becky Quick]

Have you read some. Well, its effect on crude. Have you read some of the things that. We were close. I don't know if it's confirmed, but apparently the president was thinking about doing something to Iran as he is threatened. They didn't execute that one individual and supposedly those are often. I watched some of the president's comments yesterday about, you know, whether things are cooling down. I watched a crazy interview with Bret Baer from, I think, the foreign minister of Iran. It reminded me of Baghdad Bob. That's their line and they're sticking to it. But for whatever reason, it didn't happen. And oil is down a little bit today, down almost 4% below 60. Again. Yesterday it saw its highest close since October. As I just said, prices fell after President Trump signaled that he would hold off or could hold off attacking Iran over its treatment of protesters. The president had previously threatened to take strong action against Iran if it. If it executed prisoners. So we've got a lot of hot spots around the globe and we don't even talk about Ukraine much anymore, given Greenland, all of the other strictly Greenland, Iran.

[Andrew Ross Sorkin]

President Trump now saying he is not planning to try to fire Jay Powell amid this Justice Department probe into the Fed chair, though he said it was too early to say what he ultimately would do. He made those comments in an interview with Reuters. The question of Fed independence came up when I spoke just yesterday with Carlisle CEO Harvey Schwartz at the Economic Club of New York. As a lot of business leaders are now being asked about this very issue.

[Steve Liesman]

I actually think all this is reinforcing central bank independence.

[Austan Goolsbee]

There is so much discussion about central.

[Steve Liesman]

Bank independence that existed before this investigation that you now have central banks around.

[Joe Kernan]

The world writing letters.

[Steve Liesman]

You now have former treasury secretaries signing letters.

[Austan Goolsbee]

I think it's actually brought it to a peak in terms of a discussion. Personally, I think one of the great.

[Steve Liesman]

Lessons from past crises and economic history is that central bank independence is incredibly important.

[Andrew Ross Sorkin]

In that Reuters interview, President Trump suggested he would choose National Economic Council Director Kevin Hassett or former Fed Governor Kevin Warsh to succeed Jay Powell. So it really is the two Kevins. And he also dismissed the idea that curtailing Fed independence could lead to a weakening of the dollar and a spike in inflation.

[Becky Quick]

It's all pretty interesting. What Ford said was interesting, I think.

[Andrew Ross Sorkin]

Well, there is this. I mean, the backlash is real and.

[Becky Quick]

It'S on the front burner and everybody suddenly knows and is against taking away or even chipping away at Fed Independence a couple of years ago, if you were riding in an Uber or cab or something like nobody even know what the topic is, and you said you think the Fed should stay independent, they'd say, what Feds? Now, I'm sure people have an opinion.

[Austan Goolsbee]

Yeah.

[Andrew Ross Sorkin]

And I think this is a little bit reflective, actually, to give Scott Bessen some credit, you know, when he spoke to the president, and I don't think we know the full details of it, but when he was saying, look, this could, this could backfire in its own way in terms of what happens next, I think that's an element, an element of that to some degree. And the other piece of this is that it's more likely perhaps that he, meaning Jay Powell, will stay as a governor on the board of the Fed because of this very issue, counterproductive for President Trump. And so it doesn't remove that slot or doesn't open up that slot for him either.

[Becky Quick]

But you said you saw and this plays into your overall sort of opinion of the way things work with President Trump in charge. Scott Besant did come out and he didn't change exactly what he said about Jay Powell, what he reportedly said. But he did say that everyone's accountable, everybody needs to be accountable. There's nothing wrong with looking at the fact. It's almost like he didn't backtrack, but he sort of changed, amended a little bit because he might have heard from. Because we talked about it yesterday. Right.

[Andrew Ross Sorkin]

I think you could be, I think you can hold both ideas in your head at the same time, which is, by the way. And that's one of the things that I think is important. I think as a US Taxpayer, you.

[Becky Quick]

Should be able to hold, although this isn't.

[Andrew Ross Sorkin]

I know that people say that. I think you should hold all of these agencies and institutions accountable. I think that Scott Besson and I agree on that. I think the question is how you go about it. For example, could you hold hearings specifically about the cost overrun, the renovations and the cost overruns? Could you bring an auditor in to review all of these things? I think that that's one approach, and then there's a very different one, which is when you have a criminal investigation, which has all sorts of other implications. I mean, once you're into a criminal investigation, you're in a whole other world. And obviously this investigation is about perjuring yourself in front of Congress.

[Becky Quick]

Right. Which does sound like a pretext for. Because he's been so critical of Powell for the last year or Maybe even longer.

[Andrew Ross Sorkin]

But I just want to be 100% clear. I believe you can hold my point, these agencies accountable without interfering with their independence.

[Austan Goolsbee]

That my point was yesterday we were.

[Becky Quick]

I was lauding Scott Besson. Aren't you glad he's there? Sometimes, you know, the President may need a calming influence. And I know the President never likes really to be overshadowed.

[Andrew Ross Sorkin]

And by the way, he's in charge. Scott's been pretty outspoken about, you know, when people say, you know, Scott Bessen is the adult in the room.

[Becky Quick]

Right.

[Andrew Ross Sorkin]

It sort of cuts both ways. You'd think you'd like that, but it actually is not what you'd like. Because you know what?

[Becky Quick]

Good cop, bad cop works in almost all settings in the world. It works with your kids. It works, you know, in a lot of negotiations. And, you know, the President says one thing, other people pull it back a little. But you remember what the President said, and he says it for a reason. I don't know if we'll talk Greenland later, but that was really interesting also yesterday because it almost seems like it was amicable. Amicable to some extent with those meetings. I don't know if anything comes of it. I thought it was interesting what the gentleman from Denmark said. He said, look, there's no way the United States is prepared to do what we do for Greenland in terms of European style welfare state. So they know. They even know over there.

[Steve Liesman]

How.

[Becky Quick]

Yeah, maybe we don't, we don't want to take on that, that burden. Bank of America CEO Brian Moynihan also highlighting the importance of an independent Fed. Is there anyone who, who says the Fed should not be in?

[Andrew Ross Sorkin]

I have yet to come across like it's a headline.

[Becky Quick]

Shockingly, Moynihan told Becky yesterday that he was forfeited independence when she interviewed him on CNBC's Power Lunch. If you think about the U.S. economy, you think about the strength of this country, you think about us leading the world across all dimensions. One of the important parts of that is to have an independent Fed who will then set interest rate policies based on what they see. Moynihan also talked about President Trump's pitch to cap credit card rates at 10% for a year. Becky asked him what rating a customer would need to qualify for a card. Under those circumstances, you'd have to be well into the seven hundreds, which, if you think about the array of the population, moves you to a very small portion of the population. So the people outside that range will want credit. How they'll get credit is to go to people outside the regulated industry, quite frankly, or use non credit card facilities to get to that credit. Moynihan saying that a cap on rates would lead to a dramatic pullback in credit availability probably is not a great thing anyway. So, Andrew, this reminds me a little bit of when we first did the Affordable Care act and remember the young people who really are not probably going to get sick and they, they were going to sort of shoulder everybody else do, do, and I was going to say do good credit, but my credit's not so great.

[Joe Kernan]

But do good credit.

[Becky Quick]

People pay higher rates because some people have really bad credit and are still able to get it a little bit.

[Andrew Ross Sorkin]

But not really. That's, that's a whole other misnomer.

[Becky Quick]

I think the banks use that as a resource.

[Joe Kernan]

Right.

[Andrew Ross Sorkin]

I think it's, I think that's a little bit different in this case. Senior economics reporter Steve Liesman is at the table, joins us now. Good morning, sir.

[Steve Liesman]

Good morning, Andrew.

[Andrew Ross Sorkin]

So what do we think?

[Steve Liesman]

Well, I'm interested in Harvey Schwartz's idea that this is reinforcing Fed independence. I think it looks to me like the administration has come up against a limit here on how far it can go. The pushback beginning with the Fed chair buttressed by several regional bank presidents. We'll have another one coming up at 830. Talk to Austin. And now the bankers themselves seems to be like, okay, Mr. President, that's, that's.

[Becky Quick]

A.

[Steve Liesman]

Investigation too far. I'm also interested in how I've been away for a little bit. The structure of the outlook for rates has changed in part as a result of this.

[Andrew Ross Sorkin]

If, what do you mean by that?

[Steve Liesman]

If you look at the Fed funds futures market, I went back to the beginning of January and to now pretty much the market has ruled out a final Fed chair Powell cut before he leaves. There was some toying with it. It was at 50%, 60% for April or so. That's gone now really. The idea is Fed chair Powell leaves and a new Fed chair comes in. What's the number here? 68% for the June hike, but before that, 3,000, 623. I don't know if we have the chart.

[Becky Quick]

Did it move yesterday on that PPI that Rick said was much hotter than people thought it might have been? I was looking for you yesterday on that.

[Steve Liesman]

I was still. There we go. There's the chart. So look at those probabilities. Yellow is the beginning of the year, January 2nd. Blue is where we are now. So there is no Powell cut on the way out. And there's also A reduction in the odds of the new guy coming in. Now this may interestingly enough, I don't know if we have the cowshe odds but this may go along with the idea that Kevin Warsh has been elevated over Hassett. I don't know if somebody went in, they're so good in the back. Do we give enough credit for that? I mean I said Kalshee ckalsheet so there we go, 46% warsh now above. I don't think it's crazy to think of Kevin Warsh as being more hawkish or perhaps less dovish than Kevin Hassett.

[Becky Quick]

We all think that less likely to.

[Steve Liesman]

Follow directly orders from the administration. So there's that and it's been an.

[Becky Quick]

Interesting thing but also a big critic of the Fed in general in terms of the I don't know how much transparency every waking thought that we hear and some of the other mechanics of the and there are some people and I'm getting hearing more and more that when we like Austin, I think called him what a first ballot hall of famer or something. There are people that still think that the mishandling of the 40 year highs in inflation is a permanent and almost said okay, you got, you know, now you're making the arsonist the demigod for just putting out the fire.

[Steve Liesman]

Congress approved that. That was something the Fed went to Congress for. And these payments to the banks are part of a process of, of managing the fed funds rate that Congress has approved of.

[Becky Quick]

But they make a lot of money.

[Steve Liesman]

You got to go back and it.

[Becky Quick]

Doesn'T go, it doesn't go out to the real economy where people could just not.

[Steve Liesman]

And there's a good debate. But that's what I was about to say was you can have a good debate about the Fed's actions during the pandemic. Inflation. I'm not sure we've had that discussion and I have gone back and I've lectured on this at a couple universities and tried to understand, you know, maybe Sorkin writes the next book about this but, but the idea here's the thing, it's policy in context. When did you want the Fed to reverse course in the middle of the pandemic. Everybody is brilliant looking back on this but when I try to find the moment that they screwed up and you.

[Becky Quick]

Know what, four months, what else? There's something there for everyone for what caused that inflation I always blame, I say there was too much fiscal stimulus in the midst of other people say it was all supply chain. It was around the world. There was inflation everywhere.

[Steve Liesman]

So it's the same debate we're having now in the sense that people who are proponents and supporters of the president want the Fed to cut rates because of what the fiscal side is doing. But you don't want, you did not want to have had the Fed to cut to raise rates while the fiscal side was pumping in stimulus on the other side. So how the monetary side responds to the fiscal side is a very important debate. And now I'm screaming and we got to go. I'm sorry.

[Becky Quick]

And you forgot to talk about AI, which changes all the change all the calculus.

[Steve Liesman]

Thank you, John.

[Andrew Ross Sorkin]

Coming up in the one and only.

[Austan Goolsbee]

He'S will be next.

[Cameron Costa]

Coming up on Squawk pod, Iran warns of retaliation as the US Weighs military options there. Former White House foreign policy adviser under President Bush, Dan Sinore.

[Joe Kernan]

At this point, there's no U.S. support in a kinetic sense for these protests. I think the regime has a chance of surviving.

[Cameron Costa]

We'll be right back.

[Austan Goolsbee]

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

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[Becky Quick]

You're watching SquawkBox on CNBC. I'm Joe Kernan along with Andrew Ross Sorkin. And Becky is off today. And you just got to handle it all. It's a big job, right. To being on the other side to handle this, to handle you.

[Andrew Ross Sorkin]

Yeah, yeah, yeah.

[Becky Quick]

It takes a lot.

[Andrew Ross Sorkin]

Our next guest here to weigh in on the protests in Iran and the possibility of US Involvement after President Trump said help is on the way. Joining us right now is Dan Sinore. He served as foreign policy advisor in the George W. Bush administration. He now hosts Call Me Back. It's a great podcast. Good morning to you.

[Steve Liesman]

Morning.

[Becky Quick]

Good to see you.

[Andrew Ross Sorkin]

So what do you think should happen here if you were advising President Trump? Do you think that there's an opportunity. We were talking to Amos Hochstein yesterday about whether we should be doing more and actually either, you know, some kind of military help or something else and whether there's really opportunity for effectively regime change.

[Joe Kernan]

At this point, the regime is the weakest it's ever been. What we've seen over the last couple of years is whenever there's been military action against Iran, whether from Israel or the United States, the regime has been in a weaker position. There have been a number of protests against the Iranian regime going back to 2009 with the, with the Green Revolution after the quote, unquote election of Ahmad dining job in 2009. So there's 2009, there was 2018, 19, there was 2022. We've had protest after protest after protest. None of the bit them have been like this. They've only strengthened the president. United States has said he has the Iranian people's back, that he will not tolerate them being savage, brutally savage and attacked the way they have been. And I think that if at this point there's no US Support in a kinetic sense for these protests, I think the regime has a chance of surviving. It still may fall. But I think U.S. military action will not only weaken the regime and the instruments of terror within the regime, but it will also strengthen the morale of the Iranian people that are.

[Andrew Ross Sorkin]

What do you make of the argument that it's just not ready to crack yet? That this is not a situation like Venezuela?

[Joe Kernan]

Yeah. Well, you mean the, the protest movement is not, is not fully like we have to wait for the protest movement to have even more energy and even.

[Andrew Ross Sorkin]

Know that there is just too many other people behind this regime that will, that would remain in power, that you wouldn't be able to topple it all in one shot.

[Joe Kernan]

I Look in on October 7, 2023, Hamas attacks Israel. Virtually no country in the world, no government in the world defends what Hamas does against Israel. Some criticize Israel as responsible for Quote, unquote, the root causes. But no government defends what Hamas did, except for Iran. Since October 7, Hamas is gone, Hezbollah is gone. This is basically Iran's proxy system in the region that Iran had invested hundreds of billions of dollars in developing. Iran's client state. The Assad regime in Syria, gone. Iran's nuclear program seriously weakened. I mean, this is a regime that if you look at its 46, 47 year history, has never been on the edge the way it is now in terms of the external pressure it's under. Like this whole proxy system is gone. There's no Hezbollah, there's no Iranian nuclear program. And then suddenly internally, we've never seen levels of protests against the government like we have now. So I don't know, I don't know what people are. Wait, like, so what's the next thing that you're hoping?

[Becky Quick]

You had to estimate public sentiment in Iran. I mean, the leadership still says that they've got plenty of people that are, that are backing the current regime. Then I see it's 80% against the regime. But I don't know whether we know. Do we have an.

[Joe Kernan]

It's very hard to know.

[Becky Quick]

Look, remember Iraq? It was going to be flowers in the street and there were so many dead enders. It was almost half the country were dead enders, weren't they?

[Joe Kernan]

If you. I could make the argument that Iranian inflation in Iran is off the charts, right? So something like 50% as we understand it. For food, it's something closer to 70%. The economic conditions are unsustainable.

[Becky Quick]

That said, not just ideologically, it's actually.

[Joe Kernan]

Very practical, very practical. Except the regime does have these security forces that they've been investing in and those have staying power, which means you've got to hit the security forces. Security forces will.

[Becky Quick]

They might be 20%. They might be 20%.

[Joe Kernan]

This is not the Soviet Union in 1989 or 1990 or 1980, 1991. Because back then you had a Gorbachev, regardless of what one thinks of Gorbachev, who had already made the decision to bring reform to the Soviet Union. So the Soviet Union was already starting to shrink in terms of its centralized power. There's nothing like that in Iran. Which means if the, if the Supreme Leader is committed to stick sticking around and strengthening the regime, they'll have some staying power. Absent US forces with US force, US military projection of power. I think things could change.

[Andrew Ross Sorkin]

What do you think? We've been talking just even off camera, just about sort of where what's happening in this country right now, and I'm curious how you think it relates actually to what's happened. What's happening in this country relates to what we either do or don't do externally, which is to say in a sort of America first world. I think there was a view, I remember a lot of Trump voters actually, that he was not going to be getting involved in wars, that he was not going to be getting involved outside of the borders. He was going to be focused squarely here and therefore how much support he has or doesn't have for some of these efforts.

[Joe Kernan]

I think one of the fascinating things about Trump is what people project onto him as a political figure rather than what he actually represents. Trump has never been an isolationist. He has never saw a paradox between American power and America First. That you can use American power abroad. And that is actually an America first interest. I'm just. The way he talks about it, you can go back to him taking out Soleimani in Iran in his first term. You can look at what he invested in in the Abraham Accords, which obviously wasn't war.

[Becky Quick]

Fordo was a weekend. Venezuela was a matter of surgical powers, surgical targeted strikes.

[Joe Kernan]

His lessons from the Bush and Obama administrations. In some respects, you could argue he's taking the best lessons from the Bush and Obama administrations, which is not to. To hold back from using American military power. It's just to do it differently. In no situation that he's gotten involved in so far has he kind of gotten into what he would call one of these forever wars. He said, we have tremendous capabilities. I mean, what the US did in Venezuela was unbelievable. 150 aircraft in and out, very targeted. It had a real end game. This is the objective. This is. We want to get Maduro out. We're not going to leave troops on the ground. Same thing with, with the June attack against Iran. Let the IDF do all the, and the Israeli Air Force and the Israeli intelligence forces do all the front, front end work and we'll come in and finish things off in and out. I think he, there's never, he's never seen a problem with that approach. And I think among the maga, quote unquote, the MAGA base, they don't have a problem with it either.

[Becky Quick]

Yeah, you're getting the MAGA back and you're even getting the neocons back, which is awesome.

[Joe Kernan]

Oh, Trump could hold the.

[Andrew Ross Sorkin]

Throw Greenland into the mix. What do.

[Joe Kernan]

I do not think there will be military action against Greenland. I think, look, I think President Trump is forcing a discussion among European leaders. I'm Surprised by the divide among some of the European leaders right now about whether or not the US Has a legitimate case that it's in the US and west, the Western security interest to have some presence in Greenland or have some control of Greenland. But I do not think it's even worth having that conversation in the same conversation is whether or not the US Is going to unleash military power against Iran. It's just one is that it's regime change. One is regime change. One is, is an action of war. This is not. We're talking.

[Becky Quick]

So the Danish ambassador, and obviously the Danish ambassador was picked by the Trump administration, but she knows Denmark and her reasoning was not that different than what you hear coming from. And I think even the individuals that were on last night from Denmark, they do concede a lot of the things that Trump, the end game is something they agree with. They can't really provide the security. They don't have the money to provide the security that might be needed to keep Russia and China out of Greenland. It's becoming more and more important.

[Joe Kernan]

I would just say between what's happening in the Western hemisphere and what's been happening in the Middle East. I know people are, a lot of people are very critical of President Trump, but if you just took a step back, remove him from the storyline, what is being accomplished right now in multiple theaters around the world is this is.

[Becky Quick]

Like you saw historic. And so let's try to separate out what's happening here. And I was going to tell you, you know, new highs in the stock market, 5% GDP, low unemployment, trade deals around the world, the southern border is closed, wages are rising. So I'm looking for the part of that story you told us where things, the culture wars, we're always going to argue about that. Now, maybe people think that Trump's going to leave the world in a worse position in terms of culture wars here in the US but there's plenty of people that like the side of the culture wars where Trump is at this point.

[Joe Kernan]

I will say the following. The lives that will be changed if the regime falls in Iran is extraordinary. You're talking about tens of millions of people's lives that we not only think they want to change, they're on the streets and they are risking their lives every day for that change.

[Becky Quick]

Right.

[Joe Kernan]

And to your point about the culture wars, you go around American college campuses right now, right? Crickets, like for Iran, suddenly, suddenly there's like no concern about the brutal human rights violations of this most brutal human rights violating regime.

[Andrew Ross Sorkin]

Right.

[Joe Kernan]

And the opportunity for it to be toppled. Like whose side are people on my ticker?

[Becky Quick]

My Twitter feed is self selecting, obviously, but someone today said George Bailey, Think of how many lives could have been if Trump had never been born. That's the point you're making right now. How many lives we're talking about that would have been changed in the Middle East. Or, you know, take your pick.

[Joe Kernan]

Yeah, first of all, I don't think. I don't think you would have had an end to the October 7th war. I don't think this fall we would have gotten all those hostages back, even though there's still one there. And the windup of the war.

[Becky Quick]

Every time a bell rings, Andrew, you know what happens. An angel gets its wings.

[Andrew Ross Sorkin]

Don't forget Dan, thank you.

[Joe Kernan]

You don't even know what to he.

[Becky Quick]

Had no idea what I was talking about.

[Andrew Ross Sorkin]

I have no retort. I have no retort.

[Cameron Costa]

The key questions about the independence of the Federal Reserve and the impact it could have on everything from what you pay for groceries to how much you put in your gas tank. Chicago Fed President Austan Goolsbee argues that a strong free from political influence central bank is the only way to go.

[Austan Goolsbee]

There have been countries that had criminal investigations of their central banks, but those countries are Zimbabwe and Russia and Turkey and a bunch of places that you would not characterize as advanced economies. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and [e-mail] MarketUpdatePodcast or find Schwab Market Update wherever you get your podcasts.

[Steve Liesman]

Before we had ATT Business Wireless coverage.

[Austan Goolsbee]

Our delivery GPS wasn't the most reliable.

[Joe Kernan]

Once our driver had to do a.

[Steve Liesman]

14 point turn to get back on route.

[Austan Goolsbee]

A 14 point turn.

[Joe Kernan]

An influencer even livestream the whole thing.

[Steve Liesman]

Not good for business.

[Joe Kernan]

Now with AT&T business Wireless routes are updating on the fly and deliveries are on time. And the influencer did get us 53 new followers though.

[Andrew Ross Sorkin]

AT&T business Wireless Connecting changes everything.

[Joe Kernan]

What made you confident that you could.

[Cameron Costa]

Do something that hadn't been done before? I have no fear of failure. Trailblazing women Changing the game One of my favorite pieces of advice Think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is Short.

[Steve Liesman]

And you just gotta think big to accomplish big things.

[Cameron Costa]

Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts.

[Becky Quick]

Foreign.

[Cameron Costa]

Welcome back to squawkpod. This morning the Labor Department reported the number of new filings for jobless aid in the last week. It turns out the number came in much lower than economists expected, a potential good sign for the strength of the jobs market. So what does this number tell us about the broader economy? Joe and Andrew are joined by Rick Santelli, Steve Leesman and a special guest to digest the number under 200 on.

[Austan Goolsbee]

Initial claims for the week of January 10th. That's 198,000. 198,000. Now, we have had some sub 2 hundreds, some of them revised away, but one still stands. That was the last week in November when it was 192,000. These numbers are getting very close to going back into kind of the Beatles era in terms of how low they are.

[Steve Liesman]

These numbers on jobless claims are eyebrow raising. They suggest that people are not firing. We're still in a zone, I hate to say this, where we could be affected by seasonal adjustments. We're still coming off of the holiday hiring. And the question becomes whether or not there were a lot of people expected to be hired who were not hired. I really want to see the December, the January jobs data. We'll get that first week of February. So it's a question and it's actually our next guest, Andrew Austin, president, Chicago Fed President Austan Goolsbee has some thoughts about this. And rather than Austan. Good morning.

[Austan Goolsbee]

Good morning.

[Steve Liesman]

Rather than starting where I was going to start, which on the big controversy over, over a criminal subpoena to the Federal Reserve. I want to ask you about these jobless claims because you have had some thoughts on this issue of the low fire, low hire world. Are you surprised that these claims remain? What did Rick say? Sub 200, sub 200,000. He said you got to go back to the Beatles to find numbers like this.

[Austan Goolsbee]

Yeah, that was a good line. Look, I'm not surprised by these low numbers. I've been saying, as you know, for months, our labor market indicators coming out of the Chicago Fed suggests strongly that there's stability in the labor market, that it's, it's cooling at a, at a slow rate. The low hiring, low firing is not what the business cycle looks like. That is a, that characterizes a high uncertainty environment where everybody just kind of pulls back high layoffs with low hiring. That's what the business cycle looks like. And you saw the unemployment rate tick down. You've, you've seen the vacancy rate still remaining relatively modest, comparable to previous booms. And layoffs are low. You see that in unemployment claims, but you see that in the layoff rate and the other indicators. So I think this is, there's still strength there, and growth has been pretty solid. The American consumer continues to be the driving force. Force. I don't think it's a, I, I think it's consumer spending, and that's rooted so far in income. Growth has still been pretty strong.

[Steve Liesman]

Austin, part of what motivated the latest series of rate cuts was concern about weakness in the jobs market. Is it time in Europeans with that concern aside?

[Austan Goolsbee]

I have put that concern aside. As you know, I dissented at the last one precisely because a. We had little data and a lot was shut down and I wanted to wait. And I think the most important thing facing us is we've got to get inflation back to 2%. Everywhere I'm going out here in the 7th district, you're hearing about cost, you're hearing about affordability, you're hearing it on the business side and on the personal side. And so let's just make sure we're on path back to 2%. If we are, I think decent growth in the economy, solid unchanging steadiness or cooling mildly in the job market, rates can go down still a fair amount. But we have to have, we have to have convincing evidence that we're on path back to 2% inflation.

[Steve Liesman]

So, so really what you're talking about, Austin, sounds to me like a debate about timing. You think we ought to get there, which is lower rates, but the speed with which you get there is the one that you seem to be arguing with. Do you see rates lower at the end of this year than they are right now?

[Austan Goolsbee]

I do, I do. But it's a little more than just timing. We must get convincing evidence, as I say, that prices and inflation is going back to 2%. And even in these, the latest CPI and PPI numbers, there's some that is encouraging, but there's some that are still warnings. So the, the best thing about the, the recent inflation numbers we got are that the impact of tariffs on inflation, maybe it's easing as we want it to, that that would just prove to be transitory and goods inflation would go back down to where it was before this started. The disturbing part was if you look at non housing services, that inflation is not yet under control. And we've had some discouraging signs. Health care inflation and Others that I don't need to tell every people can look for themselves and see that the price of these services. When you got inflation in that running over 4% at an annualized rate, you still got some work to do. So we've been five years fighting to get inflation on a path back to 2% and we've made some progress. But we, we, we, we need that. And if we get that, I think rates can come down now.

[Becky Quick]

Well, you led right into this question, Mr. President. Now I'm going to call you Austin. You've never told me to call you.

[Austan Goolsbee]

Oh, man. No, no, you should.

[Becky Quick]

Yes, I always like to do that because I tell people. Well, he insists on me calling him Mr. President. You don't do that. You're not like that. But someone pretty.

[Austan Goolsbee]

You mentioned the dinner, but I don't know what happened.

[Becky Quick]

Tacos. Yeah, someone wrote in because they were kind of raised an eyebrow when you said Jay Powell was a first ballot hall of famer. And this was their take on it. Austin, which I mentioned earlier. Why a Fed chair who lost 40 years of inflation control with the insane policy of buying bonds, 2 trillion of bonds, and kept rates at zero for two years after the vaccine confirmation in a robust economy. Why is he a first ballot hall of fame chair? Inflation has been above target for five years and the fiscal insanity he encouraged and enabled has left us in a precarious situation. And I'm just wondering why did we. Who's to blame for the five years of being above the target of inflation and a lot of blame to go around, I guess.

[Austan Goolsbee]

Well, as you say, there's a lot of blame to go around and that's a big topic. I've only been at the Fed for three years. So when the thing was raging out of control, I wasn't there.

[Andrew Ross Sorkin]

Right.

[Becky Quick]

Just the last three years.

[Austan Goolsbee]

I do think, I do think the Fed moved too slowly and they weren't the only ones counting on inflation to be transitory. Now it's Steve's line that it turned out Team Transitory was right in the end and that we did have the supply shocks and it came down. I think the Fed deserves blame for moving too slowly and it's the Fed's job to get inflation back to 2%. We can't change the shocks that happen, but we can change how we react to them. On the question of why is Jay Powell the first ballot hall of famer in my book, look at the series of things. We had an epic crisis, catastrophe in the economy and there was no financial crisis. We had the Silicon Valley bank collapse that did not turn into a financial crisis. Inflation fell the most close to that it has ever fallen in a single year. If you look in that kind of 2023, 2024 period and there was no recession. That's never happened before. And you will remember that economists were saying there was a 100% chance of recession. Larry Summers was saying the unemployment rate would have to go up significantly to 6% or something for five consecutive years before you would see inflation come down.

[Becky Quick]

To call it just a horrible performance when President Trump calls it the greatest economy we're building the greatest economy we've ever had. Well, and at the same time saying that Powell's doing a terrible job, it just, it doesn't really. Whoever gets to take credit for new highs in the market and five, you know, much better GDP maybe and labor market. As you point out, its demise was greatly exaggerated, just like the greatly exaggerated.

[Austan Goolsbee]

And the argue growth is solid. I mean just look at the American consumer good. But it was never slowed down things.

[Steve Liesman]

It was 15 months after the approval of the virus that the fed raised rates.

[Becky Quick]

15 months.

[Andrew Ross Sorkin]

15 months difference from 2 years.

[Steve Liesman]

Anyway, Austin, let's get to this issue of what's happening in Washington right now. The president or the administration has issued apparently criminal subpoenas to the Federal Reserve. People who support that action say, you know what, we want to get to the bottom of this. The Fed failed to respond to our queries and this is an appropriate action. What do you think about that?

[Austan Goolsbee]

I'm not a lawyer. I know that there have been countries that had criminal investigations of their central banks. But those countries are Zimbabwe and Russia and Turkey and a bunch of places that you would not characterize as advanced economies. Anything that's infringing or attacking the independence of the central bank is a mess. You're going to get inflation come roaring back if you try to take away the independence of the central bank. And I told you we're on a path back to 2% inflation. We have been for five years. We've made progress at some points. At some points it's gone the wrong way. That's not been an easy road to try to blow up. Fed independence is kind of a festering stink bomb in the middle of that road back to 2%.

[Steve Liesman]

I mean, we don't do respect Mr.

[Austan Goolsbee]

We need to be really careful.

[Steve Liesman]

That's not exactly responsive. You're not arguing that the Fed should not be subject to inquiry when there's a question about the veracity of something the chair might have said in front of Congress.

[Austan Goolsbee]

I don't. Like I said, I'm not a lawyer. The only reason I'm not answering the legal question of should this or that be investigated? I don't know anything about that. I know that in Chair Powell's statement, I agree with his argument that if you're investigating as a pretext to, because you disagree with the rate decisions, that's a mess. We should not be in that place. We should be taking the job seriously of setting interest rates, which we do at the fomc. As I've said many times, you become a sworn member of the Federal Reserve, you're out of the elections business. The, the minutes come out and the transcript will come out. You can see word for word what's on people's mind. And people take the job very seriously. It's all about the economic outlook and the economic conditions, and that's where it should be. The law gives the Fed the job to look at the stabilizing of prices, the maximizing employment, and that's it. That's. That's the job. It doesn't say anything about make the stock market happy, doesn't say anything about make the President happy. It's maximize employment and stabilize prices. And we must commit to that. If we don't, to me, that's a mess.

[Andrew Ross Sorkin]

Austan. Look, I don't think anybody is happy about lawfare or the idea of coercion or anything else. The question I would ask you, and it's a question we get a lot from viewers, so I have great sympathy for the question, which is to the extent that you believe that the American taxpayer should have be able to hold an institution even like the Federal Reserve, accountable, not just for the decisions it makes, but for its spending in the context of a renovation and the like. What does that mean? Should the taxpayer be able to hold the Federal Reserve accountable? Should there be audits of how the money is spent and, and the like, or is this money genuinely considered separate? You don't consider this taxpayer money? I know this is, this is different than about the policy of the Federal Reserve. And I recognize the clear view that there's a coercive effort underway. And I hear all that. I'm just. To those who are asking this other question about accountability over spending.

[Austan Goolsbee]

Okay, those are two different questions totally.

[Andrew Ross Sorkin]

And by the way, I imagine you.

[Austan Goolsbee]

Could hold criminal inquiry about budget overruns.

[Andrew Ross Sorkin]

I recognize you could do this through hearings and other things.

[Steve Liesman]

Were.

[Austan Goolsbee]

I think there were 60 more than 60 audits of the Fed Reserve System, including the 12 Reserve Banks. We all have audits. There are system wide audits and there, there are audits of the, of the Board of Governors. There should be, but we should not, in my opinion. And the Federal Reserve acts set up so that there would not be direct coercive control of the budget of the Fed because of policy differences over interest rates. I think that would be, that would be really dangerous, if that's what you're asking. We should have oversight of, of costs. And my understanding is they've outlined here why there were cost overruns in this Washington D.C. building. That's something totally different than if you're mad about what the interest rate path is, should you be able to go over and, and bully the, the fomc. I think that's ways to deal with.

[Steve Liesman]

This that are separate ways to deal with this that are separate from a criminal subpoena. Austin, thank you for joining us this morning.

[Austan Goolsbee]

Yeah, great to see you.

[Cameron Costa]

That's the podcast for today. Thank you for listening. Squawk Boxes is hosted by Joe Kernan, Becky Quick and Andrew Ross Sorkin weekday mornings on cnbc starting at 6 Eastern. To get the smartest takes and analysis from that TV show right into your ears. Follow Squawk Pod wherever you get your podcasts. We'll meet you right back here tomorrow.

[Austan Goolsbee]

We are clear.

[Andrew Ross Sorkin]

Thanks guys.

[Cameron Costa]

What made you confident that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women, Changing the game One of my favorite pieces of advice, think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta.

[Steve Liesman]

Think big to accomplish big things.

[Cameron Costa]

Julia Boorstin HOSTS CNBC Change Makers and power Players New episodes every Tuesday. Wherever you get your podcasts.