Good morning, I'm Cheryl Casone. I am in for Maria Bartiromo, Thursday, August 13, 8:00 on the East Coast. Look at futures, seeing a little bit of a buildup in Dow Jones, S&P up 12 and three-quarters, NASDAQ up 8 and three-quarters. Watching yields, bond market, ten-year down 2.2 basis points. Oil, we are continuing to focus, excuse me, on the issues of the Brent and WTI contract. As you can see, right now Brent is down 1.7%, WTI down about 2%. Meanwhile, there is this op-ed. Citigroup CEO Jane Fraser op-ed out making the case global capital repeatedly chooses America despite concerns about conventional system. Fraser returned from India, China, Europe, front-row view about international businesses. Think become American enterprise. Joining me, Jane Fraser. Thank you so much for being with us.
Thank you so much for having me. Glorious morning.
It is. You just got back from the global trip, and you and Citigroup have purview of the world. What is most important about your trip and, plus more, what you learned? What is the, I guess, view of American capitalism?
Well, as you may not be able to tell from accent, I am a proud American of many decades. I came from the UK in part because of the strength of the capital markets, the opportunities this country affords. Americans are hard on themselves, may not win all style points at the moment. We are winning. Capital markets are the envy of the world. The financial system is just the breadth, depth, the ability to fund, the ability to invest behind great American entrepreneurs. You never want to bet against that. The report of what the world wants and needs to be part of, I do think we are selling ourselves short. Banks are the envy of the world, competitive strength. I am very proud to be one.
You talk about direct global investment in the U.S. Can you expand on that?
Around the world, people look at America, the breadth, depth of different industries, leading on innovation. I think it comes down to the simple fact that America builds about what it needs, even if disruption. Other countries tend to protect what they have. That building, that need, drives scale, drives innovation, drives so many diverse companies in America. The envy of the world, leaders of the world. Other countries just don't have that source of opportunity for their middle class, for pension funds, for savers to participate in. We do. That is why everyone wants to be here.
I want your take on several issues facing the U.S. economy right now. But first, I do want to ask you about the inflation story, because July PCE, 3.4% year-over-year, core did cool to 2.5%. But what do you think, consumers, businesses—you follow that, you track, serve. Bigger question: what is the Federal Reserve going to do next month? There is a take right now that some of Kevin Warsh's critics are being disproven, because the inflation story has remained somewhat in control. Backs his decision, the board's decision to leave interest rates alone.
Look, Social Security navigating prior to that time, complex environment, tremendous resiliency. A lot of people—manufacturing, strong numbers. You are seeing CapEx, AI investments, but not just AI, it is across the board that we are seeing it. And you are seeing a consumer who has a lot of resiliency. Now, I am not pretending one moment you don't have part of the U.S. consumer base that is facing real affordability issues, the impact of high prices. It is a concern. We keep a close eye on the unemployment number. Right now, the labor market is pretty stable. So I think what the Fed is doing, what Chair Powell is looking at very carefully, we have a lot of confidence he will do, looking at data. The unknown is what happens in the Straits. If inflation, oil prices pick up again because of problems in the Straits, that will hit energy prices, it will hit supply chains elsewhere in the world. The U.S. is more independent of that, but that will obviously have a detrimental effect. At the moment, we don't know quite what is going to happen there. So it is a big unknown.
I wanted to ask you about supply chain inflation, that possibility, because to your point, that is something we've not seen filter into the U.S. economy. But do you think that is a threat moving forward if conflict is not resolved?
I think a threat if you are in Asia and in Europe. Less of a threat to the U.S. We are much more self-sufficient and independent. But if you are over in parts of India, Korea, Japan, you've got energy dependence on the Straits, supply chain dependency—fertilizer, chemicals, the like, alum as well. In a place at the beginning of the year where strength was evident in the first half of the year, it is tight right now. So it would be a much more serious problem internationally if the situation deteriorates in the Straits and the Red Sea gets closed once more.
