Squawk Pod: A Stake in Intel & Chicago Fed’s Austan Goolsbee - 08/15/25 | Audio Only

Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod, where does the true cost of inflation go? Wall Street has not reacted badly to the tariffs yet. And the question is, should they? We go behind the numbers with economics reporter Steve Liesman. At least in the data, we cannot find the idea that foreign exporters are absorbing this price. At least not now. The latest data suggesting that companies are still bearing the brunt of tariff uncertainty. When does it hit consumers? We talk exclusively to Chicago Federal Reserve Bank President Austan Goolsbee who is sounding a note of caution.

Plus, the surprising news that the US government is considering taking an ownership stake in Intel days after President Trump wanted the CEO fired. Our Eamon Javers reports.

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

But can Uncle Sam really pick winners and losers? We have been trying, maybe you could argue unsuccessfully, but I think relatively successfully over the last hundred years to export our brand of free market capitalism to other countries. We have long denounced national champions when other countries have taken these golden shares and golden stakes. We've said that's a bad idea.

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

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

Good morning. Welcome to Squawkbox right here on CNBC. We're live at the NASDAQ market site in Times Square. I'm Andrew Ross Sorkin along with Joe Kernan. Becky is off on this summer Friday. Take a look at US equity futures at this. First up today on the podcast, the US stock markets on track for a winning week in spite of a stumble Thursday.

Have a mixed day. It's been quite a ride even though we're not going to finish on either side of that. Most stocks down, but the market managed to hang in there when a hotter than expected producer price index saw wholesale prices had risen in July. A .9% jump that was the biggest since March of 2022. Now, this could indicate that sticky inflation remains. Companies have been bearing the cost of potential tariffs or the actual levies themselves and not passing that on to consumers yet. Is that about to change?

You know, the journal has a great... they make me think about a lot of things and I'll tell you what I'm thinking. So, the journal's right. We now know who's paying for tariffs. Companies are eating a lot of them so far.

They're eating a lot. They can't do that forever.

Correct. And that's why it's going to evolve, the customer eventually hits the consumer. The scary thing and the journal points out is that the worst thing about inflation or even one-time cost increases is that it's hard to have real wages increase.

Correct. And it's been anemic now, 1.1% in July, zero in June, .4 in May and March might have been... but that's how they eat it. That's one of the ways they eat it.

That's the way they eat it. But the reason that people felt crappy during the Biden administration when everything seemed, you know, stock market was at high, things seemed like they were going well, their purchasing power didn't go up, their real wages were down and we mentioned that again and again and again. They finally turned up towards the end of the administration but by the end of the administration you still were making less in weekly real wages than you were at the beginning of the administration. So it's an issue. But what bugged me about this Andrew was that perhaps this is one reason Wall Street reacted badly to the producer price news, the S&P was up to a new high two points yesterday. The Dow finished down 11. The yield curve at this point. Remember those numbers? We were worried about four and a half on the 10-year. We were worried about five on the 30-year and we were worried about... they're all those round numbers. We're still well below all those levels. We're what? 4.29 on the 10-year. But I'm just saying Wall Street has not reacted badly to the tariffs yet.

We're at new highs. The bond market is not ready.

Correct. And the question is, should they?

Still could.

That is the question.

We always say that and I always feel uncomfortable thinking that the market doesn't know what it's doing. I just think at first... I think we've been in a number of situations, you and I, over the years where the market has been not correct. I think there's been many more times where you thought it shouldn't be doing what it's doing and it continued to do it and you finally just threw in the towel. I think that's how...

I think there's a couple of those times. I don't disagree. A couple of those I just defer to Mr. Market most of the time. You know what? Mr. Market doesn't like August and it doesn't like September. So, there's certainly a...

It doesn't like October either because we bottom in October. We go August and September and then we have the horrible day where there's like a... there have been a lot of bottoms made in October.

Our top story this morning and I... oh yeah, and then we'll get to the Intel because I'm having trouble getting all agitated about this. I don't know whether you are, but President Trump is set to meet Russian President Vladimir Putin later today in Alaska. It's going to be Putin's first visit to a western country since he and his country invaded Ukraine in 2022 and his first trip to the US in a decade. The two leaders will discuss the Ukraine war at a military base in Anchorage. It's expected to be a one-on-one gathering with the Kremlin saying interpreters will also be present, which would be necessary. I think it's a good thing. You're going to get nowhere if there's no interpreter. If Putin's speaking Russian and Trump's speaking, you get nowhere, right? I think it's a great idea.

I would just bring Gemini with me.

A joint. Really? You picked Gemini this time.

Translation.

Oh, really? Fantastic. Really? Real time translation.

So, you got there's like six of them. You got to pick your poison for specific.

I said the other day, you can't really say pick your poison in conversation.

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

Let's talk about this corporate news. I know you have views on it. We'll bat it around in a moment. I want to get Eamon Javers first and then we'll talk. Sure's agitated, but I'm not.

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

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

We're already giving them a lot of tax... of course. I do the reporting from... what exactly are... report from Bloomberg is...

Yeah, I mean again we can't match this as of right now but what Bloomberg has reported is that this would be a US government investment of dollars in exchange for a stake. Now presumably that's an equity stake, presumably that's shares. We don't know for sure how it would be structured and we don't know how much money. The idea being that this would kickstart investment in plants in the US to build chips. That's the president's goal here. But as you say, Andrew, this is a company that's gotten a lot of money from the US government. In the Biden administration, there was a ton of money.

So, Eamon, let's talk about this, though. And the question, what's the difference this time around? Right. The companies in America where the taxpayer, the government has taken actual stakes in businesses. I think I can count them for the most part on one hand. Obviously there were the banks post 2008 crisis for a period of time but with the plan being and the proviso being that they would be out and they were within... in this case they were within about a year.

Automakers, we made money. We had General Motors and we had Fannie and Freddie.

We had Fannie and Freddie which we still own.

Right.

Anybody else? Which is a whole other issue. Off the top of my head I can't think of any and in each of those cases as you know the situation was viewed as existential. Right, these companies were going to fail and to borrow a term from your book they were too big to fail and the US government couldn't allow that to happen and so stepped in and made a massive taxpayer investment and that has for the large part worked out. You know, with the exception of Fannie and Freddie which the US government doesn't seem to be able to figure out how to IPO. There's some speculation that that IPO might be coming under Trump too now. But the idea is that these companies are in an existential dire crisis and the US government has no other recourse other than to do this. Now it's both parties. The approach has been we won't do this unless we absolutely have to because we don't want...

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

Well, yeah. Two other examples just from this year, guys. This one is this golden share with US Steel, right? The golden share with US Steel. And the 15% deal with Nvidia and AMD, right? So, let's just talk about getting a revenue stream from those companies. And here's the distinction in those cases and this new Intel deal which is these are effectively long-term investments which is a very different approach, right? The others were rescues, right? And by the way, they were rescues with the proviso that at least the stated plan even with Fannie and Freddie back in the day was actually that the government was going to be in and they were going to be out. The plan wasn't we're in and we're here forever. I would imagine this investment with Intel as it appears with some of these other arrangements is a much longer term arrangement.

That probably has implications by the way for the entire industry, Joe. So I don't know where you sit there. The other piece of this though that to me is the longer term thing and I know you may think first of all this CEO is pro... it appears is doing this under duress because he might be losing his job otherwise so let's just... but that Intel is somewhat an existential and we need... you've mentioned... maybe they build the foundries and you've said well it's important they're the one company that does have the foundry so you would want them to... you might... what I don't know is whether there's a long-term decades-long implication for how other countries are going to do business or not do business with the United States in the future. We have been trying, maybe you could argue unsuccessfully, but I think relatively successfully over the last hundred years to export our brand of free market capitalism to other countries. We have long denounced national champions when other countries have taken these golden shares and golden stakes. We said that's a bad idea and we have tried so desperately to create a system in the world...

It's not going to open up the floodgates. I tried, I had a lighter on my head and I kept going and I couldn't get it going. I could not get... yours is so tinder, it's so dry and so ready that a spark from lightning and yours is... I can't get agitated. Are you agitated about...

I'm not agitated but you're pointing out all the downsides when...

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

But I just... All of a sudden...

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

Eamon. All of a sudden, by the way, in the last administration, if Biden had done this, your hair would have been... there would have been an explosion.

Consistent. It wasn't far. This isn't the same thing though. This isn't the IRA, this isn't giving it away. If you have union workers and child care and DEI hire enough...

Okay, Eamon Javers, break in here and tell us what you think.

Eamon's fine. Look, he looks... Yeah, look, I mean, it's not my job to think one thing or another, but you got to put it in context, right? And this is... Joe, this is getting closer to sort of state champions and state sponsored capitalism in a way that we haven't seen in this country before. And so you debate whether that's a good idea or not, right? We can, you know, look, I talked to folks in the White House earlier this week about whether the idea of Nvidia 15% stake was a one-off test. And the initial reporting I got from the White House was, 'Yeah, this is a one-off. That's it's just artificial intelligence. It's chips. We're not envisioning doing this in a more broad way.' Two days later, we had the Secretary of the Treasury come out and say, 'Actually, you know what? We view this as a model and we think, you know, this could work in other industries and other cases.' So, you know, these things have a way of taking a life of their own and once people see in the government see the revenue coming in, it's hard to let go of that.

You could, okay, right now it's the strategic metals, it's steel, it's chips, it's Nvidia.

By the way, I'm not saying that this is, you know, the end of the world. I just want...

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

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

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

But we are turning into China.

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

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

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