About Gary Cohn
Gary Cohn, vice chairman of IBM and former director of the National Economic Council, has made several media appearances discussing the economy, Federal Reserve policy, and artificial intelligence. Commenting on the potential impact of an Iran deal on oil prices, Cohn said prices are "not going to fall like a rock overnight" and that it depends on how quickly the Strait of Hormuz reopens, though he added that a "change in psychology" could eventually lead to lower prices. He noted that rising oil prices "will have an impact on the consumption power of America" and described the economy as K-shaped, with asset owners seeing their holdings appreciate while a "large predominance of our country" faces rising input costs that outpace wage growth.
Regarding the Federal Reserve, Cohn said incoming Chair Kevin Warsh understands inflation is at three-year highs and faces political pressure to lower interest rates, but predicted Warsh will "remove himself from the political pressure" and base policy on economic data. Cohn expressed confidence in Warsh's experience from the 2008 financial crisis. On artificial intelligence, Cohn stated he is "in the camp that this time is the same," comparing AI to past technological advancements that were expected to eliminate jobs but instead led to GDP growth
Source: AI-verified profile updated from Gary Cohn's recent appearances.
Browse all interviews →
✨ AI-enhanced transcript with speaker attribution
I
Interviewer0:00
Way back down to the New York Stock Exchange from Palantir to talk about inflation, because this morning's headline print did come in above 4% for the first time in three years, 4.2%. Let's bring in Gary Cohn, Vice Chairman of IBM, former Director of the National Economic Council. Gary, always a pleasure. Welcome.
G
Gary Cohn0:16
Thanks. Thanks for having me.
I
Interviewer0:17
So how big of an inflation problem do we have here?
G
Gary Cohn0:20
Well look, we're 4.2%. Which in itself is a problem. But then when you take the other side of the equation, which is wages, wages are not keeping up with inflation. So we are losing purchasing power in the country. We've been talking about for the last couple of years, the K-shaped economy. Obviously the top side of the K continues to do well. There's data out there that looks like in the consumption patterns, the top Americans are consuming over 50% of what's being consumed. And the bottom Americans, which is the vast, vast majority, 80 plus percent of Americans, are losing consumptive ability every day. So as prices go up and wages don't keep up, they're losing the ability to purchase. And I think we have to think seriously about that and what it means.
I
Interviewer1:03
And what do you do about that?
G
Gary Cohn1:05
Look, what do you do about it? It's obviously not an easy solution.
I
Interviewer1:09
Does the Fed raise rates?
G
Gary Cohn1:11
Well look, historically the Fed would look at this as an opportunity to raise rates and potentially slow down inflation, slow down growth in the economy. I don't think we're at a time right now where the Fed is going to raise rates. I think the Fed is on hold. I think we will see some interesting output from the Fed. I think that the Kevin Warsh Fed will look different than the Powell Fed. I think we will see less forward projections. I think we'll see less data coming out of the Fed. I think Kevin will try and work the balance sheet down over time. But on pure interest rate policy, he's pretty locked in to where the market is today. And I think they're locked in almost for the rest of the year here.
I
Interviewer1:54
You say that about the consumer. And yet I mean part of the story has been resilience of the consumer. I know we've seen the savings rate go down, but if you listen to companies on earnings and I highlight a lot of them right here, I mean, nobody's talking about a big deterioration. I shouldn't say nobody.
G
Gary Cohn2:09
They say the consumer runs out of money.
I
Interviewer2:11
Okay, fine.
G
Gary Cohn2:12
Kraft Heinz, Walmart says they're self-rationing gasoline.
I
Interviewer2:15
Because nobody wants to buy Philadelphia cream cheese. But mostly across sectors, what you hear is that the consumer is doing okay.
G
Gary Cohn2:23
The consumer has been doing okay. Remember, the consumer got a windfall tax refund check this year. So refund checks were dramatically higher than people thought they were going to be. That money has gone through the system. Look, we do have jobs. The most interesting part of this whole equation, and I always go back to the JOLTS report because I'm JOLTS obsessed. But if you look at the JOLTS report, we brought on about an extra 750,000 new job openings last month. So there's not a problem of work. Our unemployment rate stays steady at about 4.2%, but there is work to be had in this country. So to the extent the consumer needs to go out and consume, they can go out and work. What's troubling in those jobs numbers, and I don't want to spend the whole morning on that, is our participation rate does not go back up. We need more people to reenter the workforce. We need people to take the jobs that are available. And as we've talked about before, AI is going to force some job retraining in this country, but there are going to continue to be jobs. This massive layoff wave that people want to talk about with AI, it's not happening so far. Maybe it's going to happen, but at this point, all of the data shows that there's a strong employment picture in the United States. So people that want to work can go work. There is some consumptive power, but you're losing consumptive power. If wages are going up at 3.7% and goods are going up at 4.2%, I think you're losing 50 basis points of purchasing power, which means people are being forced to make those decisions, whether it's cream cheese or whether it's Nike.
