A Stake in Intel & Chicago Fed’s Austan Goolsbee: “A Note of Unease” 8/15/25

0:00Bring in show music, please. 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 tariff yet. And the question is, should they? We go behind the numbers with economics reporter Steve Leesman. 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 Austin Goolsbee, who is sounding a note of caution.

0:42Let's not overreact to one month of CPI or PPI inflation, but it's at least an area of concern. Plus, the surprising news that the U.S. government is considering taking an ownership stake in Intel days after President Trump wanted the CEO fired, are 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 Boutin 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.

1:23We 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. Stand Andrew by in three, two, one. Q, Andrew. Good morning. Welcome to Squawk Box 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 U.S. equity futures.

2:05First up today on the podcast, U.S. stock markets on track for a winning week in spite of a stumble Thursday. 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. When a hotter-than-expected producer price index saw wholesale prices had risen in July, a 0.9 % 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?

2:45You know, the Journal has a great piece. They make me think about a lot of things. I'll tell you what I'm thinking. So the journal's right. We now know who's paying for tariffs. CPI, companies are eating a lot of them so far. They're eating a lot, but they can't do that forever. Correct, and that's why it's going to have ultimately to the customer. Eventually it hits the consumer. The scary thing, and the journal points it 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.

3:22The 0.4 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 that's the way we eat it. The reason that people felt crappy during the Biden administration when everything seemed, you know, stock market was at high. Things seem 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 no one by the end of the administration, you still were making less and weekly real wages than you were at the beginning of the administration.

3:53So it's 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 we were worried about four and a half on the 10 year. We were worried about five, I think, on the 30-year. And we were worried about all those roundup. We're still well below all those levels. We're at 429 on the 10-year. Well, I'm just saying Wall Street has not reacted badly to the tariffs yet. We're at new highs.

4:31The bond market has not reacted. 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 I 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 I think there's a couple of those times. I don't disagree. I think that's a couple of those.

5:01I 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 bought them in October. We go August and September, and then we have the horrible day where there's like a, there's 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.

5:43It's his first trip to the U.S. 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 is would be necessary. I think it's a good thing. You're going to get nowhere if there's no interpreter. If Putin speaking Russian and without the interpreter. Yeah, and Trump 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.

6:19So you got, there's like six of them. You got to pick your poison for the specific. I said the other day. You can't really say pick your poison for this kind of conversation. My favorite name is Lama, because I just like to say Lama. 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, Vladimir Zelensky. The president suggested that that could happen before he leaves Alaska.

6:54But Russia has not agreed to that yet. that Trump has worn very severe consequences, in his words, if Russia, 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 to Eamon Javers first, and then we'll talk about it. I'm sure Eamon's agitated, but I'm not agitated. Hold on. The Trump administration reportedly considering taking a stake in Intel. Shares of the chip giant jumping on that news.

7:30Eamon'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.

8:01They 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 U.S. 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.

8:41So 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. Lipp Boutin meets with the president on Monday, one-on-one. 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 Boutin and Intel.

9:21And 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 U.S. government taking a stake in the company. And the question that I have about taking the stake in the company is, what is the U.S. government going to be, Well, I have about 100 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 taxpayer money. Of course I do.

9:59What exactly are we talking about here? The reporting 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 U.S. government investment of dollars in exchange for a stake. Now, presumably that's an equity stake. Presumably that 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 U.S. to build chips. That's the 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 U.S.

10:33government in the Biden administration. We got a ton of money. We got nothing. So, Eamon, let's talk about this, though. And the question is, what's the difference this time around? Right. The companies in America where the 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. And in this case, they were within about a year. Automakers, we made money. Fannie and Freddie.

11:08We had General Motors. General Motors, Fannie and Freddie. Fannie and Freddie. We had Fannie and Freddie, which we still own. Right. And anybody else? Which is a whole other issue. Off the top of my head, I can't think of any. In each of those cases, the situation was viewed as existential. These companies were going to fail. And to borrow a term from your book, they were too big to fail. And the U.S. government couldn't allow that to happen. And so stepped in and made a massive taxpayer investment. And that has, for the large part, you know, worked out, you know, with the exception of Fannie and Freddie, which the U.S.

11:47government 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 U.S. government has no other recourse other than to do this. Now it's now it's that our parties, the approach has been we won't do this unless we absolutely have to, because we don't know. Now it's a security thing. Now it's a it's not it's not for Intel. It's it's for we want to press we want those strategic medals. 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.

12:31against China. I didn't realize it. 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.

13:06And I think you almost get inured 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. So they give him the benefit of the doubt because they can't stop him. He's president. Well, two other two other examples just from this year, guys. That's a low bar. One is this golden share with U.S. Steel. Right. The golden share with U.S. 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?

13:47The others were rescues, right? And by the way, there 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.

14:23And I know you may think, first of all, this CEO is, it appears, is doing this under duress because he might be losing his job otherwise. So let's just put that to the table. But you have mentioned that Intel is somewhat an existential thing. And you've mentioned they build the foundries. And you've said, well, it's important. They're the one company that does have the foundries. So you wouldn't want them. 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.

14:59We 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. And we have tried so desperately to create a system in the world. It's not going to open up the floodgates. I tried. And I had a lighter on my head and I kept going and I couldn't get it going. I could not. I know. Yours is so tender. It's so dry and so ready that a spark from lightning in yours is.

15:36I couldn't. I can't get agitated. Are you agitated? I'm not agitated. But I'm saying out all the downsides when that's the job. The job is to say. What happened in the last four years? Let's talk about the upsides and let's talk about the downsides. Why are we not allowed to talk about both of these things? You are, but I just said all of a sudden. Because instinctively, you only talk about what you think of is everything is good. Everything is great. Amen, 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.

16:07It was. It was. It wasn't. This isn't the same thing, though. This isn't giving it away if you have union workers and child care and DEI higher enough. Eamon Javers, break in here and tell us what you think. Eamon's fine. Look, he looks wrong. Yeah, look, I mean, it's not my job to think one thing or another, but you've 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 percent state was a one off.

16:50And the initial the initial reporting I got from the White House was, yeah, this is a one off. That's it's just it's 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. OK, right now it's the strategic metals.

17:19It'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 to be clear. I just don't think it's a slippery slope. I don't think it all of a sudden you can extrapolate that we're going to have that the government's going to have a stake in every, you know, in tapestry. to make decent facts. But for the last 15 years I've known you, everything's a slippery slope. If we go this way, it's a slippery slope. I can't do it. Just, you got to deal with it. I told you, I'm getting inured to it. These are out-of-the-box ways to think about things, and I'm not immediately going to say that the world is ending because we're turning into China, state-sponsored industrial.

17:59But 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. Okay. Eamon Javers, thank you for waking us up this Friday morning, summer Fridays here. We appreciate it. He's got more hair today. He's got more hair. I don't see any of that. You know, it smells when it burns, and it's horrible. Terrible. He looks good. He looks handsome. He does. Cheese will be next. Coming up next on Squawk Pod, like the central bank, we love a data dump. the numbers that tell us what could be going on in the economy. And we're bringing a decision maker into this conversation, Chicago Fed President Austin Goolsbee.

18:41We put in a note of unease, I'd say, in the last CPI and now PPI with the inflation kicking up and kicking up in categories that are not obviously going to be transitory. What the numbers signal for the next Fed decision in late September and what they could tell us about America's inflation picture. CNBC's Rick Santelli is keeping an eye on investors. The most interesting feature about them, CPI and PPI, is the market response. Back after this.

19:19This is Squawk Pod. Up and Andrew, cue. You're watching Squawk Box on CNBC. I'm Andrew Osorkin, along with Joe Kernan. Look how you just sort of gave a little look to the camera. Did I? Yeah, right there. I saw that. Yeah. Is that come hither? I don't do that. I don't know what that look was. That's never worked for me my entire life. I'm not sure what you're doing there. Retail sales, usually important, but imports. Imports. Steve's very excited. Rick Santelli standing by at the CME in Chicago. Could anything change? Could we have a whole new view on everything based on imports today, Rick? Probably not, right?

19:57No, you know, it's hard to tell. These numbers the last couple of days, the most interesting feature about them, CPI and PPI, is the market response. We could spend a lot of time digging into data and looking at how strange some of it is, but the market divined it real well. Here we go. It's hitting the wires. Retail sales, this is for the month of July. It's the advance. It's going to change in a couple of weeks. Headline number expected up six tenths. Comes in darn close, up half of 1%. A path 1 % compares pretty good with the up 6 tenths in the rearview mirror, which hasn't been revised yet.

20:33And the up 6 tenths was the second best number of the year. 1.5 is the high watermark in March of this year. If we strip out autos, it actually still retains a good chunk of that growth. Up 3 tenths, and that's exactly as expected. It follows up 5 tenths. Don't see revisions yet. X autos and gas, it holds up okay. It's losing a little bit of steam. Up 2 tenths. Now, two-tenths X autos and gas, that would be the lightest since it was unchanged in May. So not bad numbers. Revision starting to come in. I'll get to those momentarily. The core retail sales or control group coming in at nice half of 1%, better than expected.

21:14Half of 1 % is what the rearview mirror was, but we'll get to revisions in a second. Here we go on the revisions. So the numbers are pretty good with respect to the advanced July. Look at the rearview mirror. Headline now moves from 6 tenths to 9 tenths. X autos from half of a percent to up 8 tenths. X autos and gas from up 6 tenths to up 8 tenths. And that control number moves all the way up to 8 tenths from up half of 1%. These are solid growth numbers. Now, let's go to import prices, shall we? Import prices, these are all July. If we look at the headline number, up 4 tenths. Okay, Joe, that's definitely warmer than expected.

21:54Up 4 tenths. Well, that would be the high watermark of the year. That would be the high watermark going all the way back to tax time of 2024, April of 2024. So we see import prices under a bit of pressure. If we strip out petroleum, they're still on the high side, up three tenths. Up three tenths equals the high watermark of the year in April. And you're going back to April of last year to find a higher level at up six tenths. Now, if we take a year over year perspective, those were month over month. Year-over-year perspective on import prices, down two-tenths, down two-tenths, which means one, two, three.

22:33This is the third down two-tenths in a row. Okay, switch gears to export prices. Export prices up one-tenth on the month-over-month headline on the year-over-year. They are up 2.2 year-over-year, up 2.2. Where does that comp? Well, May was 1.9. Last month was 2.6. Fits right in there. We are seeing some revisions on some of these import-export prices. They're going negative. So we see minus one-tenth now on import price month over month. That was originally up one-tenth. We have one category left, folks. Empire Manufacturing comes in powerful. 11.9, we're expecting unchanged. 11.9 would be the second highest of the year outside of March when it was 20.

23:19The market divines all this better than any single human can. Interest rates have moved up a bit. We were at 429 and a 10. Now we're at 430. How does 430 compare? 430 is up two on the session. It's up three on the week. And we want to pay very close attention to what's going on in the pre-opening equities. They haven't been phased much. Still a powerful opening expected in the Dow Jones Industrial Average. Joe and the gang, back to you. All right. Very good, Rick. Seemed a little continued upward movement in the 10 years. Steve Leisman joins us now with more. Did Rick take a breath when he did that?

23:58No, he doesn't do that. Did this live up to your expectations? I'm excited by this. I think the retail numbers are good. That's the most important thing to me. But I don't know how much of this is going to be inflation, how much you have sort of tariff inflation in here. What is interesting is to see that this number may be helped GDP forecast. We came in with the Atlanta Fed tracking at 2.5, Half CNBC Fed survey at one and a quarter. That's the forecast versus the tracking. Bit of a boost in gasoline station sales. And the key about this big question, who's paying the tariffs? If import prices are up, it means that they're not paying it overseas.

24:36And I would look at one particular category. I just want to find it again. Finished goods. Prices for major finished good import categories were mostly up in July. Import prices for consumer goods increased 0.4 % in July. So at least in the data, we cannot find the idea that foreign exporters are absorbing this price, at least not now. And maybe actually they have somehow used this opportunity to increase prices a little more. Forget my analysis. Let's get some real expert analysis. Joining us now is Chicago Fed President Austin Goolsbee. Austin, thanks for joining us this morning. Yeah, good morning, Steve.