AI at the G-7 & A Memorandum of Understanding 6/17/26

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0:57Bring in show music, please. Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. President Trump at the G7 in France speaking about his memo of understanding with Iran. If they don't behave, we'll go right back to dropping bombs right smack in the middle of their head. Former nuclear weapons inspector David Albright says the document needs more work. This deal is giving away a lot of U.S. leverage. I mean, it's paying a very high price to get the Strait of Hormuz open. And there isn't going to be a lot of leverage left to deal with the nuclear questions. Also at the G7, Google, OpenAI and Anthropic.

1:39This meeting comes right after Anthropic suspended access to its newest AI models, former White House Chief Technology Officer Anish Chopra. What went wrong here? Was the model evaluated? What did they see? Did they miss something? Plus, SpaceX, Fed Day, and what goes around, comes around. Jimmy Carter was in the White House. He was lusted his heart. And Iran was in the news. It is Wednesday, June 17, 2026. Squawk Pod begins right now. Stand back to bye in three, two, one. Cue it, please. Good morning, everybody. Welcome to Squawk Box right here on CNBC. We are live from the a NASDAQ market site in Times Square.

2:23I'm Becky Quick along with Joe Kernan. Andrew is out today. And the Federal Reserve is set to issue its decision on interest rates today, the first under new chairman Kevin Warsh. The market widely expecting the central bank to stand pat on rates. The decision comes at 2 p.m. Eastern with a Warsh news conference scheduled for 30 minutes later. The FOMC also set to issue updated economic projections in the so-called dot plot, Most Fed watchers think that Warsh won't participate, either because he's too new at the Fed or because he wants to underline that he's not a fan of the dot plot and all the implications for all the forward guidance.

3:03Yeah, he's been talking about pulling that for a long time. He has. He thinks they talk way too much. And Greenspan did not. And it sort of all changed under Bernanke. What do you. There are pretty unusual circumstances with Bernanke. Good reason for maybe talking more frequently because of the financial crisis. They never, like government programs, once they're out, they never go back. They never go back. You mentioned oil. Yeah. What, 76? $76. 76. That's a different number than even a week or two ago that Warsh was going to be facing. Japan's raising interest rates because of oil prices. Japan's in a much more complicated position.

3:42But they use that for inflation, too? They use higher rates to end inflation? So they got the same tool. It just gives him, I think, a little more flexibility, maybe not to cut, but maybe not to indicate that the next move would be a hike. I agree. Look, I don't anticipate there'll be much difference in the communique that comes out. Maybe he'll want to get his fingerprints on that. But really, it's the meeting after the press conference afterwards to see what Warsh himself has to say, what he wants to put forward as the main points on his agenda that people will be watching. Right. It's true.

4:20He's, you know, it's his first meeting. So I don't know what. Yeah, I would tread kind of lightly. We'll see if he doesn't. That would be news. If he comes in blazing. Yeah. I kind of like to see it. I was thinking back today of the Fed chairman that I've known in my career and my consciousness, I guess, starting with Greenspan and working your way through. Yeah. Bernanke, Yellen, Powell, and now Warsh. And I've been around. I remember more presidents than I remember Fed chairmen. Who appointed Greenspan? Was that Reagan? Reagan. So that's where my, and, you know, I'm a lot older than you. And that's my beginning recollection, too.

5:03All I know is that there were a couple of predecessors to Greenspan that were totally pilloried because of that. Yeah, but Volcker, right, of what he did to have to raise rates. I'm sorry, Volcker is what I, yeah, that goes without saying, that everyone remembers that big tall guy taking rates. Yeah, but that was when I was first in the job market, and I was never going to buy a house because it was 16 % mortgage rates. I remember my parents having mortgage rates that were just unbelievable. 21.5%. Even as a kid, I remember the idea that if you could move and take your mortgage rate with you, your fixed mortgage rate with you, that was a big deal.

5:38Or sell your house and be able to sell them the interest rate that came with it. I'd look it up, but I'll just guess. But they had a misery index at the time. Yeah, I remember that too. It was like 22 or something like that. Double-digit unemployment and double-digit inflation at the same time. Which is why what the Fed has to say matters. Jimmy Carter was in the White House with lust in his heart. And Iran was in the news. It was in 79. It certainly was. I remember the, do you remember Mickey Mouse flipping the bird saying, hey, Iran? That was, that was what was on all the T-shirts. I just remember our horrible losses when we tried to get them out and then we were stuck and we just felt horrible.

6:18Yeah. And here we are again. We're monitoring shares of SpaceX, which again gained yesterday and in the pre-market this morning up another 3 percent. And the shares rose 4 percent yesterday, 20 percent in each of the stock's first two days. And SpaceX overtaking Amazon's market cap at briefly top Microsoft's market value, just shy of$3 trillion. Investor Michael Burry made famous in the big short, arguing in a sub-stack post that options used to wager against SpaceX stock remain too expensive. And those began to trade for the first time yesterday. So a lot of people think that it's a good short, I guess, at this point, or at least overvalued.

7:09It's been, you know, when it overtook Amazon yesterday, kind of watching through. Okay, so you look at the market cap right now,$2.74 trillion to$2.64 trillion for Amazon. There's so much stuff in Amazon. If you consider it's not just the retailer. It's not just the cloud computing. It's got its own satellite program with Kuiper that's now been renamed to what is it? Leo. There's just program after program, you know, from the movie studios, Amazon Prime, video, on and on and on. And SpaceX has some huge promise, but, you know, again, you've got to figure out how quickly they're going to ramp up.

7:51Elon Musk has some pretty big numbers he's anticipating. What did he say? A trillion dollars in revenue by 2030. Yeah. But that's where you've got people who are going to start really looking at this. Well, you know, for years, people had to think about Amazon the same way. Yeah. Yeah. Right. And for Amazon, it wasn't going to be profitable for a long time because Jeff Bezos was trying to build it and make it bigger and bigger and bigger. So every time they had any money that came in, he was deploying it. It was all revenue growth at that point. Right. All right. President Trump says that a Senate confirmation hearing set for today on U.S.

8:25Attorney Jay Clayton's candidacy for director of national intelligence will be canceled. In an early morning post on Truth Social, the president accused Democrats of breaking a deal to allow an extension of the Foreign Intelligence Surveillance Act in exchange for removing acting director of national intelligence Bill Pulte. and clearing the way for Clayton to take that job. President Trump said that he doesn't want Clayton to leave his current position to take the intelligence post until Jamie McDonald is installed as the new U.S. attorney for the Southern District of New York. Trump saying in his words, to add a slight bit of intrigue, but for the good of the nation and the people of our country, I will not approve FISA without the Save America Act going along with it.

9:08The Save America Act is the president's proposed bill that would require proof of citizenship in order to vote. Yeah, some other provisions in there. And I did get to watch the majority leader an extended interview on another network with my buddy Brett. But it was a good interview, and a lot went on. He said a lot of things, and he was very forthcoming. We had him on last week. Yeah, we had him on last week. And he agrees with a lot of things the president's doing, but there are some sticking points in that relationship and in trying to do things. I don't know what the prospects are for that.

9:46They've brought the SAVE Act up I don't know how many times. It's not currently workable with the makeup of both Republicans. I think they've got 48 votes or something like that. So you don't even have all the Republicans at this point. And then if it goes into a voterama, it gets very deep in the weeds. But there are certain amendments that would go on to the voterama that would make it very tough for certain Republicans and tough districts to support. So it's, you know, literally really like, you know, the really gross, greasy sausage that goes into the intestine. It's not just making sausage.

10:24It's making the worst. It's making blood sausage. All right. People are just waking up. What is that from? Groundhog Day, right? It says some people eat blood sausage. Not me. No. Cheese will be next. Coming up on Squawk Pod, President Trump's first televised comments of the day at the G7 in France. The topic du jour, of course, is Iran. It's a memorandum of understanding. And if I don't like it, we'll go back to shooting at him. Former nuclear weapons inspector David Albright zeros in on that memorandum of understanding. And two paragraphs have what he calls leaky language. This one in particular really needs some serious amendments and work, and I hope that this is not the final.

11:12The language in this memorandum of understanding is kind of timid.

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13:21This is Squawk Pod from CNBC. Here's Becky Quick. President Trump just finished taking questions from reporters with the president of Egypt at the G7 meeting. There is some news breaking out of this. Megan Casella joins us right now with the highlights from that. Megan, good to see you again. Becky, that's right. This was the first time we heard from President Trump on camera today, and he was being asked specifically about that draft 14-point memorandum of understanding that we've been talking about for the past few days. And the president's suggesting here that this is not a final document, that things could still be changing, and that if he doesn't like the way negotiations go, the U.S.

13:54and Iran could return to active war. Take a listen to the president's comments. No, it's not final. It's a memorandum of understanding. And if I don't like it, we'll go back to shooting at them, dropping bombs on their head. If I don't like it, if they don't behave, we'll go right back to dropping bombs right smack in the middle of their head. Guys, the president here severely undercutting some of the stability that he and his top officials have been trying to generate this week with this deal. The argument we've been hearing all week from the Trump administration has been that, yes, this is a bare bones document and it leaves a lot to be left negotiated.

14:30But what it got the U.S. and the rest of the region was a lot of stability here while they worked out the harder details. It was extending the ceasefire. That is still true. But the president, of course, saying now that if he doesn't like the way things are going, potentially even within the next 60 days, he says he won't hesitate to return to dropping bombs. Becky. Yeah, I guess I can't say I'm completely shocked by this, Megan. And there's been a lot of pushback about the terms of the deal, how you make sure that the Iranians stick to the terms of some of these things, questions about all those issues.

15:01That's why I asked the last time you were with us about the idea of removing the military, because that's always been kind of the cudgel that President Trump will hang over anything to try and get them to the negotiating table and try and make some of the progress with some of those negotiations. I can't say I'm shocked to hear this. That's right. Right. And I think that's fair. I mean, he, of course, does not want to remove what he views as the U.S.'s biggest negotiating point is the power of the military. He doesn't want to take that off the table entirely. So in one hand, not surprising. On the other hand, though, the argument at the G7 all week and when talking with regional allies and specifically, especially European allies who really want to see this war ending has been, well, now we've gotten to firmer ground.

15:46We're going to pull tensions both sides. Cooler heads will prevail on both sides while they work out the rest of the agreements, which, of course, continue to be the hardest one. So, you know, the president in some ways may be trying to balance those two things, not wanting to remove what he sees as the biggest the U.S.'s biggest leverage point. But also this really does undercut that stability and things like markets that have been celebrating this deal because they think it means the end to this war clearly showing here we're not there yet. Look, I think what the European leaders want and many other areas like China and India, they want the strait reopened.

16:20And that's why we've seen oil prices. In fact, can we take a look at oil prices and just see where they stand at this moment? Oil prices were at$76 when we started. Now it's at$76.46. If there's an undercutting of the stability that you're talking about affecting the markets, I don't know what markets you're looking at. Yeah, I mean, this is we'll have to play this out and see. But right now, WTI is still sitting below$77 a barrel. That's the immediate stability that this has brought, the idea that the strait would be reopened. And I think the oil markets are going to reflect any concerns, any conditions that are brought up, because the war premium came out of that market immediately with this coming out the other day.

17:00Obviously, the president's saying this. That's going to catch some attention. We'll see how it plays out in the markets. But this is the first time he's been speaking on camera today. and Megan is following all of this very closely. Megan, thank you for bringing us those comments and continue to watch all of this and bring us any developments as they happen. Megan Casella. Joining us right now is former nuclear weapons inspector David Albright. He is the president of the Institute for Science and International Security. And David, I think we'd all like to see the world without Iran having nuclear ambitions.

17:32How likely do you think it is that they will give up those nuclear ambitions for some of the things that they seem to have been promised? I think based on just reading this available memorandum of understanding, I mean, you can't have a lot of confidence. This deal is giving away a lot of U.S. leverage. I mean, it's paying a very high price to get the Strait of Hormuz open. And there isn't going to be a lot of leverage left to deal with the nuclear questions. And the language in the memorandum of understanding isn't very good. I mean, it's not even using kind of the standard language that's been developed to say a country shouldn't develop or test or manufacture or produce nuclear weapons.

18:16It just uses the word produce. And we know from experience that that creates loopholes and countries have exploited that. Iran included has been exploiting that kind of imprecise language for years. And so the words not being able to test, not being specifically in the memorandum, they're not in the memorandum that is available publicly. Now, maybe this is the finalist version, we should say. Right. But Trump's been making statements that he wants to see improvements in it. And this is one area where I think he's been less than satisfied. But still, this is the the version out there that's being said is final.

18:56And it has leaky language. And it also has some language that talks about the nuclear issues will be addressed that are mutually agreed upon. I mean, that's not normal language in a deal. I mean, it should just be the issues that need to be dealt with. And mutually agreed could actually exclude robust International Atomic Energy Agency inspections aimed at making sure that Iran doesn't have on-declared nuclear material. I mean, Iran rejects that point of view of the IA completely. So it's highly contentious view from Iran's point of view. And we'll never mutually agree with the United States to look into that.

19:35So I think this paragraph, there's two, nuclear is in two paragraphs, but this one in particular really needs some serious amendments and work. And I hope that this is not the final. Now, there may be side deals. I mean, we had that in the 2015 Joint Comprehensive Plan of Action. But the side deals back then, which took a lot of effort to flush out, and the media was important in doing that, made things worse. So it was since the side deals can hide the even further problems and are there to hide embarrassments and weaknesses. And then I saw Vice President J.D. Vance recently saying that, you know, there are these secret arrangements.

20:20I think it was him. Let me not quote him saying it, but there are these secret arrangements. But we should know what this deal is about. It shouldn't be OK. It's a great deal because you don't see the secret part of it. We should know exactly what it is. And on its surface, it has some serious problems. David, I mean, this has been the question of dealing with Iran going back decades at this point. The idea that we don't want them to have a nuclear program. the idea that they will give as much as they have to, but they've never been very open or forthcoming. I'm sure you have the sense that they have not followed the spirit or the letter of any of these agreements to this point, that they've tried to evade detection of any of their programs that are there.

21:06How do you work within a regime like that? Well, I think you have to be very tough. I mean, that's the bottom line. And the language should be very clear that Iran has to accept robust International Atomic Energy Agency inspections and Iran should cooperate. I mean, that's the key word. I mean, this whole nuclear issue can be settled in a few months if Iran cooperates. And I think the language in this memorandum of understanding is kind of timid. It's not enough to push Iran to feel that it needs to do something. And the memorandum is a bit open ended about, you know, there's could just be renewed.

21:49There's no obligation that Iran complies before it gets the vast benefits that are being given to open the Strait of Hormuz. So I think you have to just be extremely tough with Iran. And I think that could require a return to military strikes. I mean, this is a ceasefire deal fundamentally. And I think if Iran doesn't perform, it should understand that military actions could resume. And so I don't think we should see this as an end to the war like World War II ended. I mean, this is an interim process that we're in, and military conflict could resume because Iran will not abide by even the basic requirements of international obligations like the Nuclear Non-Proliferation Treaty.

22:41And so I think perhaps it's not good news for the economy per se, but I do think that this memorandum kind of reinforces the idea that we're in a very unstable situation. Do the threats ring hollow now, David? I could make the case either way, because the president has threatened many, many times in the last month or whatever it was. I'm going to, you know, we're going to do it again. We're going to do it again. We're going to do the bridges and infrastructure power plants. We're going to do it. And then it never happened. Yet he did do something right at the start that no one ever did before.

23:20So it's not like Iran can say, oh, we don't, you know, this guy's all talk because he really did do something initially, destroying the Navy, destroying someone. But but at this point, I don't know whether they're they think they have gotten beyond that, I think, to where they're I think they're they're acting with with impunity in a lot of ways for the last month. Yeah, and I think the deterrence has to be reestablished. I mean, Trump did, and with Israel, did serious damage to the nuclear program, including the parts of the program aimed at building the nuclear weapon itself. And so they've been seriously set back.

23:59And that's a real victory of these two wars. And it actually puts Iran in a weaker position. And that's why it's surprising to me to see that it's like the U.S. has put itself in a weaker position on something that was a U.S. victory or almost a U.S. victory. So so I think they have to have to reestablish deterrence. And I do think that President Trump has just made one too many or 10 times too many threats that don't mean anything. And Iran is reading that very accurately and pushing for an advantage. All right, David, thank you for joining us this morning. Thank you. Coming up next on Squawk Pod, AI in focus at the G7 meeting.

24:45Are the newest models effective and safe? We hear from Anish Chopra, former White House Chief Technology Officer. There appears to be some rough global consensus that we've got a model to keep the innovation machine running, but protecting against harms.

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