AT&T CEO John Stankey & Treasury Sec. Bessent 2/13/26

0:00Your data lives everywhere. On-prem, in the cloud, across apps. Bring it all together with EverPure, the platform that acts like a living system, delivering the latest in data performance, security, and innovation without ever slowing you down. Sophisticated enough to anticipate your ever-changing data needs, yet simple enough to feel like second nature. Tame your data chaos with EverPure and make storage and data management the simplest part of your business. Visit everpuredata.com to learn more. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information-packed daily market preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions, and key results and statistics that may impact your trading.

0:47Download the latest episode and subscribe at schwab.com slash marketupdatepodcast or find Schwab Market Update wherever you get your podcasts.

1:00We knew what it could do, but the rate and pace at which it's coming on every aspect of the business, whether it's operational, strategic, societal, it's kind of like a freight train. AT &T chairman and CEO John Stanky at the Pebble Beach Pro-Am with Joe Kernan. In between rounds on the California golf course, Stanky explains how he's building out the infrastructure of the internet. Spoiler, it's fiber optics. I don't think universally you're going to ever beat fiber in many places. And I think what's sometimes missed is that a third of our capital investment goes inside of buildings, inside hospitals, inside stadiums, inside universities.

1:43Satellites not going to be the best technology to get everything connected. But first, a newsmaking interview with Treasury Secretary Scott Besant. He says the Senate will proceed with Kevin Warsh's Fed confirmation hearing, despite one senator's hold on the nomination. My understanding is that we are going to proceed with the hearing. Senator Tillis wants to keep a hold on any vote with Kevin Warsh leaving committee, making it to the full Senate. But I think it's important to get the hearings underway, and I think we have an agreement to do that. And, of course, the Secretary's view on the U.S.

2:21economy and inflation. After you've been in a massive auto pileup, you're a little skittish about driving, and Joe Biden crashed the economy. I'm CNBC producer Cameron Costa. Squawk Pod reports from the AT &T Pro-Am at Pebble Beach begins right after this.

2:46A History of the United States in 100 Objects is a brand new podcast from 99 % Invisible and BBC Studios. Each week, we're looking at a different object from across American history with a unique story to tell about who we've been, what we've built, and what we've allowed ourselves to forget. Some of these objects are well known, many are not, but all of them carry the story of how we got to this moment. Find a history of the United States in 100 objects on the 99 % Invisible Feed, wherever you get your podcasts.

3:40time learning to trade brilliantly. Learn more at schwapp.com slash trading. If you're a parent and want to help set up your child for success, then IXL is a right for your family. As an effective and affordable online learning program, IXL covers math, language arts, science, and social studies using interactive practice problems for kids from pre-K to 12th grade. Listeners can get an exclusive 20 % off IXL membership when they sign up today at IXL.com slash 20. Visit IXL.com slash 20 to get the most effective learning program out there at the best price.

4:20Welcome back to Squawk Pod, where Joe Kernan is in Pebble Beach and one of his interviewees is in Washington. Treasury Secretary Scott Besson. Mr. Secretary, thank you for gracing us today, even though I'm out. I wish you could be here. Joe, good to see you. And thanks for getting up so early. Yeah, you are. And work with me on this if I get a little groggy or my questions don't make any sense. You do have some news this morning for us. I think it might relate to what we've seen in various states around the country and maybe with Doge and elsewhere. But there's a new initiative from the financial the Treasury's financial crimes enforcement network for whistleblowers that can actually be compensated if they come forward.

5:08Why wasn't this done before? It seems like a no brainer. I don't know, Joe, but it's very exciting. I think it's going to be a great way to ferret out waste, fraud and abuse, starting in Minneapolis, which has been ground zero. So we are encouraging whistleblowers who know about fraud, people who are stealing from the American taxpayer to come forward at Treasury. We're setting up a Web site and we will be giving rewards up to 10 to 30 percent of the fines that we levy. So what are go into some of the things that you're talking about? What type of tips are you looking for surrounding what type of fraud and abuse?

5:53Again, anything that has to do with government programs where there's a lack of common sense. What we saw in Minneapolis were daycare centers without children. The programs where they're claiming that 80 % of the children in the programs had autism. public or senior transport companies with no vehicles. So, you know, it's kind of like they say at TSA, if you see something, say something. And if you say something and it turns out that you have helped us make a big recovery, we want to pay for that. And it's FinCEN.gov slash whistleblower. And who's eligible? Anyone in the United States? Where will the money come from?

6:43to pay out? Again, it's going to come from the recoveries that we get, the fines we levy. And again, we want to call this back for the American people. These Minneapolis numbers are astounding. They keep getting bigger and bigger. The lack of oversight. Minnesota Attorney General Keith Ellison was in front of Congress yesterday. I thought he gave some very unsatisfactory answers, And it seemed like from what I saw that there was a circular system where people were stealing from the federal government, then donating back to politicians. Secretary, let's shift the ears to something everyone's watching closely.

7:26Obviously, Kevin Warsh, the president would like to have him confirmed in a timely manner. And there are some obstacles in one Senator Tillis. I think you proposed, I guess you'd call it an off ramp, some type of an off ramp if the investigation would move from justice to the banking committee. I can't tell. I'm looking at what his comments are. He says, well, yeah, we could we could certainly have some type of investigation, but that would not replace the investigation for the DOJ being that needs to be dropped first. Do you know where we stand on that, how this is going to plan? Yeah. Again, Joe, the administration has no influence on what the U.S.

8:18attorney for D.C. does. What I was proposing was that the Senate Banking Committee also investigate this very large overrun on the Fed construction project. We'll see where the investigation goes with Jeanine Pirro's office. There were subpoenas issued, but that doesn't have to mean that there are charges. They reached out to the Fed in December via email, didn't get responses, and then issued subpoenas. So we'll see what the state of that is. I think what's important here is that at this, I spoke on Tuesday at a Republican Senate working group. And what I think is important, my understanding is that we are going to proceed with the hearings.

9:10Senator Tillis wants to keep a hold on any vote with Kevin Warsh leaving committee, making it to the full Senate. But I think it's important to get the hearings underway. And I think we have an agreement to do that. Do you I think Senator Scott has weighed in as well. Do you agree that that the Justice Department may have have overstepped in this? I guess you may not want to weigh in on on what the DOJ does. But there are a lot of people just intimating it's a pretext just to try to force the Fed and J-PAL to lower rates. again joe i'm not going to comment on the ongoing justice department investigation but i i will point out uh senator scott my home state senator who i'm very close to did say that jay powell is guilty of one thing incompetence and this building project is out of control way way over budget and the fed unlike other branches of government does not work on appropriations.

10:17They have magic money. So when they go over budget, they just print more money. And I'll remind your viewers that due to some terrible bond market purchases, the Fed's losing$100 billion a year. Did we know that the Senate was ready, the committee was ready to move ahead? So you just confirmed that that is the case? That's my belief. And that's my belief that what was settled, what came out of the meeting I was at on Tuesday. So I think we can move ahead with the hearings and Senator Tillis will exercise his right to hold up a vote. But I think it is important that we get to the hearings. A Chair Powell term as chair ends mid-May, and anyone who cares about the integrity, the independence of the Fed is going to want to see continuity with Kevin Warsh.

11:11He's a great candidate. Last time he was voted on for governor, he received a voice vote, and he got 100 percent of the votes. And unbelievably, he was sponsored by his home state senator, Chuck Schumer. We can see how things have changed since then, Joe. Yeah, that's an understatement. Before we move on to that jobs report, which was better than expected, there's some news out this morning. Mr. Secretary, is the team, the Trump team, working to narrow the scope of some of those metal tariffs? I think it was 50 percent at one point. I directed at China, but there were maybe some collateral damage.

11:52Can you shed any light on whether there are things going on behind the scenes that would, you know, that would make the EU feel a little bit better? So, Joe, I'm not going to get out ahead of the president here. I spoke to USTR Ambassador Jameson Greer on my way into the studio this morning. And, you know, we'll see if there's kind of a narrowing. My understanding is if anything is done, and I don't think it's great reporting that we saw today. If anything is done, I think it would be sort of clarification on some incidental objects. But again, that's going to be the president's decision. I don't think we have great reporting this morning.

12:36Mark, it wasn't so great yesterday. That's a great this morning. But 50 ,000, Mr. Secretary, 130 ,000 jobs, more than double what was expected. that 4.3 percent unemployment, closed border. What is wrong with the mood of the country? What are people feeling that have some polls showing that people miss Joe Biden's economy? How does that work? Where's the disconnect? Again, Joe, what was even more impressive about the numbers is the private sector numbers were more than 170 ,000, and government jobs were reduced by more than 40 ,000. More than 30 ,000 of that was federal jobs. We're at the lowest ratio of government jobs to total jobs since 1966.

13:26And this is part of President Trump's plan to reprivatize our economy. And I think, as I've said many times, 2025 is about setting the table. 2026 is going to be a banquet for the American people. The economy is taking off. We saw 40 ,000 new construction jobs. Everyone says to me, oh, where are these factory jobs that you planned? And unlike what you and I see in the financial market, you can't push a button and build a factory. There's lead time, but what we are seeing is big commitments to these factories that are going to be built. First, we'll get the construction jobs, and then the factory jobs are going to come.

14:08So I think we're going to see the tremendous groundbreakings. I think we're going to see a lot of factory completions this year. And I think thanks to the work and families tax cut, on one side of the balance sheet, we are seeing corporate CapEx, the surging, and CapEx jobs always follow. And then on the other side, we are seeing the president's signature policies, no tax and tips, no tax and overtime, no tax and Social Security, deductibility of American-made cars. I can tell you I'm also the IRS commissioner and that tax refunds thus far and were very early in the season are up 22 percent. You know, this secretary with an election coming, you will see maybe not feet of clay, but you're going to see some members of the Republican caucus thinking about what happens in November.

15:02I don't know if that's how you tie this tariff, how you tie the tariff vote and what the point is, because it's probably going nowhere. But the deficit itself, in getting down to 3 % where you'd like to get the deficit to GDP ratio, do you trust these CBO numbers or do you think that growth is being underestimated? Because the tariffs, they do point out, the tariffs do offset some of what the big, beautiful bills provisions do to widen the deficit. I mean, maybe there's, on the other end, there's growth that's going to come from a lot of those programs. But in the meantime, the deficit widens offset by tariffs.

15:43So why don't some of the Republicans in Congress see that that's a rationale? Well, Joe, look, the CBO missed what went on last year. So if they can't do the near year, how can they do 10 years out? And they're a static scoring system. And it's, I don't know what they're thinking because they assume GDP growth is 1.7, 1.8 percent. If we'd had the biggest tax hike in history, they would have assumed that if we, in fact, what we did, we gave the biggest tax cut in history. And we'll never have to talk about these tax cuts again because thanks to President Trump's leadership, Mike Johnson, Leader Thune, we now have great permanence.

16:31we have great certainty. So, you know, I'm not sure what the CBO is saying. And for just to give your viewers some context, Joe, 2024 deficit to GDP was 6.97 percent. 2025 went all the way down to 5.4 percent. That's constraining spending and growing the denominator. So when we have high growth, then the deficit to GDP comes down, and that's how we pay down this debt. Interest rates, we had the 10-year bond did the best that it had since 2020 last year. We were the best performing G7 economy in the bond market. And one of the reasons that the bond market has been so tame is because we are getting our fiscal house in order.

17:20So I will take the market over the CBO any day. Can we just touch on China quickly? I know you're going to meet with the vice premier in the next few weeks ahead of the president's visit to China. Is this the same thing you've always sort of felt, the term of fair rivalry? Or is that a little bit of a softening, just sort of an acknowledgment that these two countries, we need each other in terms of trade? Joe, what it's acknowledging is China is the second largest economy in the world. And I've been very consistent when I said we don't want to decouple. We don't want to decouple. We need to de-risk.

18:02President Trump, it's a dual strategy here. We want to engage with the Chinese. We want fair trade. Turns out since the China shot fair trade, free trade was not fair. And our great American workers got wiped out. We're bringing back factory jobs. But we are going to de-risk. Mr. Secretary, the more as time goes by, and I think things happen even more quickly, we remember some of the transformational technological advances in recent decades. AI could dwarf, you know, could dwarf the Internet, could dwarf the cloud. But 15 percent is what the president said in terms of I guess he's talking about maybe nominal growth if if the new chairman of the Fed were to lower rates.

18:56I don't know whether obviously that that sounds like an exorbitant number. But I don't I think we could underestimate some of the advances we get from A.I., deregulation, everything else that that happens. What do you think is possible? Look, I've spoken to the president quite a bit about it. As you know, the president is an optimist. And we saw numbers last year, both in terms of inward investment to the U.S. economy, tens of trillions of dollars coming in. We are also the GDP numbers for what while President Trump was fully in office, four point one percent, four point one percent. We'll see where the fourth quarter comes out, but good chance will be at three or over three percent.

19:48And again, that's a private sector economy, Joe. And I think what the president's looking back at is when you have these transformational technological breakthroughs back to the 1880s and the railroads, we could see something that we couldn't imagine on the upside. I'm not going to put specific numbers on it like the president, but I think there's a very good chance we're seeing this productivity boom. We're seeing this investment boom. And most of all, we're seeing inflation come down, Joe. that this terrible tax that the Democrats put on the American people, the most the onerous tax is inflation.

20:29So 21.5 percent under President Biden, thus far under President Trump, 2.7. And it is coming down. I would predict that we could be back near the Fed's 2 percent target in the middle of this year. The some of the numbers, some of the recent numbers on inflation have people wondering whether the Fed has the the leeway to lower rates additionally. I guess your thesis would be that for productivity reasons. And I guess we keep hearing the president posit that growth is not necessarily might be coincidental with higher inflation, but doesn't cause higher inflation. Well, Joe, I'll tell you what causes higher inflation.

21:16It's what the Biden administration did. They created a demand shock with this government led tax and spend, but they created the demand shock with spending. But then this regulatory burden that they created, they constrain supply. So when you've got demand, demand up, supply down, that's how you get inflation. President Trump's done the opposite. He's created, we have a demand shock through the private sector, through tax incentives and CapEx. And then we have the dramatically deregulated. We're going to continue to deregulate. So we are creating supply, whether it's through deregulation or through all the productive capacity that's being put into the economy.

22:07So I think we should have an open mind here that we could see something very similar to what we saw in the 1990s when there was also a technology boom then. And we've got to get away from this idea that growth automatically has to be tampered down because growth per se is not inflationary. It's growth that leaks into areas where there's not sufficient supply. And everything this administration is doing is creating more supply. I mentioned that the stock market, we didn't even have, we usually would print up hats. I know Santelli had a 50 ,000, but it came fairly quickly. You talk about some GDP numbers that we haven't seen in a while.

22:564.3 percent unemployment is almost full employment. I'm still trying to figure out the affordability question and why Americans are glum about their situation. Is it housing? Are there other thing about oil prices, gasoline prices are how much lower than they were when they ran up during the beginning of the Biden administration from all the overregulation? What what needs to happen to make Americans feel better to maybe increase the Republicans chances of holding the House and Senate? Look, Joe, if the Democrats want to compete on the 2026 economy, I think Republicans, House, Senate and local candidates, they are willing to do it.

23:47As I said, we're seeing things kick in now. But look, you know, after you've been in a massive auto pileup, you're a little skittish about driving. And Joe Biden crashed the economy. Whether it was Joe Biden, Elizabeth Warren, Kamala Harris, these policies were a disaster for the American people. As I said, 21.5 percent cumulative inflation, loss of real purchasing power. And our friend at Strategas, Jason Trinert, had something called the Common Man Index. So for working Americans, the numbers weren't at CPI. It was up in the 30s in terms of groceries, insurance, rents. And we're seeing we're bending the curve on all those.

24:32And there are two ways to fix affordability. There is bringing bringing down prices and things like energy. Energy is coming down. Energy is a core component of everything for consumers. So as that comes down, we will see the inflation levels come down. But on the other side, it's real income increases. And we've seen real we saw real wage growth in 2025. I think it could be very strong in 2026. And I think the American people are going to start feeling it. In my career on Wall Street, I always looked to see what was performing well in the stock market to tell me about the economy. And as we've seen, there's been some volatility in big tech.

25:17But if you look at the broad indices, whether it's the equal weighted S &P or the small cap indices, they're doing fantastic. The cyclical indices are doing well. Regional banks are doing well. So that tells me the stock market is saying that Wall Street is saying that Main Street is going to have a great year in 2026. And I think the American people will feel that. And finally, Mr. Secretary, just an overall comment on the political environment that we find ourselves in, a complete lack of civility in some of the things I've seen. You don't pull any punches a lot of times. I've seen you recently in some interactions with senators or from the other side.

26:09there there is going to be some real hardball play. Do you think would you tell the president or Republicans to push for an end of the filibuster because it may be this is the last real chance to do anything before before November? I mean, the Democrats probably would get rid of it if they took the House. Well, Joe, the president couldn't have been more clear. I couldn't have been more clear a couple of months ago. I had an editorial in The Wall Street Journal just saying we've got to get rid of the filibuster. You know, in game theory, the best-known game is The Prisoner's Dilemma, and it's, like, who moves first?

26:46And if you have bad actors in The Prisoner's Dilemma, which the Democrats are, then you should move first. It's kind of kill or be killed. And clearly that Joe Manchin, Kyrsten Sinema, the Democrats basically had nuked the filibuster, But they refuse to go along with it. And guess where they are? They're both sitting at home now, hopefully watching your show. And I think the Republicans need to be smart about this. And I think that maybe the filibuster doesn't get withdrawn for everything. But there are things that we've got to do, like voter integrity. And we've got to keep the government open.

27:34I mean, look, we are on the verge of another government shutdown. And the Democrats think this is the way to hurt President Trump. But they're willing to hurt the American people. We had the biggest or the longest shutdown in history. The economy still did great because all the initiatives we put forward. But I think that we have to get on with the people's business. And if the Democrats shut the economy down again, it is a sign that they are good, that they are bad actors. They don't care about the American people. And we ought to move forward, not let the government shut down, have voter integrity and many other of our signature issues.

28:16And I thought of one more that, you know, while we not quite a half hour yet, which I really appreciate, Mr. Secretary. Crypto bills moving forward. Bitcoin a little bit dicey here at this point. You wonder about the leverage in the system. Any comments? Yeah, Joe, the history, if we take Bitcoin as a proxy for crypto, Bitcoin has a history of volatile movements. We went back and looked. I believe the average sell-off has been about 58 percent. And we're coming into that zip code right now. And crypto holders are mostly in it for the long term. They are used to the volatility. So it's important that everyone knows what they're buying.

29:08But part of the volatility here is self-induced because, and this is one thing where there has been a bipartisan working group. And Democrats, there is a group of Democrats who want to work with Republicans on getting a market structure bill. It's called the Clarity Bill. But there are a group of crypto firms who have been blocking it. They said, well, we'd rather have no legislation than this legislation. And that doesn't seem to have been good for the overall crypto community. So in a time when we are having one of these historically volatile sell offs, I think some clarity on the Clarity Bill would give great comfort to the market.

29:58and we could move forward from there. So it's very important to get this done. And I think if the Democrats were to take the House, which is far from my best case, then the prospects of getting a deal done will just fall apart. I mean, look what the Democrats did to crypto under the Biden administration. It was almost an extinction event. And President Trump has worked to make the U.S. the digital asset capital of the world. There's a lot of innovation that goes on adjacent to crypto in the blockchain in DeFi. So I think it's important to get this clarity built done as soon as possible and on the president's desk this spring.