David Rubenstein, the FOMC, & Saving Spirit Airlines 4/29/26

0:00Hi, I'm Jennifer Garner. Being a business owner takes hard work and a whole lot of miles. So once upon a farm needed a serious business card, we chose the Capital One Venture X business card with unlimited double miles on every purchase. We earn rewards on all the things we need to grow our business. Venture X business gives us big purchasing power so we can spend more and earn more. We redeemed miles to travel the country and partner with new stores. Capital One, what's in your wallet? Terms apply. See Capital One dot com for details. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab.

0:35Join 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. Download the latest episode and subscribe at schwab.com slash marketupdatepodcast or find Schwab Market Update wherever you get your podcasts. Bring in show music, please. This is Squawk Pod, and I'm CNBC producer Cameron Costa. On today's episode, Jay Powell's last FOMC meeting as Fed chair is today. Carlisle co-founder David Rubenstein on Powell's legacy and the policies of his likely successor, Kevin Warsh.

1:21He can dream big, but there's a war on. I think he will recognize that getting a Fed funds cut rate now is not going to be easy. As Kevin Worsh said in his testimony, he would like to, you know, lower rates. Everybody would like lower rates, but I wouldn't expect it would happen overnight. And the major shift in the Middle East. CNBC's Dan Murphy reports on the UAE's epic OPEC departure straight from Dubai. This is a country that's looking to a post-oil future. Is it a break with Saudi Arabia or simply an economic evolution? The UAE has basically outgrown the optics of OPEC as well and is better off alone as an indispensable partner for Washington rather than a constrained member of a quote unquote cartel.

2:09And finally, a spirited debate about spirit airlines, that is. 19 ,000 people between the direct employees and the contractors who will suddenly be out of work, out of their health care. People who are getting ready to have babies are in the middle of cancer treatments and everything else. So we need to think about how we're supporting the American people. Association of Flight Attendants International President Sarah Nelson and Joel Griffith from the think tank Advancing American Freedom. This is not due to the current situation in Iran with higher fuel prices. This has been a long time mismanagement and a long time accumulation of debt.

2:46It's Wednesday, April 29th, 2026, and Squawk Pod begins right now. Stand Becky by in three, two, one. Cue it, please. Good morning, everybody. Welcome to Squawk Box right here on CNBC. We are live from the Nasdaq market site in Times Square. I'm Becky Quick along with Joe Kernan and Andrew Ross Sorkin. Meantime, Elon Musk expected to return to the witness stand today in the billionaire's case against Sam Altman. And OpenAI Musk was the first witness called in the case to testify yesterday at that federal courthouse in Oakland, California. He's seeking to hold OpenAI responsible for what he says is the company going back on a vow to remain a nonprofit.

3:27On the witness stand, yesterday Musk claimed that he played a pivotal role in the founding of OpenAI, motivated by what he said was a desire to serve as a counterweight to Google. He also covered his predictions for AI, saying it would make the world more prosperous or kill everyone. OpenAI has characterized Musk's lawsuit as a baseless harassment campaign by somebody who's a competitor. And we're going to see whether how much that part of the argument works or doesn't. It could be both. You could be both. You could be both. But it's interesting. So much of the defense has been about that the person prosecuting is prosecuting based on being a competitor, not based on the underlying merit.

4:10So it's going to be very interesting to see whether the judge stripped out so many complaints. But how the jury thinks about that. But I think the judge takes what the jury says into consideration, but then gets to do what she wants to do. Yes, it's an advisory decision. And she threw out a lot of the complaints. I think there were 26. It's gotten whittled down to two. So this is really very focused on whether a nonprofit can convert into a profitable enterprise over the objections of one of the founders who gave them the startup money, the seed money to begin with. Yesterday was definitely Open AI Day.

4:46That's for sure, with all the stuff swirling around it. Yeah. Three steps forward, two steps back, but that was not great. I mean, are there any doubts? Should there be doubts about how bullish everyone is on AI based on yesterday? Or is it just growing pains? Maybe it's just growing pains. I'm more on the growing pains at the moment, Camp, only because the anthropic numbers are so wild. Right. And the Gemini numbers are so wild. And so the amount of compute that you're still going to need seems pretty high. And the money will be there for it. I'm saying the money, if you look at the revenue growth of Anthropic, the money should be there.

5:27Who's going to get there? There's going to be shakeouts, though, right? There's going to be also. Of course. How many real competitors? And they do different things. But how many real competitors will survive? The question is whether you think they're all commodities. I mean, the other thing is, are they all so close to each other? Will there be a top five? Will there be a top ten? Will there be a top two? The commodities, commoditization is really interesting. I think there's two or three of these. Only two or three. Because they're all the same. I mean, that's the thing. Well, streaming services, right?

5:57How many do you have? Well, can you tell me about Spark, whatever the hell that is? Have you looked at that yet? This new meta one that is like horizontal across all? It appealed to me because it supposedly is personal health. It's like an agentic personal health monitor. It's going to do everything for me. You'll see. I know you think you're going to live forever. You're immortal. I don't think these are any of these things. Actually, it'll be great for you with all your horror will. I hope so, but I don't think I'm living forever. And I'm not sure I want to. The United Arab Emirates shocking the energy world, announcing that it will pull out of OPEC after decades with the oil cartel.

6:42CNBC's Dan Murphy joins us live from Abu Dhabi. And Dan, we got this news about 23 hours ago, maybe. A lot of scuttlebutts since then trying to figure out if this is retaliation because they're upset with not having been better defended by the other Gulf states during this war or if this is a move that's been long in the making. And this just happens to be good timing because you're less likely to crater the oil market. when we've seen so much supply that's been pulled off because of what's happening with the war in the Middle East. Becky, good morning to you. Well, we are following all the angles here, and this is historic for the region and for the Arab oil producers.

7:22The UAE is out of OPEC after 57 years. This is a major break, but it's not necessarily a big surprise. We know the UAE has had long-held reservations about its own output quotas, And the Iran war has also really changed the regional calculus, the security relationships and the energy architecture as well. I spoke with the UAE Energy Minister Sahel al-Mazroei as the news broke, and I asked the question that everyone is asking right now. Is this a break with Saudi Arabia? Here's how he responded. This has nothing to do with any of our brothers or friends within the group. We've been working together for years and years.

8:04We have the highest respect for the Saudis. It's a pure policy change, but the timing, as I said, was taken into consideration. The UAE energy minister there. And while he says this is about policy, not about politics, it's also fair to say that the UAE has watched Saudi Arabia dominate the group's agenda for many years now and has ultimately now concluded that independence, not solidarity, is the way forward. Analysts have also told me today that the UAE has basically outgrown the optics of OPEC as well and is better off alone as an indispensable partner for Washington rather than a constrained member of a quote-unquote cartel that also includes Iran and Russia.

8:49And take a look at how prices have reacted here. You can see on screen WTI holding above$100 a barrel, Brent just below$115. We saw prices initially moving lower on the headline, but have since shot up. The conventional thinking is that when the strait eventually reopens, the UAE is going to be a free agent ready to flood the market. But we've seen prices move higher because, of course, the bigger focus right now remains on the Strait of Hormuz, which brings us to Washington. The Wall Street Journal also reporting this morning that Trump has told aides to prepare for what could be an extended, potentially indefinite blockade.

9:25The White House believing this economic squeeze is working and Iran is running out of places to store its unsolved oil. But the president also made his mood pretty clear this morning on Truth Social, saying, quote, Iran can't get their act together. They don't know how to sign a non-nuclear deal and they better get smart soon. And of course, that post also came with this AI image of Trump holding a gun, explosions behind him and the words no more Mr. Nice Guy. We'll see exactly what that means over the coming hours and days. Back over to you, Becky. This is not good for Oprah. This could be it eventually.

10:00It almost seems like some of the bad actors get, you know, they don't have to pay attention to the quotas. Some of the, you know, the actors that feel like they've played by the rules and lowered their cost of production and they're ready to go and they can't. And I think they feel like they're treated unfairly. The other thing, there's this perception... And Saudi Arabia's been able to keep everybody from getting bigger over time. From getting bigger, right. But those are the two swing producers. But, Dan, everybody thinks the United States is losing influence in the Mideast. You just said, this is UAE getting even closer to the United States.

10:36And that's not the only country. The actual action of some of the countries sort of doesn't say that that they're distancing themselves more from the U.S. at this point. That's true. And we have heard from senior Emirati officials who have suggested that the regional backdrop, this conflict, is only going to push the UAE closer towards Washington and indeed closer towards Israel as well. That's also been reflected in some of the commentary that we're hearing from analysts today in the aftermath of this decision to have the UAE essentially pull out of OPEC. And while the minister suggested this isn't necessarily a break with the UAE's regional allies like Saudi Arabia, for example, it also just reflects the growing sophistication of this economy.

11:23This is a country that's looking to a post-oil future. It's a sophisticated international investor. It attracts top talent from around the world. And really, they see this OPEC influence as looking a little dated now, given the fact that they're also pivoting towards increased diversification. This country no longer needs to have really high oil prices in order to outperform. That is unlike Saudi Arabia, for example, where the break even is still near the triple digit handle. And that country requires higher prices in order to continue the economic diversification drive. And as much as we're producing here, it's just much less OPEC doesn't have the juice that it once had.

12:05I had to point out in the journal, January 2010, the U.S. was producing 5 million barrels a day, 13.2 million now a day in January. It's just that it's a totally different world than it was when they could choke everything off. Anyway, Dan, thank you. Or you thank Dan. We can both thank him. Dan, thank you. Thank you. Me time. Take a look at this. shares of Starbucks, they are higher following solid quarterly results. The company raising its full year outlook for earnings and same store sales. U.S. and global comps are now expected to increase at least 5 percent. That's up from a previous projection of 3 percent.

12:47And CEO Brian Nichols saying the company has not seen higher gas prices alter the behavior yet. This is interesting of Starbucks customers, but he does acknowledge that Starbucks' forecast now that hike was cautious relative to its outperformance in that second quarter. This is the turn in the turnaround. This is the turn in the turnaround. This is like the fourth turnaround. Probably took a little longer than they were hoping for, but it's starting to turn. Used to be Howard Schultz executed turnarounds. This guy knows customers. Wasn't he Taco Bell? Chipotle. Oh, Chipotle. Oh, see? But I thought he...

13:22But then the Chipotle... Didn't the Taco Bell go to Chipotle? One of them. I was thinking about it personally because I was hoping Chipotle would become more like Taco Bell. A lot of people, there's two kinds of people in the world, right? Taco Bell people. Yeah, he was Taco Bell from 2015 to 2018. Yeah. And then he went to Chipotle. You forgot that. Sorry. I was vaguely out there, but yeah. All comes back to Taco Bell. Cheese will be next. Coming up on Squawk Pod, it's Fed Day. Carlisle co-founder and chairman David Rubenstein joins us ahead of Chair Powell's last press conference. His likely successor, Kevin Warsh, is waiting in the wings, but Powell has a legacy way beyond the drama of his last years.

14:07After the press conference today, that will be the 65th press conference that Jay Powell has had. And so he's revolutionized the way Fed chairs communicate with the public. Historically, Fed chairs did not talk after FOMC meetings.

14:24Welcome to the pod they don't want you to hear. Today's episode, Hangry Joe's Hot Chicken. It sounds innocent, right? But where did this delicious hot chicken come from? Do we even have the technology for such mind-altering flavor? Is it aliens? Are they beaming cravings directly into our brains with 5G? Hey, I'm just asking questions. Be warned. Once you try Hangry Joe's, there's no turning back. Hangry Joe's Hot Chicken and Wings. If you know, you Joe. Hi, I'm Jennifer Garner. Being a business owner takes hard work and a whole lot of miles. So Once Upon a Farm needed a serious business card.

15:01We chose the Capital One VentureX Business Card. With unlimited double miles on every purchase, we earn rewards on all the things we need to grow our business. VentureX Business gives us big purchasing power so we can spend more and earn more. We redeemed miles to travel the country and partner with new stores. Capital One, what's in your wallet? Terms apply. See CapitalOne.com for details. 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.

15:43Download the latest episode and subscribe at schwab.com slash market update podcast or find Schwab Market Update wherever you get your podcasts.

15:54Welcome back to Squawk Pod. Here's Becky Quick. It is Fed Decision Day, believe it or not. The central bank widely expected to leave rates unchanged. It is, though, expected to be Chairman Jay Powell's last news conference, and that's why more people will be paying attention to this than normal. Joining us right now is David Rubenstein. He is the co-founder and co-chairman of the Carlyle Group. And David, let's first of all, welcome. It's good to see you. My pleasure. Let's talk a little bit about what we might expect today. Again, this might not be something that too many people were interested in because they're not going to do anything with rates.

16:31We expect them to leave it unchanged. But we don't know exactly what Chairman Powell is going to say at his last meeting or if he'll be stepping down from the Fed or decide to stay on a little longer. And that might be the biggest reason people will be paying attention. What do you expect to hear? What's your anticipation here? I don't have any inside information, but I'll give you my guess. After the press conference today, that will be the 65th press conference that J-PAL has had. And so he's revolutionized the way Fed chairs communicate with the public. Historically, Fed chairs did not talk after FOMC meetings.

17:05Alan Greenspan never had a press conference after an FOMC meeting, and nor did Paul Volcker. And so you had to guess a little bit about what the Fed was doing. J-PAL has brought transparency to the Fed, and I think that's a good thing. He's obviously had to struggle with the president of the United States criticizing him for many years. But he's overcome that, in my view. Today, I don't expect that the Fed is going to have any rate cuts. During Jay Powell's turn tenure as Fed chair, he's had 15 rate increases and 12 rate decreases. So more or less about even. But what he had to deal with was one of the hardest problems any Fed chair has ever had.

17:45When he became Fed chair, not long thereafter, we went into COVID. And as a result, the Trump administration and the Biden administration injected about$5 trillion into the economy with no corresponding tax increases. That obviously produced inflation, which went as high as 9 percent. J-PAL had to engineer a situation where we did not go into a recession, but also had to deal with high inflation. And fortunately, we did not really go into a real recession. There was a technical recession, but generally we didn't have a recession during his eight and third years as a Fed chair. So I think he deserves credit for engineering that and for being transparent and also for not, I would say, getting into a fight with President Trump.

18:29Obviously, many of us would probably say it's difficult to have a president of the United States criticize you and not respond. But I think he basically did not respond to that and bit his tongue for most of the time he was Fed chair. So on the whole, I think the country owes him a lot of gratitude for doing a good job in engineering the post-COVID inflationary situation in the United States. David, I guess just on the other side, I'd say I just keep coming back to and I know that there's there's there's different ways, different people to blame for the inflation. And the five trillion, I think, you know, a lot of it was not necessary.

19:11The last three and a half trillion, which came later in the Biden administration. But as a result of those 40 year highs in inflation, real wages dropped during that four year period when Biden was president. The other thing, the balance sheet expansion that we saw from that, a lot of people would say that was very good for people that owned assets. And you can see what happened to the owners of things when you expand the balance sheet like that and dump so much money. We've got the worst income inequality in the history of the world. A lot of people say that that's totally due to the profit profligacy.

19:50There's another word of the Fed, which enabled Congress to overspend as well. So, I mean, there's plenty of of negatives that I can find. No one wants to have less wages in a four year period than when when when they began, David. I agree. But what would you like to do if you had been the Fed chair and you saw COVID coming in and the government of the United States is spending five trillion dollars? What would you do to respond to that? Well, they were the critique would be they responded too late. In terms of raising. In terms of raising. We did not have a recession. They were involved in all kinds of climate change.

20:28They're involved in all kinds of things, but never once, you know, weighed in on all the money that was being spent on all the infrastructure. Although, Joe, I will say at the time, Joe, Green New Deal, Green New Deal and all that. You defended Powell a lot of the way. The Fed chairman is. I'm just saying that I'm just playing devil's advocate. The Fed chairman does not decide what Congress does or the administration. Remember, the Fed chairman is the chairman of the FOMC. He doesn't make all these decisions by himself. And so you have a lot of people on the FOMC making these decisions. These weren't narrowly decided.

21:00They were generally unanimous. Yeah. It's always easy to go back and criticize and critique. But the biggest issue he's going to have to, and by the way, I'm a fan of what Chairman Powell did over this time too. But the biggest critique is always going to be waiting so long to deal with that inflation, thinking that it was going to be transitory. That's a phrase you don't forget. I think Janet Yellen and Jay Powell both said in March of 2021 that the inflation that was high, then when peaked at 8 % to 9%, was transitory. Later, they admitted that that was probably not the best word. I think that was probably something they would all regret.

21:39It wasn't transitory. It turned out to be more enduring. However, they did do something about it. And the result is that our economy went pretty well. We did not have a real recession during that eight-year period of time. Jay Powell has been, I think, the fourth or fifth longest serving Fed chair and never had a recession during his period of time. So I think he deserves some credit for that. And I think dealing with the problems he had at the White House was was not easy to deal with either. So on the whole, I would give him pretty high marks. I'd say no perfect, no Fed chairman is perfect. But I think he did a pretty good job and he bit his tongue for much of the time.

22:13And I think all of us would have had a tough time biting our tongue if you're going to criticize daily by the president of the United States. Right. Grace under fire is certainly a phrase that I would associate with Jay Powell and how he's dealt with all of it. The question now becomes, OK, the the the attorney general has that case has been taken away for now. It's going to be referred to within the Senate. They're going to be investigating it there through their own committees on this. You know, Powell has said that he was not going to step down if it still looked like he was in danger of this criminal prosecution.

22:48Do you think that he should stay on the Fed because his term's not up until 2028? Or do you think that he should step down at this point since this concession has been made? Well, he'll have to make that decision, obviously. Yes, yesterday, James Comey was indicted after about a year of nobody talking about his being indicted. So you never know exactly what's going to happen out of the Justice Department for sure. But I think that probably J-PAL's lawyers, and I'm not one of them, of course, would probably say they would want something in writing that indicates he's not being subject to another potential indictment.

23:25Because, you know, just saying that in a leak that they're not going to investigate him any further unless new information comes up probably would not be in his lawyer's views enough. But again, I'm not his lawyer and he may have a different view than I do. I'm just saying that if it were my situation, I'd like to have something in writing that would make me feel I can go about my life and not have to worry about a federal indictment. And I would say I can understand that. But then you get to the position where you're holding on to this. This seat is leverage that that you feel like you've lost it.

23:55I mean, maybe it's the prudent thing to do, given what we've seen with Comey and others. But is it a trade like, OK, I agree to I'll step down and kind of go my own way with things. if you'll agree to stop harassing me? Is that basically what the trade is? Well, I think that stepping down basically would enable Jay to basically go back about his life and go back to a more normal life without having security around him all the time and having agents follow everything he does. And I'm sure he'd be happy to go back to that. But I think he'd like for the comfort of his family and his own well-being to know that he's not being subject to a federal indictment.

24:34I don't see a lot of interest in a federal indictment by members of Congress against Jay Powell. Jay Powell theoretically wasn't as honest as some people might say he should have been about the cost overruns, but the cost overruns were not something he had any control over. There are always cost overruns in Washington, D.C. The ballroom being built was supposed to cost$100 million. Now it's costing$400 million. The costs in Washington are always exceeding what people project. How do you know what the building is going to cost? In terms of the Federal Reserve, You had a lot of asbestos that had to be dealt with.