Gary Cohn & CNBC’s Disruptor 50: Gecko Robotics 6/12/25

0:00Bring in show music please. Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. Gary Cohn, a veteran of the first Trump White House, says the U.S. economy is sitting pretty. The Fed right now is in a pretty, I would say, opportune, lucky, good scenario. And the Fed, a target of his old boss, may be doing OK, even as tariff policy leads to volatile markets. They do admit we're in a restrictive environment right now, but the restrictive environment doesn't seem to be having a negative consequence on the economy. And climbing robots going where human intelligence won't? Gecko Robotics is a defense and infrastructure startup now worth billions.

0:46The founder, Jake Lusararian, joins us. The people that are out there gathering information to detect, is this going to fail or not, whether it's a power plant or a bridge? someone had fallen and died. And so that inspired me when I was in college to build a company that could gather information and data, make it safe, but also figure out how to build new materials. Plus, the developing story of a crashed Air India jet, a Boeing 787 Dreamliner, our Phil Lebeau reporting. A catastrophic loss of power and the ability to get any lift and you have a crash within basically a minute. It's Thursday, June 12th, 2025.

1:23five. Squawk Pod begins right now. Stand Becky by in three, two, one. Cue it, please. Good morning and 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. Andrew is off today. And oil prices, which are the big story of the week, higher across the board. In fact, yesterday, WTI was up by close to 5%. You can see it's at$67.08 right now. Brent is equally pulling back a little bit down by about 1.6%. There have been a lot of concerns about tensions in the Middle East and what's exactly happening there. President Trump saying that some U.S.

2:05personnel are being moved out of the Middle East. Those tensions with Iran in focus, but we've been moving some of our personnel out of Baghdad in Iraq. NBC News reports that Israel is now considering taking military action against Iran in the coming days, even as the Trump administration is in talks with Iran about a deal to try and curb the country's nuclear program. Just a short time ago, the board of the U.N. Nuclear Watchdog declaring for the first time in almost 20 years that Iran is not complying with its nuclear obligations. Immediately responding to that, Iran said that it would establish a new uranium enrichment facility in a secure location.

2:41President Trump making comments yesterday saying that it did not look like they were going to be willing to reach a deal, that things were different than he had thought just a few months ago. Just happening. An Air India recently plane has crashed in the western city of Ahmedabab. Air India's chairman saying on X that flight 171 on the way to London's Gatwick airport was involved in that tragic accident. Police say the plane crashed in a civilian area outside the airport, about 242 passengers on board. According to Flight Radar 24, the aircraft was a Boeing 787-8 Dreamliner delivered to Air India about 11 years ago.

3:23In a statement, Boeing says it's aware of the initial reports, working to gather more information, trying to determine whether there's any possible. I guess at this point there may be survivors. There were some reports that there were some ambulances leaving the scene. This happened initially on takeoff. It was only up by less than 700 feet in the air. 700 feet. And with all the problems from the 787 that we've seen, I don't think there's been a fatality or a hole failure or anything close to this. And the shares of Boeing, as you can see, down 17. Phil LeBeau joins us now on the Squawk Newsline.

4:02Good morning, Phil. What can you tell us? Good morning, Joe. I'm actually over here in Paris, ahead of the Paris Air Show, where we will be listening and hearing from Boeing CEO Kelly Warburg next week, as well as the CEO of GE Aerospace, Larry Culp. We believe that the Air India plane, we haven't confirmed this yet, but we believe it had two GE engines powering it. look, we're so early in this investigation that it's hard to know exactly what would have caused a catastrophic loss of power and the ability to get any lift. And you have a crash within basically a minute of takeoff. So what you're looking at right now is a situation where once the immediate task at hand, which is trying to see if there are any survivors, Once that is done, investigators will have a chance to say, OK, let's find the black box, the cockpit data recorder.

4:59There have been reports that the crew issued a mayday warning just seconds before the plane crashed. Whether or not that's true or not, we haven't confirmed. But that will tell us what we need to know in terms of what went horribly wrong within a minute or two of takeoff. And again, you mentioned the 787 Dreamliner. I do not believe there has been a Dreamliner crash. To my knowledge, this is the first Dreamliner crash. It's not a terribly old aircraft. 11 years is well within the life cycle. So it's not a case of a really old airplane here. We just have to wait and see until we get more information about what exactly contributed and caused this accident.

5:43Can you, Phil, I was going back and trying to look at all the myriad problems of the Dreamliner. How many production stops were there and delays? There were fastener issues. Over the years, it was along with some of the other problems that were so widely reported on with Boeing. The Dreamliner had its own issues, but never an issue like this. And we did see Boeing trading at a 52-week high recently. And not that this has anything to do with the stock, but Boeing has had a lot of problems. It's still 50 percent below its all time high. Now this. Right. Right. I think what you're getting at, Joe, is this question of could some of the quality issues that we've seen over the years when it comes to the Dreamliner, could they have been a contributing factor here?

6:33We don't know at this point, but you are correct in saying, look, I remember going back to when they were first developing the Dreamliner that there were issues. You are 100 percent correct. There were issues when it came to the batteries, a couple of batteries catching on fire. They had to rework that within the aircraft. There have been issues with fasteners. And the production has generally been about four per month over the last couple of years, three years, maybe. Some of that is largely brought on by issues with the pandemic and staffing and the supply chain. But there is no doubt that there will be scrutiny here in terms of the quality of the Dreamliner and specifically what we're, you know, have any of these past issues, could they have been a contributing factor to this accident?

7:28I will point out that Air India's CEO said earlier this year, back in February, I believe, that they would not be taking or exercising their option to buy more Boeing planes until Boeing was able to get through the backlog. They've been in the middle of an upgrade for their fleet where they've been adding a lot of planes. They're a buyer of both Boeing planes and Airbus planes. But I think they were concerned about some of the backlog issues and said that until Boeing could figure out when it could deliver some of those, they would not be taking that option on additional planes. And Boeing is, Becky, Boeing is in the process of planning to increase production for the 787 DreamWire going up to five per month.

8:08And whether or not that's impacted by that, that remains the B.C. All right. So we, you know, stay near the phone and whatever you find out. Interesting that you're you're at the Paris Air Show and Boeing will be obviously confronted with this front front and center when that when that happens. But hopefully we'll be able to keep tapping your your knowledge about the whole industry throughout the throughout the show today. So just keep your phone handy. Thanks. Will do. We're going to be sending letters out in about a week and a half, two weeks, to countries telling them what the deal is, like I did with EU.

8:53And are you happy with the EU right now? You were unhappy with them about 10 days ago. Well, I'll let you know in about a week. They do want to negotiate, I will say that. Thank you. Mr. President, we'll make you feel great again. President Trump says he'd be willing to extend an early July deadline for finishing trade talks with countries but doesn't think that'll be necessary. At the Kennedy Center last night the president told reporters that the US gonna send out letters in the coming weeks with terms of trade deals to dozens of countries which they could choose to accept or reject. Earlier in the day Secretary of the Treasury Scott Besant told lawmakers that the White House could extend the July deadline for countries that are negotiating in good faith.

9:34It is highly likely that those countries that are negotiating or trading blocks, as in the case of the EU, who are negotiating in good faith, we will roll the date forward to continue the good faith negotiations. If someone is not negotiating, then we will not. In the meantime, the Wall Street Journal reports that China putting a six month limit on licenses for the exports of those rare earth metals to U.S. auto manufacturers and automakers. Those have proven to be a major point of leverage for China in the trade negotiations. Health and Human Services Secretary Robert F. Kennedy Jr. naming eight new members to a key government panel of vaccine advisors after firing the previous panel of 17 members a few days ago.

10:25The group reviews vaccine data and makes recommendations that determine who is eligible for shots and whether insurers should actually cover those shots. On X, Kennedy said that the eight new advisors will attend a meeting of the panel later this month. Among the new picks are some well-known vaccine critics, including one doctor who suggested earlier this year without evidence that recent measles deaths among children were because of medical errors rather than the virus itself. There is at least one member who identifies as an anti-vaxxer. And this is not exactly what people had been hoping to see.

11:00If you if you talk to some of the senators who had signed off on this, I think we talked about the Louisiana senator earlier this week who had some concerns as a medical doctor. He approved RFK Jr.'s nomination, but he has said that he's spoken with him about this and it will continue to monitor the situation. If you had seven that were, you know, not anti-vaxxers and one who's an actual accredited, well-known published scientist that has concerns with it, I could see that. But I don't know. Having concerns with vaccines, I think, is a little different than being an anti-vaxxer and calling yourself an anti-vaxxer.

11:35It's kind of scary. I'm raising questions about whether the measles deaths were actually called by measles. I have no idea what the guy actually said or about that individual case with me. But we're at a point in time where we certainly do give out a lot of vaccines. And there's still scientifically you'd like to at least know more about the long term effects on the immune system of bombarding someone with vaccines early on. Sure. But I do think that they're the people who were concerned about what RFK Jr. would do in this role. They're seeing it. Are seeing it play out the way they had feared it might just in terms of.

12:12I don't know if they can if the jury's totally in on that. It's just going to be rabid anti-science conspiracy. No, but we used to talk to Scott Gottlieb, who was the head of the FDA during the first Trump administration, about his concerns with the vaccine requirements during COVID because he worried that it would lead to vaccine backlash. And we have seen the number of people who are willing to take vaccines drop. We worry that you get to the point where you no longer have herd immunity on some of these because you raise so many questions about the vaccines. Definitely the way that it was handled by Fauci and others, some of that backlash is more did because it didn't prevent infection, number one.

12:57And a lot of the stuff that they told us about lockdowns, about masks, none of it was based on science. The vaccines did not prevent infection. It didn't prevent it. And you think that it probably prevented the worst case scenarios of some of these things happening. I would agree with that, but whether young, healthy people, I mean, I look at, I look at Djokovic now and I think, wow. Yeah, there are questions about whether young boys in particular should take it. I bet you Djokovic is. Because of the risk of myocarditis. And by the way, I've spoken with my doctors who are generally in favor of vaccines who raise some of the same questions about for young men in particular because of.

13:33Or healthy people. I mean, if you're not eating, you probably weren't going to die. Again, it depends on the variant that came through. Some of the variants were much worse than others. None of the variants was the mortality rate for a 40-year-old healthy person worth, perhaps, if there were, you know, at that point. I don't know. The army shouldn't have been going door to door to give people vaccines. Cheese will be next. Still to come on Squawk Pod, de-dollarization? The world's reserve currency, the U.S. dollar, may be heading for a reckoning, as countries around the world contend with a dramatic trade policy from President Trump.

14:10Gary Cohn, a one-time Goldman Sachs banker who was the initial National Economic Council director in the president's first term, joins us on the squawk set. We're now to a point where the world is now reevaluating the dominance of the dollar. And B, they may not have the extra currency to ship out to the United States to buy dollars. We'll be right back.

14:40Welcome back to Squawk Pod from CNBC. Today with Joe Kernan and Becky Quick. Here's Joe. Joining us now for a look at the economy, trade, the budget bill, and much more. IBM Vice Chairman Gary Cohn, who was in the White House, the first Trump administration, as NEC director. long career at one of the preeminent firms, obviously, on Wall Street, Goldman Sachs, so you know what you're talking about in terms of things. And you're not part of the administration anymore, so I think you won't be, you won't feel like you have to say great things, but I mean, why does this keep happening every single time it happens?

15:20Why are things defying the worst case scenario? Why is the market now, and the SP's in a bull market again, so is the Nasdaq. Why are these things happening when so many negative things have been pointed out by so many people? Look, Joe, the actual economy continues to perform very well. That's what you're pointing out here. The perceived economy and the polling data keeps coming in horribly. So we've got this huge divergence between what people think may happen, what has actually happened. And I think people's anticipation is like things are going to get worse, but they haven't gotten worse. We continue to see inflation data sort of at or around the Fed's target of 2%.

16:01We continue to see the job market be strong, not overly strong and not overheated, but strong enough to continue employment growth. So when you look at the underlying economic data, we're relatively sound right now. Everyone keeps worrying about the tariffs and tariffs feeding through the system and the inflation that's going to cause in this disruption is going to cause. And look, I'm not saying we won't see that. We still may see that. We've only been in this tariff dislocation, tariff conversation for a few months now. It takes a long time for these things to feed through the economy. We had inventory.

16:41A lot of people brought in a lot of inventory before Liberation Day. Those goods are priced at old prices. As we work off the old inventory, we bring in new inventory, I think we're going to start seeing some price increases, but it's going to take its time working its way through the economy. So, look, we're early in this game, and we may never get to a place where we have this inflation. We've definitely gotten past a couple of data points where people said, OK, you're going to see it here, and it wasn't there. I'm really afraid to stick my neck out and say, we're not going to see it. I believe what all the dooms say.

17:17I believe him. It's coming. Which is why he'd like you to say it. This is why I like, no, no, no. But then at the same time, I look at the discounting mechanism of the stock market, and I'm not absolutely convinced that the most dire forecasts are ever actually going to come to pass. But I think the market's not convinced that the highest levels of tariffs are ever going to pass. A lot of times, most dire things don't happen. Usually. Markets tend to. The world can only end once. Yeah, markets tend to overreact. We tend to overreact in everything. Whether it's perceived data, whether it's reality, we tend to overreact.

17:50Markets tend to normalize relatively quickly. But look, there's some things we do know. So if you look at freight shipments coming into the port of L.A., L.A. Long Beach, which is the major import destination for things coming out of Asia, we know that freight shipping is down about 50 % year over year. So we are getting 50 % less goods than we were a year ago. It doesn't feel to me that the U.S. consumer is consuming 50 percent less today than they were a year ago. So as we work through the inventory buildup that I perceive was there, that new pricing has to feed into the system. I think a lot of people felt like that was going to feed into the system now.

18:33It was going to have fed into the system by June. Maybe it's July. Maybe it's August. I'm not smart enough to know, but it feels to me like it's a July. And on the other side, we should have seen some of the uncertainty and the paralysis of consumers and CEOs. We should have seen some of that manifested, too. I think you are seeing some of the I think you're seeing some of the I won't call paralysis of CEOs. I think you're seeing hesitancy. It's a much better word. I think you're seeing some conservativeness. You know, CEOs in the CapEx space are taking their time. Right now, I don't think the CEO community feels like they're getting rewarded for leaning into big CapEx opportunities.

19:13They don't feel like they're being rewarded for making big, bold investments. You know, then I say that then you see what's going on in the power space and the energy space and the small nuclear reactor space. We're seeing deals all the time because this whole AI boom and what's going on in AI. So in selective areas where people feel like there's an immediate need, we are seeing CapEx. in traditional business investment, where the business community says, look, I need to make this investment, but if I make it today or I make it six months from now or I make it a year from now, it's not going to matter as much.

19:46And if I make it too early and the economy turns down, it's really bad for my shareholders. If I don't make it and the economy stays steady, it's okay, I'll have time to make it towards the end of the year, the beginning of next year. And I do think you're seeing that feed through the economy. Is it time for you to sign up full bore with the bond vigilantes at this point. Are you concerned? I mean, we had a... I mean, I really think it was like 20 basis points. And people said, oh my God, Trump's folding because the bond market is paid. Well, he himself said the bond market was getting deteriorated.

20:19I know, but 460 is not... And then we also have seen a dollar has been declining. Is our preeminence around the globe, has our brand been damaged by any of this? Are we exceptional anymore? I think we're seeing a natural move in markets. Remember, markets never go one direction forever. And if you think they are going to go one direction forever, then you know you're in trouble. So this view that the world was going to own dollars and was going to invest in U.S. fixed income, and there was this great carry trade, we lived off that trade for a long time in America. You know, the dominance of the dollar was really helpful to us.

20:55We're now to a point where the world is now re-evaluating the dominance of the dollar and b they may they may not have the extra currency to ship out to the united states to buy dollars so if you're looking at europe for instance right now a country that has historically under invested in its own infrastructure under invested in its own national defense with what's going on right now they're being told you know what you're going to actually have to spend money to defend your country great food though well it is but you're talking about the dollar here, they don't have the extra capacity to buy dollars and invest in the United States.

21:30The extra currency flows that they have are now being recirculated into their own economy to provide the defense mechanism they need for themselves. These things are on the margin. You point out, even though there's vigilantes out there, we're talking about relatively small moves in the big picture. But these relatively small moves happen because of the marginal investor, the marginal dollar. The price of the Treasury auction is based on the marginal bid, not the core bid. The price of the dollar is based on the marginal buyer today, not the core buyer of the dollar. So when the marginal buyer changes slightly, we get price moves.

22:06And that's what we're seeing. We're seeing a new readjustment. The Treasury Secretary, Scott Besson, is trying to find new marginal buyers. That's why they're talking about the SLR, relaxations on what banks can do with their capital. Will that work? Will the banks actually buy treasuries? Look, I think to the extent that we get new relaxations on capital, banks will look at the opportunities to put their capital to work. You know, there's a move on with the Department of Labor right now to free up 401k retirement plans to go into the alternatives market. You know, if we get more capital coming into the alternatives market, which I think makes enormous amount of sense, that long term investors investing for the retirement should have access to better product and more product.

22:48These all have inputs because all of these markets do price on the marginal buyer, the marginal dollar. The marginal dollar in, the marginal dollar out really drive the price. You know, that's the most unique thing about our market system here in the United States. It's an open, transparent market. And in open, transparent markets, the marginal dollar, the marginal player really dictates price. At the beginning, you talked about how businesses and consumers are worried about inflation expectations. The Fed watches that very closely, too. Do you think that's because of what they're hearing when they look at the news?

23:23Do you think that's because of what they've lived through the last five years since COVID? I think it's a combination of both. You know, if you look at the current Fed chair, you know, he lived through, quote unquote, transitory inflation that proved not to be transitory, where the Fed did have to play catch up and they did have to raise rates quite dramatically to get things back under control coming out of COVID. So they've got that real time experience in hand and they still haven't totally recovered reputationally from that. They're hearing in the news and they're hearing from they're hearing from the corporate community that the cost of inputs is going up or the scarcity is starting to show.

24:03And we know supply demand drives price. We know that less materials come in the United States. So I think the Fed is worried about the potential that prices go up and things get more expensive. And therefore, we end up in an inflationary cycle. The Fed right now is in a pretty, I would say, opportune, lucky, good scenario. Like I said, inflation is right at their target, just slightly above their target. So they can say, look, we're living at our 2 % target. employment sort of right at their target. They do admit we're in a restrictive environment right now, but the restrictive environment doesn't seem to be having a negative consequence on the economy.

24:43So the market is giving the Fed the opportunity to wait. Yes, look, I understand that we all would probably like lower interest rates. I mean, given our choices, we all would like to pay less for money. Interest rates is a cost of money. But right now the Fed is saying, you know, it's our job to moderate the price of money and right now we see no reason to lower the price of money based on the data inputs we're looking at. Gary, we have been told that some of the angst in the bond market and we've been told repeatedly it has to do with the perception of the markets to the big beautiful bill. So somehow the three trillion that the CBO estimates that we add to the deficit is a lot worse than that three trillion we just added during the Biden administration.

25:26It's qualitatively different than that$3 trillion. So I don't believe that. But I also don't think that the deficits you were running in the Trump administration, or the Trump administration, we were at$700 billion. We're at$2 trillion post-pandemic for no reason to be at $2 trillion. And we're going to be there again with the big, beautiful bill, probably. So there is something wrong with... It's not all Trump's fault, obviously. And if the Green New Deal passed, I mean, we'd I don't know, we'd be at 8 % probably. Joe, I think we need to separate two things. I think there's two things we really have to separate.

26:01You know, when we're talking about the deficit here, people argue about the$2.4 trillion over 10 years to extend the existing tax cut plan that was put in place in 2017. Yes, they do. Okay. That$2.4 trillion is a static scoring number. It doesn't relate to the economic impact of rolling or not rolling. What we don't talk about is we don't talk about the economic impact of not rolling over the Trump tax cuts. If we said these Trump tax cuts are going to expire December 31st of this year, what would be the scoring impact of that? It would be a lot more dramatic than the$2.4 trillion. People have estimated it being the$4 to$5 trillion of negative impact of raising taxes on hardworking American citizens.