Kevin Hassett on Tariffs & Ken Burns on The American Revolution 11/17/25

0:00Bring in show music please. Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. Affordability in America and the president's response to prices. He's cut tariffs on certain food items. A top economic advisor to the White House, Kevin Hassett. It's just kind of astonishing to me that the cost problem is somehow being blamed on us. Is it enough to tame inflation fears? What the president just did with food is decide to make like a blanket movement so that we weren't going through each deal and picking this and that. And filmmaker Ken Burns. We wanted to do a deep dive into what I think is the most important event since the birth of Christ.

0:43On his epic look at the American Revolution, nearly 250 years after the history-changing events that he says are as timely as ever. I'd like to put the us back in the U.S. Plus, is the bull market of the last few years taking on too much debt? This is where Joe Kernan, you may be right, stick with me for a second. I'm with you. After years of soaring equity prices, a noted bond investor says, hold on to your cash. Is this a turning point? RBC Capital Markets' Lori Calvacina joins us. I feel like we just have a plain old-fashioned valuation problem. And puts things into perspective. You've got the AI stocks carrying the weight of the market, but there is still a tremendous amount of jitters around those AI stocks.

1:25So we do have some bad days thrown in with the good days. It's Monday, November 17th, 2025. Squawk Pod begins right now. Stand Andrew by in three, two, one, cue Andrew. Good morning and welcome to Squawk Box right here on CNBC. We're live at the Nasdaq Market site in Times Square. I'm Andrew Ross Sorkin along with Joe Kernan. Becky is off today, but we got a lot going on on this Monday morning. Let's talk about crypto because Bitcoin fell about 8 % between last Monday and then Friday, dipped under$95 ,000 over the weekend, had some people on edge. I don't know if people will feel better this morning, but we're sitting just at about$95 ,570.

2:07What does that say to you, Joseph Kernan, on a Monday morning? We got the 92 at one point. It was 125, so it is volatile. I don't know if anyone really thought it would hold 100. I think Novogratz said it would, but he didn't really have a lot of conviction that it was going to hold 100. We're going to talk about it today, but it certainly is volatile. It was, you know, I don't know what it's correlated with, because the NASDAQ actually was up on Friday. I don't know whether that changes. The Dow was down over 300 points. So that kind of flipped. This is supposed to be like a gold thing? Is it supposed to be your digital gold?

2:45It sort of hasn't been correlated to anything except maybe AI stocks. You know, although. So Friday, the NASDAQ did better. But the NASDAQ's been, you know, the AI stocks have been obviously feeling the nosebleed. They're in nosebleed territory. A lot of people think they're expensive. We'll get a look on Wednesday. I mean, we've been talking about this for two weeks. It feels like the whole game is riding on this. For two weeks, we've been talking about NVIDIA. It's important. Big week ahead for the markets and the economy on the Squawk Planner. The bellwether, NVIDIA, is going to report third quarter results after the bell on Wednesday.

3:29It's also a key week, though, for retail. We're going to get results from Home Depot, Lowe's, Target, Walmart, and more. Meanwhile, the Bureau of Labor Statistics is going to release the shutdown-delayed September jobs report on a Thursday. So it's going to be a jobs Thursday. And Saudi Arabia's Crown Prince Mohammed bin Salman will visit the White House tomorrow for talks with President Trump. Saudi Arabia has pledged hundreds of billions of dollars in U.S. investments in May when the president visited the Middle East. Meantime, Warren Buffett's Berkshire Hathaway taking a stake in Google parent Alphabet.

4:04This one was surprising. We learned about it over the weekend. The Colomerate's end of Q3 equity snapshot revealing a nearly 18 million share position in the company worth roughly$5 billion. Unclear if Buffett, of course, made this call himself to buy Alphabet. Could be some of his other teammates now. The equity snapshot reflecting Berkshire's position from the end of September. So again, things may have changed even since then. But at Berkshire's 2019 annual meeting, Buffett and Charlie Munger said they had, quote, screwed up by not buying Alphabet earlier, even though they saw how well Google Advertising was working for Berkshire's own operations.

4:42Of course, they did double down on Apple at the time, and that was a worthy bet. Late on Apple for them in a big way. They were late on Apple, but, you know, in this case, being late on Apple for him was not so bad. Did he lighten up on him? I don't think it's him, by the way. I'm not sure he gets involved in much anymore. I think he's sort of passed the baton at this point. He's kind of implied that. Yep. What do you do with Disney and Apple? Lightening up on both of them. Not him. What did Berkshire do? I think that they did. Yeah. On both of those cases. But let me just give you a little. You got your 13F right there.

5:27Just trying to find it. You know what? Hold on. We'll come back to that in one sec. Trump administration taking steps to reduce food costs in the U.S. Yeah, pared back on Apple, but I don't see the Disney that you're talking about. I don't know. Maybe not. To be sure. I don't remember him being in Disney. He owns actually a piece of News Corp, interestingly, by the way. Amex, Bank of America, Coca-Cola. When was the last time he was in Disney? If he's not, then he obviously, it's not wrong that he pared back, never was in it. I guess if you say so, I thought I saw a headline that said. All right.

6:10President Trump cutting tariffs on more than 200 food products, including coffee, beef, bananas and tomatoes. A White House fact sheet says given progress on trade deals, the president decided certain foods could be exempt from tariffs because they're not grown or processed in the U.S. Here's how a National Economic Council director, Kevin Hassett. The prices for those goods weren't necessarily going up just because of tariffs. And so the prices will go down. Well, the prices will go down, of course. But because the tariffs have been taken off. Right. Well, because the supply of the goods into the U.S.

6:43is going to increase. Wall Street Journal reports President Trump's aides are working on a plan on plans to deal with voters frustrations over the cost of living in America, including potentially striking more deals with pharmaceutical companies, green lighting, more offshore drilling. We're going to speak with Kevin Hassett. Bond investor Jeffrey Gundlach recommending a 20 percent cash position to hedge against a severe market downturn, which he sees brewing in an overhyped promise of AI driven transformation. Gundlach making those comments on Bloomberg's Odd Lots podcast. And he criticized what he called garbage lending and flagged concerns in close to$2 trillion of what we've all been talking about, the private credit market.

7:27Gunlock saying he thinks the U.S. equity market currently among the least healthy he's seen in his career. And so we're going to talk a little bit more about that this morning as you look at those equity markets. I never pay attention to him on equities. And it's been that it has served me well. Served you well? Yeah. With bonds, he seems to know, but there's been multiple times, and it's always negative, usually, on the stock market. One of these days, he could be right, I guess. We're getting closer to right than, right, like four years ago if he said that. He has said over the past, and every time he said it, it's like when Bill Gross used to talk about stocks.

8:03It's like, Bill, they never write about stocks. They're great bond investors, but that doesn't always translate. He's warned so many times about valuations. We have somebody here at the table. We do. And she is an equity expert who might have a view on all this. She's not in a great mood. Lori Calvacino, RBC Capital. She's in a great mood. This came out of hair and makeup. What about the stock market? You're worried about margin debt, I think, a little bit. Are you not? I feel like we just have a plain old-fashioned valuation problem. Like, you know, I know there have been some extremely cautious voices out there.

8:36There are some extremely exuberant voices out there. I'm somewhere in the middle. I think we can still have a good year next year. I still see more upside into next year. But, you know, we have valuations bumping up against the ceiling, and that's making people very, very nervous. And that doesn't mean we have to go back to a GFC, you know, type downturn. That doesn't mean this has to be the tech bubble. Sometimes stocks do get a little bit over our skis, and, you know, we have to consolidate a bit, have a little bit of indigestion. But you don't have to throw the baby out with the bathwater. Well, what did you calculate this past earnings season, what earnings gains were much better than people thought?

9:13Where did it come in at you? 12 percent, 13, 14? I forget the exact percentage, but if you look at earnings beats and sales beats versus consensus. Not just beats, but above the last year. Yeah, and they ticked up. We had even better beat rates than what we had had the prior reporting season. What you did see was that operating margin expectations came down just a bit. And that was really offsetting strength that we saw in tech. Tech margin expectations went up, but things like industrials, materials, energy went down. Right. It was really the AI versus kind of cyclical economy type dichotomy that you saw in that data.

9:48Investor sentiment got less bullish, which is not, that is not bearish, is it? So it's bullish. I think we're at a range now where you should be up about 10 percent or so over the next 12 months. If you look at the four week average on the AAII net bulls. What's really interesting about that data set though is it's just been chopping around over the last few months. And it basically went back up recently to the highs that it had seen earlier this summer, earlier this fall, and then pulled back in a little bit. And if you look at things like NFIB, you look at the consumer sentiment surveys, there seems to have been a little bit of a stall in sentiment across the board.

10:22Some of those indicators are stronger than others, but we've been in a very sentiment driven market. So you're sort of seeing this stall in the sentiment indicators and you're seeing the market kind of chop around and trade sideways in here, which, you know, it makes a lot of sense after a big run. Yeah. The breath had been improving most recently in your comments, just saying it's, you mentioned bad breath. Yeah. Yeah. We looked at a stat where we're just looking at the percent of stocks that are above their 50-day moving average or their 100-day moving average. We started to see that come in a little bit.

10:55And even in the post-COVID era, I usually get a little bit of a pullback in that broader S &P 500 when that happens. It hasn't happened this time. And what I think we're seeing, it's really, really odd because you've got the AI stocks carrying the weight of the market, but there is still a tremendous amount of jitters around those AI stocks. So we do have some bad days thrown in with the good days. But if you look at momentum, you know, we've had just a very strong run in that factor. You're starting to see high quality act a little bit better, low vol act a little bit better. Health care is having a big move as people are getting a little bit jittery on this market.

11:29So you're starting to see some of these kind of more defensive factors and sectors act a little bit better in here. We've had people talk about the S &P 500 trading at whatever, 23, even though it's not as bad as it was because earnings did so well. But the S &P 493 trading at much lower multiples. So you talk about hitting a valuation ceiling. Yeah. That that's still concentrated in certain names. You know, what's really fascinating. So we we look a little bit beyond the mag seven. So we have this one data series where we look at the top 10 market cap names in the S &P and we rebalance it every week and we go back a few decades.

12:07And then we look at the rest of the S &P, the 490. I think the 490 is trading a little above 18 times right now. And that's expensive. It's not expensive. But if you look at it in the context of history in 2021, we got a lot higher than that. You know, when we kind of had all this stimulus money, you know, people goosing, you know, on the retail side, big, big surge up post-COVID. Putting that peak aside, this is about as good as that particular indicator gets. And then if you look at the top 10 names in the S &P 500, we're trading around 28 times. Now, that's nowhere near the tech bubble highs, but it's pretty close to the, you know, kind of post-tech bubble highs.

12:44And I think recently I've seen that go as high as 30, but it really hasn't been able to break above that level since the fall. So both of these areas, right, even the rest of the market, which doesn't look that bad on the on the multiple itself, in terms of its own history, this is about as good as both of those tend to get. I mean, I remember that we had, I think it was Jared Bernstein came on. He had written a piece about valuations, and we kind of challenged him because the valuation he used for NVIDIA was based on a trailing 12-month price-to-earnings multiple. When you look at a future, it was half of what it was because it's growing so quickly.

13:27This just highlights how important that Wednesday number is. But NVIDIA future on forward PE, it's not like 1999. It's nothing like 1999. That's what our data shows. But some of the stuff that they're forecasting, obviously, is circular, and they've got all these weird relationships. Where do you live in the private? What do you make of what's happening in private credit? Back to the gun lack point, which is I think there's a real anxiety among some, especially focus on that space that we actually just don't know how interconnected some of these loans are, how collateralized they are, all of the things that you, in a normal world, you would want to know.

14:11And probably, by the way, back even in 2008, you'd have a better idea of knowing given that so much of the loan volume came out of banks back then. Right. No. And look, I used to be a small cap strategist, right? And one of the things we talk a lot about in the small cap world is a lot of stuff that might normally be bought by small cap value investors and still sitting in the public markets has now been kind of sucked into the private equity world. So I would say, you know, two things. One, I do think the lack of transparency makes people nervous. You know, back when we had sort of at the beginning of reporting season, we had a couple of these issues come up and Diamond made his cockroach comment.

14:46This was a big kind of point of conversation. And I think going back to the valuation comment and just how far we've run, people get more worried about this kind of stuff when you have these sorts of valuation levels. They're a little bit easier to not worry about quite as much when you haven't had a big run like this. Someone compared it to me recently to kind of the commercial real estate issue, which we were all up in arms about a couple years ago. There was a lot of focus on that issue. There's a lot of focus on this issue now, but I do think you kind of run into the transparency. Okay, but does that worry you?

15:18So that is interesting, by the way. That's a great comparison insofar as we talked about it incessantly. We wrung our hands. This is where Joe Kernan, you may be right, if you want to stick with me for a second. I'm with you. Because everybody went crazy. And guess what? Turned out to be kind of okay. Yeah, and I remember I was doing a presentation at one point where this, you know, to a group of financials folks, to be honest. Right. And, you know, this issue of commercial real estate came up a few years ago, and they were asking me what I thought. And I said, well, I care more about what you think.

15:47And I said, you know, I'm listening to everything all of you are saying and the fact that there are so many eyes on this. I've lived through the GFC. I've lived through the tech bubble. The fact that you're all so vigilant gives me a little bit of comfort. And I think that's something we have to keep in mind. Right. When you go back to these past crises, we never exactly repeat the same mistakes. Right. There's so much nervousness from people who live through those things. Frankly, you know, when we see, you know, sort of these discussions of risk emerging. And I think that's really what this is all about, is there just kind of too much risk in the system.

16:19This tends to happen. And I think older folks are a little bit more nervous about the younger folks who haven't lived through the GFC or lived through the tech bubble. I think there are enough of us with gray hair around to take some lessons from those. I don't see any gray hair. It's all covered up very expensively. You're doing great. You're doing great. Lori, thank you. You know, AI, as imperfect as it is, there is receipts. and you can ask just about any question. What's the question? How many times has Gunn-Lak predicted either a crash or that stocks were way too high? It will give you serially all the dates and times and receipts for when it's happened.

17:00So you can't get away with outliving your bad calls in the past. Cheese will be next. Coming up, National Economic Council Director Kevin Hassett will break down the White House plans for tackling food inflation, what's next for the Federal Reserve, and what might be driving a quiet time in the markets. I think that there could be a little bit of almost a quiet time in the labor market because firms are finding that AI is making their workers so productive that they don't necessarily have to hire the new kids out of college and so on. Squawk Pod will be right back.

17:43Welcome back to Squawk Pod from CNBC. Today with Joe Kernan and Andrew Ross Sorkin. Efforting something. Efforting? I don't like that word. I don't love that term either. Efforting. But I am efforting something. So I will, Lori mentioned, and we're talking about private credit. Yep. Margin debt is hitting a record. And just to explain to the audience, margin debt is when folks are basically buying stock or other kinds of equities or other instruments using margin, meaning using loans. Yeah. This is what I've been talking about for the last month and a half incessantly. Private credit or margin debt?

18:22Both. Well, margin debt, it goes up, and it can keep going up, and you never know when it's peaking, but it's out of record. And in the past, there have been other times where margin debt gets very high and you do get an S &P consolidation. So I'm efforting to get a 30 or 40 year FINRA margin debt chart, along with correlated to the S &P. And there could be there can be significant pullbacks from. But this was the problem in 1929. It always rhymes differently. And like anything, valuation usually doesn't all of a sudden cause a big— just because things are expensive, you can't say it's going to crash next week.

19:14That's true. Or that it's going to pull back. But there have been times—we just should say that in the past, there have been times where— but as the margin debt is going up on the chart, it's at a new high here. It's at a new high here. It's at a new high here. And then finally, in hindsight, you can see that it was predicting or not predicting. But here's the thing. JP Morgan did a put out a chart, I want to say about a month ago. And if you looked at that chart and you looked at timing the market, anytime you got above sort of a 23 times PE multiple, if you had bought into the market at that point on the index, 10 years later.

19:53You're up. not as much as you would have. You would have only been up between up 2 % or down 2%. Yeah, but then there's other things that show if you're out of the market two or three days, important days, bottoms, that you can it's better just to go ahead if you have time. If you have time. Look, if you have 30 years, you're in good shape. But, you know, so margin debt hit a high in July of 2007 and then it went down. Okay, May of 2018, it hit a high, and then, you know, things happen. March of 2020, then came COVID, and we know what happened there. So there have been times in the past, doesn't mean it's going to happen anytime, but margin debt is very high right now.

20:38So we're not Pollyannish, not whistling past the graveyard. Maybe we can get a mephredy.

20:49President Trump cutting tariffs on more than 200 food products. The administration saying that certain foods could be exempt since they're not grown or processed here in the U.S. Join us now to talk about the cost of living, tariffs and the possibility of sending Americans$2 ,000 direct payments. White House National Economic Council director Kevin Hassett. Good morning. Kevin, how are you? You guys had a great marriage session there, marriage counseling session. I think there's hope for you, too. There's hope. Maybe we cover the gamut. Professional optimists, professional skeptics. Maybe the truth is somewhere in the middle, Kevin.

21:31And I have been fairly optimistic. When people come on about the U.S. economy, I can find a lot of positive things. Why do you think affordability is such a buzzword right now? I mean, we live through 9 percent inflation. And I think Biden years, it averaged over 5 percent for those four years. We're at the highest levels that we've seen recently at 3 percent. Why all of a sudden is it, I don't know, is it Trump's fault? Right. Well, I mean, for sure, people still are trying to dig out from the big hole that was dug by the previous administration's policies. So if you figure the typical mortgage payment, monthly mortgage payment about doubled, if you look at a typical bag of groceries, the monthly bag of groceries cost about four hundred dollars when President Trump was leaving office last time and about five hundred and twelve dollars right about when President Trump took office.

22:31And since then, it's gone up almost not at all. I think it's like five hundred to fifteen dollars, but it hasn't gone back to four hundred dollars. And so what the Democrats are doing is they're saying that this runaway spending that we gave you guys that created runaway inflation is 100 percent your fault because you haven't fixed it already. And of course, that's very economically illiterate. And I don't think really many people in markets are buying it. Well, I'll tell you, Kevin, one of the reasons I think that people are and I'm going to highlight both sides. One of the reasons people feel like they're not keeping up is because real.

23:07Average weekly wages fell during during the Biden years because of the inflation. That's right. Right. So it fell. However, the president is constantly saying prices have come down. Now, inflation is still three percent. It's still too high. Now, oil prices, energy prices, there are certain things where they have come down. But when you keep saying prices are falling, that's not true because inflation is still it's the 3 percent is on top of all the inflation we had during the Biden years. So we got all that inflation plus an additional 3 percent. And we should I think you should admit that a more a more precise way to say it, though, Joe, is that purchasing power has gone up.

23:49And so real wages, that's W divided by P for our technical people in the audience, have gone up by about$1 ,200 this year. So the way to think about it is that we've dug a$3 ,000 hole because of Biden policies, and we've gained$1 ,200 on the way out already, which should give you a great deal of hope for the future that the wage increases that we're seeing will continue. And even if inflation stays positive, make it so that people feel way better when they go to the grocery store and to buy a car. You know, we've reduced the cost of buying a car with the deductibility of interest. I mean, there's a million things that we're doing to fix this problem.

24:23But it's just kind of astonishing to me that the cost problem is somehow being blamed on us. Now, think about it, especially with the Obamacare thing. So Obamacare is 100 percent Democratic policy. It's always been 100 percent Democratic policy. What they did is they expanded the subsidies during COVID. And then all those subsidies basically went right into the pockets of insurance companies. and Obamacare insurance policies have doubled in price relative to normal policies. And so the fastest inflation in the economy is these big government subsidies thrown at Obamacare insurance. Think about it.

25:00It's kind of like if you give lots of student loans, then the tuition goes up. It's that effect. And so now they're blaming President Trump for Obamacare as well. They should have fixed Obamacare in the first place. And President Trump had a plan in the big, beautiful bill to give people some subsidies. but the Democrats didn't like it because the subsidies weren't going to their campaign contributors, the insurance companies. The whole issue of tariffs, if we're reversing some tariffs to try to help affordability, isn't that acknowledging that the tariffs were responsible for some of the higher prices and for some of the inflation that is still a problem?