The Fed Holds Interest Rates Steady & Dr. Fauci Pleads the Fifth 7/30/26

26:56This is a treaty of all the civilized countries and try to convince them. You can't make people do things, but civilized countries should be concerned about this as well. And we should try to work throughout the world to adopt standards to say, hey, because the big one they were experimenting on 2010 is still something people talk about. It's the avian flu, the bird flu. It can go from birds to humans, not very well, but it doesn't go human to human. But if someone is setting up a lab and taking the avian flu and infecting mice with human cells and running it through over and over again, what you create is a virus that you have forced the evolution of to adapt to humans.

27:33That's a terrible idea. We should not be doing it. It unfortunately opened up the discussion, got off track, got this in vermic, all these other things came out. And then it also, though, Senator, did give Democrats a chance to divert to some of the policies, which I have a problem with some of this stuff, with the way that HHS is being run right now. It almost seems anti-science in certain respects in terms of funding and other things. And it allowed Democrats to filibuster with some things that maybe a reasonable person could say that they're on to something. And that all had to come out yesterday.

28:13Do you think they're on to something? with measles and polysporium and less funding for all this stuff? I thought Senator Langford made a good question connecting the lockdown to measles. And he said, when we had the lockdowns, we quit doing the measles vaccine because people were so afraid of COVID and nobody was going to the doctor. The cancer clinics were closed, but so were the vaccine clinics. And some people have pointed to the outbreak being from people who didn't get vaccinated during the COVID period. So that could be catching up to us. The one thing I would say, though about public health, it's really important.

28:47Public health should be about persuasion. If I'm the lead public health doctor, I should tell you the pluses and minuses of behavior. So for example, with masks, what I would have told people during the pandemic, I would have said if your loved one has and you haven't got it before and they have COVID, wear an N95 when you go in, maybe wear gloves, minimize your time, but you don't need to wear a mask outside. You don't need to wear a mask in the rest of the house. You don't wear it all day. You should change out the masks. But if you've already had COVID, I would tell you, you don't have to wear a mask at all.

29:17And then you can go and take care of your loved one. Would you need 60 votes in the Senate to move forward with the contempt? So it's over, basically. What about Florida? Can anything good happen with the individual states? What I predict will happen is if we win the vote in the committee, we will send our recommendation directly to the Department of Justice. There is no law saying I have to go to the full floor. You're right. It'll be difficult to pass because some reason the Democrats have made this partisan. I think we can pass it out of committee and we'll send it direct. I've already sent a direct referral just from my own office.

29:52So this is just another referral from another group or body because it's not a law. There's not a procedure it has to follow. Traditionally, people have gone to the Senate because in the old days you could go to the Senate. If you had a vote, you could send the sergeant at arms to arrest the person. So we're not going to get that vote. And so we're going to, I think we're going to try to pass it. I just wish you were going to answer. We're going to try to pass it out of committee. He had immunity. I don't, that's what is so strange to plead the fifth. There is a legal question whether or not you can plead the fifth when you already have immunity, when you already have a blanket pardon.

30:23Many people say you can't. Why did he feel the need? Why did he feel the need? What was he going to do that was criminal? But Senator Rand, you can declare, you can take the Fifth Amendment in front of Congress too. I I mean, you're allowed to do that. Nobody's saying you can't, but there's a legal question. And Senator Hawley, who is an attorney and has practiced at a high level, quoted a Supreme Court case saying that once you've been granted a pardon, the Fifth Amendment doesn't apply. That's sort of beyond my pay grade deciding that. I can make the allegation and then I'll have to go to a court.

30:55The court will have to decide. The Fifth Amendment is given great privilege in our country, and it is rarely abrogated. but a complete pardon you would think would be a grant of immunity. If you make a plea deal with the police and you say, I'll testify who the murderer was in exchange for immunity, then you can't get there and plead the fifth. You make a deal and you have immunity. So I don't know. All he had to do was tell the truth. The only way he would be, like, we think he destroyed records. His assistant said that I've destroyed a ton of records this weekend for you. We found records where he said to Francis Collins, delete this, and then delete it from your deleted file.

31:32He was very organized in getting rid of records. But all he would have said yesterday was, I deleted records maybe I shouldn't have. That would be the truth. If he said he didn't delete records, then he's in trouble because we have evidence that he did, and that would be a lie and a new problem for him. But if he told the truth, even if he admitted that he funded gain-of-function research, he could have admitted to anything. As long as he told the truth, he wouldn't have had any liability. Right. I didn't understand gaslighting. Someone finally explained it to me. But watching the performance of certain senators yesterday in terms of you've got some weird obsession and this and that.

32:08And there are some people that I thought really didn't comport themselves very well yesterday. And I don't think it's going to be forgotten for a long time. Because you're just, I mean, we needed to get 10 million people worldwide. Look what it did to the economy. Look at all the things that happened. I mean, to not want to have to not want to know what actually happened because he's right, you know, because because they hate Trump. Is that what it is? Is it because he represents is an enemy of my enemy? Is this all about does it all come back to President Trump? I think it's more of the love of government experts.

32:42They believe that the American people can't make these decisions that when experts tell them what to do, we need to our side and our sympathy needs to be with the experts. But the reason this isn't political and this isn't about an individual obsession is the scientific community is split. They were split before I became on the scene. This started in 2010 in a big way when they mutated the avian flu to pass through the air between mammals. That was a terrible mistake. Anthony Fauci funded it and defended it. That's when this debate began. 200 scientists led by a scientist at MIT wrote a letter, the Cambridge Working Group, saying it shouldn't be published.

33:19So this debate started way before me, but it came to a culmination because this is the first time so many people died. This is not the first worldwide pandemic from a lab. In 1977, the Russian flu got out. The reason we know it got out of a lab is they looked at the genetic sequence, and it was identical to a virus from 1954. And it turns out anybody born after 1954 could get it again in 1977. Anybody before 1954 couldn't get it because they had already had it. But no virus doesn't change in 30 years. The fact that it was identical meant that it had to have come from the lab. And that happened worldwide.

33:58It wasn't as deadly as COVID, but it went worldwide. And it was an accident from a lab. We have thousands of accidents each year. So we have to be very, we should have oversight over this. And one of the points I made, which may have been lost yesterday, is I think that our intelligence agencies in our country are still doing this. They won't give me proper oversight of this, but we believe that there are monkeypox experiments going on that are still gain-of-function. And monkeypox is containable at this point, but I don't want them changing monkeypox to be more dangerous or spread in a different way.

34:31Well, it's just weird that the party, you know, if you do want to believe in science, I don't know why you wouldn't want to hear what science really does tell us about what potentially happened and how to fix it. Make sure it doesn't happen again. Senator Paul, we appreciate your time, Dave. Thanks. Thank you. Coming up. There is a lot of hot air coming out of the Iranian side. CNBC's Dan Murphy in the Middle East on the latest heavy wave of U.S. strikes against Iran. And energy analyst Amos Hochstein on where it all goes from here. Iran is a tough nut to crack and to do it with an air campaign alone is also was a little bit of a wishful thinking.

35:09So then you can just air bomb and then they'll just collapse. More Squawk Pod when we come back.

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36:52You're listening to Squawk Pod. Here's Becky Quick. The United States conducting a new round of airstrikes in Iran. CNBC's Dan Murphy joins us right now with more from Abu Dhabi. And Dan, what can you tell us? Becky, good morning to you. Well, a fresh wave of U.S. airstrikes in Iran. This was a two-hour operation hitting dozens of IRGC targets. CENTCOM calling it a powerful response to Tuesday's attempted Iranian attacks. It says the aim was to degrade the threat that Iran and its proxies posed to American forces, to commercial shipping and to neighboring Gulf states as well. These strikes hit military command centers and missile and drone facilities.

37:34And for some added context here, one U.S. official telling the Wall Street Journal today that these strikes were significantly broader in scope than the recent tit-for-tat exchanges as well. Also, this is the first U.S. strikes of their kind inside Iran since President Trump paused operations. That pause, of course, interrupted after Iran fired in a surprise attack multiple ballistic missiles at U.S. forces in Jordan, ultimately forcing this American response that we saw overnight. Well, interestingly, now Tehran has responded with a new threat as well. Iran's Tasnim news agency citing a statement from the IRGC saying it will, quote, punish the aggressor today.

38:18It also says countries aiding the United States would also, in its words, receive a harsh response. That statement, of course, being read closely in the Gulf Arab capitals today, including in Riyadh, which we know flew strike missions alongside American aircraft over Iraq this week as well. The latest escalation already having oil markets on edge as well and raising concerns over further disruptions to global energy supplies. supplies. What's interesting here is that we are seeing oil pulling back right now. Of course, crude popped on the news, but the president did telegraph this U.S. reaction, which has limited some of the upside that we are seeing at the moment.

39:00Yeah, Dan, that was my question. Yesterday, oil was up sharply after President Trump said that he would hit them and hit them very hard, using even harsher language than that. We're going to be hitting them very hard because it's our turn to hit them. They know it's coming. They're asking us not to do it. If that was, I realize you said this was broader than the general tit for tat. But if this was a response to what they had done in sending missiles into towards our troops in Jordan, are you reading it as a OK, that's a one and then a return and then it's done and things quiet down? Or do you believe the rhetoric that you just mentioned coming from the Iranian side of things?

39:42I think that's probably why the oil markets are down. They're waiting to try and interpret that. That's exactly right. And I think that's the smartest question to ask right now as well. The next 24 hours are going to be really critical to watch. If Iran does follow through on the threats that I just outlined, effectively threatening to punish the entire region for this latest wave of U.S. strikes, then that could represent what could be a return to more widespread, perhaps more material strikes between the United States and Iran moving forward. If this is, though, perhaps just a one and done round of strikes between the US and Iran, then that would obviously be good news for the region and perhaps better news for the oil markets as well, which have really been whipsawed on these headlines over the last couple of trading sessions.

40:31I think what's interesting as well, Becky, is the fact that if there is any diplomacy happening right now, it's not happening very fast. We saw Tehran rejecting Oman's proposal for this joint management of Hormuz this week in the Red Sea as well. We're seeing the Iran-backed Houthis continue to enforce their own blockade. So at the same time, what we see here is markets really struggling to price. What could potentially happen next year? And of course, the escalation risk certainly staying intact. All eyes are on what happens in the next couple of hours. You know, bluster, bluster. We understand bluster, I just wonder how long the Baghdad Bob Act can really continue.

41:12Maybe if you believe anything about how much we've degraded the military capabilities of Iran in terms of the Navy and everything else, that's just more hot air and bluster. We're going to do this and that. Maybe they do. They do it right up to the midterms. They keep talking tough or because it's somewhere in the middle. They're in no way comparable in firepower to what the United States can call on, Dan, even to try to attack their neighbors. So I'm just wondering, and with the dire financial straits with the blockade again and, you know, what they're putting their people through, I'm just wondering how long they can keep up this tough exterior.

41:54Yeah, that's the question. The duration risk, obviously, still something that we're watching in the region and market investors are watching as well. Joe, you're exactly right. We're seeing kinetic strikes, but this is also a war of words here. The narrative war continuing to unfold. The Iranians threaten a lot, but then don't do much. At the same time, we also hear the same from the United States as well. And that's what makes this war so hard to price. Exactly what happens next, I guess, will have to be very closely watched to determine which way the conflict goes. But there is a lot of hot air coming out of the Iranian side.

42:32And whether or not they follow through on this threat, I think, is probably the most important aspect of what could potentially happen next. All right, Dan, thank you.

42:44Now for the latest on the Iran war, what we can anticipate with oil prices as well, we want to bring in Amos Hochstein. He is TWG Global Managing Partner. He, of course, served as White House senior advisor in the Biden administration. And Amos, thanks for being here. It's good to be with you. So what we were told initially would be four to six weeks of an incursion has turned into six months plus for this war. And it's dragging on. It does not look like there's an end in sight right now. There's no end right now. In fact, I think we're at the precipice of making this. The president is trying to make a decision.

43:16Should he go all in or not? So look, This was never going to be four to six weeks because Iran is a very large country. It's 90 million people, has multiple borders, much more complicated than Iraq. In Iraq, we had hundreds of thousands of troops on the ground. It was an international coalition. We prepared for it for eight months. So this was never going to be that fast. Iran is a tough nut to crack, and to do it with an air campaign alone also was a little bit of wishful thinking, to think you can just air bomb and then they'll just collapse. So now where we are today is there's two problems that the president has.

43:51One, I think he feels a little bit caged in, you know, with walls and not having a door. He's looking for this out. The MOU was supposed to be that out, but it was hurried. And Article 5 of it says Iran will manage or make arrangements to reopen the strait. They read that as we're in control. The U.S. read that as you're not in control. And so you had a disagreement there. Now he is faced with this. basically as military leaders are saying, what we're doing with these nightly strikes has diminishing returns. There's a certain point where it's not working anymore. It doesn't do very much. And in fact, Iran is now attacking us in pretty harsh strikes in Jordan and in other places.

44:34So now he has to say, do I go all in? Meaning scorched earth, a much bigger campaign against civilian infrastructure. That will not take 10 days or two weeks. It will take four or five weeks. and nobody knows what's on the other side of it. In the meantime, the economy of the United States and the world will be heavily damaged. So he's got to make that decision. And lastly, for the first time, the Russia-Ukraine front and the Iranian front are coalescing in the worst way for the economy. The Ukrainian attacks against Russian energy infrastructure have now taken the toll. Russia is an 11 % share of diesel exports.

45:11It's now at an export ban, so they're at zero. Two refineries went out yesterday with Ukrainian attacks. And our own refineries at some point, something's going to happen. We're running at near 100 percent for months. I think 96 percent. Yeah, 96, 97. With no maintenance. And the SPR is lower. Sorry, Joe. And the tanks. Lower than where you guys got it, which is bad. The tanks are lower than the commercial stocks. So the tools that were there in March and April and May are diminishing. Energy Secretary Chris Wright was speaking yesterday, and he said that there's 13 million barrels a day coming out of the Middle East, either through the strait being helped through by U.S.

45:54troops to get that through or through pipelines that take it out through other directions. He said that's two-thirds of what we were getting before the war started. That doesn't sound nearly as dire as a lot of people had anticipated it might be. So, one, I think there's a lot of different views on what that number is, and I think 13 million may be on the higher end of that. Second, look, if we came here during peacetime and just said, we're going to take a third of the supply off from the Middle East, we'd have people who'd go crazy. So one, a third is a lot, especially when the refined product is also a big problem because of the Middle East also produced a lot of refined products.

46:32The 13 million, I don't know how he's counting, but you have to look at crude and then you have to look at the refined products that is also what the Middle East produces. So if we don't have a solution in sight, the market is now pricing oil, not based on where we think we're going, but where we are right now. There's an announcement of talks, boom, oil prices go down. There's an announcement of strikes, boom, oil prices go up. That's a silly way to trade. I don't understand what the trade is. But futures are silly, too, because no one can predict the futures. Well, the futures, I ignore. During war, you can't look at futures.

47:04Right. In normal time, you can look at futures because they can be based on investments and so on. Right now, the futures is junk. But in this moment, they have to look at, if you don't think this war is ending in the next two to four weeks, there's a slowing down of the SPR releases. We're already seeing that because it's a little harder to get it out. What does this market look like in four weeks of the current state of affairs? And I can tell you the gulf between oil industry, really the people that are actually doing it, CEOs of the big companies, versus traders is huge. They believe that this is, we're in rocky waters here.

47:40So if you were advising this White House, what would you tell them? I would tell the president today to worry about the energy prices in not today, but in four weeks from now, which I think they'll be very, very challenging. And I would say bring in, try to create alliances out of this. We have an opportunity here. The Iranians overplayed their hand in the last several days. They struck Egypt. They're striking Jordan. this is the time to go to the Europeans and say, look guys, I know you're upset that I didn't call you in advance and I kind of, you know, was belligerent a little bit. And we pay for all your defense.

48:15But don't even say that. We just say now, like, look guys, the Iranians are not accepting a deal. I want a deal. We need to do this together. Let's coalition this instead of going this alone with Israel. So Netanyahu has said this war can't end until really there's regime change and until we just take care of this once and for all in terms of nuclear material and all that thing. As a pro-Israel Democrat, not quite an oxymoron, close these days, but as a pro-Israel Democrat, do you wish, is there a part of you that is in that camp, that we've come this far? Maybe it's time. Look, every American should hope and wish that there's a regime change in Iran.

49:02us bringing it about and causing it I don't think is plausible and therefore that's not in our national security interest to do it right now. Okay. Because of what that would cause. But you wouldn't mind if that finally happened. Nobody should. These people are, first of all, they have more American blood on their hands than any other regime. They want to wipe Israel off the map. They want to wipe, they say they want to wipe us off the map. And I take people at their word when they say they want to wipe the United States off the map. They're killing Americans. That's why I think that I wish they were gone.

49:32But I can't wish my foreign policy. Do we have different interests in the United States than Israel? Is Netanyahu overplaying his hand in terms of what we should be doing? We definitely have different interests and different threats. We also have some mutual interests. Israel's facing an election, a pretty historic election, October 27, a week before our elections, the midterm election in the United States. I think a lot will be determined by that. But I think no matter who comes in, it's going to have a strong view on Iran. The consensus in the Israeli military and intelligence circles is that the regime change option is off the table.

50:08That was probably a step too far from the beginning. And therefore, we should focus on the nuclear sites. I think we've done a lot of damage there. This is a moment where for the United States national security interest, which is what really matters to me, we need to get some kind of deal back, back into some kind of deal with Iran, together with our Gulf allies. I understand the need for a deal. What would we be willing to take for that deal? Will we have to say that the Strait of Hormuz is open and Iran has no control over that? Would we have to say, are you taking nuclear ambitions off the table, saying that we're not going to deal with that issue at this point?

50:48If we need a deal, what has to be in that deal? What has to be in the deal, one, is nuclear, for sure. We've caused an enormous amount of damage to the nuclear industry, which President Trump did last June, which was a tight, very careful 12-day war, which, by the way, Iran didn't even retaliate during or after that war because it only focused on the nuclear. And I think we have to get the Strait of Hormuz to function. Will it function exactly the same way they did before the war? I think that's probably wishful thinking. We have to work... So we would allow them to set up some sort of a toll?

51:21No, I don't think control only means money. Control, after all... Ask permission before any ship can go to the strait. So I think the Gulf states are already talking among themselves how do we create some kind of mechanism where everybody is involved in, similar to the Strait of Malacca, where everybody in the region is involved. You're going to have to concede something because, look, we went to war, we did not get our objectives. And when you don't win in a war, there are consequences to that. And we're going to have to own up to the fact that the United States did not succeed in its objectives, and therefore there are going to be some consequences.

51:54But we've got to get back to a normalized thing where we are able to replenish our own military, secure our troops not just in the Middle East, but focus on other areas of the world, and to get our economy back in place where we don't have this war as a drag on what could have been a successful economy right now. The economy is pretty successful. Inflation is a little higher, though, too. So the economy is successful in the sense that the market is successful. But inflation, as you said, that's what people are feeling. If you look out there, what's going on in the country ahead of the midterms, these midterms wouldn't look like this.

52:27And the president's numbers wouldn't look this way if beef was not at seven dollars a pound, if gasoline wasn't at four dollars and ten cents and potentially rising. That's the part that's that I'm referring to when I say the economy is challenging. Almost. Thank you. Great to see you. Good to be here. That is Squawk Pod for today. Thanks for listening. Squawk Box is hosted by Joe Kernan, Becky Quick, and Andrew Ross Sorkin. Tune in weekday mornings on CNBC at 6 Eastern. Get the best of our TV show right into your ears when you follow or subscribe to Squawk Pod wherever you like to listen. And let us know what you think.

53:03Rate or write a brief review on Apple Podcasts to help other listeners discover us. Have a great day. We'll meet you right back here tomorrow. We are clear. Thanks, guys.

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