Goldman Sachs CEO David Solomon & Facebook Co-Founder Chris Hughes 4/22/25
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This is SquawkPod, and I'm CNBC producer Cameron Costa. On today's episode, uncertainty breeding market volatility. We know what it looks like it means, and that's a sell America trade. Goldman Sachs CEO David Solomon issues a word of caution about tariffs. Until businesses and individuals all over the world, not just here in the United States, can understand our trade policy, how it's going to be implemented, and...

That allows people to step back and make decisions about their capital spending, their investment, their planning. Solomon's watching U.S. Treasuries and tariff plans, but he says you can't unwind 80 years of global investment in a snap. And markets, well, they tend to overreact.

"This is a stressful time, but in terms of market function, this is in no way a crisis." And Facebook co-founder and economist Chris Hughes is out with a new book, just as regulators are taking aim at Google and at the company he founded.

Hughes is not opposed to reining in the giants. I wrote the book because I believe that the private sector is very, very important to spurring innovation. It just needs to be managed. Those conversations plus AI at the Oscars? Not off the table. And Harvard is suing the Trump administration. That is where the free speech piece of this is complicated. It's Tuesday, April 22nd, and SquawkPod begins right now.

Stand back your by in three, two, one, cue please.

Good morning, everybody, and welcome to Squawk Box right here on CNBC. I'm Becky Quick, along with Joe Kernan and Andrew Ross-Orkin. This morning, I'm in Houston at the Chevron Leadership Initiative's Commission Champions of Women in Sport event. This is a gathering of business leaders ahead of the Chevron, which is the first major tournament of the LPGA Tour. This is a moment in women's sports where you're seeing lots of money going into it and lots of interest along with that. We'll be talking about all those things through the

course of the morning. You saw the Dow off by close to 1,000 points yesterday, closed down by more than 900. It was the worst day for both the Dow and the S&P that we've seen since all the way back to just April 10th. So we are getting a little used to this volatility. NASDAQ futures this morning up by 167 and the S&P up by 46.

All of this happening yesterday as President Trump wrapped up, ramped up his attacks on Fed Chair Jay Powell and Fed independents. In a morning post on Truth Social, President Trump called Powell Mr. Too late and a major loser and again called for Powell to lower interest rates. You've also got gold coming off its 23rd record settle of the year. It's now compounded.

Closing in on its inflation-adjusted all-time intraday high of about $3,589. This morning, it's up another 1.3% to $3,469. Gold hit that record level on an inflation-adjusted basis in early 1980.

Yesterday, the dollar continued to weaken. It hit its lowest level in three years. And you're going to take a look this morning. It's a little higher, only up by about 16 cents. And then you've got Bitcoin, which yesterday was higher and this morning looks like it is up another 1.4 percent to 88,522.

Guys, these moves have been really interesting to see equities weaken, to see the dollar weaken, to see yields rise at the same time you've got gold hitting these all time highs. A lot of people wondering what exactly this all means. I think we're still wondering what this all means. It's not we know what it's great. We know we're not great things. We know what it looks like it means. And that's a sell America trade, which is I don't know how long it lasts and how it gets reversed. Journal has a good piece today.

The best thing to do is get a couple of trade deals done and move on and do the other things that you were planning all along and hope that, you know, hope we can, I don't know, reset a little bit because definitely a lot of these things are not being taken positively by the market. That's an understatement. He doesn't seem to be doing that at the moment, unfortunately.

I mean, he seems to be doubling down. Who's in his ear? You know how quickly he can change. We should also tell you Harvard suing the Trump administration following the White House freezing billions of dollars in grants that was earmarked for the school. The lawsuit accuses the administration of flouting the First Amendment and asks a federal judge to declare President Trump's freeze order unconstitutional.

Harvard argues that the move was not related to anti-Semitism concerns that the administration has cited. That lawsuit, in part, says, make no mistake, Harvard rejects anti-Semitism and discrimination in all of its forms and is actively making structural reforms to eradicate anti-Semitism on campus. But rather than engage with Harvard regarding those ongoing efforts, the government announced a sweeping freeze of funding for medical, scientific,

technological and other research that has nothing at all to do with anti-Semitism. In a new statement, a White House spokesperson says, taxpayer funds are a privilege and Harvard fails to meet the basic conditions required to access that privilege. We should talk about this. The thing, and I don't know, Becky, how you feel about it, though, and we've talked about the anti-Semitism piece of it for weeks on end. The truth is, if you look at what the government has said and what the president has said as it relates to Harvard,

Antisemitism is only a small part of it. What they're really trying to do is change the structure of Harvard

and change who they hire, how they hire, what they do, and a lot of it has to do with ideological beliefs. And he has made it clear that it's actually in large part about ideological beliefs, about the professors that are being hired, the students that are being recruited, all of those things. That is where the free speech piece of this is complicated. That is where the free speech piece of this is complicated. He's got about six things, at least six...

entities in mind that he is not happy with and wants to disrupt, including media, including law firms. Correct. And I think, and we'll see what courts ultimately think, that that perspective is

is not constitutional. Not to say that I don't agree that the Ivy League and a lot of higher institutions have totally lost their way, and I don't like what's happening to the kids. I'm not saying that they're perfect. I think they could be a lot better. They're not just not perfect. They're just hideous in terms of who's hired and the dogma that's institutionalized in those places. Once you're in, you can't get fired. Why do you think we have such problems with...

with anti-Semitism. All these wacky, crazy stuff is institutionalized. I agree with you. And that's who you hire, and it's incestuous. And then the people that you hired 20 years ago that were like that are hiring more people that are like, so what do you do? You just let it continue? Well, first of all, I think it's actually shifting. What you're doing by targeting in particular the science funding, the National Institutes of Health, the national science funding that comes through this is potentially breaking down...

Right. But by setting these things up that are completely unrelated, what it does do is threaten the innovative engine of this country. So many of the...

so many of the great developments have come through the funding that comes through these universities and I can understand being upset with how things have gone with how some of these universities are looking on the other side of things but to do this and to put all of that at risk by the way a lot of these funds were set up from funds that were promised for last year if it's not resolved by July from people I talked to about some of these issues on the science side of things it's going to create massive problems you're going to lose

All kinds of students and doctoral candidates and Ph.D. work that's being done and some of the most innovative cycles that are coming through. And that is something that, again, you can look at this the same way you look at the trade war. Were there imbalances and things that need to be adjusted? Yes. Is there a better way to do it? Yes. Is there a way that might preserve these institutions and preserve society?

the functions that are best about the United States to do this instead of breaking everything and saying we're going to shut this down now until we get our way with it. That is the harsh reality. And that is this. The fear is that you break things that can't be fixed easily by doing it this way.

The Academy Awards giving some new guidance on artificial intelligence and movies for top prizes. The Academy of Motion Picture Arts and Sciences saying the use of generative AI tools and movie making will neither help nor hurt the chances of an Oscar nomination. But it also tried to convey the message.

that the more that humans were involved in a film, the better. Officially, it said, the Academy and each branch will judge the achievement, taking into account the degree to which a human was at the heart of the creative authorship when choosing which movie to award. Which I imagine is going to be increasingly difficult to... Even discern. Discern. Mm-hmm.

Yeah. But but that that tells you the guidelines, I mean, and just that fear in Hollywood of the machines taking over, not just Hollywood, I guess a lot of places wanting to make sure that there's still the human creativity, that they're still rewarding that. Joe, you move in these film circles. I can't imagine they'd be thrilled about the idea of having a whole lot of A.I. there.

I'm dragged into these circles. You are. I am. Yeah. And, you know, sometimes people are kind of pointing at me and I don't look like I've never had granola. I don't think I don't have it all the time. There it is a certain. But you do wear Birkenstocks with your socks. With socks, with dark colored. You've done that. You said, right. You still do that.

I wear Birks, not with socks. Oh, but you don't wear socks. Okay. Yeah, you're right. And, Becky, I don't know, like we were just saying, how do you discern? It's going to be more and more difficult to see...

But there will be buzz within the community. These are the people involved in the film industry are the ones voting for this, and there will be buzz about where they actually use people and where they wouldn't. And my guess would be is if the artist community, the creative community, feels like they were cut out of the process, you're going to get snubbed. Right. Right.

The Federal Trade Commission is now suing Uber. The government claims that the ride-handling company provided misleading information to users about the Uber One subscription service, failed to provide a simple way to cancel memberships, and charged people without their consent. The move is the first FTC action against a major tech company during President Trump's second term. Notably, Uber and CEO Dara Khosrowshahi each reportedly donated $1 million to the president's inaugural fund.

Uber spokesperson telling CBC the company is disappointed by the FTC's complaint, but is confident the courts will rule in its favor, Joe.

I think for all those folks who thought that, you know. That's not why. They could be just patriotic and want to participate in the inauguration of the U.S. president. Stop being so cynical. I'm going to start drawing a line at some of the cynicism. OK, we've got to move on. We've got to come together. We've got to come together. We've been part for, remember, H.W. Got to come together. They

Dana Carvey, we've been apart. Let me just tell you, I spoke to so many CEOs who wrote those checks. And they wanted something? Who will privately tell you exactly what they think, which is that this was a down payment. And all I'm suggesting to you is it was a down payment on nothing. Because, well, it was a down payment on the rug being pulled out collectively from under them. Good. These corporate fat cats. Um...

Tease will be next. Next on SquawkPod, Facebook co-founder and economist Chris Hughes joins us. He weighs in on President Trump's criticism of Fed Chairman Jay Powell, future of capitalism, and much, much more.

I also think that if Trump fires Powell, then the chaos in those markets is going to lift the cost of borrowing. It's going to make it a lot harder to follow up on those kinds of promises. So I think most of them, I'm American, I'm a patriot. I believe that it would be great to have those kinds of investments here at home. I just think that they're in the long term is a much better way to go about doing it.

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This is SquawkPod.

So you're watching Squawk Box right here on CNBC. I'm Andrew Ross Sorkin, along with Joe Kernan and Becky Quick, who's in Houston this morning. Facebook co-founder and economist Chris Hughes out with a new book this morning. It's called Market Crafters, the 100-Year Struggle to Shape the American Economy. It explores the history of capitalism. He joins us now. Got a whole bunch of things to talk to you about. I'm ready. But maybe the best way to start is to try to put this moment

in terms of our politics and maybe our economy yeah in the context of what you looked at because you talk about sort of the whole sweep of history and by the way democrats ruling and republicans ruling absolutely so this book makes the case that there's a long history of policy makers

organizing and managing markets for political goals, things like making Americans richer, safer, more economically stable. That's a joint project. Republicans do it. Democrats do it. And only by uncovering that hidden history are we going to figure out some way to rebuild after the chaos of Trump in this moment. Okay, so here's my question. How important is... You went to Harvard, for example. How important do you think...

government spending as it relates to universities, science endeavors and things like that compared to the quote unquote true private market where there's no government money at all? It's incredibly important. I mean, the universities are a major engine of research and development. And as you've seen over the past half century, the overall public investment in R&D has gone down. And a lot of that has shifted to the universities as being the

engines of doing that now for me at least in the context of my research what i find is even more powerful is when government institutions are doing that kind of r_n_d_ making those kinds of investments for political goals for something like the chips act right from a few years ago republicans started in the first trump administration republicans believe we needed to make semiconductors here the biden folks agreed congress passes it now we have five of the world's largest uh...

semiconductor fabricators either operating or opening plants here. That's a major investment of R&D, of course, but also of industrial policy to make us safer. And it's successful and we can learn a lot from it. There's been a lot of criticism about tariffs, but is there any example that, I mean, you talk a lot about more, I would say, carrots than sticks, if you will. But are there any examples where the stick has worked? Hmm.

Well, I think on balance, the public investment industrial policy is a much better way to accomplish these goals. So bringing back jobs in American manufacturing, for instance. I think targeted tariffs can work in some moments, but I definitely don't think that's what's happening in this administration. What do you make when we see a press release like Roche announced this morning they're going to have a...

make a $50 billion investment in the U.S. that says it's going to create 12,000 jobs over the next five years. Right. We saw NVIDIA make a statement last week. We saw Apple make a statement two months. Is that policy by press release or is that real? No, I think it can be real.

However, I also think that if Trump fires Powell, then the chaos in those markets is going to lift the cost of borrowing. It's going to make it a lot harder to follow up on those kinds of promises. So I think most of... I'm American. I'm a patriot. I believe that it would be great to have those kinds of investments here at home. I just think that they're, in the long term, it's a much better way to go about doing it. One of the things I've been thinking about is assuming that Powell is out next May anyway... Yeah. ...and assuming that Trump is going to put his person in then...

Why would the market dislike his firing but be fine with whoever replaces him? Because you're going to think that whoever, because of what it says. Because of what it says. But the practical reality may be no different. I don't think that's right. I think, you know, a

A quarter of the book that I write about is the history of the Fed and why its insulation independence is so important to its success. And so, first off, the Federal Reserve Act is very clear. The chair cannot be fired unless it's for a cause. Now, the FTC Act also says that, and Trump has fired two of the Democratic commissioners. So we'll see if he follows the law in the first place. However, if he does fire the chair, he can also remove the other governors. So if he so chooses, if the courts uphold that law,

that way of thinking about it. And so all of a sudden you have a board of governors which is entirely dependent on the political cycle. And how are you going to trust that to guarantee price stability, let alone financial stability or full employment? I just have almost my default position is that the government is probably the worst entity at snickering.

uh... i'm not snickering on that until the way you know that it's a work that you know it's just historically central planning in trying to allocate resources based on what a hundred uh... intellectuals and in in an administration think they have been it just hasn't worked out in the past in and you know i pencil adam smith the invisible and

I would say both sides probably make mistakes in terms of trying to orchestrate industrial policy. So, Linda on one side,

you know, and then the Republicans do tariffs on the other side with all the unintended consequences of tariffs. It just seems like central planning and industrial policy never works. Yeah. So I'm with you on central planning, but you like the Fed, right? Is that different than industrial planning? Well, what I'm talking about is something called market craft. And so I think the Fed is a good example here. I imagine you like it. Most investors, watchers of the show believe that on balance, it's a good thing to have. The Fed is literally guiding short-term money markets.

sets the price of credit and then it buffers and ensures that in any given day it functions in an orderly fashion. That's not planning, nor is that a free market fantasy. That's market craft. And that's a powerful and inspiring example. We're talking about the Fed, but let's talk about just innovation in the way that

The way that the private sector decides to allocate resources for things, you don't think that's more effective than a bunch of smart people in Washington? I wrote the book because I believe that the private sector is very, very important to spurring innovation. It just needs to be managed and guided. It's all about entrepreneurs more than it is. It's a dance. You need two. You need the state and you need markets to make it work. I just read a summary, but it was just that the government...

industrial policy has been more important than the private sector in terms of innovation? I think this is a false choice, more important or less important. You need both of these things to guide markets and make sure that they're working the way that we want them to. You need it on climate policy. I think, you know, the

the biden administration is a perfect example of the beginning in the and let me just finish the camera climate investment doubled because of the ira because we agreed he climbed it's actually a big problem guys and we need to and he does he doesn't have any we don't agree that i think that's a people think that's a prime example of what i'm talking about well we agree on some things and we disagree on others

but i i think the important thing is seeing that market craft is a real history that we need to wrestle with and reckon with if we're going to be able to think about these things constructively in the future well i just want to go back to them that the the tariff piece because i would argue the tariff piece is similar to you know the carrot piece or the chips that's what i'm saying both sides use industrial policy and it seems to be ineffective on both sides

I mean, the CHIPS Act gave, you know, they picked Intel as one. I mean, they do have fab plants, obviously, but they picked the biggest loser. But this goes back to the question whether then you're very happy they're taking money away from Harvard. My point is like this picking and choosing thing is the problem. I'm saying with $37 trillion in debt that we've had 30 times the amount of funding just in the last 20 years.

twenty years or whatever but i said if you want to define university we should have a debate about that if you want to define specific universities we should a different conversation about that is that's where it gets more complicated but i think the key thing that i'm trying to say is that it's not just about industrial policy you look back at treasury secretary bill simon a libertarian libertarian but when he was in government in the nineteen seventies he worked with alan greenspan to set up the strategic petroleum reserve

enormous amounts of oil store them here so that we would be able to be resilient if there was another or embargo and so that we could buffer the price i don't think you would call that industrial policy i wouldn't either but it is market crap and saying that we can't just wait for energy markets to supply as we need government to have a guiding hand here to make sure these things are still on we have had your an energy crisis in forty plus years because then your guys

I'm talking about Biden used it because the emergency was that prices were too high during the midterms. So we depleted it to where we're down how much at this point? The SPR. The SPR still has hundreds of billions. But we're probably 40 percent. Aren't we down 40 percent? Well, the whole idea is to use it to buffer. Like if you're not using it. You said for wars. You didn't say for higher energy prices. No, I didn't say for wars. No, actually for price buffering. I think it's important. That wasn't an emergency. The midterms.

What I think is important to learn from the SPR is that we can buffer prices, right? So that when they get high, we can ensure that they don't get too expensive. And when they go low, we can ensure that they're exactly. And that is market craft. It is fossil fuels, though, Chris. Well, it is. We need them, it turns out. The longer conversation. For a little while longer. The book is called Market Crafters, and it's a fascinating history of just what's happened in this economy. And it actually creates a lot of this good debate. So, Chris, thank you for having me. Thank you for having me.

Coming up on SquawkPod, Becky Quick is in Houston with her

Goldman Sachs CEO David Solomon. He has a word of caution on the world's history of confidence in America's economy. And he, like everyone else, is awaiting tariff certainty. I don't think that we're taking 80 years of a direction of travel and just reversing it instantaneously. But I do think these are serious things that you have to watch very, very carefully. And if we don't get to a policy place of certainty where people can trust and they can rely, it will have longer term implications.

Solomon's take on market health, U.S. Treasuries, and much more right after this.

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You're listening to Squawk Pod from CNBC with Joe Kernan, Andrew Ross Sorkin, and Becky Quick. We are here at the Chevron Leadership Initiative's co-mission Champions of Women in Sport event. Uh,

Joining us right now is Goldman Sachs CEO David Solomon. He's here because Goldman Sachs has an interest in women's sports and in the LPGA in particular. But, David, I want to talk to you about what's happening in the markets right now. It's been a pretty confusing time. You're seeing all these weird things happening with equities dropping, bond yields going up, the dollar dropping pretty steadily, gold prices at all-time highs. And it's making people...

wonder what this all means. Is this a crisis of confidence in our markets right now? What do you read as to what we're seeing? Well, first of all, thank you for having me. It's good to be with you. Thank you for joining us. Absolutely. It's good to be with you in Houston.

We're in a very different macro environment than we were in just a few months ago. I think the last time I was on the show and the last time I spoke to you guys was in Davos. And certainly we could all talk about kind of the aura of how people felt in Davos, but it was very, very different. You were coming into the inauguration. There was a lot of optimism around a lower regulatory environment and changes. And so now we're a few months into the administration. And instead of policy becoming more certain,

We actually have a greater sense of uncertainty broadly, and it's having a big impact on asset prices and markets. And so the trade policy and the discussions about trade policy certainly have changed the level of uncertainty in markets. Markets are looking to reprice

uncertainty they have around what these policies will ultimately look like and how they will ultimately be implemented. And that is therefore causing shifts in fund flows on a very significant basis and I think one of the things that's different. About what we're seeing right now is normally when asset prices when equities reprice it's not surprising. That there are

when you go into a more uncertain environment that equities reprice. But generally when they do, people buy U.S. treasuries. But here we're seeing different behavior because at the margin people that have been very, very inclined towards U.S. dollar assets are slightly shifting their preferences. And I'd say it's still at the margin, but as people are selling equities,

that puts downward pressure on the dollar given these are all US equities. You've got investors around the world buying US equities. And as they de-risk to some degree, that's putting pressure on the dollar. And that obviously has an impact on Treasury. So the level of uncertainty is high. I think it's good that there has been a delay, let's say, in the implementation of these reciprocal tariffs. But we still don't know what these deals are going to look like, where it's going to land, and what the ultimate impact on business will be. And so what's happening is businesses pulling back

People are pulling back because they want to wait and see. They want a higher level of certainty before they make decisions and they move forward.

So you think this delay is good? You think it's good because it gives it a chance for them to undo some of those actions and activities? I would say the delay is good because this was all happening very, very quickly. And, you know, I think these are complicated issues and we need more time to see what the ultimate result will be. I think one of the things about the delay is the delay didn't decrease the level of uncertainty. In fact, in some ways, the delay increased the level of uncertainty.

And so until businesses and individuals all over the world, not just here in the United States, can understand our trade policy, how it's going to be implemented, and that allows people to step back and make decisions about their capital spending, their investment, their planning,

We can understand relationships and global markets with respect to the dollar until we settle down and get to a place that can understand that. We're going to see a higher level of volatility and continued pressure on U.S. asset prices. So you say this is around the margins, just in terms of investors having less faith in the United States and other places. Do you think that this, some people get hyperbolic about this and think that this is the end of the American exceptionalism when it comes to the markets. Do you think that's the case?

Well, I've been talking to clients. I've been talking to clients all over the world. And I happened to be on a trip overseas last week. I was in the Middle East a little bit last week. And the reason I say at the margin is kind of U.S. preeminence from an investment perspective and the long-term flow of international investors into U.S. assets because of the relative performance of the U.S. is something that's happened over a very long period of time.

And you can't reverse it 100 percent in five minutes. And so what we're seeing is certain changes in behavior at the margin. But when you step back and you ask, what are the opportunities? Where can you go? Think about it as a balance in a portfolio. If you've got more U.S. dollar exposure, there are two ways that your portfolio rebalances and you have less U.S. dollar exposure. One of them is you can sell the assets. The other is a relationship between, let's say, your European investor, the relationship between the dollar and the euro changes. So

I don't think that we're taking 80 years of a direction of travel and just reversing it instantaneously, but I do think these are serious things that you have to watch very, very carefully. And if we don't get to a policy place of certainty where people can trust and they can rely, it will have longer-term implications.

but what uh... i guess what is the alternative for where where where people go where well that's that's one of things i is a listen to clients i talk to clients that have been capital allocators around the world we have to have a conference in the least last week where we had both you know capital allocators from that region also a bunch of u_s_ capital allocators uh... come together and when you step back and you look at the big buckets the big opportunity buckets whether it's the u_s_ whether it's you know broadly across europe whether china

you know still I'm even with all

the issues that we're facing here when you look at the innovation economy in the US, you look at what we're capable of from that perspective, you look at our capital markets, our capital formation, our financial system. You know, we have enormous embedded advantages that I think investors around the world recognize, but they're concerned by the level of uncertainty. They're concerned by the pace of change and they're looking for more clarity as to how this will settle down. And the

The tariffs in themselves, where do you think things will settle down if markets are reacting and trying to reprice to whatever that ultimate place is going to be? What do you think ultimately happens with tariffs? Well, I'm watching as you're watching. I think the administration has been clear they want a base level of tariffs to stay in place.

But I think it would be very helpful. You know, I understand, my understanding is there are a number of discussions going on with various nations. It would be good to see a deal or two put forward so there's a construct that people can understand and people can start to say, okay, if that's what these deals are going to look like, this is a framework that we can start to think about and we can start to plan as we look forward. If you had framework like that that was put out with some of these deals, where is...

where are the equities markets priced to those deals? Would there be relief in the equity markets at this point? I'm not a good speculator as to ups and downs in equity markets, but the one thing I know for sure, if you can create a roadmap

and a clear understanding as to where we're going and what the desired result is, confidence will improve equity market prices. And markets tend to overreact in the short term. We've all been through stress lately.

You know, in markets, they overreact, but you get to a different place when you look forward six, 12, 18 months. You get to a different place where the market has digested that change in the macro environment. It will be no different here. David, Joe has a question as well. Joe? Sure. Dave, I just wonder, in terms of tariffs, we're told that they're inflationary and they could be recessionary. I mean, it's like the worst of both worlds, theoretically. Now, we don't know the uncertainty of the 90 days. You point that out.

But if we don't see them totally implemented on the inflation side, isn't it more likely that the real risk is that there is, it's going to be a growth problem and that we're going to see a slowing of growth and therefore maybe the Fed auto-

and can you make the case the feds should preemptively uh... start easier are they using enough but by uh... by lessening the tightening or do you think they should actually cut sooner rather than later well do you hear your grays in the right point i wouldn't say that the tariffs are recessionary but there's no question the trade policy that's more articulate or the direction of travel has changed the uh... the perspective on forward growth so consensus on for growth was two percent it's obviously much lower now

I don't know whether at the moment we're growing 1%, 0.5, 0, but growth has slowed. And part of this is it's a little bit of a self-fulfilling cycle. If confidence comes down, people obviously pull in and that slows spending, that slows investment, and it slows growth. And so certainly there's inflationary pressure to the degree tariffs are put in place. We're now in an environment with slower growth.

Those are kind of contradictory forces that ultimately the Fed will have to deal with. The market at the moment is telling you, given the actions that have been taken, that they expect the Fed to cut during the course of the year. And to the degree that the economy really is slowing down, I do think ultimately there's a good chance you'll see the Fed wrestle with that and try to create some sort of support for that slowing economy.

But if you have inflationary pressure, that makes their job much more difficult. Do we, though? I don't know if we do. That's my that's my I think one risk is much higher than the other. And as crazy as Trump seems that President Trump seems at times, I fear that you're going to look back and say, Eric, he was right again, that probably Powell should have cut.

Well, I think we're going to see. We have very little data. I woke up this morning, was watching the show. You have a handful of companies reporting earnings. At the moment, everybody's reporting earnings from the first quarter. You look at our earnings in the first quarter, it was reflective of an environment. We're now in a different environment. And so, Joe, until you have more data and more information, it's hard to, and this is one of the things I think about the Fed, the Fed is very data dependent. Until you have more data and more information, it's hard to understand exactly where this will go. Right.

David, Andrew, I'll get one second, just one follow-up real quickly. You're saying we're in a different environment right now. What have you seen the last couple of weeks, just in terms of the activity you've seen from your clients, the potential for deals out there? What does that tell you? Describe this new environment. Sure.

I think there's a high level of uncertainty. There's no question that capital markets activity is slower, but it's not zero. And the first quarter was a reasonable quarter for capital markets in M&A. As we head to the second quarter, it's slower, we're early in the quarter, but it's not zero. We were involved in a significant deal for WorldPay and FIS last week. It was a very significant deal. That deal moved forward. I think we're involved in a deal for Versace, which was another deal.

um... that so that there is there is activity uh... but to the degree that the uncertainty increases from here there's no question that that will slow down you know that deal flow in the capital markets activity more to the degree that we start to see some trade deals and we start to see a road map to the direction of travel there's a lot of pent-up capital markets activity and you know i think that will come forward and so again you need

you know everybody wants to jump to the conclusion i understand why people want to jump to the conclusion but it's hard to jump to the conclusion based on where we are at this moment and david i i want to put your investment banker had on be the advisor for moments on president trump on hiring you david in goldman sachs and i both of you collectively to advise me on how to negotiate

This is what you guys get hired to do constantly by CEOs who want your advice and want to understand where the leverage points are in these negotiations, how to best negotiate these tariffs. Do you do them ad hoc, one at a time? Do you try to do some collectively? The reason I ask is because I think there is a major leverage question, which is to say that if you try to actually knock off a couple of deals early,

Those early countries actually oddly have leverage over you.

which is to say that you're going to probably give them maybe better terms then. But then it actually makes it harder over time because everybody knows that there's going to be like a favored nation status situation going on and nobody else is going to come to the table in the same way. The other question is, to the extent that the ultimate goal is to be able to have real leverage over China, you need a lot of these countries to get together with you. And so...

If you're Mark Carney, it's not clear to me from a leverage perspective that he sits around and says, how much can I give you, dear President Trump? It may be how much can you give me if you want me to help you with China? Was that a question, Andrew? I want to know what you would do, how you would go about all this, given what you understand about negotiating and leverage.

So, Andrew, as you know, I was an investment banker. I'm not a trade negotiator. But I do think these are relationships. They have different contexts. The relationships between different nations are different. These have to be negotiated one at a time. But I think the important thing is to set out a roadmap of priorities. What are we trying to accomplish? What are we trying to get done?

And then this is going to take time. You're going to have to, each trade deal, if you're negotiating with all these different nations, each trade deal is a one-off negotiation ultimately. And that's going to take quite a bit of time to execute on.

David, let me ask you about the markets right now, just the plumbing, because it felt like a couple of weeks ago we were getting to a point where there were some real concerns being raised, just the bond market in particular, the way it was reacting. And people can look and say, OK, that was some hedge funds that were settling some trades that had to sell some of their most liquid assets. Do you see any problems in the plumbing? The plumbing, I mean, this is something that...

you know, the bank CEOs have been talking about, certainly have been in touch with the Fed, have been in touch with regulators, et cetera. You know, the plumbing has been, markets are working quite well. Now, people don't like when stocks go down, but markets have been working quite well. I think the

You know, the change in exposure that came down in March when people de-risked a little bit, I think, help as we came into this. One of the things that's just interesting to me, there's been a move in credit spreads, you know, at this point from what I'd say was kind of all-time tights.

But we're still, if you look at high-yield credit spreads yesterday, they're still tighter than kind of 10-year averages. And so credit spreads have held in nicely. That's something to watch if the economy does indeed slow. But at the moment, markets are functioning very, very smoothly. I do think you want to watch the Treasury market. And that's not because of the functioning of it. That's because of the fact that we need to finance our debt deficit. And so...

Obviously, pressure on that has broader implications in the context of how we finance our debt and deficit, but that's not the plumbing and the efficiency of markets at this point. This is a stressful time, but in terms of market function, this is in no way a crisis. What do you think in terms of the Trump administration?

You talked about in Davos how everybody was coming into this thinking this was going to be a much more business-friendly administration. It hasn't worked out exactly the way a lot of people have planned on this, but is this a more business-friendly administration? What's your relationship with the administration? Well, the question, you know, you ask the question, and it obviously immediately gets to a comparison. And so the expectation was, because the last administration was,

was very, very difficult for business, very, very difficult to engage and to communicate broadly across all industries. The expectation was that this would be improved. I think one of the things, and I've said this publicly a number of times, the administration and people across the administration are engaged with the business community. That's constructive.

There are certain things that have been put forward from a policy perspective that don't feel in line with the expectation people had. But obviously, we'll have to watch and see how the policy is implemented, watch and see how some of the stuff with the FTC plays out.

but it's early days and certainly it's hard to know exactly where that lands. I don't really think about administrations as being business friendly or not business friendly. Ultimately, the economy growth and investment needs interaction between government and business. It's very, very important for economic growth broadly. And so hopefully that'll continue to be very constructive.

Joe? Yeah, David, I'm just trying to figure out how to phrase this because I certainly don't want to be Pollyannish or cheerlead. Anyone who's close to retirement, this is gut-wrenching, obviously, when you have close to a bear market in some of the major averages, and actually do have one in some. But is there, in your view, is there a half-full way

to view any of this i mean the market would you say this i mean seven stocks led that market up 20 two straight years to to to highs i don't know whether any of this is was destined to happen anyway we need corrections occasionally is any of it cathartic and if if we do

You know, maybe not go scorched earth on tariffs, but if we go selectively and get some deals done, is it possible we're in a good place a year from now? Because there's so much pessimism now. People are writing off the next four years before we're done with the first hundred days in terms of the economic record. Are you optimistic at all?

Well, I'm definitely optimistic when you step back and you take a broader view, Joe, because I continue to have enormous confidence in the U.S., the innovation in our economy, the forward on technology. When I look at what's going on with AI and the ability to deploy it in the enterprise and create massive productivity across business broadly, massive productivity in our economy, when I look at the impacts that

that it can have around health care and health and wellness these benefits you know these are these are things to be enormously excited about and so

We had an extraordinary equity market, and as you point out, seven stocks led the way. It's not surprising that something has rebalanced that. I did not necessarily expect it to be this in the form that it is, but certainly, and we did talk about this when we were in Davos, we talked about the robustness of the equity markets. And, you know, it's interesting to go back and kind of look at a basket of stocks and where they were 12 months ago. Obviously, the Magnificent Seven and that tech, that NASDAQ-led rally, and

has certainly had a dramatic move. But at the same point, there are lots of companies and stocks are up versus where they were. Goldman Sachs is up about 85% from

a year ago. So, you know, all this has to be put in perspective. I think the level of uncertainty is too high. It's not productive. And it's important that we have a clear understanding of the direction of travel as soon as we can so that businesses can plan, make investments, continue to help drive our economy forward. Have you heard any CEOs, David, say

I mean, this is what we're hearing, that they had the rug pulled out from under them. And I mean, I think it's implied they'd actually go back if they voted for Trump and want to change their vote to Kamala Harris. Do you know any CEOs that say they missed the Biden administration in terms of their approach to business?

I think, Joe, what I'm hearing from CEOs, from clients that I'm talking to, is they want to understand, they want to have more certainty with respect to what the policy is going to look like, where it's going to land, what deals are going to look like, so they understand the lay of the land and they can make decisions.

uh... they can make adjustments if necessary in the way they run their businesses you can't change these things when you look at supply chains when you look at where things are made when you look at how the supply chains work you can't change that in five minutes or there was a question in this case they are yet yet yet

You asked Andrew if there actually was a question in there, but you didn't answer the question. Are there a lot of CEOs saying, God, I sure wish I voted for Kamala, or I wish it was the Biden administration policies on business? Are we there yet?

I don't think we're there yet. Joe, when I'm talking to CEOs, we're talking about policy. We're talking about investment. We're not talking about people's election preferences. All right. You're not just worried about saying the wrong thing and incurring the wrath of President Trump at this point, are you, David? No, I think I've been clear. We need a higher level of policy uncertainty. This level of uncertainty is not good.

It's not healthy and it's affecting investment spending and planning and that will have an effect on growth in the economy. And we will see that, you know, in my opinion, relatively quickly if we can't get to a higher level of certainty around this trade policy.

David, let me ask you about why you're here. Goldman Sachs interest in women's sports, in the LPGA in particular. Well, we've had a relationship with Nellie Korda for a number of years. And I just must say, besides being an extraordinary golfer, she's an extraordinary human being. She won this tournament last year. She won the tournament last year. And she was honored last night at a dinner, as they do every year. And so we were both...

We were both there for that. But there's an event this morning. I think women's sports is fascinating. Look, I come to it first from a personal perspective that I have two daughters. And I watch them and the impact sports had on them and their personal development and their growth. But I also look at some of the superstars we have developing in women's sports, Nellie being one, Kaitlyn Clark being another. There's a lot of opportunity for growth and interesting economics in women's sports. That's what I want to get to, the business proposition for

Well, the business proposition is very, very strong and it's moving. If you look at the WNBA meteorites deal, if you look at the hundred million dollars over the course of six years, I think for that was two point two billion, two point two, two point two billion dollars. You know, if you look at the salary cap structure, the WNBA, it's going to get a big move with this meteorites deal.

Now, obviously, these brands, these franchises, they're not 50, 100 years old, and they're still developing. But they're attracting more attention. I think the direction of travel is certainly pretty obvious with respect to that. You see more and more investors taking a look and saying, hey, look at the relative value equation here. Look at the direction of travel. Look at the way the expansion of meteorites can impact this.

There's a good opportunity here around a variety of sports to get involved. And so we've got a number of clients that are looking at women's sports in a completely different way than they did just two, three years ago. David Solomon. David, thank you very much for spending time with us this morning. My pleasure. Thank you for having me always. I always like being with you, Andrew and Joe, and appreciate the opportunity to be here with you, Becky. You've got an open seat anytime. Come join us at the NASDAQ. I appreciate it. Thank you.

That's the podcast for today. Thank you for tuning in. Squawk Box is hosted by Joe Kernan, Becky Quick, and Andrew Ross-Orkin every weekday morning on CNBC starting at 6 Eastern. To get the smartest takes and analysis from that three-hour TV show right into your ears, follow Squawk Pod wherever you're listening now. We'll meet you right back here tomorrow. Have a great day. We are clear. Thanks, guys.

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