Closing Bell - Closing Bell Overtime: Exclusive Interview With Ken Griffin; Fed Decision & Powell Presser 5/7/25

Episode Date: May 7, 2025

Adam Crisafulli of Vital Knowledge and Lori Calvasina, Head of U.S. Equity Strategy at RBC Capital Markets, break down the market action after the Fed left rates unchanged and a fresh wave of earnings. ARM and Skyworks report as semis stay in focus. Fed deep-dive with BNY Investments’ Vincent Reinhart and Jefferies’ David Zervos after fresh commentary from Fed Chair Powell. Jon Breaking down ARM’s quarter with Benchmark analyst Cody Acree. Our Sara Eisen has an exclusive interview with Citadel CEO Ken Griffin on the markets, monetary policy, and Trump vs. Harvard. 

That bell marks the end of regulation. No kid hungry. We're going to close the bell for New York Stock Exchange. Sizzle Acquisition Corp. doing the honors at the NASDAQ and a higher end to the day as investors digest Fed Chair Powell's comments and his trade headlines about chip curves perhaps going away, move tech stocks late in the session. That is the scorecard on Wall Street, but winners stay late. Welcome to Closing Bell Overtime.

I'm John Fort with Morgan Brennan. Well coming up on today's show, a can't miss interview with Citadel founder and CEO Ken Griffin on the Fed's message, market volatility, the impact of tariffs and more. Plus another busy hour of earnings is on the way including results from Arm Holdings, App Loving, Skyworks, Flutter and Zillow as we await those results. Let's get straight to today's market action. Joining us now is Vital Knowledge founder, Adam Chrisafulli, and RBC Capital Markets

head of US Equity Strategy, Lori Calvicina. Guys, welcome. Lori, we got what we expected from the Fed. How much attention now is on June versus, I mean, now we've got these headlines having to do with trade yet again. Hi, so thanks for having me. Look, you know, I think, I hesitate to use the word boring, but I think we heard a lot

of what we already know and what we already think as a forecasting community this afternoon from the chairman. And so I do think we tee up, you know, perhaps not for June, but I'm really worried, frankly, more about kind of that mid-July, mid-August period when I'm expecting to hear, you know, we're in one reporting season now, we're going to be in another reporting season then, and I think getting a lot more color. And when I was talking to my rate strategist earlier today, he was saying, you know, that he's, you know, looking for kind of May, June. We'll get a little bit more color on how the hard data is being impacted by all of recent

events, but we may not necessarily get all the color that we're looking for then either. So we'll see what they say, but you know, I really sympathize with the chairman today when he said, you know, we're really waiting and seeing. We're all in this big waiting game. It's not exactly clear when it's gonna end. And Adam, how much does the market then have to hang on here?

I mean, so far, earnings season, I think it's probably fair to say, especially on the big tech end, but overall, not as bleak as some feared. Guidance has come in from a number of companies, and in a lot of cases, it's not that bad. So, are these levels, you think, defensible? I think we're towards the upper end

of the recent trading range on the S&P. You know, I definitely think we're coming out of an earning season that was very encouraging. Like you said, you had healthy Q1 numbers, guidance for the most part wasn't disastrous. You have seen full year estimates kind of bleed lower as we're near the end of the recording period. It definitely wasn't as bad as anticipated.

And most CEOs and CFOs sounded just like Powell did today where they acknowledge that conditions at the present time are okay, but there's just a huge amount of uncertainty on the horizon, which is pretty much the main message from Powell today. So I think markets now are kind of going to pivot back and watch to see how these trade negotiations unfold. Administration officials have implied we could see an announcement imminently on at least

one agreement. And then obviously, we have a huge China meeting this weekend in Geneva, which will be very important. So that's really the central focus for this market right now is how these trading negotiations unfold. What do these deals look like? Where do tariff rates kind of reset to when the deals are in place? And that's a critical variable. Okay, we've got our first earnings report. Arm holdings are out. Christina Pards-Nevelis has the numbers for us. Hi, Christina. Hi, Morgan. Well, Arm Holdings posting a Q44 beat non-gap EPS of 55 cents on revenues of 1.24 million the first time

the chip designer surpassed over a billion dollars in revenue. It was driven by higher levels of royalties and license revenue. Its largest segment though is the royalty revenue. That came in at 6.07 million which is higher than estimates and driven by continued adoption of its latest architecture which is called V9 and as well as ARM-based chips and data centers. Its licensing business, though, that fell short of estimates by about $25 million, but it's the Q1 guidance that is causing the stock to drop right now. It fell short of estimates. Q1 revenues of about $1 to $1.1 billion, which is a little bit lower.

EPS, I should say, was actually lower, 30 to 38 cents. that's what they were saying for Q1, versus the estimates at 42 cents. And let me know when you want me to come back for Skyworks, too. I have that. And let's do it now. Why don't you just go ahead? Yeah. Yeah. Let's do it. Now, because Skyworks is another chip company. They develop analog and mixed RF technology

and stuff. So EPS, $1.24, higher than the street, revenues of $953 million. The Q3 EPS guidance, also higher at 1.24 adjusted, so that's for the third quarter. The revenue range was also higher, Q3, 920 to 960 million. And it seems like there's also gonna be a change internally, but I'll have to get back to you on that because I just didn't get through the report in time before coming here just to find that word. Okay, Christina Parts-Nevelis, thank you.

Thanks. Lori, I want to get back to you because we did see tech perk up into the final moments of the trading session right before the close here. We have seen those headlines that maybe some of these chip export curbs could be changed, revised, revoked. We'll have to see the devils in the details here. Is tech the place to be if we are going to see some sort of tangible trade talk turn into tangible trade deals,

or would you be investing somewhere else given all the uncertainty, and to use the word you just used before I think waiting. Well it's a great question Morgan and one of the things that I've noticed as I've gone you know in every week in my weekly I look at how sectors are performing and we've seen some resilience in that tech space and what we've also noticed on our valuation work and again everybody's questioning what exactly is the right e but if you accept that the e is somewhat reasonable we've actually seen the tech sector gone from being a very expensive sector to a very reasonably valued sector in here.

And so I think this is a good place. I've been neutral, but I do think that given the improvement we've seen on the valuations, it is a reasonable place to be looking for opportunities in here because it's something that really does seem to have changed on the quant work over the last month or so. Okay. Carvana earnings are out. Philip O. has those numbers for us. Hi, Phil. Hey Morgan, this is a beat on the top on the bottom line and a beat by a wide margin in the first quarter for Carvana. The company earning a buck 51 a share. The street was expecting just 67 cents a share for so more than double what the street was expecting with revenue coming in well above expectations at

4.23 billion the metrics within the first quarter adjusted EBITDA of 488 million dollars above the estimate of 434 million dollars EBITDA margin 11.5 percent the street was expecting a margin of 10.9 percent vehicle sales better than the street was expecting by almost 5,000 vehicles selling more than 133,000 in the first quarter with profit per vehicle better than expected at $6,938 per vehicle. So are they changing their guidance or their outlook? Well, not in specifics, but they are saying that they do expect record sales and record earnings in the second quarter though

They're not giving any metrics to hang on those two expectations also. They are now targeting three million annual vehicle sales within the next five to ten years So for Carvana a big first quarter as they beat on the top and the bottom line guys send it back to you all right beat on the top and the bottom line. Guys, send it back to you. Alright. Phil LeBeau, thank you. Shares are down about one and a half percent right now. Carvana's CEO will break down those results in a first on CNBC interview tomorrow though on Squawk Box. From cars to homes, Zillow earnings are out. Diana Olek has those numbers. Diana? Well John, a beat on the top and bottom line. Zillow's Q1 EPS came in at 41 cents a share adjusted versus estimates of 37 cents revenue of

598 million versus estimates of 589 adjusted EBITDA of 153 million versus estimates of 138 million on the for sale side mortgage revenue was the main driver up 32% year-over-year on the Rental side it was multifamily with the biggest gains up 47% and that is an all-time high for Zillow with its rental business biggest gains up 47% and that is an all-time high for Zillow with its rental business accelerating. The CEO noted that partnerships with Realtor.com and most recently with Redfin and Appfolio are expanding its rental reach. The FTC though is now investigating that Redfin partnership. Traffic to Zillow groups, mobile apps and sites in Q1 was up 5% year-over-year, visits up 2%. Zillow's Q2

earnings and revenue outlook, a little bit weak but full year reaffirmed. Back to you guys. All right, Diana Olek, thank you. Adam, we just ran through quite a few names. Your reaction? You know, I think for the wireless chip companies, the RMX medications were obviously pretty elevated and that's why you're kind of seeing an outsized reaction whereas with Skyworks, you know, sentiment was quite depressed and negative. The bar was a little bit lower. On Carvana and Zillow, you know, it's hard to kind of extrapolate to the broader macro

landscape game where we're relatively late. In the quarter here, I think, you know, for Carvana, specifically in auto investors generally, you know, there's still obviously a ton of anxiety about what happens with pricing in the industry. We saw the Manhattan used car index out today was pretty hot for the month of April and then the effects that will have on aggregate demand in the coming months does that kind of lead to we'll pull back in demand or to consumers just accept those higher prices and so be interesting to see the color that Carvana has on that subject

all right Adam Chris a fully Laurie calbacina thanks to both of you now we got Dutch Bros earnings out, stock heading a little lower right now. Steve Kovac has the numbers, Steve. Yeah, John, it seems like the guidance for Dutch Bros is what's heading shares lower, but first let's go over the top and bottom lines here. Both were beats, EPS coming in at 14 cents adjusted,

Street wanted to see 11 cents, and then revenue, a beat here as well, $355 million. Street was looking for 344.7, but it's the full year revenue guide that seems to be weighing on things here. They're now estimating 1.56 to 1.58 billion for the full year. Street was just looking for 1.58.

So not exactly a knockout revenue guidance here. She shares down about 2%, Morgan. Okay. Steve Kovac, thank you. Flutter Entertainment earnings are out as well. Contessa Brewer has those numbers Contessa. Margaret Morgan March was

madness for the sportsbooks and Fandel was not immune customer friendly results from college basketball's tournament dragged down results for parent company Flutter here missing on top and bottom lines earnings per share of a dollar fifty nine

adjusted against the street consensus of a1.89. And revenues come in shy at $3.67 billion versus $3.84 billion, which was what the street was expecting to see. Flutter is revising its full year guidance because of March Madness, lower in the United States, but for the company overall, full year guidance is higher. Here's CEO Peter Jackson. There's been a lot of volatility in the FX market this year.

That when we pulled our guidance together at the beginning of the year, FX was a headwind for us, it's now a tailwind, so there's been a hundred million dollar swing there. And we've closed a couple of deals. I asked Jackson whether he's concerned that these trade wars and economic concerns will dampen consumers enthusiasm, or their budgets for online sports and casino gambling.

And he said in his experience, his business is quite defensive amid other inflationary concerns. More of that interview on CNBC.com. I guess this has to do with, you know, you don't have to buy the beer if you're just gambling on your phone. The stock right now, as you can see, is off by 1.4%, Morgan. Yeah, the new SIN stocks, perhaps. Maybe you could even put video games in that bucket

with some of the results we've seen there too. All right, Contessa Brewer, thank you. Those shares down 1%. After the break, oh, AppLovin's out. We're going through the numbers. We're gonna bring them to you momentarily. In the meantime, though, after the break, David Zerbos from Jeffreys

and former Fed economist Vincent Reinhart join us with their first reaction to the Fed decision and Chair Powell's comments about tariff driven uncertainty. And speaking of tariffs, Citadel founder Ken Griffin warning recently the trade policy risks damaging the American brand. He will join us exclusively in a can't miss interview to discuss Overtime's back in two. Applovin spiking more than 12 percent some wild action overtime Steve Kovac has the earnings number Steve. Yeah and this is likely John due to an agreement to sell its mobile gaming business for $400 million.

That's just right out of the press release. But let me go over the other numbers, too, here, because it was beats on the top and bottom lines. EPS coming in at $1.67. Street wanted to see $1.45. Revenue, a slight beat, $1.48 billion versus $1.38 billion expected. And adjusted EBITDA, a nice surprise here, too. $1.01 billion.

Street was expecting just $ 847.7 million. You see shares here reacting strongly up 15, now 16%. Morgan, I'll send it over to you. All right, Steve Kovac, thank you. Meantime, Double Line's Jeff Gunnlok telling our Scott Wapner last hour that he doesn't think the Fed should cut rates right now due to macro uncertainty.

I just don't think they should be cutting rates against this backdrop. If they cut rates and inflation rises, I think you're going to have a real problem at the long end. Well, joining us now is Vincent Reinhart, BNY Investments Chief Economist. He spent over two decades at the Fed. We also have David Zervos with us, Chief Market Strategist at Jeffries and a CNBC contributor. Gentlemen, wonderful to have you here to break down what we heard from the Fed and Chair Powell this afternoon.

David, I'm going to start with you. I want to get your reaction to Gunlock's reaction, especially given the fact that yesterday on CNBC, you suggested that you see things very differently right now in terms of where monetary policy should be headed Well Morgan, you know, I don't tend to like to talk about where I think things should be going I like to talk about where I think they are going to be going That's my more positive outlook rather than normative But they asked me that question every six weeks about what I think I would do if I was in that position

And I give it to them. I do think there's a very cogent case for bringing policy back to neutral rather quickly. We had an incredibly volatile April, an unbelievably volatile April, where correlation patterns went out of whack to the tune of something we haven't seen in over 40 years really, or at least in my market experiences. And I think there was a pretty significant change

in inflation expectations in the break-even space that suggests people are looking at falls in inflation on a forward basis, one-off price increases that are then followed by weakness because of what might happen with tariffs. And I think there's lots of other supply side effects that are disinflationary that are lurking on the deregulatory side. So why we're at 100 to 150 basis points, maybe even more, above neutral and continuing to do QT escapes me a little bit. Vincent, how do you see this moment right now?

I'm reading your notes and you say black smoke signals from Constitution and C streets as well as the Vatican. What did we learn from from Powell today especially since it seems like there really weren't a lot of headlines. Yeah the bank presidents can go home the Cardinals have to stay locked in place though. So the fact is what we learned is if Chair Powell doesn't want to inform you about what they're going to do then he won't inform you about what they're going to do and the reason he didn't is he's not sure.

As opposed to David, I understand the arguments, but there were a couple mights in David's characterization. And that's what Sherpaugh emphasized. We might see changes in tariffs, and we might see expectations of inflation well anchored after the tariffs come into place but they haven't happened yet and they just don't want to jump off the diving board until they're sure there's water in the pool. David what do you think of the way President Trump is characterizing the

trade deficit and the idea that it's okay to have perhaps an overall pause on trade with China. In contrast, with anecdotally, what we're starting to hear out of several small businesses saying they're running down their inventory right now, they've got maybe a month or two left, and then they can't afford to bring more over from China, and they might just go under with an impact throughout their customers and suppliers.

How do you square those two? Sorry, that's for David Zervos. Oh, sure. I thought that was it. Thanks, John. A great question and something I think that is still, you're going to divide a lot of economists and a lot of people who think about trade with those comments.

I don't think in principle there's anything that an economist will say is bad about a trade deficit or a trade surplus, but I think what we're looking at is an overall fair trade storyline that is trying to be rewritten from an unfair trade story line. And that I think is something that does manifest itself very often in trade imbalances coming through the trade deficit. So while a trade deficit or surplus is not necessarily a good or a bad thing, it is associated with an imbalance. And the imbalance that we have today is $1.2 trillion, which this administration is trying to bring back to something more manageable and something that I think feeds gross domestic

product in the United States in a more positive way. So there are a lot of salient truths to what the president is saying. But I think this idea that just trade deficits are bad is not something you want to lead with. Trade deficits themselves are a symptom of something that could be bad that we should fix. And I think that's where the policy should be amplified. From your perspective, curious to hear,

might the medicine be worse than the disease here, particularly in the case of those small businesses I mentioned? So the issue is how do we get from here to there? You may want to bring manufacturing back to the U.S. However, you're starting from a really low base, 8% of the labor force. The transition could take a long time. Firms have to be convinced to put capital in place to foster that transition. And uncertainty about trade is, as economists say, just a deadweight loss.

and uncertainty about trade is, as economists say, just a deadweight loss. Nobody is willing to make decisions if you're not sure about where the structure of tariffs will be. Supply chains are very intricate, and if you gum up some of the decision making in just a couple of the links, you may very well find that there aren't goods on the links, you may very well find that there aren't goods on the shelves or that key intermediate inputs

aren't in place. So that's what you're hearing from small businesses. I do think it's worth noting that AI is going to play an important role in any factories of the future and in terms of retooling and bringing an American manufacturing workforce back online. I don't think it gets talked about enough. Alex Cart from Palantir discussed this with me

earlier this week. David, is a weaker dollar here to stay? And if so, what does it mean in terms of how you position yourself to invest? Look, I really do think it is. I don't think you want to call it a weaker dollar. You want to call it a reduction in the strength of the dollar That's probably the better way of saying it if you were

Someone in the policy circles here in Washington DC, but we have a very strong dollar We've had that mercantilist behavior that's been driving that stronger dollar for some time And I think we're trying to unwind that with these trade negotiations particularly with China And I think we're trying to unwind that with these trade negotiations, particularly with China. And I think that's a very positive storyline for risk assets. If we're in a broad trending lower dollar period or revaluation of the dollar lower, as I like to call it, not devaluation, then I think we have a lot of really exciting things to think about in terms of valuation. It's just all of the US's stuff looks cheaper

to anybody that's foreign, and that's a huge positive tailwind to the price for real estate, for financial assets. And ultimately, I think it comes into fruition in a lower rate structure, which is how you get there. And so really, it's kind of goes back to my risk parity trades of long stocks long bonds or levered long bonds

slightly revalued weaker dollar or lower dollar environment from morgan very strong levels in it wasn't that long ago ten fifteen years ago the euro was at one sixty dollar yen was at seventy five the pound was above two the aussie dollar was above one We have an incredibly strong dollar now. And nobody was talking back then when the dollar was 50% weaker against some of the majors about the end of dollar dominance. So I'm not really worried about it.

Very gentle with your dollar language there, David. I appreciate it. David Durvaux and Vincent Reinhart. Well, when we come back, Arm taking a leg lower, we're going to talk to an analyst about the report that's sending those shares down about 9% and about the breaking news this afternoon around reported easing, possibly, of global chip curbs. And later, don't miss our exclusive interview with Citadel founder Ken Griffin on the Fed decision, inflation, the impact of tariffs on Brand USA, so much more, over time.

We'll be right back. Welcome back. Armed down 8% here in overtime. Skyworks getting a little pop up 2% after posting earnings just moments ago. Those reports come after late session headlines saying President Trump would rescind some global chip curves. Let's bring in benchmark company managing director Cody Acree. Cody, I want to start with ARM here,

and particularly what some will call a weak guide after some solid results. How does that, does the after hours move here in overtime? Is that justified based on this guide? I think it is. I think the expectations for ARM were pretty high. They turned in a pretty solid March quarter with a little bit of upside in revenue and inline EPS,

but the outlook for June is weak by about 45 million and light on the EPS by eight cents, which I can only attribute that to softness in the smartphone market as they likely saw some pull in of royalty revenue into Q1 that's cannibalizing their Q2 outlook and that accounts for the sequential decline. Now that's in contrast to what we saw from Skyworks, which guided above a consensus by 21 million and 18 cents, likely on Apple's strength, expecting that that is about 70ish percent of their total revenue on overall smartphone revenue.

So a bit of a dichotomy between what Arm and Skyworks are saying, but all of it levered largely to Apple and the smartphone market. Cody, staying with chips, but widening out a little bit here, we've had AMD CEO Lisa Su and NVIDIA CEO Jensen Huang on CNBC just over the past day talking about the impact strategically, competitively of chip curbs, potentially when it comes to China.

Here's what they said. China is an important market. strategically, competitively of chip curbs, potentially when it comes to China. Here's what they said. China is an important market. China is a large market, and there's a balance to be played between sort of restricting certain chips and enabling sort of the larger access to the market, which I do agree that there's a large opportunity there.

China is a very large market. It's probably gonna be a $50 billion AI market in a couple of two, three years. It would be a tremendous loss not to be able to address it as an American company. It's going to bring back revenues. It's going to bring back taxes. It's going to create lots of jobs here in the United States. Coney, how should investors interpret these headlines until we know more, given that there's more than China involved here in these global chip curbs and the U.S. is in the middle

of trying to start a negotiation there? I think the outlook is what's most important here and I think the future of trade imbalance or trade tariffs are likely to continue to be pretty volatile with curbs going on in the AI processor market, AI GPU market that's restricting Nvidia by about 10 billion of revenue into the next quarter. And it just hit AMD by about a billion five into this last quarter and so just ostensibly cutting off Nvidia and AMD from the China market as a whole just at a time when the AI trade is actually starting to recover. So say we don't actually see that, I guess, reemergence of trade flows for those most advanced AI chips for American companies like Nvidia and AMD to China, but you do see some

of those export restrictions on allies like the UAE and Saudi Arabia with President Trump going to the Middle East next week erode and some of those markets further opened up. How much does that offset the China impact? It's possible that it offsets a portion, but it's going to be more of an incremental modest portion to offset. China is by far the biggest growth economy outside of the US for AI. Their development of advanced large language models and inference platforms is second only to the US, and they need processors to drive that.

And the demand in China is extremely strong for both NVIDIA and AMD. But unfortunately, these diffusion rules that looks to be setting aside by the Trump administration that is going to create country by country, like you said, easing UAE and other countries, but continuing to lean on restrictions in China. Okay Cody Acree thanks for joining us. It's time now for a CNBC News Update with Courtney Reagan. Hi Court. Hi Morgan. Well the first vote for Pope Francis's successor has ended with black smoke billowing from the chimney atop the Sistine Chapel signaling

no pope was elected. The Cardinals will return tomorrow morning for more voting. They can vote up to four times every day moving forward until they have a two-thirds majority and elect a new pope. A Tennessee jury today cleared three former Memphis police officers of all state charges and the fatal beating of Tyree Nicholas, whose death sparked protests nationwide two years ago. The judge ordered the men immediately released

after they were found not guilty of second-degree murder and other charges, though the former officers are already facing prison time after they were convicted on all federal charges in Nichols' death. And Amtrak is cutting roughly 20 percent of its top-level management amid uncertainty of President Trump's plans to invest in infrastructure. Bloomberg reporting the layoffs began Tuesday and will not affect railroad operation positions as it tries to save $100 million in costs.

Amtrak has yet to comment. Morgan, back over to you. All right, Courtney Reagan, thank you. We have a news alert on drug costs. Angelica Peebles has the details for us. Hi, Angelica. Hey, Morgan. Politico is reporting that President Donald Trump

is set to revive his push to tie the price of drugs in the U.S. and the Medicare program to lower prices overseas. Now this is something that he tried to do in his first administration and he's also been trying to convince lawmakers to include the similar provision in Medicaid as part of that reconciliation bill. So this isn't a total surprise. We know that this is an issue that is near and dear to President Trump's heart. He thinks that we are getting ripped off in terms of our drug prices that we pay here in the U.S. compared to other countries, but still a big step to hear that this is likely going forward. Politico citing people familiar

with the matter, saying that he's expected to sign an executive order directing his administration to look into this next week. Morgan. All right. Thank you, Angelica Peebles. Still ahead, Citadel founder Ken Griffin joins us exclusively from the Milken Conference in Los Angeles with his latest thoughts on tariffs, taxes and market volatility. And after the break, Mike Santoli returns with a closer look at app. Love and report one of the big winners of twenty twenty four.

That's up 14 percent right now in overtime be right back. Welcome back at Levin rallying and extended trading after topping earnings estimates earlier in the hour about sixteen percent right now senior markets commentator Mike Santoli is digging into the charts. Mike.

Yes, 16% move on an earnings report perfectly in tune with the way this stock has behaved. At Blovin was a year ago about 75. It peaked at 510 at the two days before the overall market peak in February. Then it was cut in half in about a month and it has bounced back to around

300. What it's looked most like in terms of other stocks over the last six months is micro strategy. So you have this similar situation, battleground stock, you have some true believers, you have some shorts working against it. Obviously big gains over six months, but working to some degree below the highs.

It's also, Applovin is the largest component of a video game ETF. It's a small one, but it's been moving pretty well. It's called the Nerd, and it's 11% of this ETF. And you see what I find interesting about this is that in contrast to the overall market, which is still several percent below its highs, this one is right back up to the highs. Is it a double top? Is it going to break out again? We'll see about that. And it's also a large holding at Loven and MicroStrategy in the VXF. This is the Extended Market Index.

It's everything in the US market except the S&P 500 stocks. And that is lagging. And you see, that's often the case when the market has been in risk off mode until it really gets back in gear. Those types of stocks tend to have more volatility, a little bit less tested, and it still has some catching up to do, guys. I think they should have called that video game ETF geek.

The Mike Santoli ETF should be nerd. Wonder if it's taken. Yeah. Alright, I'll take it. Alright. Thank you. Mike, thanks. Republican mega-donor Ken Griffin recently saying President Trump's trade war is hurting

America's brand. The billionaire hedge fund manager weighs in on whether that damage can be reversed when overtime returns. Question about tariffs and trade consuming a lot of oxygen during Jerome Powell's news conference this afternoon. The Fed chair saying policy is on hold as we've got, quote, so much uncertainty about the scale, scope, timing, and persistence of the tariffs. Our next guest has criticized the president's tariffs,

saying the trade war risks eroding the American brand. Joining us from the Milken Conference is Citadel founder and CEO Ken Griffin, along with our Sarah Eisen. Sarah, take it away. John, thank you. Good to see you. And I am joined by Ken Griffin, the grand finale here

at the Milken Conference. It's nice to see you and have you on CNBC. Thank you. It's great to be here today. So the topic du jour is the Federal Reserve. Fed Chair Jay Powell came out today. I don't think he leaned one way or another, but did warn that the tariffs present risks to higher inflation and also higher unemployment. What should the Fed be doing now? Well actually let's think about what he just said. Presents risk to higher inflation and higher unemployment. The word that evokes is stakeflation. That's a dirty word. It's a dirty word and I give him credit for not using that word because it's such a dangerous word but Jay Paul is doing his best to keep all of his

options open to make sure we can try to maintain maximum employment in the United States while mitigating the risk of an acceleration inflation. Do you see a risk of stagflation is that where we're headed? Well there's a risk of it because we are a high risk of it. I'd say we have a modest risk of stagflation and the question will be if we implement tariffs at the rates that have been proposed, that will certainly be an inflationary shock. Will that shock persist as we undergo deglobalization and move supply chains back towards the United

States? That's the real question that none of us know the answer to. So in your view right now, which presents the bigger risk from the tariffs? Higher inflation or weaker economic growth and high unemployment? Well, I think that it's important to remember that the president's strategy towards tariffs is part of a three-point strategy as laid out by Scott Besson. So it's a combination of tariffs, tax cuts, and deregulation. And so the question is, will all three of those come together to give us the growth

that we need in our economy? That's the real question we're going to face over the next two years. Will they? I mean, Besant was talking to me sitting right here talking about the three-legged stool producing 3% economic growth. So again, it's going to come down to how high will tariffs be in the end? How deep will the tax cuts be in the end?

And bluntly, how much can we deregulate the economy? All three of these are really big, unknown wildcards at this point in time. So it doesn't sound like you're particularly alarmed by the inflationary impact of the tariffs. Are you? Of course I'm worried about inflation. I mean the reason the American voters elected President Trump was because of the failed economic policies of Joe Biden and the inflationary shock that reduced the real incomes of every American household.

So the president really does have to focus on managing inflation because I think it's front and center the primary scorecard that American voters are going to think about when it comes to this midterm election. Right. I guess the question is how long the tariffs stay. I mean, that's what it comes down to. How long do you think they have here to till we start seeing deals?

So we have there's there's two dynamics here. Number one is it's better to cut a thoughtful deal than a quick deal. And I do hope that the president and his team really are effective at negotiating on behalf of the American people. President's spot on right. American businesses and therefore American workers do get the short end of the stick when it comes to trade around the world. It's clear that many countries take steps, both extraordinary, whether it's by regulation,

law or otherwise, to make it more difficult for American businesses to sell goods and services into their countries. President's spot on right on that point. Tariffs are his way to deal with this issue. I would have picked a different path, but we need to be thoughtful here in the negotiations with foreign countries to make sure that the American people do get a fair deal with trade going forward. You've been pretty critical of the tariffs.

I have been. Damage on Brand USA. What do you think the consequences are? The challenge that I have with tariffs is that tariffs hit the pocketbook of hardworking Americans the hardest. It's a very regressive tax. It's like a sales tax for the American people. It's going to hit those who are working the hardest to make ends meet. That's my big issue with tariffs. It's such a painfully regressive tax.

Administration will say that they're actually trying to help the American worker because they're trying to bring back manufacturing and the lost jobs, the forgotten worker. Do you see a likelihood of that? Is that a realistic goal? So it's unclear to me how many jobs will come back to the United States. There's a number of significant challenges. First, unemployment's only 4.2 or 4.3 percent at this moment in time. So there's not there's not a lot of people looking to work in factories and

there was a recent poll of the American people and one of the questions asked would you trade your current job for a chance to work in a factory and a very small proportion of the American people said I would give up my current job for an opportunity to work in a factory. So it's gonna be very difficult to find workers to work in manufacturing America. And people forget that manufacturing America today is about 5% of the workforce.

It's a small part of our total economic base. Now manufacturing has almost parallels to agriculture. 125 years ago, almost half of all Americans were in one way or another involved in agriculture, farming, processing of foods. My family, both sides were involved in farming. Both had small farms in the Midwest. Today in America, about 2% of the populations involved in farming. The economy is much broader, much deeper, far wider array of

opportunities for people to pursue for their careers. Farming still, of course, existentially important to the United States, but we are able to feed this nation and the world with very few people actually working in agriculture. It's a triumph of productivity and advancements in farming technology. Manufacturing, we've shrunk our manufacturing base dramatically. So it's not as if we're going to take 30% of Americans working manufacturing and make it 40%. Are we going to turn four to six or four to seven? And the question is, is the cost of that worth it to the American people?

It sounds like you do not think so. I think it's just incredibly regressive. And I think that many of the aims the president wants to achieve are better achieved through other more direct measures. The president's rightfully worried about national security, the ability for America to defend itself in the event of a war, could we build the planes, the tanks, the ships that we would need if, God forbid, America was pulled into a global conflict?

But the answer is only a small portion of all manufacturing facilities could actually make a meaningful difference in helping that to happen. The idea that just manufacturing brought to America will make us more robust in the event of an incident of war, it's just not true. We need very specialized factories with very high skilled labor that knows exactly how to build the F-35 or the drones of tomorrow. And yet here we are with 145% tariffs on things like sneakers and t-shirts coming from China. You warned recently that you see a hit to brand USA, the brand damage. And I just wanted to dig into that a little more and find out what you think the consequences

of that are, short and long term. So of course it's gonna hit many different ways. You know if you look for example at the the attitudes in Canada towards the United States over the last several weeks. The Canadians, the Canadians now have stores where products are labeled not made in America, not made in the United States right and when you do And when you do that, when you do that, you're telling the Canadian people, the Canadian people are saying to the Americans, we don't want your products. We're losing access to a very important export market

because of how we have dealt with Canada. That story, that story is playing out around the world. And what's really unfortunate is so much of what we sell to the world is the sense of the strength of the quality of American-made products and the quality of the content that we produce in the entertainment industry, for example. When we make people no longer have positive feelings towards American-made, whether it's movies,

whether it's cars or otherwise, we really diminished the opportunities for American businesses and American workers. What about the American stock market, bond market, dollar? Questions in recent weeks about whether it's all still exceptional. Or do you see potential damage here to that story? You know, what's interesting is this.

I think this debate's been misframed as Wall Street versus Main Street. It's one country and almost 65% of all Americans own stocks. So I start with my conversation on tariffs with the fact that all Americans are going to pay with respect to this trade war. But when it comes to finance, clearly there's been a pullback by foreign investors from US equities, US debt securities, and the US dollar. That raises the cost of capital for American businesses. That actually makes it harder to build factories.

That makes it harder to invest in our country. That's really heartbreaking. And then with the dollar being weakening, we're now importing inflation into America. It wasn't supposed to be that way. No, it was it was not anticipated, right? The theory of the case from some of the president's advisors was if we impose tariffs, if we impose tariffs, the dollar would strengthen. And it's gone exactly the wrong direction as compared to what those advisors told the president. He was misinformed as to what was going to happen.

And we're seeing foreign capital leave our country and make it more expensive for American businesses to create new jobs and new factories. Before we let you go, I definitely wanted to ask you about Harvard, because you are one of the biggest, if not the biggest, donor to Harvard, your alma mater. I mean, the fight between the administration and Harvard ramped up again. I spoke to Linda McMahon, the education secretary, about her letter she sent this week.

No more grants. Don't bother applying. What do you want to see happen here? The situation at Harvard is really, really heartbreaking to see. You and I both reminisced about our college days before we came on air. I mean, for me, to be at Harvard as an undergraduate was an incredible experience. Martin Feldstein was one of my professors in economics. Richard Neustadt when it came to government policy.

Larry Summers. I was exposed to so many brilliant minds with such diversity of thought. Lori Lightfoot. Well. Bill de Blasio. You know, I'm not sure why we have two of the mayors whose terms were amongst the most failed leadership moments in American politics at Harvard teaching the next generation. I don't understand that.

But leave that aside, the university is in a really tough spot with the administration. I think that their strategy to escalate has forced the Trump administration to escalate back and the only losers are the students and another one of America's great institutions, one of America's great brands. I really do believe on the issue of governance, Harvard has to change course. The administration has made it a consistent point that governance at Harvard and the insular nature of the corporate board is not in the best interest of the institution. I actually concur with that.

I believe the alumni should have a voice in who serves on the corporate board. The corporate board should open some of its seats to either direct or indirect election by its alumni to increase accountability and to make the board more representative of the overall ethos of a Harvard alumni. Echoing Bill Ackman a little bit there on changes, calling for Penny Pritzker to step down.

Is that essentially what you're saying? No, I'm not saying that. Just changes on the board. I'm saying that the board at Harvard should have a path for the alumni of Harvard, who are the donors, who do represent the brand each and every day around the world, to choose who governs the institution going forward. Ken, thank you for the time today. Good to get your your take on the world as always. Great to be here. Thank you so much. Thank you. The founder and CEO of Citadel. Back over to you, John.

All right. Thanks to Ken Griffin and to you, Sarah Eisen. Well up next, a cybersecurity name sinks and an under-the-radar AI play gets a boost. We've got some more big earnings movers to tell you about. And if you are looking for the perfect Mother's Day or graduation gift or just want to treat yourself and scan the QR code on your screen to sign up for the Fast Money Live event on June 5th at the NASDAQ. Stay with us. Welcome back. Let's get to some more overtime earnings movers.

Cyber security company Fortinet is falling down about 8% after a mixed quarter beating on earnings while matching revenue estimates. The lower end of guidance coming in below expectations. Mercado Libre moving the other way up about 10%. The company handily beating earnings estimates and reporting a 17% jump in gross merchandise volume year over year.

And Axon is popping up five and a half after beating earnings and revenue estimates. Morgan, big interview just now here. Sarah Eisen had with Ken Griffin, talking about the global trade picture, and something in there just kinda caught my thought wheel, and the little hamster in there started running pretty quick.

This idea that US businesses have been screwed by this trade deficit with China, I'm thinking back over the last 20 years, and in technology, it's been really interesting how US software and connectivity has thrived because of lower cost Chinese manufacturing. Look at what happened with the iPhone, right? Look what happened with the cloud where the emphasis is not on the hardware cost, it's on the network connectivity and the software fabric that ties all that together and operates

out of service. Think about Dell and just-in-time delivery and how he moved manufacturing from the US more toward China and then innovated in the delivery and in the lower cost. I wonder if we need to consider that as we think about these trade deficits and what's really valuable. Yeah, certainly it's all part of this

much more complicated conversation and sort of the role that populism has played. And I think that if you look at the income inequality that's happened in this country and how that has happened over pretty much the same period of time that China has entered the WTO, that's the other piece of the equation. That being said, we have a number of other rate decisions coming from other central banks tomorrow. It was an update for the markets despite the FOMC meeting and holding study today.

That does it for us here at Overtime. Pass money starts now.