Closing Bell - Closing Bell Overtime: Trump Tours Fed with Powell; CSX CEO On M&A Rumors 7/24/25

Episode Date: July 24, 2025

President Trump toured the Fed’s renovation alongside Chair Jerome Powell before taking questions from reporters. We break down all the angles with our Steve Liesman and Eamon Javers, as well as former Federal Reserve Vice Chairman Roger Ferguson on what it means. Plus, the market breakdown from Vital Knowledge’s Adam Crisfulli and Citi’s Scott Chronert. Intel earnings reaction with Bernstein’s Stacy Rasgon. CSX CEO Joe Hinrichs on earnings and consolidation rumors in the industry.  

Well that's the end of regulation. The Autism Science Foundation and Wall Street rides for the ringing, ringing the closing bell at the New York Stock Exchange. Mega fortune doing the honors at the NASDAQ. And we've got another record close on Wall Street, both for the S&P 500 and the NASDAQ. The Dow, however, snapping a two-day win streak. Earnings fallout for three stocks that released results right here on Overtime yesterday. IBM is the biggest drag on the Dow after reporting disappointing software sales. Tesla sinking after missing on both the top and bottom lines due to a 16% decline in automotive revenue.

And Chipotle, one of the biggest losers in the S&P 500 on declining same store sales. Airline stocks also under a lot of pressure. Grounded after American slashed its full year profit forecast on weak demand in Southwest missed earnings estimates plus health care being dragged down by United Health after the insurance giant announced it is quote complying with formal criminal and civil and civil requests related to the Justice Department's probe of its Medicare billing practices. Well, that's the scorecard on Wall Street.

Welcome to Closing Bell Overtime. I'm Morgan Brennan, along with John Fort. And Chip Stocks now set to take center stage when Intel reports earnings just moments from now. We're gonna have instant reaction from a top semiconductor analyst. Plus, we get the outlook for the Hollywood box office when we speak exclusively with the CEO of IMAX.

His company just beat earnings estimates and could be set for a blockbuster weekend with the release of theMAX. His company just beat earnings estimates and could be set for a blockbuster weekend with the release of the latest Marvel superhero movie. But first, we have breaking news as President Trump gets set to begin an unprecedented tour of the Fed this hour. And he just announced on social media that Chairman Jay Powell will be there with him.

Our Eamon Javers has the details. Eamon. John, that's right. According to reporters traveling with the president, his motorcade has just arrived at the Federal Reserve. We should be seeing those pictures momentarily. This comes at a moment of high drama between the two men. The president has been harshly critical of Jay Powell,

suggesting that he has been too late on lowering interest rates, demanding that the Federal Reserve do what he wants in terms of interest rates around the world. The Fed clinging to its independence here, J-PAL suggesting that he's not going to resign any time before his term is up next spring. The president said he's not going to fire J-PAL, doesn't want to do that because he's got a limited amount of time left anyway. But this visit today, John, is all about putting political pressure on J-Powell. The president's going to suggest that the cost overruns at the Fed's construction site — and we have some new pictures that came in earlier today of that construction site

— those cost overruns are Powell's fault, and Powell's mismanaged it. There is a suggestion in Washington that the president might use those cost overruns as a for-cause reason to fire Powell. That is, that he's mismanaged that, and a for cause reason to fire Powell. That is that he's mismanaged that and that's reason enough to fire him. The president said for now at least he doesn't want to fire Powell, but this visit will put a lot of pressure. We do expect to see J Powell here on camera with the president of the United States in a couple of moments.

The president put out a post on truth social just a short time ago in which he said that he will be looking at this project and he will be visiting with Jay Powell. So watch for that handshake, watch for the body language. Really high stakes, really high drama here over the next couple of minutes as we watch this meeting play out, John. All right, and in Javers, thank you.

Well, Intel stock popping a bit, up a little better than 2% at the moment initially because earnings are out. Christina Parts-Nevelis has the numbers. Christina. Thanks, Don. Well, Intel reported a revenue of $12.86 billion a beat with a loss per share of 10 cents. I'm not going to compare current quarter EPS or margins to estimates due to an $800 million non-cash charge. Intel had to write down some tools it can't reuse, which hurt profitability. Looking ahead, though, Q3 revenue guidance came in strong the midpoint at 13.1 billion,

which is above estimates, possibly helping the stock right now. Gross margins and earnings per share for Q3 were a little light. I did speak to Intel CFO David Zizner just about 20 minutes ago who said the company has completely or has completed most of its planned job cuts to reach 75,000 employees by year end, but with headcount still at 96,000 at the end of Q2, more cuts are still occurring. As for other cost saving efforts, Intel is canceling planned projects in Germany and Poland and then consolidating a plant in Costa Rica. Zizner says they will allow or that will allow for more CapEx to be directed to the United States.

And they also plan to be more conservative with foundry spending as the CEO comments are going to come out It's no more blank checks I also ask Intel in regards to the 18 a chip process and it's the most advanced manufacturing technology It's meant to rival the likes of TSMC. There were reports from Reuters It might be used only for Intel's own products Zizner said that was always the intent adding quote, quote, we haven't made nearly as much progress as we had hoped with external customers. Still, Intel is ramping up 18A volume,

while the next generation 14A process also advanced, is showing better yields, and is in a much better position to achieve customer success, according to Zissner. Back over to you. All right, Christina, thank you. Now, looking at these Intel numbers, the revenue both for the quarter they just reported and the quarter that they're guiding to,

revenue seems solid, but the EPS, a bit of a question, I know you said we're not comparing it, but I imagine this is gonna raise questions about whether they're discounting chips, whether that plays into this at all, whether their margins are still on the trajectory that they were, they haven't been good because of not being able to load

up the fabs. And then how much the pull forward because of tariffs might play into this. Is that something we have to wait for on the call? Did Zizner say anything to you about that? Yeah, so he did. So in regards to the gross margins, they came in a little bit light. He said that had to do with Lunar Lake, which is a particular chip.

He said it's going to improve going forward. And then in regards to tariff pull-ins, remember in Q1, we did see that, and that contributed to the beat. I asked him specifically about that. He did say he saw it again, so there was some demand pull-in because of the tariffs, but he didn't think that that attributed,

or that was the reason why revenue came in strong. So it's kind of the same case as last quarter as well. All right. Christina parts and have less. Thank you. Intel shares jumping around. We're now down about an hour up, I should say about 1% on that on those results. Well, let's get more on President Trump's visits to the Fed with Steve Leaseman.

Steve, your take on this, especially since we haven't had a president formally visit the Fed in almost two decades. And last time that happened, it wasn't for political reasons. No, it was back in 2006 when George W. Bush was there for the swearing in of Ben Bernanke. Before that, it was Gerald Ford for a similar reason. And before that, it was FDR opening up the central bank in, or this particular, or one of its buildings in 1937. So this is a very different reason for the president to visit the Federal Reserve and meet with the Fed chair. Obviously there are many out there who think this is

simply political. This is something that the president is doing to distract from other things going on in Washington, for example, the Epstein case. For example, as a cudgel, there he is, the president now walking through with a hard hat on looking at the new building. I believe he was going to be with Mr. Pulte from the FHFA. Yeah, we're actually just going to go there and take that shot right now as he enters the Fed building. OK, all right. And I'm cutting you off, but we don't have audio.

And there he is with Jay Powell there on his. Yeah, there's Jay Powell on the right there explaining to the president what's going, why they're at where they're at. It's something like a 700 or 600 million dollar overage compared to some of the prior estimates that were out there. And there's the President and the Fed chair standing in hard hats together. One of the more...

It sounds like we do have audio now, Steve. Let's listen in. Yeah. And Tim has been with me for a long time, and you're in charge of the committee. Indeed. One of the reasons I wanted to see it was the overruns of the expenses wanted to figure out why. So we're taking a look and it looks like it's about 3.1 billion it went up a little bit or a lot so the 2.7 is now 3.1 and I'm not aware of that. Yeah, it just came out. Yeah, I haven't heard that from anybody at the Fed. Yeah, it just came out.

Arndt has added about 3.1 as well. 3.1, 3.2. This came from us? Yes. I don't know who does that. You're including the Martin renovation. That's our entire capital. You just added in a third building. That's a third building.

It's a building that's being built. It was built five years ago. We finished Martin five years ago. It's part of the overall work. So we're going to take a look. We're going to see what's happening. And it's got a long way. Do you expect any more additional cost overruns?

Don't expect them. We're ready for them. But we have a little bit of a reserve that we may use. But, no, we don't. We expect to be finished in 2027. We're well along, as you can see. Nice to take these off every once in a while when we're not under too much danger.

So any questions? Mr. President, as a real estate developer, what would you do with a project manager who would be over budget? Generally speaking, what would I do? I'd fire him. Do you think this issue, Mr. President, gives you comments to do that? Well I'm here just really with the chairman. He's showing us around, showing us the work.

And so I don't want to get that. I don't want to be personal. I just would like to see it get finished. And in many ways, it's too bad it started. But it did start. And it's been under construction for a long time. It's going to be a real long time, because it looks like it's got a long way to go.

Are there things the chairman can say to you today that would make you back off some of the earlier criticism? Well I'd love him to lower interest rates. Other than that what can I tell you? The country is doing really well. I just briefed the chairman on the deal we've made with Japan. Japan is putting up 550550 billion in order to lower their tariffs a little bit. That way they have a little bit lower tariff. And they also opened their country to free trade, which nobody thought was even a possibility.

And we get a zero tariff in the free trade. We don't pay tariffs. And they're going to pay 15 percent on everything they send into our country. So it's great. But they put up, as you could call it, seed money. Let's call it seed money. You could call it anything you want.

But it's five — it's a total of $550 billion. So nobody thought any of that was possible. And it's wonderful. And we're doing pretty well with the European Union, likewise. And we have some others. They're all really big. And our country is going to make a lot of money. We would be helped if interest rates would come down,

but we're going to see how the board rules on that soon. I'd love to see them come down a lot. But we have a country that's thriving. We had a dead country one year ago today. We have the hottest country anywhere in the world. And we'll get this one finished. Thank you. Okay.

It appears that the President is continuing his tour with the Fed chair. Steve Leesman, I want to bring you back in here. We had a bit of a dramatic moment there as the president and Senator Tim Scott I believe said that the cost of the Fed renovation had gone up to 3.1 maybe 3.2 billion I believe it was around 2.5 and the Fed chair looked at the sheet of paper looking concerned that the president handed him he had been shaking his head no as the president had been saying that and the Fed chair said well you added another building in here construction on that actually began five years ago not sure if you know which

building they were talking about there or what what that adds to the significance of this visit but what was your take Steve? So I saw those same numbers earlier and I did a double take on it I believe the chair is correct that what they did is they they were adding in the cost of renovating the building across the street where the fed moved in order to be able to renovate the buildings that it occupied or one of the buildings that it occupied. It also took on a third building apparently at the urging of the general services administration as part of the renovation.

So I think the Chair was right about that, that it was including another building that I believe had already been completed. I'm not sure why it appears in the running costs of the Fed. Maybe Eamon Javeras has some details on that. I know he was trying to suss that out earlier, that it looked like 3.1, but that was inclusive of a third building. I just think that, you know, the moment is extraordinary where the reporter asked, what would it take for you to back off? And he said lower interest rates.

So there's that connection, John, you know, straight, directly, you know, unalloyed, unchanged in terms of saying, well, why am I doing this? I want the chair to lower rates and then then I might back off. It's the implication of that. It is really bizarre or extraordinary, I guess, for a president to be visiting a building, a government building in renovation that has a cost overrun, which I have watched this building under construction

for many years and thought, well, there's just another government project that takes forever. I would hope if the president has interest, he could also visit the George Washington Bridge, which has been under construction for it looks like a decade now. All right Steve stay right there because for more on Trump's visit in the future of the fed let's bring in Roger Ferguson he's former vice chairman of the federal reserve he's also CNBC contributor. Roger it's great to have you on the significance of the video we just saw, that interaction between the president and the Fed chair, your takeaway.

Well, look, let's be very clear. It has very little to do with the building. That is the cudgel that's being used right now to try to do something I think is very unwise. The president is trying to pressure the Federal Reserve, including the chairman, to lower rates at a time, and I think the data don't support that. What is unusual here is not that

there's this pressure, because it has happened many times in the past. What is unusual is how public it is, and I think it risks really undercutting the independence of the Fed or the perception of independence, and I think that

is not very helpful at all. So, Roger, a number of folks have, in recent days, made what you could call a contrarian case, whether it's Mohammed Al-Aryan or it's Jeremy Siegel, because of the politicization or the optics of politicization here, that perhaps if the goal here is to maintain operational autonomy for the Fed or the optics of independence, that the best thing the Fed chair could do right now is to resign.

Your reaction? I disagree with that completely. I think the worst thing that Chair Powell could do at this stage is resign because it would obviously be a political move. It would obviously be in response to the pressure from the president. It would be the opposite of proving independence. I think the best thing that Chair Powell can do and the best thing the FOMC can do when they meet next week is to make decisions based on the incoming data, changing outlook

as they see it, and articulate whatever the end of the round rationale is. I would expect them to keep rates on hold and maintain a wait and see posture because there's so much uncertainty. And to do anything other than that I think would be inappropriate at this stage. Steve Leesman, give me your take on the significance of this moment in the history of the Fed and sort of what happens perhaps from here. The president has made the argument

that the Fed is political. Some other people have said that as well. David Zervos has said that here on overtime. And that the Fed isn't lowering interest rates Some other people have said that as well. David Zervos has said that here on overtime. And that the Fed isn't lowering interest rates perhaps for political reasons. But at the same time, what we just saw, the stagecraft with the hard hats and then, you know, taking out the paper and saying the cost overruns are worse and that this is really about construction, but no, it's not.

The Fed seems to be getting pulled into a political atmosphere, even as it tries to assert independence. Is it possible to get this rabbit back in the hat? Will the Fed ever be arguably completely independent again if it has to deal with this sort of political tug of war? So there's something that I sort of like about Donald Trump in the sense that the way he pushes every institution to the limit and to find out how strong it actually is.

And we are at a moment now where we are going to find out just how strong, how secure, how independent the Federal Reserve is from political pressure. Not because the Fed, the President made a couple of tweets, not because that he took a Fed chair as Roger said, as happened in the past in the back room and yelled at him, but because he has created a public assault on the Federal Reserve and made a huge issue out of a building renovation.

And we will find out, John, what is the deal? How independent is the Fed? I think if it survives this, it emerges very strong. And we'll see. I just want to make one comment on something the President said in front of the Fed chair. He said the economy is doing great, and he used the word hot. That's an inadvisable word, I would say say for the president to use to the Fed chair. You got a hot economy.

I think that's a reason why the Fed may not be so interested in cutting rates. Look at jobless claims this morning, 217,000. The unemployment rate, 4.1%. We're going to do pretty good on GDP growth in the second quarter. I guess we get that next week. And other things are doing pretty well. The stock market hitting new records. And by the way, this whole big to-do about should the Fed cut rates.

The Fed has two cuts dialed in, just not in July. And I should think that the economy is strong enough, the President would be even confident enough in the economy and the legislation that he has shepherded through to think that a Fed that cuts a quarter point in September is not that consequential versus doing it in July. Okay Roger Ferguson last word to you given all that our Steve Leaseman just said this could come down to the Supreme Court. Now we've had some indication from the court that there are limits

to a president's powers to fire and perhaps those limits begin at the Fed's door. Look, the Supreme Court was pretty clear that, at least with respect to the Fed, the president's powers are maybe more limited than for other places. There's still this question of for cause. So while this may come down to the law, I think at the end of the day, it comes down to markets. And it comes down to the points that Steve was making, which is, you know, the current incoming data does not support the concept of a cut.

The president should be relishing his strong economy, which does not call for a cut. And the final point is if the Fed were to cut rates inappropriately now, it is going to make the cost of borrowing from the United States higher, not lower, as markets build in greater inflation expectations. So I think at the end of the day, the Supreme Court may have a statement in this, but the markets, I think, will dictate what needs to happen. And I have a high degree of confidence that Chairman Powell and his colleagues will stand firm, do what is right, and come out of this showing that they are prepared to serve the

U.S. people and the economy and their mission, not knuckle under to political pressure that's being applied so publicly at this stage. Roger, finally, I just want to get one more question on the markets piece of this, because there is that concern out there that you could see a debt spiral and obviously it's costing more at higher rates to service that debt and this has been part of the argument from the president in recent weeks so how do you counter that? Look, I think the president's saying that the Fed should lower rates is I think misunderstanding a little bit of

the way the market would work. What the Fed controls is the short end of the yield curve. They may at the right point lower rates if in fact inflation is under control and the economy appears to be slowing. That may lead to longer rates coming down if the market agrees with the Fed. If the market assumes that there's going to be greater inflation than maybe the Fed does or they think the Fed is cut inappropriately, they're going to expect out of the longer end of the curve, 10 year, 30 year, etc., higher interest rates, not lower rates. And so I think the president should be very careful what he asked for. I think the Fed is unlikely to

agree unless the data is supported. and only if the data support lowering rates Well, the market go along with it. And so at the end of the day, you know The economy will dictate what needs to be done and that's what we need to do. All right, Roger Ferguson former vice chair at the Federal Reserve Thank you our own Steve Leesman. Thank you as well up next We'll get reaction to Intel's results from an analyst with a hold rating and find out what he wants to hear from management on the call at the top of the hour. One more time is back in two. Let's get another check on Intel. Stocks still higher, almost 1.5%, but off the highs after reporting earnings results moments

ago. Let's bring in Bernstein Research Managing Director, Stacey Rasgen. Stacey, this is a tough report for me to parse. Revenues beat, but EPS is a miss. Margins seem to be a miss, but it's not clear if that is really in the mix for the EPS issues. And then we've got the CEO, relatively new, coming out saying more about the direction here, but it's not clear to me how different this is

from what previous management might have done under these current circumstances today. How do you parse it? Yeah, you bet. So I think it's different than what prior management would have done. I mean, clearly, Lipu was cutting, like Pat was sort of the opposite.

The print itself is actually okay. Like the revenue is pretty good. The EPS was hit there. They took some charges in the quarter. They've got some tools. They've just got too much equipment. They're writing it down. X the charges, it was actually a pretty good beat in the quarter.

The guide is a little strange. So the revenue guide is actually quite good. The gross margin guide is light. I suspect that it's either mixed or probably more outsourcing that's driving it, but the gross margin is light. The EPS guide is below, even on a revenue guide that's pretty strong. They're making some other operational changes. So they're cutting OpPEX and CAPEX.

The targets for this year are still the same as they were last quarter, but it looks like those are set. They're delaying some future projects. They've canceled, looks like the Germany project and the Poland project. They're closing down their Costa Rica backend facility. They're delaying their Ohio plans further. That has implications. I think investors will want to know maybe for some other stocks, what are their capex

plans like for next year? But overall, I would say it's a mixed print around this. It's a little messy. At a minimum, the revenue outlook for now, we'll see how sustainable that is. People worried about pull forward and everything. But for now, the revenue outlook at least looks pretty decent. So what is the next potential landmark catalyst for the people who are trying to see,

is there a point at which we can buy this stock? What would be the proof point from Lit Butan and from Intel to say, okay, well, maybe this turnaround is coming on a pace? Yeah, no, it really probably is around the next generation processes. And so again, 18A is supposed to be ramping, launching and ramping at the end of the year.

Again, their margin guidance to me suggests that they're doing more outsourcing. So we'll see how that outsourcing versus internal manufacturing goes. But it clearly is the process roadmap. 18A, attracting foundry customers, I guess eventually like ramping 14A. There's been a lot of question

of whether or not those processes are viable. I would say at least in the slide deck, I think it's on page five, they still have the logos for 18A and 18AP and 14A on the page at least. So at this point, I guess those processes are still there, but investors are really gonna wanna know how successful those are gonna be.

Like what does that volume look like as it ramps? And then can they attract any customers? Those are probably like the structural proof points above and beyond just is revenue good or is it bad? Because right now we don't know how sustainable or not sustainable that would be. All right, for sure. Stacy Raskin, thank you.

You bet. Well, there's an urge to merge in the railroad industry. Up next, the CEO of CSX on whether merger talks between Union and Pacific and Norfolk Southern will force him to consider a deal of his own. Stay with us. Welcome back to overtime. A transcontinental railroad. That's the vision for Union Pacific as it confirmed with North Southern today that the two are quote engaged in advanced discussions to merge.

The talks could still collapse, but the possibility of consolidation triggering reports at Berkshire Hathaway's BNSF could look to buy CSX too as well if a merger between UP and NS materializes. Now I spoke exclusively with CSX CEO Joe Henrichs earlier, and he said no comment on whether CSX isn't talked with BNSF, but I also asked about the risk that regulators could say no to consolidation across the industry.

There are definitely, you know, requirements to be met and any kind of consolidation and the STBs are very clear on that. They've not been tested. So it's gonna be a long process if in fact it does start to materialize. Let's be clear, other major stakeholders will have a big voice in all this, whether it's the unions, whether it's customers,

other parts of the ecosystem in rail. And we're proud of the relationship we have with all of those different constituencies in the railway. Now the last big merger, which was Kansas City and Canadian Pacific, which closed back in 2023, if that's any indicator, any deal could take years and we'll see those quote stakeholders, not just the regulators at the surface transportation board weighing in along the way.

Now CSX, which reported better than expected earnings right here on overtime yesterday, also offering insights on the economy. It's a mixed bag. You know there's strengths in some areas like construction. The ag business has been strong and strong Midwestern crop coal volumes are still strong met coal prices are down significantly, but I but

also in the motor business has been up and down but it's up you know very much for the year but autos housing some of the paper pulp board you know stuff tied to interest rates are still under pressure. And so there's still potential for this economy to grow if we can get some of that going. All right, well, Henrik's noting, quote,

ebbs and flows and port activity tied to tariffs, but also said he's bullish over the next few years on industrial development, especially as the bonus depreciation in the tax bill helps to enable that. So now I believe the president is set to speak again. Is he speaking? Let's get back to the that. So now I believe the president is set to speak again. Is he speaking? Let's get back to the president.

If you remember, not so long ago, we rebuilt the old post office into the Trump Hotel, and we sold it to Waldorf Astoria. And it was a great success, and we had great luck with the building. We did a good job. We built it quickly and relatively inexpensively, and for about $200 million. And that was a big hotel. Big, big project.

But we looked around, and Tim Scott is here someplace. Tim, come on up. Just you saw what we saw. And the big thing is to get it done. They have to get it done. They have to get it finished. And very importantly, we have to get interest rates lowered in our country.

Our country is the hottest in the world right now, but the one section, people are pretty much unable to buy housing because the interest rates are too high. We have no inflation. We have a lot of cash coming in. The tariffs have been unbelievable now. People that didn't even believe in tariffs are saying,

what a great move that was. We have hundreds of billions of dollars coming in. Japan, just on one deal, is paying us $550 billion. And they opened up their economy. It's incredible, the deal. And they're happy, we're happy, everybody's happy. But we should have the lowest interest rate of any country, and we don't. We should have the lowest interest rate of any country, and we don't.

We should have. Every point is worth $365 billion. So we want to get the rates down, but we also want to get the Fed building finished. So I met with the contractors. We toured it with the chairman, and we had a very good tour. And we'll talk to you about it sometime. But Tim and I I we sort of understand what happened. Too expensive. Bottom line is this that Americans

deserve to become first-time homebuyers. President Trump has created the best economy in the world. The one thing that would make it better is lower interest rates. Full employment is even more possible. Wages rise faster as interest rates come down when your employment is at 4.1 percent because of your leadership. We have revenues coming in at record-breaking maybe last month even more revenue coming in than bills going out which is remarkable. They found 25, 26 billion dollars they said where did that come from? Nobody I think that's been many many decades since that

happened. I can't remember that But they found 26 billion last month. And they said, Where did that come from? I said, Why don't you try the tariffs? That it was true. We took in we're taking in hundreds of billions of dollars. And our country is doing great. And we have no inflation. And the numbers, the job, everything is good.

The one thing we have to do is get housing prices down and the interest rates down so people can buy the house because they're all making money, but they can't get the interest rate down. We have to. Amen. Right? And he's been my friend for a long time. A very luxurious situation taking place, let's put it that way.

And I was given a very nice tour by the head of construction. And, you know, look, if you look over here, they're trying to open up the basement. When you open up a basement, first of all, it's the worst space. Always a basement is the worst space in a building. And it's also the most expensive space to build.

And especially here, because you have a water line, you know, you're going down into the water. So they have to build a reverse — what's called a reverse bathtub. The water has to be kept out. It's very expensive construction. So it would have been good if they didn't build it. It would have been good if they didn't do certain other things. If you look at the kind of protection in the hall —

have you been able to get in the hall? You saw the protection of plywood. I mean, that was a lot of money, just to protect it for a period of time. I would have done it very gingerly and easily and not have spent, you know, millions of dollars on protection. And there are things that could have been different.

Look, look, there's always Monday morning quarterbacks. I don't want to be that. I want to help them get it finished. It's been going on for years, and I want to help them get it finished. And what we really want to do, and I think I can speak for Tim, and I think I can speak for the entire Senate.

We can speak for everybody, frankly, is we want to see interest rates come down. Our country is booming, and the interest rates is a final little notch. And if you look at Europe, they've lowered 11 times, 11 times in a short period of time. We've lowered zero. And, you know, they are competition, although we're in the process of probably making a very good deal with them, too. They want to make a deal very badly, very badly.

So we're making a deal. We just completed our deal with Indonesia. We just completed our deal with the Philippines. We're making unbelievable deals. and the money is pouring in. We want to get interest rates down. But on interest rates, at some point, does the level of interest rates now slow economic growth? Yeah, it never helps it. If it's high, it never helps it.

Well, it's already as good as we're doing. Think of how well we'd be doing. We'd be like a rocket ship. As good as we're doing, we'd do better if we had lower interest rates. And we should. We're prime. Don't forget, without us, the whole world collapses. So we should have the lowest interest rate.

Because, you know, you can talk about Switzerland. You can talk about wonderful countries. No debt, no. But without us, everything collapses. We should have the lowest interest rate. And if you took it down three points — not a little bit, but three points — if you got us down to one, we would save more than a trillion dollars, basically with just a paper transfer.

You wouldn't be cutting costs of anything. You wouldn't be building anything. Just a move of the hand, saying we're going to lower interest rates, you would save a trillion dollars a year. And there's nothing you can do to save that kind of money. So I'll... The Press. Mr. President, why he's not lowering interest rates?

The President. We had a little talk about it, and I thought it was a very productive talk. He'll be able to tell you at his next meeting, but I will say that he did say the country is doing really well. How would you describe your talk with him? Would you say that the energy was tense? You know, did you come to any agreements with him? I thought we had a good meeting. I really, no, there was no tension. There was no tension. I think he had more tension with my great senator to the right.

He's a pretty tough cookie. He was a... You might say... The problem is we had an honest candid conversation about some of the overruns at this building. We had it in my banking committee, and he said we were wrong. And it turns out we were right.

Thank God President Trump and his team took enough time to dig into some of the details. And the details are clear. We need to get this project done. We would like to keep it where it is or a little lower. But at the end of the day, the point is that instead of talking about interest rates, instead of talking about first time home buyers, instead of talking about the heat in our economy, that's a good thing.

We're talking about an overrun on the Federal Reserve building as opposed to the Federal Reserve objective of lowering and keeping our economy full. Mr. President, you know, as an example, they built parking spots under a building next door. Really expensive. That's very expensive. When you're starting to build parking lots, underground parking lots, that's a very expensive thing.

A lot of people I know, they park their car and they walk a block or two blocks or something but it is a very expensive thing but that is what it is and that's okay. Is this project a fireball offense for Jerome Powell? Look, I would love to see it completed. I don't want to put that in this category. It's a very complex thing that could have been made simple. I built a great hotel, and the great hotel that everybody in this group knows very well, it's called the Old Post Office.

And it's a much bigger project than this. And I spent $200 million building it. And it was down. It was taken down to the steel, for the most part. Taken down. You know, you've seen it go up. And I built it quickly, and I built it for $200 million. That was a much bigger job than this.

It spent $200 million. And it's got marble bathrooms, the top fixtures, the best of everything. All brand new. So, you know, this is a very expensive job. I don't know. It got out of control. And that happens. That happens. I don't know. It got out of control.

And that happens. That happens. It's a shame. I built it quickly and I built it for 200 million. That was a much bigger job than this. It's been 200 million and it's got marble bathrooms, the top fixtures, the best of everything, all brand new. So, you know, this is a very expensive job.

I don't know. It got out of control. And that happens. That happens. It's a shame. The Press. I'm negotiating on auto tariffs. Your auto tariffs are not being negotiated. The President. No, I'm not negotiating on auto tariffs. The Press. So does the EU, the EU looking at 15 percent like Japan? The President. Well, it depends. Japan, what Japan did is they bought down their tariffs.

They gave us $350 billion because they didn't want to pay 20. They were 28 percent, and they gave us $550 billion upfront. 100 percent, 500. We get 90, they get 10. 90 percent, they get 10. And there's no payment. It's not a loan or anything. It's a signing bonus, I call it. But they gave us $550 billion and took down the tariffs a little bit, and then they agreed

to open their economy to everybody. This was not easy. This took, you know, a lot of people walked out of rooms and things. Sometimes they walked out of rooms, went back to Japan. I said, where are they? They went back to Japan. And then they called and they said, can we make a deal? They came back a couple of times.

This happened. This was, as you know, it was over a period of months. And ultimately they agreed to open their economy. Now, the opening of the economy is worth more than $550 billion, the payment that they made. It's worth more. So between that and the payment, we reduced it down to 15 percent. But they were at about 28 percent,

and then they bought it down, basically. But could other countries buy it down? Yeah, I would let other countries buy it down, too. Mr. President, do you feel better about your relationship with President Chiavinoff this meeting? I feel good about it. I mean, look, I have one dispute, and the dispute, there could be some things with money and, you know, where it comes from, how it's come from,

how it's printed, where it's printed, all of the standard things with the Fed. But I just want to see one thing happen, very simple, interest rates have to come down. If the interest rates don't come down, we're knocking it out of the park with high interest rates. If interest rates come down, then that final little element kicks in, that's housing. And the sad part is that people, wonderful young people, young couples starting off, they can't get a mortgage

because the rates are too high. Tim knows that better than anybody, I think. Mr. President, if the rates are hurting families in the country, why let that keep going for another eight months? Why not just fire them? Because to do that is a big move, and I just don't think it's necessary. And I believe that he's going to do the right thing.

I believe that the chairman is going to do the right thing. I mean, it may be a little too late, as the expression goes, but I believe he's going to do the right thing. The fact is, it's so big what's taking place in America, where the King of Saudi Arabia says you have the hottest country anywhere in the world, and I thought you were dead one year ago. I thought we were dead.

I just left NATO, as you know. They're agreeing to pay 5 percent. We're not paying anything. We send them the equipment. They pay for 100 percent of everything now for the war, Ukraine. But I just left NATO and every one of those leaders said, every country, they said, and very smart countries, very,

you know, very successful countries, frankly. And every one of them said, you have the hottest country in the world. We did that over a period of a year, less than a year. I mean, if you think, I mean, less than, they say a year ago we were dead and today, so I'm here six months and we did it over and we had the help of men like this

and people like standing right behind me. They're great, they're great professionals. They really are, they're great professionals. They really are. They're great professionals. And in a short period of time, we made it the hottest country in the world. With all of that being said, we'd like to see — we can always do better, and we can do better if interest rates come down. Good job you do.

You're doing a nice job. I watch you a lot. Thank you. I appreciate that, Mr. President. Do you have a name in mind to replace the chairman? I do. One person? Two people. Maybe do. One person?

Two people. Maybe three. Any clues? I'd pick him, but I think he's not leaving the Senate. No, sir, not. I'd pick Tim. Mr. President, what do you think? Thank you.

Mr. President, Mets have been pressuring you for an hour. No, there's no pressure. No. We want to have, you know, his term comes up soon. I think he's going to do the right thing. Everybody knows what the right thing is. Even people that believed in, you know, the higher rates, they're all on board.

They all want to see the interest rates come down. It's very important. The Press. He doesn't do the right thing in cutting interest rates, as you said, when you don't consider funding. The President. I don't think we're going to do that. I don't think so.

The Press. What do you think you're trying to do? Investigate the newly declassified documents like Amber? The President. Yeah, that's a terrible thing. I have great respect for Tulsi and the documents they found on President Obama. Frankly, it was an Obama thing,

but it was the people that worked under him also, working with him. And, no, it's a very, very serious thing. Thank you very much, everybody. That is President Trump leaving the Federal Reserve Building after what he called a, quote, good tour and a, quote, good meeting with Fed Chair Powell. He was flanked there as he answered reporter questions

by Senator Tim Scott, the chair of the Senate banking committee. A lot of talk about lower interest rates and focus on housing, rates and the cost to service debt, and some trade talk as well. So let's go back to Eamon Javers at the White House for more on what we just heard and the cost to service debt and some trade talk as well. So let's go back to Amon Jabbers at the White House for more on what we just heard in the significance of this moment. Amon. Yeah, Morgan dramatic video there coming out of this visit.

I mean the video of Trump and Powell side by side and Powell sort of nodding or shaking his head in disagreement with the president over the total cost of the project arguing about whether the third building should be considered as part of the project or something separate. I mean, that was dramatic confrontational stuff that we don't really get to see. That stuff is usually kept behind the scenes. In this case, we saw it on live television. But despite the drama of the moment, Morgan, I would say this. I think what you actually saw here, as provocative as this visit to the Fed is, is the president backing off of J-PAL.

He was asked at one point there by one of the reporters in that impromptu scrum, you know, do you consider the cost overruns here a fireable offense to J-PAL? He said no, I wouldn't put it in that category. He refused to take the bait several times in that press scrum in terms of calling for either PAL to resign or saying he was going to fire PAL. to take the bait several times in that press scrum in terms of calling for either Powell to resign or saying he was going to fire Powell. I think that's a sign that this president has, at least for now, made up his mind not to move forward with an attempt to fire Powell.

As he said in the past, Powell is out in the spring anyway, so he can simply move forward with considering his options. He said he has two or maybe three people that are in mind for Fed chair. We've seen all those names listed in the media over the past couple of days. Clearly this president is actually as provocative as this was. This seemed to me to be a president who's backing off of some of those criticisms of Powell. Eamon, that is what the president said verbally, but visually it seemed to me he was communicating something different with the hard hats, with him putting forth his expertise as being someone who's done a lot of construction, including at the old post office with him bringing in Senator

Tim Scott. And Senator Scott appeared to play bad cop here and be the one who was more verbally direct in attacking Powell this time around, even though the president is saying he's not looking to get Fed Chair Powell out of the way, he's certainly making a case that the rest of the nation should want the Fed Chair to do what he wants him to do. I know he, the president said that, you know, know all the economists everybody agrees that we should have low rates That's not the case from here on CNBC. Certainly. Everyone does not agree about that So it appears that perhaps the president is playing this both ways to me. I don't know. What do you think about that?

Yeah, no question John, you know the optics are embarrassing for the Fed They're embarrassing for J pal because it suggests that Powell is somehow responsible for these cost overruns. Now, you can debate that. You can go back through the documents for years. What was Powell's exact role? What did he push for? What did he not push for? How much of this overrun can be, you know, laid at his feet versus other people who are his predecessors or other people in the building? You know, that's a debate for later. The optics do suggest that the president is blaming Powell for this embarrassing cost overrun. So to that extent, you're right.

It is pressure. It is pouring on some of the embarrassment factor on J-Powell. There is sort of a subtle power play, maybe not so subtle, a power play here between the president and the Fed chair. The president showing up in his motorcade with the secret service and the press pool and going live on television to expose something that he thinks is embarrassing about the fed. So all of that, you're right.

I'm just saying that in terms of the rhetoric about calling for Powell to resign or to be fired, the president seems to have backed off that piece of it and was really eager not to take that bait here and side by side with Powell said I'm not going to get into it I'm not going to make it personal. All right reminds me a bit of Mark Antony's speech in Shakespeare's Julius Caesar. Amid Jevers thank you. More overtime after this. Welcome back to overtime we got another record close for the S&P 500 and the NASDAQ. Let's bring in Vital Knowledge founder Adam Chris Foley and City Research Equity Strategist Scott Kronert.

Adam, boy, what a day. We just heard a lot from the President here with the Fed and the interest rates issues. I don't know how much you think that's hanging over the market, but I mean, we're near all-time highs here, and yet there's a question about what's going on with industrials, no? No, we had, you know, we definitely had a few negative data points this morning

with industrial earnings. You know, Honeywell came to the press report, there was some details in the release in the era of the Sundow chemical was another big negative. But I think, from a bigger picture, you know, the economies are relatively resilient. We had a lot of bullish data, economic data last week. We had a few relatively encouraging data points this morning with the weekly claims, initial claims, and then the flash PMIs in

aggregate were ahead of expectations. And Trump talked about this. He said the economy is very hot, and that's one of the big dilemmas that the Fed faces right now when they decide on policy next week. I don't see any reason why they would really change from their current posture of being firmly on the sidelines, given that growth is in a relatively healthy position, and given that you still have a lot of upside inflation risk. The June inflation data, which doesn't even have nearly all of the tariffs already embedded in it, is already showing some upside risk. And unfortunately, you're probably going to see that play out a little bit over the

coming months. Now, ideally, that gets absorbed with other parts of the economy, with housing and services. But I think the Fed next week at its meeting is probably going to be—is going to reiterate kind of its view that they're waiting to see how the economy responds to tariffs on the inflation front. Scott, you were underweight industrials after being overweight last year. How much does this interest rate intrigue from the President and the Fed play into

what you expect to happen next? Well, it's been a concern of ours, John. We've been of the view that the industrial part of the market would face ongoing tariff headwinds, which is mostly behind us now in terms of market impact. The flip side that they have gotten some relief from the accelerated depreciation changes, potentially R&D expensing.

So you have a mixed macro overhang on the industrials, but the fact is, they've been the top performing sector in the SP500 year to date. And this is gonna be a function of a couple of forces. One is the ongoing tailwind supporting defense spending, where a lot of these defense contractors are part of the industrial sector. And the other is the attachment to the infrastructure spending, where the bricks and mortar that go with a lot of that buildout continue to drive many of these companies.

So we look at it in bigger picture, industrials are doing just fine, mixed influence from the macros, the interest rate component of it at this point doesn't seem to have choked off much incremental investment. There we're waiting for, I think, ongoing policy clarity to really get more corporates off the sidelines, if you will, in terms of future CapEx plans. Okay, so Scott, if you're underweight industrials,

despite the fact that there is this spending environment as what I think the administration will call a CapEx comeback that is afoot here, and where would you be investing? Well the issue with the industrials that we have is that they're at the most expensive multiples They've been in 20 years. So that's been an issue for us. The market's been seeing through that right now We continue to focus on the growth parts of the market's been seeing through that right now. We continue to focus on the growth parts of the market. We've been all in on tech and communication services this year, that continues to play out. We also have been continuing to be overweight financials

via the banks, which has been working quite well. So in terms of what's driving the S&P 500 now via high single digit move year to date, it's actually those four parts of the market, industrials, tech, comm services, and at the same time, the financials component.

Adam, I want to go back to the fact that we do have this Fed meeting, this policy meeting next week. We also get inflation, PCE, next week. What we saw happen here today, does that do anything to change

the dynamic going into next week's meeting, especially when the market's already basically pricing in no change to rates already? Yeah, I think the market's kind of looking past some of the theatrics around the White House's pressure on the Fed. You know, clearly there's always a risk

that Trump could pull the trigger and attempt to fire Powell. But you know, as far as long end rates are concerned, the Fed doesn't necessarily have a whole lot of control over that, that's much more a function of the economy. And so you've been seeing rates creeping back up, you've seen Fed expectations actually moving in a hawkish direction. So I think while it makes for a good TV,

the market is really watching the data very closely, they're watching to see how tariffs unfold. August 1st will be a big event, we're gonna get a lot more tariffs coming in. You're already seeing that show up in some of the inflation data. And that's really, I think, what's driving yields and Fed expectations more than kind of the White House pressure at this point. Scott, how do you expect the consumer to play into this as we continue to, I guess, see

a bit of a bifurcation between how the working class consumer is doing versus the more stock owning public who are benefiting from the markets being at these all-time highs. Yeah, John, we could ask the question on the state of the consumer a lot, and there's no one right answer on this. The upper half of the income distribution is essentially a net saver. The bottom half of the income distribution is essentially a net saver. The bottom half of the income distribution is essentially a net spender. That bottom half has faced inflation, they faced the hawkish fed rate regime, whereas the upper end of the income distribution is

where most of the money market funds are held. It's also where most of the equity exposure is. So you have that wealth effect. You have a very bifurcated consumer that's going on here. But interestingly when you come back to this rate regime and you look at where they're still lagging parts of the equity market. Well it turns out they do tend to be attached to those

that should in theory benefit from lower interest rates. That would include areas like consumer discretionary as well as utilities for the telecom sector. And even the home building component of it is probably sensitive to rates. That would include areas like consumer discretionary, as well as utilities, sort of the telecom sector, and even the home building component of it is probably sensitive to rates.

So there is still that argument, but it hasn't held the index back in aggregate because of the strength in these other sectors. I think that really kind of focus and speak to the importance of this AI infrastructure build out that continues to be a main driver for us. Scott Croner and Adam Chrisafouli. Thank you both. Let's get some check on some other earnings movers. Corsera soaring, beating profit and sales estimates and issuing stronger than expected 2-3 guidance revenue

guidance. Shares of Decker's outdoor surging and overtime after beating Wall Street's estimates on both the top and bottom lines thanks to better than expected sales at its UGG and Hoka brands investors cheering Boston beer after a blowout bottom line beat and saying full year tariff impacts will be less than expected and of course John we did also get a record close for the S&P for the Nasdaq the Dow lower and right here fireworks from the Fed building on overtime. One hour. That does it for us here at overtime. Fast Money starts now.