10AM Hour: PayPal Buyout? Fed Chairman Warsh Testifies on Capitol Hill 7/15/26

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**Sara Eisen** (0:45)
Good Wednesday morning. Welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber. We are live as always from Post 9 of the New York Stock Exchange. Coming up, day two of Fed Chairman Kevin Warsh's testimony on Capitol Hill. Today, appearing before the Senate Banking Committee to face lawmaker questions, we'll take you live to Washington in just a moment. Plus, we'll talk about the headline sending shares of PayPal sharply higher this morning, including new reporting from our David Faber and former NEC Director and current IBM Vice Chair Gary Cohn with us, his read on the economy, the market, and much more. But guys, we got a PPI report and we had CPI yesterday. And so inflation is top of mind as we await. Kevin Warsh, the Fed Chairman on Capitol Hill Day 2, he really did not say much yesterday as we expected, right? The guy does not want to get forward guidance or any hint of what he's going to do. But here was the only quote that I thought was notable as far as how he's thinking about inflation and policy. He said, quote, it's one data point. This is in regards to yesterday's CPI number, which was better than expected. It was cooler. The market took it as a release. He said it's one data point. The reason I created a task force on data is I do not want to over read or cherry pick data. There might be some that look at this morning's data and say, mission accomplished. Everything is swell.
That is not my view.
Does that mean that he wants to raise rates? Who knows? We don't know exactly what he means, but it means that he's not satisfied and that the inflation fight is not over, just because there's a good data point that he's not reading too much into it. Just that that was the only notable thing. And again, it doesn't really point us one way or another on policy. As far as what we got today, more really good news. I mean, PPI, this is wholesale inflation.
What's being passed on at the wholesale level, it's often seen as a precursor to consumer inflation, with a negative number on it. I mean, even economists, with the sharp decline in oil prices, expected a percent, we got a negative 0.3 percent. That was good. We also got a revision for the month before, a little bit lower as well. That was good. That was a hot month because of oil prices. Here's the problem. The year over year numbers, this is the monthly numbers that we just did, the negative, the year over year is still elevated. It's at 5.5 percent. And that's why the Fed's war with inflation is not over. And that's why he talks about the fact that he's serious about knocking down inflation. I'll just pair that, though, with the good news that we got on CPI consumer prices yesterday, which was a negative 0.4 on the headline. I didn't really have time to get into it because of the testimony, but that was a lot better than expected of the negative 0.2 percent. And you know, there was good news across the numbers. Just to give you a sense of where we are, the Fed's target is 2 percent, 3.5 percent on CPI. So, you know, we're still above target. I think that's why Warsh is still talking tough. But it's not obvious what he's going to do about it. And we're seeing two-year yields go lower today on the idea that maybe they don't have to hike.

**Carl Quintanilla** (3:43)
Yeah. I mean, we mentioned the long bond getting to 511 this morning, and not a lot of relief in the 10-year. We did get mortgage apps negative again, and the 30-year fixed, 665 That's about a one-year high.