11AM Hour: Former Goldman Sachs CEO Lloyd Blankfein, AI Concerns Ramp Up & Diesel Prices at Record Highs 9/11/26

SPEAKER_1 (0:01)

Never bet against American grit or American energy. Through innovation, Venture Global is not only building some of the largest energy facilities in the world right here in the United States, but delivering American energy at a fraction of the cost and a fraction of the time. So while others are busy talking, we're busy building.

That's Venture Global. That's unstoppable energy.

SPEAKER_2 (0:30)

Trading at Schwab is now powered by Ameritrade, bringing you an expanding library of education with even more ways to sharpen your trading skills. Access new online courses, insightful webcasts, articles, engaging videos and more. All curated just for traders. Plus guided learning paths with content designed to fit your unique interests. And no sifting to find exactly what you need, so you can spend your time learning to trade brilliantly. Learn more at schwab.com/trading.

Sara Eisen (0:57)

Good Friday morning. Welcome back to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla, live from Post9 of the New York Stock Exchange. Today, a pretty somber morning here in lower Manhattan, as we reflect on this 25th anniversary of the September 11th terror attacks. We'll be joined by former Goldman Sachs CEO, Lloyd Blankfein, in just a moment here at Post9.

Carl Quintanilla (1:16)

Growing AI safety fears as more researchers now warn of rising and imminent risks, including the threat to humanity itself. We're joined by one former OpenAI employee who says, AIs are eventually going to be in charge of our planet.

Sara Eisen (1:31)

An elevated inflation, keeping pressure on Fed Chairman Warsh to raise interest rates next week. We'll explore what today's CPI actually means for investor expectations.

Carl Quintanilla (1:40)

Meantime, some strength in tech and actually pretty broad strength. The only sectors that are lower are energy, maybe some health care names. Relief, you can see there, out of treasuries as we got to 498 overnight and Brent got to 110, but it's settled back to just below 105

Let's begin with this morning's CPI data. Our Steve Leesman has a look at some of the internals and some of the second looks at super core, things like that. Morning, Steve.

Steve Liesman (2:03)

Yeah, good morning. Carl, August inflation coming in just hot enough in the view of the market and most economists that I'm reading this morning to tip the balance in favor of a rate hike from the Fed at the meeting next week. Headline coming in 0.4 had been 0.1. That's not the problem. 3.4 year over year remaining there. It's the 0.3, which by the way, rounds up from 0.26. So just two 100s of a percentage point enough to get to that 0.3, which is a bit higher than the expectation. But we did have a tick down because of base effects to 2.4 percent year over year, driving inflation, the gas prices 3.9 percent, also bleeding into the core with 2.7 percent on airline fares. Core services, ex-housing, that's kind of your super core right there, up a half a point. That's a pretty big number right there. Used cars and trucks along for the ride there, up 0.4 percent. The problem, not so much this month's big gain in gas prices, but the certainty that it's going to be higher next month, that creates the inability of the Fed to say, hey, higher oil prices are a one-off. There's no proof of what's going to happen down the road. Some bright spots did include food at home, a goose egg, housing up just 0.2 percent. That's been helpful. And car insurance has been falling down 0.8 percent. So here's how the market judged it. 85 percent now probability of a rate hike. That's up from 68 percent alpha, that PPI yesterday. And a second hike, well, now 73 percent. That's 50 basis points between now and the end of the year from 63 percent before the number came out. But it's more than just one inflation number. The Fed Chairman, Kevin Warsh, and Jackson Hall, left himself some bigger room, but said, you know, said that the Fed has more work to do if it's not confident underlying inflation moving to the target. Noted 54 percent of PCE components were greater than 3 percent and said he was hard pressed to see the funds rate as restrictive. It seems likely Warsh will have the votes to hike, but a quarter point increase will almost certainly require the chair's support, Sara.

Sara Eisen (4:00)

And we still have this debate, Steve, about whether they should hike or not, whether that is the right move or not, how much they should look through things like a supply shock from oil, which is clearly showing up in transportation and everything tied to energy. And then even on the super core, if you look at it, apparently half of it came from wireless phone services alone. So I think that stuff matters when you're trying to figure out whether rate hike is really the right medicine.