11AM Hour: Former NEC Director Gary Cohn, ServiceNow CEO & Goldman's Chief U.S. Equity Strategist 9/10/26

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Sara Eisen (0:57)

Good Thursday morning. Welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla live from Post 9 of the New York Stock Exchange. Today, signs of stubborn inflation and implications for the Fed's upcoming rate decision. As Treasury yields rise, we'll discuss with former NEC Director Gary Cohn in just a minute.

Carl Quintanilla (1:12)

Call it AI's fear factor. Paul Tudor Jones with an op-ed sounding the latest AI alarm. ServiceNow CEO Bill McDermott is going to join us. We'll hear why he sees AI cyber risks, quote, expanding every moment of every day and how now is positioned to benefit.

Sara Eisen (1:28)

And with the NFL season now underway, sportsbooks are looking to stave off growing challenges for betting customers from predictions markets. We're going to discuss with the CEO of Fanatics Betting and Gaming, Matt King. It was a big event in our house last night.

Carl Quintanilla (1:42)

Meantime markets, a little wear and tear here as the S&P is down for a fourth consecutive day. You see the 10-year there above 49, almost to 492, looking for its potentially highest weekly close since 2007

Sara Eisen (1:56)

And look at the 10-year. Yeah, there you go. As Carl mentioned, 5% almost. We're closing in on highest levels here since November 2023 Joining us now is the former director of the National Economic Council during President Trump's first term, Gary Cohn. Gary is also the former president of Goldman Sachs and current vice chairman at IBM. Welcome back. It's good to have you.

Gary Cohn (2:14)

Always good to be here.

Sara Eisen (2:15)

We're in a day like today with these rising treasure yields. How nervous should equity investors be about these levels?

Gary Cohn (2:22)

Well, I think the treasure yields are directly correlated with what's going on in oil.

The oil rate market correlation is very high today. I think people are very concerned with the oil price. It all feeds into the general consumer mentality, and it also feeds into the inflation fears.

Sara Eisen (2:38)

Are you surprised at how resilient the consumer has been in the face of these rising oil prices?

Gary Cohn (2:42)

I'm not in many respects. We've had this conversation many times. I think the consumer in the United States is very stable. That said, they poll really poorly. If you actually poll consumers today on how they feel about the economy, the polling is pretty negative. If you actually look at the real data and you look at real wages and you look at spending and you've had a couple of bank executives on talking about credit cards and how well it's doing, the consumer continues to be in a fairly decent situation.

They're positive wage growth. There's things going on that are positively driving the economy. And I think we're going to continue to be in this cycle where there will be enormous fear. And look, there's fear of AI. There's fear of oil prices.

There's fear of the war going on. There's fear of housing prices. All of these things are driving consumer sentiment, but they're actually not flowing through the real economy.

Sara Eisen (3:31)

Right. I know. It's so interesting. Watch what they do, not what they say.

Gary Cohn (3:34)

Exactly.

Sara Eisen (3:34)

But is there a point, and I know it's kind of self-reinforcing, treasuries are watching oil, oil's rising, the combination of higher oil and then higher borrowing rates. We're seeing already 30 or around 7% where that does start to really hurt the economy.

Gary Cohn (3:49)

There always is an impact. The initial impact we've seen. We've seen credit card rates go higher. We've seen automobile loans go higher. We've seen mortgage rates go higher. So the direct impact on consumer, which of course is not Fed funds, which is what the Fed deals with, is already working its way through the market.