Fed's Waller Talks July Rate Cut, Trump's "Two Weeks" Message, Tesla Robotaxi Countdown 6/20/25

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Carl Quintanilla (1:02)

Market Moving Insight and Analysis join Jim Cramer, David Faber and me, Carl Quintanilla on the opening bell hour of CNBC Squawk on the Street. Good Friday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with Sara Eisen, Mike Santoli, a Post 9 of the New York Stock Exchange. Cramer and Faber have the morning off. Primarket is holding gains as the president sets this two-week window on any decisions regarding US action in Iran, whose leaders, by the way, are holding talks with EU officials in Geneva today. Oil is above 75, but it's off the highs. Our roadmap begins with some of the geopolitical and macro risks for stocks. Investors watching the Israeli-Iranian conflict as it enters a second week and weighing the latest outlook from Fed Chair Powell.

Sara Eisen (1:42)

Plus, one analyst calling this weekend's expected Tesla RoboTaxi launch a key move on its path to a $2 trillion valuation. But we are joined by a vocal critic sounding the alarm on Tesla's autonomous driving efforts. And Big Tech's AI ambition, SoftBank reportedly eyeing a US. AI hub, NVIDIA seeking humanoid robots at a Texas AI plant, and Meta continuing its big spending spree in the space. We'll hit all of it.

Carl Quintanilla (2:07)

Let's begin with the market this morning and the Fed, as we do wrap up this holiday shortened trading week. This is what Fed Governor Waller had to say about rate cuts a few moments ago on Squawk Box.

Christopher Waller (2:17)

Right now, the data the last few months has been showing that trend inflation is looking pretty good, even on a 12-month basis. So I've labeled these good news rate cuts when inflation comes down to target, we can actually bring rates down. I've been saying this since about November of 23 So I think we're in that position and that we could do this as early as July.

Carl Quintanilla (2:42)

Pretty consistent message from Waller who was on with us several months ago, arguing for, I think at the time, it was four cuts in 25

Sara Eisen (2:50)

The difference now is that it doesn't feel like he is where the center of the Fed is because there were what, seven dots or forecasts at the Fed that didn't want to see any change, even though they kept their median as two cuts this year.

Look, Waller consistently has said, we need to look through any tariff price increases. It'll be a one-time effect and just get going here on rate cuts because we're restrictive and we don't want to go when it's too late and we see the market crash or unemployment spike. It jibes more with what the president is saying, though he's not going as far as the president in terms of saying, you know, 250 basis points up cuts. But it is the message that is certainly out there in the market, Mike, that the inflation underlying trend is good. It's softer inflation. And even if we see a flare up on tariffs, that's not going to be something for the Fed to necessarily respond to.

Michael Santoli (3:43)

And more to the, you know, in the other side of it is there is a heightened sensitivity within the market to signs of softening labor conditions. And, you know, Chair Powell on Wednesday really wanted to set that aside. He said, yeah, demand for labor is coming down, but so is supply. We think that the unemployment picture is fine. So I do think Waller is defining the dovish edge here. He kind of said, as soon as July, before anybody asked him, do you think July is live? So he wanted to get that out there. Now, he didn't dissent on holding rates steady this week, right, because it was unanimous. So it obviously is sort of, he's going to give voice to that position. The market did take a little bit of hard in it. You got a little bit of a bump in equity futures. Bond yields didn't do a whole lot. Two-year yields twitched lower by a couple basis points on that comment, and then more or less sat there. But I do think it's an interesting one. And it's kind of, you can sense, at least in the press conference, you can sense there's just a general discomfort with the prospect of the Fed being in easing mode if you're getting headline inflation prints that are like well in the threes, right? And so that's just, whether they should or not be uncomfortable with that. You would imagine that they might be. On the other side, there's this line that says the consensus is not all that hawkish because they all boosted their PCE inflation estimates. They reduced GDP, and they reduced the long-term neutral rate, yet they still say two cuts this year.