SOTS 2nd Hour: Steven Mnuchin & Day 1 of Powell’s Semiannual Monetary Report 6/24/25

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Sara Eisen (1:08)

Good Tuesday morning. Welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber, live as always from Post 9 of the New York Stock Exchange. Stocks are rallying today. We've got an S&P up almost three quarters of 1% after President Trump announces a ceasefire between Israel and Iran. Best performing group right now is Information Technology and Financials, both rallying more than 1%. Communication Services also strong, so is Consumer Discretionary. Energy is the loser, down three quarters of 1% as crude oil continues to sell off, adding to recent losses. As for Treasuries right now, had seen a bid earlier. That's reversed a little bit, some selling with the yields a little bit firmer. Tenure yield 4.35 ahead of Fed Chair Jay Powell's testimony before House Financial Services Committee. The Fed Chair, Taken to the Hill, will bring you live to Washington for that in just a moment as he responds to questions from members of the House Financial Services Committee. Plus, former Treasury Secretary Steven Mnuchin will be our guest to talk about President Trump's renewed feud with Fed Chair Powell after another insult-filled social media post very early in the morning, overnight really, by the President.

David Faber (2:19)

All right, first, we got some consumer confidence data crossing. Rick Santelli has that for us.

Rick Santelli (2:24)

Rick? Yes, David, these are June numbers from the conference board. Headline number expected to be very close to 100, a bit of a disappointment. 93, 93 would be the best, well, just since March, so not that long ago, but the real issue is in between then and now, we had some really weak reads that proved to be very much, should have been a contrarian indicator because the market went much higher. If we look at present situation, 129.1, that would be the weakest, going all the way back to SEP of 24, and if we look at expectations, it comes in at 69, 69 would be the best, well, just since April of this year. There's also other data out, David, Richmond Fed manufacturing side and service side, these are June numbers, minus seven on the manufacturing side, that would be the best since March of this year, even though it's a negative number. We haven't had a positive number, well, we had one this year, and that was in February when it was only positive six. If we look at the service side of the equation, comes in at minus 16, which happens to be the best since March of this year as well. Lots of negative numbers on manufacturing and several real negative numbers with respect to the service side in March and April, but they do seem to be moving up slightly, at least from the perspective of Richmond.

We see that interest rates on the long end are hovering near unchanged. We have some slight positives in price on the short end, meaning slightly lower yields, but all things considered, especially with some of the volatility that we've seen in other markets like energy and equities, the Treasury market for the most part, pretty calm today. Sara, back to you.

Sara Eisen (4:07)

Okay, Rick Santelli, thank you very much. And we've got Fed Chair Powell on Capitol Hill today. You know, we have this interesting dynamic shaping up inside the Fed about when is the appropriate time to cut interest rates and how is the appropriate approach to look at tariffs and whether they're going to be inflationary. Fed Chair Powell, about to give his opening statement in it, we know what he'll say, but here's the money line as it relates to his stance right now on policy. Increases in tariffs this year, according to Chair Powell, are likely to push up prices and weigh on economic activity. He's worried about the tariffs. For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance. He is very much wait and see. It's a repetition of what he said last week at the Fed meeting, but it's important because it comes after two Fed governors who get a vote at every meeting and are among the powerful folks at the Fed. And I'm talking about Waller and Bowman came out and added a little bit more urgency into the discussion on rate cuts. Waller said, I think we're in a position that we could cut as early as July. He said that on CNBC. Bowman in Prague yesterday said, if inflation remains contained, I would support lowering rates in July. And we'll just throw in Austin Goolsbee, Chicago Fed president, who's also a voter. If the dirt is out of the air, I think we should proceed with cuts. He didn't use the word July. But David, it's an interesting setup that we don't often get where members of the committee are coming out. I don't want to, it's not a different tune than Jay Powell, but it's certainly a different time frame seemingly. And one thing I'll be really looking for today in terms of the Q&A from Powell is, will he be asked about July? And will he say that that's premature? Or will he just sort of hang on to the let's wait and see the data because he's still nervous that tariffs are inflationary?