I- interestingly though, the absolute level of yield or the shape of the yield curve isn't at a historical extreme, so I guess we have to sort out how much impact this should have.

Well, it seems to me there's a giant tug of war going on within the markets.

Two extremely powerful sets of forces, each pushing in a, in a different direction.

On the one hand, and you just cited it, uh, corporate earnings have been extremely strong.

Uh, uh, and I think 86% of the S&P 500 during the second quarter beat consensus.

Um, and the, uh, macro data, the macroeconomic data also continues to be strong.

You know, the second quarter GDP print, which I think was one and a half percent, uh, was misleading, uh, because of a lot of noise in it.

And of course, I mean, it does create more fiscal stress given, you know, global government, you know, indebtedness.

How do you look at this as how you would take this measurement in time, what you would tell people?

Well, I think like many people say, you could think of it as two markets, big tech and everything else.

Everything else I think is doing fine.

Uh, it's strong, it's stable because it's underpinned by the remarkable resilience of the US economy, we can come back to that, and corporate profits.

I mean, they're just strong, and I don't see anything out of whack between the non-tech side of the market and the underlying economy and corporate profits.

On the big tech side, there's good news and other news.

The good news is most of the big names are strong, very profitable companies, Alphabet, Amazon, Apple, and so forth, and there's no dot-com side to this.

... you on was before his first speech.

Like with the 1980-

And I was having regular episodes of ventricular tachycardia.

Uh, and so I was hospitalized, uh, ups- uptown here in New York at Columbia Presbyterian, and I had to be there indefinitely waiting for a heart transplant.

And, uh, th- there's quite a wonderful, poignant little story.

Uh, I had never met Mehmet, and I'm lying there in this, uh, ICU, and it's pretty grim because I'm, I'm really not doing well.

And he came into my room one day and introduced himself, and he said, uh, "I'm going to Davos in a couple of weeks, uh, to give a speech.

I know you served in government before, twice, and I wonder if you'd look at my speech and see if I c- you could, uh, improve it." So he left it with me and I'm lying there and I read it.

[laughs]

Yeah.

First of all, no matter what your view of, of the original decision to launch the war, uh, what we've seen is remarkable tenacity from Iran because despite being pulverized, uh, and despite having its leadership decapitated, it has not, uh, folded.

And therefore the US has not achieved the most important strategic goals that President Trump talked about, uh, nuclear...

You know, uh, th- they still have their store of nuclear, uh, of enriched nuc- uranium, the Strait of Hormuz is closed, and there hasn't been regime change.

So that's point one.

Two, it was never realistic to expect a peace agreement in 24 hours.

The JCPOA, the Obama agreement, you can think of it what you will, but it took 18 months.

Why?

The Iranian Navy says, "You either get our permission to cross the strait or you'll be destroyed." Is this sort of how it is generally goes?

Well, it seems to me that those factors you just mentioned, as well as those, some of those that Megan mentioned just beforehand, illustrate that it's too soon to know.

It's just too soon to know whether this, quote, "fragile truce," uh, referring to s- uh, Vice President Vance's comment, can hold.

And let me tick off a few things that make it unclear as to whether it can hold.

[clears throat] First of all, negotiating a true peace agreement on a matter as complex as the Iran conflict typically takes a year or two, not two weeks.

So the idea that there's gonna be a pro- comprehensive peace agreement in two weeks, I think is unlikely.

Now, that may lead to extensions of the truce, but number one, uh, it just takes a lot longer than that to get a real agreement.

I guess I'm wondering, do you sense a moment where there will be a return of animal spirits, whether that comes to investing or even hiring?

As you look ahead to 2026, are you closer to the optimist or the pessimist's side?

A- after all, uh, we recently saw the third quarter GDP figure.

The, the, the, the, the figure that measures the growth or lack of growth in the economy in a particular quarter or a year.

And that figure was 4.5% growth, which by any objective measure, is strong.

Uh, and it was considerably higher, by maybe a full percentage point, than the consensus expectation.

Uh, and it was driven by pretty high levels of spending by both consumers and businesses.

So through the third quarter, and that's now a while ago, 'cause these numbers are reported with quite a delay, the economy was resilient or strong.

Who's had a better year?

What do you make of all of this and the ability to trust the data?

Well, I find this move quite disturbing.

Hundreds and hundreds of people, federal employees, are involved in collecting this data.

And so the idea that at the last minute and surreptitiously the commissioner manipulated the data for political reasons is nonsense.

It's actually essentially impossible.

And so the accusation is false.

And shooting the messenger like this, which is what happened, is what banana republics do.

By the way, I'd like to

Why? Can you just spell out what it would look like?

It's a dreadful idea because people know, in markets at least, that if you simply compare over years and years major countries that have independent central banks and what their economic performances have been versus major companies that have politicized central banks controlled, for example, by their heads of state, the difference is stark.

It's stark.

Once you eliminate the independence of your central bank and make the head of the central bank a a colleague, so to speak, of the president or the head of state, you're headed down.

And history is very clear on that.

And people in markets know that.

Yeah, you can look at Bank of England as an example for sort of pre and post independence and looking at the inflation record.

You can look at Turkey.

I'm going to guess that at least when it comes to tariffs, your view about the impact is maybe less benign than the Treasury Secretary's.

But why don't we step back for a second and then set the stage a little and come to tariffs? So to me, there's a rather fascinating paradox around the markets right now, or at least around equities.

At one level, there's signs of a perceptible slowing in the U.S. economy.

Take growth forecasts themselves.

At the beginning of the year, New Year's, consensus expectation for the U.S. was 2 to 2.5%.

It's currently 1% or a little less.

Our own forecast is 0.9%.

But I'm just curious, from your perspective, What do you think the likelihood is, as the White House has been saying, that that GDP will essentially solve any deficit issues we have, that by extending the 2017 tax cuts and spurring growth that, you know, the debt picture will basically be nonexistent?

Why don't we pick up on something?

that you just said, which is Goldman has raised its growth forecast for the year from one, I think you said, to one and a quarter.

Yes.

But put that in perspective.

At the beginning of the year, the widespread consensus, January 1, for U.S. growth was in the twos.

Now everybody has marked it down.

World Bank just came down to 1.4. Goldman had gotten all the way down to one.

What do you think of the big, beautiful bill? If it passes, what are your expectations that it would do for the economy and the fiscal situation?

But during your time, both at Georgetown and University of Chicago, were there any formative experiences that shaped your views on kind of what you wanted to do or just kind of shaped you as a person or as a character?

Well, I was very involved in student government at Georgetown.

I was elected vice president of my class during senior year.

I ran for president of the student body and narrowly lost.

There's an amusing anecdote about that because I lost by 17 votes out of, I don't know, 1,500 cast or something.

The year after I ran for that post, Bill Clinton ran for the same post.

He was the year behind me.

But before I kind of get deeper into your time on Wall Street, your time in the private sector, I'd love for you to give me a brief overview of from your time at Chicago all the way to founding Evercore, just kind of like a brief timeline of your career and the positions you had and how you ended up in those positions.

What are you hearing from companies in terms of how they're thinking about things? How does what we heard from the president just now and what we know at this point change what corporate America is thinking?

Well, I think corporate America is going to have the same reaction that a lot of seasoned observers will have, which is it's encouraging.

It's very encouraging, but it's preliminary.

And it's essentially a 90-day pause on the ultra-high tariffs in order to negotiate to try to get a permanent tariff reduction framework and other progress.

Keep in mind that the biggest problem with China trade, on our end at least, is essentially dumping.

China exports a lot of heavily subsidized products.

where the costs are essentially borne in large part by the government through state-owned enterprises and financing subsidies and so forth.

What's your assessment now? Does this improve the chances that we don't get into some sort of recession? Let

What do you think is happening within the most important offices in the treasury department as this is taking place i mean how do you feel this is being digested within a parent flight from assets here bonds the dollar time especially the dollar

well first of all you you have to be concerned uh... and you have to you have to feel that it's not good uh... second of all if you have any sense of the history of the country and the economic history of the country You say to yourself, the United States has benefited from an independent Federal Reserve system for over 110 years.

And investors, businesses, consumers can count on the Fed to objectively pursue its twin mandate of stable prices and maximum employment.

And imagine if we hadn't had a fully independent Fed in 2008 to 2009, or when COVID first erupted, when the Fed stepped in and essentially saved the system both those times.

And as Austin Goolsbee said on this network earlier this morning, look at countries that don't have an independent central bank.

You could pick Turkey, you could pick any number of others.

Typically, inflation is higher, growth is slower, and employment is lower.

You don't think cutting close to the election this time sort of got you into a little bit of an area of concern? I mean, that's what some critics

And are investors and foreign governments pulling back from investing in US and US, uh, Treasuries?

Well, there are two basic layers in terms of how people have reacted to the tariff policy.

One layer is the idea of reciprocal tariffs and generally speaking, much higher tariffs.

The other layer is the way they've gone about it, and I think investors and businesses don't like either layer.

I- I've talked to an awful lot of CEOs in the last eight or nine days, and to a person, they don't like the tariff policy.

But I think even more damage perhaps has been done by the way they've gone about it, meaning these tariffs are on.

No, actually they're off.

Yeah.

What do you think specifically international investors are concerned about? Is it the destabilization element of it? Is it just the lack of

clarity? Gigantic uncertainty.

Tariffs are on.

Tariffs are off.

There's a pause.

There are exemptions.

There are 232s.

So what are you hearing and what are your expectations when it comes to trying to make decisions in an environment like this?

But what's driving your conversations?

I think you can summarize it really in one word, uncertainty.

And uncertainty is always difficult for consumers.

for businesses and for investors.

And why is there that uncertainty? Because there's been a blizzard of policy actions from the new administration.

Tariffs have been threatened, delayed, canceled, enacted.

You see Remarkably wide and deep announcements on spending cuts, in particular, things like the National Institute of Health and National Science Foundation, which are very central to innovation and business.

What are your thoughts?

How do you think that all plays into the current environment?

Well, you're right.

He's saying more or less what any Treasury secretary would say in his shoes, although I think he might have added that they watch the markets carefully, which is a typical way of evidencing sensitivity to markets, which he did not say.

But look, I think the biggest issue out there right now is the health and attitude of the US consumer.

We saw a weaker retail sales data this morning.

We saw a weaker index of consumer sentiment on Friday.

A number of consumer products companies, although not all of them, are referring to consumer hesitation.

So it's an interesting way of seeming like you're doing a lot, but maybe it's not quite going to get to the bottom line.