Squawk on the Street SOTS 2nd Hour: Treasury Sec. On The Hill, CPI Breakdown, & Musk’s Mea Culpa 6/11/25
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Jun 11, 2025 
David Mericle, Chief U.S. Economist at Goldman Sachs, and Eamon Javers, CNBC correspondent, break down the latest in U.S.-China trade talks and inflation. They discuss how a better-than-expected CPI might influence Fed policy, with rising odds for rate cuts. The conversation heats up around Elon Musk's changing stance on Trump, the implications for Tesla, and Meta's bold $14 billion AI investment. Legal challenges in AI also take center stage, highlighting the ongoing battle between entertainment giants and AI technologies.
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May CPI Inflation Below Expectations
- The May CPI report showed inflation was below expectations, especially in core areas and energy prices.
- This suggests inflation pressures are easing, making it harder for the Fed to justify waiting to cut rates.
Tariff Inflation Impact Is Softening
- Tariffs have had a smaller-than-expected impact on inflation so far due to softer demand and offsetting factors like shelter costs.
- Inflation pressures from tariffs could peak around summer, but may quickly diminish as demand softens.
Wait For Fed To See Data
- The Federal Reserve is likely to stay data dependent and cautious before adjusting rates, waiting to fully assess tariff impacts.
- Investors should watch inflation and labor data over the next few months to understand Fed policy direction.