President Biden, Russia, Janet Yellen discussed on Squawk Pod

Squawk Pod


As we've been talking about to all morning, the big news this morning, President Biden, the announcing a joint task force who bolster energy security for Ukraine and the European Union, the primary goal to diversify supply of LNG and curb Europe's reliance on Russia for its energy joining us right now in an exclusive interview this morning is treasury secretary Janet Yellen secretary. Thank you for joining us. My pleasure. Thanks for being here. So as we were just discussing energy is the big topic and want to understand from you how you reconcile the administration's climate goals right now with what clearly is a shift in posture around energy and fossil fuels. Well, the climate goals are very important and there's no change in that. If anything, seeing what's happening because of our dependence on global markets for oil and to some extent natural gas just emphasizes the importance of making the transition that will shield us from events in Russia, global developments that can negatively impact our oil markets, we really want to move and see the need all of us the United States and our allies to move quickly to renewables that will give us a safer and more independent energy picture. But clearly in the short term, that's not going to work, including there's going to be an effort to push for more fossil fuels. Jamie Dimon, JPMorgan, CEO, telling the administration that they need to create a Marshall plan around fossil fuels and energy. What do you think of that? Well, I don't really want to get into what happened in a private meeting, but I certainly agree that we are looking very carefully at the global energy situation, we have banned Russian oil imports from the United States, but are dependent is in very high. We recognize how important Russian oil and natural gas imports are for our European partners and the recognize and we recognize how important it is to reduce that dependence to the maximum extent possible in the short run, which goes to this morning's announcement by President Biden about our enhanced cooperation on LNG. But it's not possible to completely eliminate that dependence search. Do you think the investor class has to rethink its position on fossil fuels? And I say that only because there has been a real shift towards ESG over the past several years. And whether that idea needs to be suspended to some degree relative to what's happening now and the national security issues that it is either creating or has created. I don't think that the ESG movement ends the emphasis on climate change is creating the problems that we have, if anything, the problem is that we haven't moved as rapidly as we should have Europe and the United States would be less exposed to the pressures that this conflict is putting on our energy markets if we had greater reliance on renewables. So that remains firmly appropriate as medium and longer term goal, but in the short run our ability to punish Russia for really the horrific acts that they're committing in Ukraine. And to degrade their power and influence in the world economy. It would be greater if there were less dependence on Russian oil. But in the immediate term. One of the things that's happening in the United States, for example, is the SEC just put out a notice about proposals around climate disclosure. Do you think some of those policies shift in terms of either timing or otherwise as a result of what we're seeing right now? So I was shortened to see the SEC proposal. It's something that the financial stability oversight council has focused on our partners around the world. And the investing community. Really want information that can guide their investments. You see increasing number of American investors, including banks that have commitments to net zero by 2050, and they need the kind of information that's consistent and transparent to let them make investment decisions. Those goals haven't changed the need for globally comparable information remains a high priority and I think the SEC is crafted a very good proposal. I was really very pleased to see them put it out. Let me ask you a question about globalization. Larry Fink this week said globalization may be over and that this war between Russian Ukraine has become a flashpoint and that American companies doing business in certain countries potentially even China and I'm thinking about big companies like Apple that are doing business there, clearly China appears to be an ally of Russia may have to rethink where they're doing business. What do you tell American business leaders this morning? Who are thinking about where their supply chains come from and the politics of where those supply chains come from? Well, we do have to in this is not just because of the Russian Ukraine situation, but this became evident in the pandemic that may be American businesses have focused on efficiency and organizing supply chains in ways that lower costs but impair resilience and resilience of supply chains is a high priority for the administration and so to an extent that will lead to some reallocation of where much of that is about resilience, which was an issue we talked about in the context of the pandemic versus politics and national security. Well, national security is also important and we recognize the need to consider having an appropriate trade policy that protects our national security interests. But when you say this may be the end of globalization or something that extreme, I really have to push back on that because we're deeply involved in the global economy. I expect that to remain it is something that his brought benefits to the United States and many countries around the world and we certainly don't want to go to a system in which the United States is loses loses those benefits. So there may be some rethinking to promote national security. You've put a number of sanctions, obviously, on Russia, but would you consider sanctions on China as an ally of Russia at this point? So I don't think that that's necessary or appropriated at this point. We have senior administration officials are talking privately and quietly with China to make sure that they understand our position, we would be very concerned if they were to supply weapons to Russia or to try to evade the sanctions that we've put in place on the Russian financial system and the Central Bank. We don't see that happening at this point. And it's really up to China to make sure that they understand the complex situation that they face. Becky has a question for you. Thanks, Andrew. It's very good to see you, secretary Yellen. It's just a question about how the economy is faring right now because the markets have been kind of roaring higher on some of the economy and then there are these questions about inflation and what the fed does next. You see the tax receipts coming in every day, is there any sign of weakness.

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