Transcription: Gary Cohn in

The following is the transcription of the interview with Gary Cohn, vice president of IBM and former director of the National Economic Council of the United States, which was issued in “facing the nation with Margaret Brennan” on September 21, 2025.

Margaret Brennan: Now we look at the United States economy. Gary Cohn was the head of the National Economic Council of the White House in the first Trump administration. Good day. Great to have you back.

Gary Cohn: Good morning. Thanks for inviting me.

Margaret Brennan: Then, it finally happened. The Federal Reserve reduced interest rates in quarter, what was expected. Therefore, the rates are now in this range of four to four and a quarter of percentage, the lowest level since 2022, the president had said that all this was late. What changes now?

Gary Cohn: So, look, I think the Fed gave us a lot of important information this week last week. As you said, they began the way to reduce interest rates, going to four to four and a room. They also gave us their perspective. Then, the 17 governors gave us their projections where they think that interest rates are going. So that plot they published shows that, in general, they believe that interest rates will be reduced twice more during this year. Now it is not 100% clear, because the committee is divided. There are about seven committee members who do not want another cut this year, but there are 10 committee members who want at least two more cuts, and one wants more than two cuts. Therefore, that averages two cuts this year, which would take the federal funds rate, and it is important to understand the federal funds rate, it would reduce it to 3.6% for the end of the year. What is also important is that the committee was quite unanimous. I think people were worried about the independence of Fed. I think Fed was clearly demonstrated as independent thinkers. They took into account all the economic data, and came out with projections that made sense based on what is happening in the economy today.

Margaret Brennan: Then, when the rates fall, the money becomes cheaper to borrow, essentially. But what really does it mean?

Gary Cohn: Yes and no. So, what establishes the Federal Reserve is that they establish the federal funds rate. Those are the rates overnight that banks charge each other to borrow safely. You have nothing to do with where, with where US consumers ask for money borrowed. Unfortunately, US consumers borrow money in more than five years, seven years, ten and thirty years, because that is where cars loans, loans of credit cards, student loans and mortgages are indexed for those. Interest rates are not determined by the Federal Reserve. They are determined by the open market. Those rates, in fact, after reducing rates earlier this week, rose a bit that said they are low in recent months. But these rates do not decrease automatically when the Federal Reserve reduces rates. They have more to do with the market, and it is a supply demand situation that determines those rates.

Margaret Brennan: then, one of the other things that the Fed highlighted here is that the labor market is, “really cools.” That is what Fed Powell president says.

Gary Cohn: Yes.

Margaret Brennan: The Administration, the Secretary of the Treasury, says, Data is bad. They are not seeing that in work numbers. So what is it? What is happening here?

Gary Cohn: Well, look, the president did everything possible to talk about the double mandate that Fed has. The Fed has two requirements that are supposed to execute the interest rates policy, one is called stable prices, which means inflation of 2%. The other is full employment. Full employment is exactly what it seems. The president said: Look, we will have to deal with the full use of the equation, although we still have inflation in the system. Then, the Federal Reserve itself and the Board of Governors admitted that we are having a labor market in Declive, and we see that, the data in the last three or four months, we have gone from creating more than 100,000 jobs per month to create less than 50,000 jobs per month. It can be temporary, it can be quite temporary, but the reality is that we have seen the labor market degrade. We have also seen companies announce a huge amount of capital and capital expenses that will enter the system. I think it is interesting to step back and look at what is happening in the world today. I think we have seen companies reduce the number of employees they have. You know, when you take companies and put them in a very difficult environment and increase the cost of input costs. And tickets have increased due to tariffs. They have been uploading other reasons, and cannot increase prices to the final consumer. The only lever they can throw to ensure that they maintain their intact margins is that they can reduce the cost of labor. We left a difficult situation in Covid, where companies really feared to attract and retain people, so they were monopolizing work. So we go from a work situation of hoarding to a current situation in which companies are being very aggressive about the management of their expenses, and the only expense they can administer is the cost of labor. Therefore, they let their workforce decrease naturally when people withdraw from the labor system, and we are seeing it in the data, and I think it clearly appears. And the Federal Reserve. Recognize that in this in this week’s action,

Margaret Brennan: But when you ask the administration about this point, let’s say, well, productivity will increase, and there are these technological changes that are happening. Then these data are distorted. Are you speaking specifically about technology, or are you saying in all areas?

Gary Cohn: I’m saying in all areas. I mean, we are … we have seen in all areas, and we have seen an anecdotal evidence of this. I have seen, and I have heard it directly from the corporate CEOs in each line of business that have done everything possible to cut their general human capital expenses. So, only the data for Q2 are pretty, quite interesting. Corporate income increased approximately 6.3% for the second quarter and corporate profits increased by about 12%. The way it does, unless consumer prices are increasing, and we, and we have not seen many prices uploading to the consumer, is that you have to eliminate something from the expense cube. All they are cutting is that they are reducing labor costs. We have seen it in the United States data. We have seen it in private data, and we have seen it in the anecdotal data.

Margaret Brennan: Then, the president signed an executive order on Friday which I want to ask him, because he has this role in IBM and some information about technology. The order will impose a unique $ 100,000 rate per visas granted to foreign workers, highly qualified workers, H-1B visas. The “Wall Street Journal” reports that this caused, like, a panic, because there were not many details, such as Apple, Google and Microsoft. Did you have a panic in IBM? I mean, what is happening?

Gary Cohn: The- I think caused panic over the weekend because people were not sure what was happening with existing H-1b visas. It has been cleaned over the weekend, so at this point, there is no panic in the system. Everyone who has an H-1B visa understands their status and understand how it is, how it is: how it will work. In fact, I think this is a good idea. If you understand the H-1B Visa program in the United States, historically, it has been a lottery system. Then, companies have delivered for these visas, and then the Lotteries of the United States government eliminate them. If you are telling a company now, look, you must spend $ 100,000 to obtain one of these visas, you will not only ask for a visa and put a name in the lottery, unless you are a highly qualified person you need, to whom you cannot hire in the United States. This visa program is destined for high -qualification labor, where that person cannot be hired in the United States. So, if for that is, ultimately, we will bring high -qualification people in the United States. It will help to grow our economy, and that is good for all of us.

Margaret Brennan: We’ll see. Gary Cohn, thanks for your ideas, as always. We will return.