WHEN: Today, Tuesday, December 13th
WHERE: CNBC's "Squawk Box"
Following are excerpts from the unofficial transcript of a CNBC EXCLUSIVE interview with billionaire Bill Gates and CNBC's Becky Quick on "Squawk Box" (M-F, 6AM-9AM ET) today, Tuesday, December 13th. Following are links to the video on CNBC.com: http://video.cnbc.com/gallery/?video=3000575806, http://video.cnbc.com/gallery/?video=3000575807, http://video.cnbc.com/gallery/?video=3000575809, http://video.cnbc.com/gallery/?video=3000575811 and http://video.cnbc.com/gallery/?video=3000575812.
All references must be sourced to CNBC.
GATES ON EXPENSIVE STOCKS
WELL CERTAINLY STOCKS ARE EXPENSIVE. BUT IT'S ALL IN RELATIONSHIP TO THE MACROECONOMIC PICTURE, WHICH I'M NOT AN EXPERT ON, AND I FIND, YOU KNOW, KIND OF AMAZING THAT INTEREST RATES HAVE STAYED SO LOW FOR SO LONG.
GATES ON INTEREST RATES
THE DOLLAR'S UNUSUALLY STRONG. AND SO THE IDEA OF REDUCING OUR TRADING BALANCE IS ACTUALLY HARDER NOW WITH THE DOLLAR HAVING BEEN STRONG BECAUSE PEOPLE ARE SEEING THAT WE'RE LIKELY TO BE MORE STIMULATIVE THAN MOST OTHER COUNTRIES ARE. SO WHEN DO WE GO BACK TO NORMAL IN TERMS OF INTEREST RATES, MULTIPLES – THERE'D BE A LOT OF ADJUSTMENT THERE. STOCKS ARE HIGHER BECAUSE THE INTEREST RATE ENVIRONMENT.
GATES ON THE FED
BILL GATES: WELL, IF YOU'VE GOT THIS ANTICIPATION AT SUCH HIGH LEVELS, THAT'S ALREADY GOING TO BE PRICED INTO STOCKS. IT'S WHETHER THE FED STARTS RAISING INTEREST RATES IN A WAY THAT PEOPLE ARE NOT EXPECTING. AND YOU COULD ALWAYS THROUGH THE BOND MARKET KIND OF LOOK AND SEE WHAT THAT EXPECTATION IS OF HOW MANY RATE INCREASES THERE WILL BE OVER THE NEXT –
BECKY QUICK: I THINK THEY ARE ONLY LOOKING FOR THREE OVER THE NEXT YEAR-PLUS.
GATES: RIGHT. SO, THAT'S PROBABLY PRICED IN. SO IF THEY GO UP TO SIX, THEN YOU WOULD SEE SOME – THE MARKET COME DOWN SOMEWHAT.
GATES ON MEXICO
WELL WE HAVE KNOWN SOME COMPANIES DOWN IN MEXICO THAT GIVES US A FAIR BIT OF EXPOSURE THERE. RIGHT NOW, THE PESO'S BEEN VERY WEAK. SO IT'LL BE INTERESTING TO SEE AS THE U.S./MEXICO RELATIONS GET DEVELOPED UNDER THIS ADMINISTRATION, IS THAT OVERSOLD OR DO THOSE THINGS HAVE FURTHER DOWN TO GO.
GATES ON RUSSIA
THERE WAS A STATEMENT BY THE RUSSIAN STATE AT ONE POINT NOT TO FAVOR OUR SOFTWARE BECAUSE OF SOME PERCEPTION THEY HAD. YOU KNOW, MICROSOFT'S DONE THE BEST IT CAN TO CORRECT THAT. BUT I DON'T THINK WE'RE COMPLETELY BACK IN THEIR GOOD GRACES. WHICH IS UNFORTUNATE. BUT I HAD NO DIRECT CONNECTION WITH THAT. NOR DO I HAVE ANY PARTICULAR RELATIONSHIP WITH RUSSIA.
GATES ON BEING CHEAPER THAN COAL OR GASOLINE
WE WANT TO BE CHEAPER THAN COAL OR GASOLINE FOR TRANSPORT. AND SO THAT BAR IS PARTICULARLY LOW RIGHT NOW. BUT THERE ARE A LOT OF PATHS THAT MAKE US FEEL CONFIDENT WE CAN GET THERE. BECAUSE WE HAVE FIVE OR SIX PATHS. WE'LL HAVE SEVERAL COMPANIES IN EACH PATH. THE GOAL IS TO BE EVEN CHEAPER THAN THOSE THINGS ARE.
GATES ON ENERGY INVESTMENTS
THIS ADMINISTRATION LIKES A GOOD DEAL. AND I THINK I AND OTHERS WILL GO TO THEM AND SAY THAT MAINTAINING AMERICAN LEADERSHIP, MAKING SURE THAT THE PRODUCTS THAT WILL BE IN DEMAND AROUND THE WORLD THAT ARE LOWER COST, THAT PROVIDE ENERGY SECURITY – MAKING SURE THAT OUR LABS AND OUR PRIVATE COMPANIES GENERATING JOBS ARE OUT IN FRONT ON THAT – MAKES ENERGY R&D INVESTMENTS A VERY SMART THING TO DO. IT'S NOT A HUGE PART OF THE BUDGET AND YET IT CAN HELP THE ECONOMY JUST LIKE SHALE GAS HAS.
GATES ON TALKING TO TRUMP ABOUT INNOVATION
I HAD AN OPPORTUNITY TO TALK TO HIM ABOUT INNOVATION. YOU KNOW, A LOT OF HIS MESSAGE HAS BEEN ABOUT THINGS WHERE HE SEES THINGS NOT AS GOODS AS HE'D LIKE. BUT IN THE SAME WAY THAT PRESIDENT KENNEDY TALKED ABOUT THE SPACE MISSION AND GOT THE COUNTRY BEHIND THAT – I THINK THAT WHETHER IT'S EDUCATION OR STOPPING EPIDEMICS, OTHER HEALTH BREAKTHROUGHS, FINISHING POLIO, AND IN THIS ENERGY SPACE – THERE CAN BE A VERY UPBEAT MESSAGE THAT HIS ADMINISTRATION IS GOING TO ORGANIZE THINGS, GET RID OF REGULATORY BARRIERS, AND HAVE AMERICAN LEADERSHIP THROUGH INNOVATION BE ONE OF THE THINGS THAT HE GETS BEHIND.
GATES ON TRUMP
I THINK THERE'S A LOT OF FASCINATION TO SEE WHAT THE NEW DIRECTIONS WILL BE. YOU KNOW, DONALD TRUMP WAS ELECTED NOT SO MUCH FOR SPECIFIC POLICIES, BUT BECAUSE OF THE KIND OF LEADERSHIP THOSE VOTERS WANTED. SO HE HAS A LOT OF FLEXIBILTY ON WHICH ISSUES HE REALLY GOES AFTER. AND SO THAT'S WHY I THINK A DIALOGUE NOW, YOU KNOW, WHAT ARE THE POSITIVE THINGS FOR AMERICA THAT HE'S THINKING AND WHO CAN HELP OUT WITH THAT?
GATES ON TRADE
WELL, I DON'T THINK IT'D BE A GOOD DEAL TO HAVE TRADE RELATIONS BETWEEN CHINA AND THE U.S. REALLY FALL APART. AND SO I FEEL SURE THAT HE AND THE TEAM HE BRINGS AROUND THEM – EVEN AS THEY TRY AND TUNE THINGS – THEY WON'T WANT THE LOSE/LOSE THAT YOU WOULD GET IF YOU START TO GET LARGE TARIFF WALLS…THE PRESIDENT-ELECT IS VERY SOPHISTICATED. YOU KNOW, I HOPE HE'S THOUGHT THROUGH HOW HE'S GOING TO GET SOME ADJUSTMENTS THERE WITHOUT THAT TYPICAL SORT OF A TARIFF TIT FOR TAT.
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