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We'll be paying off what we have through cash flows.

We have mostly fixed-- folks fixed debt, which is good.

But I don't think it's good for the economy as a whole.

I worry that we could have some geopolitical dynamics that could put some more stress on inflation moving forward.

And it's fragile enough in the overall equation that one or two of those things break the wrong way, I think it could ultimately roll down to the consumer, roll down to jobs creation.

And that wouldn't be good for any of us.

BRIAN SOZZI: I got a hot tip, John.

And hang with me here as I lead into this.

You got an offer to join the Federal Reserve out of school.

Is that correct?

JOHN STANKEY: Well, it didn't take long for that one to get out.

Yes, so that was one of the offers I was-- BRIAN SOZZI: One of the offers.

JOHN STANKEY: One of the offers I was considering.

BRIAN SOZZI: Why you turn it down?

JOHN STANKEY: It was a hard decision.

It was, you know, that or go do the choice I made.

And I always thought it'd be really fun to work in bank vaults and audit, you know, safe deposit boxes and things like that.

It just seemed cool, so.

BRIAN SOZZI: So now, here is where I'm going.

I mean, because you have that affinity for the fed, whatever it might be, do you really worry about what the Federal Reserve has done in terms of interest rates and what it might mean to a big company like an AT&T?

JOHN STANKEY: I think the fed's done what they can do and what they should have done.

I think the reality is in this economy and what's going on globally, it's only so much.

I mean-- and it's a relatively-- I don't want to call it a blunt instrument, but it's only one tool.

And it's a tool that, you know, isn't all that precise in how it works.

You just kind of have to step on interest rates and then ultimately allow it to trickle through and hit demand.

And it takes some time.

And it doesn't do it ratably or equally to all segments of the economy.

So I think I understand what the fed has done.

I wouldn't advocate for anything else what they've done because inflation is far more insidious than dealing with the results of high rates right now.

And our company is in a position to have the flexibility to navigate through it.

We have the access to the capital we need largely through our own cash generation.

But, look, it's an unfortunate circumstance that we're here.

What I'd like to see happen-- it's really not the fed's issue-- is from a policy perspective, I'd like us to see a little more spending discipline in this country.

And I'd like to see it globally, frankly, because demands on the debt markets are crowding out private industry and private investment.

And a lot of it's coming from public sector debt.

So I think that's the biggest thing we need to think about for the long-term to make sure investment is right and growth is appropriate.

BRIAN SOZZI: You just channeled your inner fed chairman.

JOHN STANKEY: I guess, yeah.

I'm not-- trust me, I'm not auditioning for the job-- BRIAN SOZZI: No.

JOHN STANKEY: --knowing anybody considered before.

BRIAN SOZZI: Fair enough.

So you mentioned the deficit.

Do you think there's a day of reckoning there, or?

You know, we continue to have these questions about rising deficits.

And maybe it'll be a problem 30 years from now.

JOHN STANKEY: Yeah, I think it's a problem today.

I don't think it's a problem 30 years from now.

What the day of reckoning is constituted by, I don't know that we can pick a day and say that things are going to trip.

I think the day of reckoning is we'll end up being in a prolonged period of suboptimal growth.

And, you know, you could even go a step further and say if you don't get your fiscal house in order, does it challenge your ability to grow the economy fast enough to be able to do the things to have influence outside the United States and make sure that the world stays a safe place and that economies can grow?

And if economies grow, then there's more opportunity for people in the US that support things like a reserve currency.

That's how it's all interrelated.

But I don't think there's like one day.

But, look, what we need to do is we've got an issue to deal with in how our federal budget is set up, how our balance sheet is set up.

You know, the fact that the federal balance sheet has-- I don't know-- average maturity sub-6 years, when you think about that why the government didn't take advantage of historically low interest rate environment, it's kind of a surprise to me.

We certainly did.

You know, we extended maturities out a long way.

That's all got to be dealt with.

It all has to be refinanced.

And you better do it when you have some discipline in place.

And I think we're at that juncture where administrations are going to have to find a way to start to chip away at it.

BRIAN SOZZI: How do they do it?

Cut spending?

Because if they cut spending, doesn't that impact a company at AT&T?

If they're out there spending on infrastructure-- your company has benefited from infrastructure.

JOHN STANKEY: Yeah, sure.

I-- look, I think one of the things you need to understand is where we benefit from infrastructure is for every dollar that the taxpayer is putting in, private industry, AT&T, or others are putting 2 or 3 in.

There's a multiplier effect on that that, generally speaking, given the economic development, comes back in proceeds to the federal government from growth.

And that's been pretty well documented.

It's a little different than, you know, some other types of investment that tax dollars go into.

But set that aside, I think what I think is best for AT&T and what's best for any business is access to capital at reasonable rates and a growing economy.

And I'd take that over federal spending any day of the week.

BRIAN SOZZI: Bidenomics has been under scrutiny here at this conference.

Are the plans by this administration, have you found them helpful to your company?

JOHN STANKEY: We're only two years-- you know, a little over 2 years into the administration.

So it's kind of hard to-- you see data points formulating.

I've been pretty vocal that I think that there has been good policy put in place on the Infrastructure Act.

It was a bipartisan effort.

It was hotly traded.

There was a lot of give and take in it as it should be when it's bipartisan.

What I worry about now is that it's out and it's in the execution stage.

And we're seeing kind of administrative overlays being put on top of what was legislated.

And those administrative overlays, whether deliberate or not-- time will tell, my guess is maybe they're intentional-- I think are putting layers of requirements, government direction on things that could be working more effectively in free markets with free market decisions than what might be optimal.

And I think it's a little early to tell that, in fact, that's the case.

But I see early warning signs around that, certainly in our industry.

BRIAN SOZZI: Whoever might win the next election-- we have a long way away from there-- what is the one policy you wish any administration would put in place to make your life easier at AT&T?

JOHN STANKEY: Well, I would-- we do have a long way to the next election.

A year is a very long time in this day and age.

I think that probably point to two things.

One is restructuring tax code to drive incentives and investment is pretty important.

And as a large investor in this country, the largest, $24 billion a year, obviously, have interest in that.

And it directly correlates to I'm probably paying a billion dollars more in taxes right now, largely because of loss of that investment.

And it comes right out of the capital program to do it.

It's a billion that I choose not to invest because I've got to ultimately bring it back in taxes.

And then secondly-- it's what we said earlier-- the best thing for any business in the United States and the best thing for the dollar in general is that we have the right kind of fiscal discipline in our government.

And so I'd love to see an administration start to get serious about the size of the federal deficit and trying to work that into a reasonable place where we allow things like inflation to ultimately work our way out of the size of the debt.

You know, we kind of get to some reasonable place and entitlement reform that looks at the fact that people are going to live a lot longer.

And as a result of that, we need to recalibrate expectations-- BRIAN SOZZI: I'm never going away, John, ever.

JOHN STANKEY: I know.

BRIAN SOZZI: Ever.

JOHN STANKEY: I'm one that probably be-- BRIAN SOZZI: [INAUDIBLE] JOHN STANKEY: --gone by the time I'm 80.

But that's OK, so.

BRIAN SOZZI: Your counterpart, Verizon CEO Hans Vestberg, he sat in that seat, so-- I'm sorry, I mean, he sat in the seat, you know?

JOHN STANKEY: That's all right.

BRIAN SOZZI: OK, all right.

JOHN STANKEY: Glad he warmed it up.

BRIAN SOZZI: OK, fair enough.

So he's-- JOHN STANKEY: Was he a 2 or a 5 or a 7 there?

BRIAN SOZZI: We're not going-- we're going to take all this offline.

What I'm going to get at, though, is-- JOHN STANKEY: It's important for me to know if I have to call him.

BRIAN SOZZI: He was good.

He did very well.

JOHN STANKEY: OK. BRIAN SOZZI: It was good to see Hans.

Nonetheless, he said the consumer was strong.

And I'm kind of getting those vibes from you.

Student loans are back and forth.

Inflation is still high.

Do you find that surprising?

JOHN STANKEY: Again, I think it's a little early to tell on things like student loans working through.

I think first payments are being made effectively, you know, over the last 30 days.

And that's not an inconsequential amount of money.

That ultimately has to move through the system.

I am surprised that we have demonstrated as much resiliency in the economy through this year as what we've actually achieved.

And I don't see any reason that it's going to change between now and the end of the year.

I don't know what's happening geopolitically.

I don't know that any of us can predict.

But if something unfortunate in the Middle East continues and we see disruption of oil shipments or something like that and gasoline suddenly jumps, should we all be prepared for a moment like that?

Do I have to think about those kinds of things occurring?

I do.

And I think we're positioned to have the flexibility to deal with it when it happens.

But you want to make sure that if it does occur, you do have that latitude.

And I think we're in a-- we're in a very, very touchy space right now economically.

And it can break either way.

And I've been saying that for a year.

It probably is even more that way given what's happened in the last couple of weeks around the globe.

BRIAN SOZZI: I am an avid reader of your earnings call transcripts.

JOHN STANKEY: It's just fascinating.

BRIAN SOZZI: It is fascinating.

I'm sure you love putting it-- JOHN STANKEY: I'm an avid reader of it too.

BRIAN SOZZI: Yes.

And there's been a-- there's been a tone change, I would say, the past two calls to the point where I left the latest one.

And I thought there was a comeback happening at AT&T.

Am I off the mark?

JOHN STANKEY: You thought there was a comeback?

BRIAN SOZZI: It feels like a comeback.

JOHN STANKEY: OK, you know, I think, actually, if you're an avid reader and you've been reading consistently for, you know, 3 years now and you go track the data points on the results that have been delivered and as they've been delivered, I would tell you, I give the management team a lot of credit.

We've basically done what we said we were going to do.

Now, through the course of that 3-year period, there's been 90-day segments where a certain number isn't exactly what somebody wanted or would have expected.

And they looked at it and said, that must be an early warning to a problem.

And, you know, they've kind of started the narrative around there's-- BRIAN SOZZI: Oh, 6 months ago, what, was the first or second quarter with the delayed payments.

And now, you're saying consumers are making their payments on time again.

JOHN STANKEY: Well, that was last year.

This year, I think it was lower cash production coming out of the first quarter seasonally as we expected but still probably not optimal in terms of how that dynamic was communicated or managed, which is my responsibility.

But we've delivered in aggregate what we said we were going to do.

We are clearly rebuilding confidence, as you alluded it to.

You called it a comeback.

I'll say rebuilding confidence that what we say actually occurs.

And I would tell you, yes, that is happening.

And you should have every reason to expect that what we've communicated out to the street, we'll continue to deliver on.

And I feel really good about where the business is.

And I feel really good about our direction and strategy.

We are in a very unique position.

We are the largest operator of both fixed and wireless infrastructure in the United States.

We have the largest fiber network.

We have the most attractive customer list from the very largest enterprises in the business to top-end consumers and everything in between.

And I think for the positioning that's going on in communication and my view of the future is a converged communications environment.

I don't think consumers or businesses wake up every morning saying, I aspire to have two or three relationships to get on the internet.

I think people wake up and say, I just want to get on the internet.

I want to get on the internet at home.

I want to get on the internet in the car.

I want to get on the internet in the plane.

I think AT&T is in a very unique position to be the first to do that at scale for more Americans than any other company.

And I think, ultimately, that will make us successful in this space.

BRIAN SOZZI: What do you think is the biggest driver of your stock next year?

Is it reining in costs further, or is the top line?

JOHN STANKEY: It's both.

It's the combination of both.

And it's something unique that we can do.

One, we have good organic growth that isn't required from M&A.

And this is something that the business, to your point of the comeback, has had to focus on.

Maybe a legacy historically of inorganic activity.

Getting the business back focused on what organic growth can occur through investment has been part of what this journey has been.

And I'm-- you're seeing that start to occur.

You're seeing us being a share taker in the fiber and fixed broadband space.

You're seeing markets that were penetrating into wireless that we were unable to penetrate before.

That's the organic part.

And we should be able to work out amount of growth that looks very similar to GDP.

But we're also repositioning and simplifying the business.

We're backing away from products that served us well from decades.

We're getting focused on which geographies we invest in building.

It-- that will also help our expense side of this business.

And we have a lot of hard work.

It's pick-and-shovel work to get the cost structure in the right place.

You've seen the progress over the last couple of years.

We've been pretty deliberate in sharing that externally.

You should expect more of that.

The combination of both is what will drive cash accretion next year.

And to your question, that's what our investors expect.

That's what they want to see most.

They want to see cash.

They really don't care how it shows up.

They want cash.

BRIAN SOZZI: Yup.

Lastly, again, your counterpart earlier in the morning said he grades his day and he grades himself as a leader.

I hear that you do hot yoga.

Is that how you relax?

JOHN STANKEY: So I only do it when I have the luxury a lot of time.

Because if I go do it, it's great.

I love it.

But, you know, it's 2 hours of cooldown, right?

BRIAN SOZZI: Wow.

JOHN STANKEY: And if you're in Texas, it may even be longer if you're doing it in the middle of the summer.

So it's not something I get to do weekdays at work.

But-- BRIAN SOZZI: I've never tried it.

JOHN STANKEY: It's a great way to, you're my age, stay limber, keep yourself fit.

The same way, get your heart rate moving.

BRIAN SOZZI: Fair enough.

Oh, strong case for hot yoga.

All right, AT&T John Stankey, good to see you.

It was a real pleasure.

Thank you for joining Yahoo Finance Invest.

Thank you.

[APPLAUSE] Thank you.

Good to see you.