the way. we get the december cpi at 8:30 a.m. eastern. we will tell you what it could mean for the fed. it is thursday, january 11th, 2024. the first day of the rest of pampliano's life. "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. here we are. it's thursday morning. let's look at where the u.s. equity futures stand. things are quiet. dow futures are down by less than a point. s&p up five. the nasdaq, which has had a good run, is up 65 points above fair

value. this is coming on a week where the s&p is now in positive territory for the week. they are for the year to date. the week with the major advantages are looking higher for ten of the last 11 weeks. s also keeping an eye on treasury yields. it sits at 3.99. the two-year yield at 4.34%. andrew. we get reads on consumer prices at 8:30 a.m. expecting an increase of .2% from the prior month. that is 3.2% year over year. we had an historic day yesterday? how do you describe it? when people look back at yesterday afternoon -- >> now are you saying this? >> if we read our history book of economics and finance, in 100

years, joe kernen? >> is it tougher to go to zero? is it real? i have been saying it for a while. i just looked at the vix. i thought we were talking about bitcoin a lot. it will get old. there is nothing going on. >> i'll tell you. >> you just did it. the vix is 12. nothing is happening in the stock market since last year. we come in every day and we say let's look at the futures. let's not. >> a lot of money. >> a lot of earnings. i almost said maybe i'm glad we have bitcoin to talk about. 11 bitcoin etfs will trade after the s.e.c. approved the applications. the move overturned the decade of the regulator opposition to the idea. i'm not sure what this means when they finally say it's okay and we talked about it. maybe it is over.

maybe all of the people who got in early are going to offload to the sheep who can get in. >> there are clearly people buying up in the last three months on the expectation of this. the question heis longer term. >> do hodlers ever sell? >> this is a historic moment. the first time the internet and wall street have had the healthy relationship. the first time they blinked. internet based asset and arms wrapped around it by wall street. now etf regulators are on board. the volatility will dampen from here. >> it could make the move to an andrew's currency. you don't want to buy a pizza for $25,000. there is too much volatility for it to be transactional. if it has no more volatility,

maybe it turns into something. >> i say no more volatility, volatility dampens. bitcoin had a growth of 50%. if you go back over the last ten years, it is still 50% compounding over growth rate. it will taper off a little bit. in the next five years, it will be 20%. that is still double. >> that won't get the tom lee's $500,000. >> you are asking a different question. is it a financial asset? it appears to be a financial asset. >> it becomes transactional. >> is it a currency? ethereum might be some form -- >> it is up more than bitcoin today. >> there are a lot of other or better technologies in the blockchain for that purpose if that is what you think this is here. >> if i go on wall street and ask people what is your be bencbe

benc benchmark. they have the equity-based benchmarks. if i ask a 25-year-old or younger, bitcoin is the benchmark. that is interesting. an entire generation of people who say if i can't beat bitcoin, i'll buy it. as those people age, now bitcoin is the benchmark and it will get into everyone's portfolio. if you want massive adoption, everyone has to put it in the portfolio. the days of the 1,000 increase in a single year is gone. i still think it is very attractive. >> if it becomes less volatility and everybody able to get into it, does it still have growth? >> there is an interesting mechanism. we never had an etf of a finite asset. this is the finite asset.

you have tens of billions d depending who you ask in the next ten years. >> the quality etf? >> gold expands, but not very fast. >> when is the last bitcoin mined? >> 2140. you have to remember 70% of bitcoin hasn't moved in the last year. now institutions are banging on the door. it is interesting to talk about the fees. bitwise is the cheapest bitcoin fund in america at .2%. they dropped to .0%. that is a difference from the publicly available bitcoin fund. >> why did the etfs say they were lowering? >> this is a feud war. >> is it profitable for anybody? demand built up, but huge amount of players who want to meet that demand. >> grayscale dropped to 1.5%.

why didn't they drop to .2%? if you want to go sell grayscale, you have to pay taxes. there are a lot of assets that will stay in grayscale. they will never get enough credit to push it forward. what you see is grayscale saying we have a lot of assets. let's hold on. everyone else saying we want the new assets. we have to go compete in the fee war. .2%. .4%. how much does it matter? others say i want to buy something at the attractive price. what will occur is tens of billions of dollars flows into the etfs. it will go up. >> how many of the etfs exist in a year or two? will there be consolidaconsolid? >> i think there will be more 12 months from now in the aggregate number. there will be clearly two or three winners.

blackrock will be successful. g grayscale will hold on. competition with the digital or internet innovation tech etfs to fight it out. if you have three big winners, that ends up being tens of billions. >> is that a huge consolidation war? >> everyone will keep it. >> in the long term, it will show in the interview later with brian armstrong of coinbase, do you think this is good for robinhood? if you no longer need a coinbase account because you can buy through the fidelity account and they will make money because they are the custodian. >> i have invested in bitcoin and equities across this thing. this is an interesting day. i'm an investor in 21 shares. i'm an investor in grayscale and

it is interesting how it plays out. the etf fee war may leak out. coinbase may have to drop their fees. it may be more inexpensive to hold the bitcoin etf for a year than to make one simple trade on coinbase. there is pressure there. also, i think there is a big contingency of educating others. buying etf is not buying bitcoin. you are not buying the bitcoin. what we will see is how many people care about self custody. >> coinbase fees -- it blows me away. wait a minute. it was trading here. why am i getting -- they are 5%? >> here is another interesting idea from the investment

perspective. the public market misunderstands the crypto business. they have the new blockchain base and generating revenue there. miners revenue is driven by the price of bitcoin. if the price of bitcoin doubles, their revenue doubles because the revenue. >> the fee structure? >> it will compress. they are shifting into a more -- >> you are an investor in coinbase. are you more likely to sell based on this or likely to add to your position? >> i think any company in the public market will do very well over the next one or two years sdpyears. >> you are not looking to sell? >> definitely not. >> you think one or two years, do you think ten years? >> investing is hard predicting ten years out. i thinkthis is a generational trend where there is an asset class that did not exist 15 years ago. now it will not go away.

if you look at where money and talent, you see crypto is a big beneficiary. the individual winners will show competition. new comers will show up and try to disrupt. you also have to look at what happens if some of the large legacy players do some consolidation with the crypto players? i'm not saying this is going to happen. blackrock says let's go buy coinbase? >> 70% of the hodlers will never sell. how much do the etf that we talk about, how much bitcoin do they need put in and where do they get it? how many billion do they need to put it in the etfs? where will they get it from the 70%? will they get it from the 30% or

sell at 70,000? >> my prediction is it will smash every record. >> it is small compared to the $950 million of market. >> it is not 900. the second thing is grayscale doesn't have a redemption function. they eventually had 3.5% of the circulating supply that went into the fund. we went from $$8,000 to $64,000 in a matter of months. if 70% of the supply is liquid by the hodlers, it will be at a higher price. >> i thought about it. i bought a tiny amount. if it is going to $500 million, i'll never sell. it would be nice to get 46. >> a lot of people sold amazon

over the years and great investments. >> we don't know. >> it is better than amazon. >> from here. >> from here. >> i take a lot of intestinal fortitude to invest. >> we have billions of dollars at a minimum. it is a generational asset shift where people are saying i'm not going to go allocate to the other assets. i'll use this. >> too late, andrew? one bitcoin for $50,000 when you could have bought at 5,000? >> you feel bad. >> i'm not saying you feel bad. you have to step up at 50 to get one bitcoin. >> the etf is another interesting thing. the unit of bias will change. now all of a sudden, $50,000 bitcoin, i can buy a $10 share. there is a very interesting

dynamic that may shift. especially people buying that etf s etf. >> that wasn't too much of a victory lap for you? humble and hungry? >> i don't need to say much. i think people realize bitcoin was knocking on the door for 15 years. cameron filed 15 years would be named everyone who was involved. >> that is the last word on it we will have today. >> good luck. >> 12 more guests. we have breaking news to bring you. s chesapeake energy buying southwest energy. it is valued at $7.4 billion. it is $6.99 a share. the proposed deal would immediately be key per share financial metrics and the

combined company with the value of $24 billion. the transaction is expected to close in the second quarter of the year. when we come back, more on "squawk box." buckle up. we are talking about the future of crypto, but the potential deal to bring back three major tax breaks for business. we will take you live to wall street with that live shot of the capitol. and brian armstrong is speaking to me in the first on cnbc interview right after the approval of the bitcoin etfs. we will show you what he said later on. and cathie wood and michael novogratz will speak out as well. all that and more as "squawk box" rolls on. hm? hm? you! your business bank account with quickbooks money, now earns 5% apy. 5% apy? that's new! yup, that's how you business differently.

hi, i'm ben and i've lost 60 pounds on golo. (guitar music) 5% apy? that's new! with other programs i've tried in the past they were unsustainable, just too restrictive. with golo i can enjoy my food and the fear and guilt of eating is gone. every day, more dog people are deciding it's time for a fresh approach to pet food. developed with vets. made from real meat and veggies. portioned for your dog. and delivered right to your door. it's smarter, healthier pet food.

what is cirkul? cirkul is the fuel you need to take flight. cirkul is the energy that gets you to the next level. cirkul is what you hope for when life tosses lemons your way. cirkul, available at walmart and drinkcirkul.com. ♪♪ ♪♪ ♪♪ ♪♪ ♪♪

welcome back. lawmakers are set to be close to the bipartisan deal to bring on

major tax breaks for business. we have emily wilkins with more. >> reporter: businesses have been lobbying congress to bring back three key tax breaks. now congressional lawmakers, republicans and democrats, say they are close to a deal. these provisions expand what companies could deduct from various things. research and development costs and property costs and interest tax breaks. if this goes into the effect with the 2017 tax law, but now it expired. now the lawmakers are racing against the clock to bring them back. the senate finance chair said he wanted this done by january 29th, the start of tax season. in the house, republican ron estes, says working on this issue in 202 and he is beginning to see clear progress. >> the process now is coming to

a head in terms of the negotiations back and forth and trying to look at how you craft something that helps make the economy grow and helps provide more money back into pockets of american citizens. >> reporter: lawmakers have to figure out a number of details. the deal is expected to cost $70 billion with half goes to the business taxes and half to the enhanced tax credits for kids. who is eligible is being worked out. some democrats are soconcerned is not going far enough. becky. >> emily, i saw some things and i forgot if i saw it on twitter or cnbc. something you posted after speaking with the speaker. it sounds like there are a lot of issues they have not looked at yet. >> reporter: absolutely. i did ask speaker johnson about

this yesterday. he hasn't had a chance to look at it yet. ron estes said he was actually going to talk to johnson about it today. this highlights how much is on everyone's plate. this is something that businesses have been pushing for and lobbying for here. it is the details they are trying to hash out with who gets the child tax credit and the measure paid for and how the deal will be. there is the urgency to get it done and it is not often that we see this big bipartisan initiative. at the same point, you want to be realistic that there are hurdle s left. >> emily, thank you. ily wilkins. "squawk box" will be right back. ♪concerns of getting screened faded away♪ ♪to my astonishment.♪ ♪my doc gave me a script i got it done without a delay.♪ ♪i screened with cologuard and did it my way.♪

cologuard is a one-of-a-kind way to screen for colon cancer that's effective and non-invasive. it's for people 45 plus at average risk, not high risk. false positive and negative results may occur. ask your provider for cologuard. ♪i did it my way!♪ it starts with a grill. but it becomes so much more. an extension of your home. not just a weekend retreat, but an everyday getaway right in your backyard. newage makes it possible with beautiful all-weather cabinetry, grills and appliances that transform your backyard into a complete outdoor kitchen. visit newageproducts.com to book a free design consultation and create the outdoor living space you've always wanted.

the first time you made a sale online with godaddy was also the first time you heard of a town named dinosaur, colorado. we just got an order from dinosaur, colorado. start an easy to build, powerful website for free with a partner that always puts you first. start for free at godaddy.com

welcome back to "squawk box"

box" . sheri redstone is seeking more bidders. this follows the report that david ellison, son of larry ellison, is discussing an all cash bid for national amusements with other help. lar coming up, we talk to a crisis manager about david calhoun and how he is handling the crisis with the company's planes. as we head to break, here is a look at the s&p 500 winners and losers.

>> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. realty! hi! this listing sounds incredible. let's check it out. says here it gets plenty of light. and this must be the ocean view? of aruba? huh. this listing is misleading. well, when at&t says we give businesses get our best deal, on the iphone 15 pro made with titanium. we mean it. amazing. all my agents want it. says here...“inviting pool”. come on over! too inviting. only at&t gives businesses our best deals on any iphone. get iphone 15 pro on us. (♪♪) power e*trade's award-winning trading app makes trading easier. with its customizable options chain, easy-to-use tools and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. e*trade from morgan stanley.

before i started playing basketball, i was kind of quiet. i wasn't really that confident or outgoing. but now, with basketball, i feel like a leader. yo, cayden! sport for good means to me that i'll be able to give back to my family and my community. goals can be accomplished, dreams can be accomplished, but dreams are just dreams if you don't go out and try to achieve them. learn more about sport for good at laureususa.com. good morning. welcome back to "squawk box." we are live from the nasdaq market site in times square. if you look at the futures this

morning, we are higher. dow futures up 12. s&p up by 5. the nasdaq up 73. the big news is the s&p has recovered enough ground this week to now put it in positive territory for the year. we saw the first week of the year which was a rough one for the markets. nasdaq has been leading the way. we will continue to keep an eye on this. we get inflation data out at 8:30 a.m. this morning. that is key to the markets. we will watch that closely. another story that is still in the headlines after the latest accident on boeing 737 max 9 aircraft that led to multiple cancellations and the investigation into boeing. ceo david calhoun joining cnbc yesterday to provide an update on the efforts to prevent this from happening again. here is what he said. >> the leadership team did what it needed to do. it grounded the airplanes. the faa immediately grounded the airplanes and the boeing team

supported every step of the process. now we're in a moment where we have nobody at risk and our job is to understand literally everything that has happened and everything that surrounds that particular fuselage plug and fix it and make sure it can never happen again. >> joining us to talk more about this is crisis management owner is here with us. there was a little more he wanted to say. we didn't want to cut him off. eric, it is nice to see you. you have been dealing for years and we have come to you for counsel and advice of how to deal with crisis of the sort on the communications end, not on the underlining case. they often come together here. what do you think david calhoun should and can be doing at this point? >> i think he did as well as

expected. far too much emphasis these days is placed on the ceo interview. the ceo interview is a price of entry to the crisis. it is not the solution. as you said, i think correctly, we always look at what is the crisis. you solve the engineering problem and the problem goes away. what calhoun said which was correct is they cauterize the immediate problem. if the planes are on the ground, they will not have a midair incident. that is the first thing that has to be done. i think what we don't know now and i am not an engineering expert, is what the fix is. the minute there is a fix and it is understandable to the airlines and explainable to the

public -- >> eric, what if this is the tenth engineering problem you are cauterizing and you were on the board of the company where the last guy was doing this with a slew of issues. when does the board say we have seen what we are going to get here? >> as i said on prior interviews about similar subjects, i reject this whole notion that you just throw a version in the volcano and the problem goes away. there is far too much emphasis on the death watch. there is a problem. you bring in the ceo for the interview. the experts declare the ceo's interview to be botched. people say when will you fire him? the board is watching and they say we better fire him because people will continue to ask the question. >> the interview is fine. what about one after another of

what gets you in the trouble where you have to do the interview in the first place? could no one have run boeing better in past five years? >> we don't know. there have been a comeuple of ceos. what you have here is a ex strategic issue of what do you do with the problem child plane? that is the broader usissue of e problems with the plane. >> speak to this. i think it is where joe's going. you can make the argument on both sides, i imagine. it appears from the outside there may be a larger cultural problem at this company. that, unto itself, from a communications or an image or reputational standpoint is a realconundrum. someone calls you, eric, and

says, look we have a problem at this company because people don't trust us. interestingly, i wonder how this plays out. kayak, the service where consumers can buy airplane tickets, you can now not only sort by the time of when the plane is leaving and whether it is direct or not or this or that and price, of course, but you can now actually see and choose which planes you're on. it will show you not only if it is a boeing plane, but which plane. you can exclude those planes. the world could get very interesting very quickly. >> it is not like there is not another company to look to -- >> that is one other company. >> a french airline maker is eating our lunch. they are making planes without these problems. figure that out. >> the problem you are referring

to is deselection. there is going to be an effort to get rid of a particular plane. what i come back to is and i'm looking at this clinically is triage. you have a patient wheeled into the hospital. you have to first figure out what's prong. if the patient has heart disease, you have to figure out after the surgery what you put them on and the regimen. the first thing, ground the planes. that has been done. >> the one thing i will say is i think there are far too many problems. there is a crisis of confidence at boeing. >> there is. >> i'm afraid of who gets put in the position and how they figure it out. every place i ever worked when a new place comes in, it takes six months to figure out a walking t tour to see how things are going on. >> becky, that's right. there is not a general in history that would have kept their jobs by the standards we

have them on today because everything now is about the death watch. you are asking a crisis manager what this is about. that is not the way to go about it. after you have the tactical problem, you have the strategic problem. the problem with the planes that is not going to be answered in the next 24 hours. there has to be a strategic plan of do you replace the aircraft? this is not like if you don't like lucky charms, you get cheerios. >> these are questions asked four years ago with the problems at the time with the m-cat system. i don't think we dug deeply enough. >> i think it is a chronic problem for the board. >> eric, thank you for your perspective on all this. i imagine we will talk, not necessarily about this, but about all these issues soon. coming up, brian armstrong will weigh in on the approval of the spot bitcoin etf immediately after the decision came out. we will show you what he said

first here on cnbc next. >> announcer: currency check is sponsored by interactive brokers. the best informed investors choose interactive brokers. when you think of investment risk, do you consider climate risk? changing weather patterns are impacting the way we live

and the value of businesses large and small. this can mean disruption to supply chains, changing demand for products and shifting regulation. what does this mean for your business, your clients, and your investments? ice offers data and markets that can provide critical insight. manage your climate risk with ice.

welcome back to "squawk box." i want to get back to the s.e.c. approval for bitcoin spot etf. i spoke with brian armstrong last night and asked about the hag in tha magnitude of the moment. >> this is monumental for coinbase and crypto. i think they have been hungry for some acknowledgment from government and s.e.c. in particular that this asset class is here to stay. they finally got that. it took a long time. i want to give a shoutout to

grayscale which is one of the firms that pursued this in the court to finally get it to fruition. it finally happened. we have a number of etfs approved today. it was a big day for coinbase. we were named as the custodian in 10 of 13 classes. more importantly, we had a huge regulatory milestone that showed the legitimizing power of the industry. >> how much does this impact your business? >> we are not sharing revenue or projections. this is a win-win. we will generate revenue as 10 of the 13 etfs. that is great for the capital who want exposure to bitcoin. we had all of the people who came in, they want to use bitcoin for a number of things. they want to use the other crypto assets for commerce and

staking and web 3. you know, this is the future of money we're talking about here. >> there will be people who have wanted to get access to the bitcoin world and invest in bitcoin. historically, the only way they could do that was to use coinbase, for example, to buy bitcoin and hold it. now they will be able to buy a fidelity etf or the grayscale etf or the blackrock etf? i know you are the custodian on one end, but the customers don't necessarily have to get an account on coinbase. >> people have been buying crypto for the last decade and using it had an option. they could come to coinbase and they will continue to do that. this etf is about unlocking new pools of capital that were not previously available. they didn't have a way to get

exposure to bitcoin. new pools of capital come in. that is the first step in people's journey. once they get ex-posure to the asset class, they look at different uses. crypto is the future of money. it will enable people to unlock utility which we can talk about if you want, but many will graduateetfs and start using it directly. >> in the block post that spot ether etf can quickly follow. how soon do you that ihappens? beyond that, is it solana? how soon do you see this playing out? >> obviously that is not in our hands. i can't give you an exact date. this will hopeful ly pave a way for other assets to have etfs. we should have index up funds just like the s&p 500. maybe it will be the coinbase

500 or something like that. you can even imagine different index funds that focus on defi or different subsets of the crypto market. this is a really important new y area of the financial markets. i think it will have all kinds of new products come to market after this. >> as you went through the decision today, was there anything that struck you about the words and maybe the word choice the s.e.c. used? the reason i'm even asking this question is, to me, reading through it, this was an approval, but almost an unenthusiastic one. one which you could sort of feel a sense they felt boxed in, in large part by the lawsuit from grayscale and that decision, but left to their own devices, this is not something they would have done by themselves?

>> it does sound like it was a be g begrudging approval. this is recognition for the 52 million americans who are excited about this and hopefully more in the future. would it be better if it followed a more typical process and held to the same standard as other etfs? absolutely. we have our case with the s.e.c. for better or worse. that is not something we ever really wanted to be in the situation. if we are not going to get clear rules from the regulator, we may have to avail ourselves to the court. the courts played a big role in the etfs. ultimately, we will have to look to congress to pass new laws because ultimately that is where the regulators deride their authority. it is clear we need new laws on the books to clarify outstanding issues of the security and

commodity and what this applies to crypto. >> does this change your relationship with the s.e.c. or how you pursue lawsuits in the future? >> my hope is we had great conversations with the s.e.c. staff that are there from one administration to the next. they have been great to work with. i think that we want to continue to engage with them so this can be a trust and regulated industry in the united states. it is a shame we had to go to the courts to get clarity and that is what grayscale had to do in the etfs. that is not the right way rule making should take place with the administration procedures act. we had shown up for dozens of meetings and shown good faith effort for any piece of information they requested. when we asked for clarity, we didn't get an answer back. we get a wells notice. that is not the way the relationship should work. we are committed to working with them. >> what do you make of the

twitter hack yesterday? you first saw the tweet or x post come up. do you think it was real? what did you think? >> i don't want to comment on that. it is unfortunate that cybersecurity incidents are prevalent out there. it happens in the crypto industry, too. we all need to make sure our systems are secure and it was unfortunate that was a distraction from what was otherwise a really important announcement. >> do you see flows and you have been watching this the last couple months. the price of bitcoin has been on a tear, in large part because of the pecspeculation this day was going to come. what do you think that means for bitcoin in the short term and in the long term? >> i try not to focus on the short term. volumes today did not have price movements happen.

over the last two or three months, the market moved up quite a bit in anticipation to the approvals. i'm optimistic on that. i think these approvals will bring in new pools of capital in the coming years. i take a long-term perspective on this. we are not so much interested in the day-to-day movements. >> 25 years from now or 50 yearsiyefrom now, where does this stand in the context of business and money? >> maybe right up there with the first bitcoin purchase happened for a piece of pizza for 25,000 bitcoin or something. i don't know. we'll see. there's been a lot of historical moments along the way. my hope is we get many more of these. i'm not sure what the next one would be. maybe a central bank holding bitcoin would be the next milestone. we'll see. >> we'll have a lot more about bitcoin and that etf approval.

we'll talk to ark invest cathie wood and mike novogratz later in the program in what seems like an historic moment in the world of crypto and finance. we'll see and probably continue to debate it. "squawk box" returns after this. d-winning trading platforms. bring your trades into focus on thinkorswim desktop with robust charting and analysis tools, including over 400 technical studies. tailor the platforms to your unique needs with nearly endless customization. and track market trends with up-to-the-minute news and insights. trade brilliantly with schwab.

citigroup out with a new regulatory filing ahead of the fourth quarter results which are due out tomorrow. the bank said that it was impacted by $880 million in currency conversion losses from the devaluation of argentina's peso and $780 million in restructuring charges tied to ceo jane frazer's corporate simplification project. those charges are significantly higher than the cfo, mark mason, told investors to expect at a conference on december 6th. citi is also saying that it set aside $1.3 billion in reserves to account for risk in argentina.

the stock down by 1% to 5245. the citigroup cfo will be on closing bell tomorrow in a cnbc exclusive. joining us right now to talk about the big bank earnings coming out today, jason goldberg, barclays senior equity analyst. let's talk about citi, with the news that came out. the charges will be higher than you were told december 6th. what do you think? >> it is a big company going through a pretty massive restructuring. and certainly there is going to be bumps along the way. i think this is indicative of that. i think it is also shows that typically fourth quarter earnings for banks are messy. and if you look at the top 20 banks, half have already preannounced charges that are going to be results, we could see additional ones. on top of that, the group, the top 20 banks this quarter are paying $13.5 billion to cover the losses tied to the failures of silicon valley and signature bank last year. so it is going to be messy. citi is a $2 trillion plus bank

going throw restructuring and bumps along the way. >> overall, we are thinking at least if you look at the expectations from the street, that numbers will improve, we'll see some bit of improvement in the earnings bottom line for these companies. but by less than we had thought maybe a month ago. >> yeah. for the group overall, you know, the fourth quarter is impacted by the continued increase in funding costs we have seen throughout the course of 2023. typically funding costs peak after the fed stops. so we're getting closer to that point, but not yet. fourth quarter you tend to see reserves building ahead of losses that are expected for the year ahead, so you can consider that in the results. >> we have seen financial stocks in general pick up though. is that the right move? >> certainly. it is interesting if you look at bank stocks, the last two months of the year rallied like 35%. mark was up closer to 15%. despite that, 2023 was the third

worst year of relative bank stock performance in the last 90, about 1990 and 2020 worse. despite the fact that they bounced a lot, so we do think there is some room for that relative valuation gap to continue to narrow against the backdrop of the soft landing and the fed switching from aggressive tightening to aggressive tightening to modestly easing. >> tomorrow we get four big banks, jpmorgan, bank of america, citigroup and wells fargo. let's go through them one by one. which one is your favorite? >> of the big four reporting tomorrow, we say jpmorgan is certainly the best athlete of the bunch. they were probably the biggest beneficiary of the turmoil last year, picking up first republic and in addition to continuing to take market share across the main businesses. >> and then let's say bank of america, what are your expectations there? and what are you looking for in terms of what they report? >> with respect to bank of

america they have lagged peers over the last several quarters. so that is something that i think the street is paying particular attention to. expenses have come down the last couple of quarters. there is expectation that, you know, should continue. and then credit quality for gene generally the measured clip. >> what do you want to hear in terms of the treasuries they loaded up on when rates were lower? >> they had the largest unrealized loss in their bond portfolio, we expect that to decline for them and others. but they do have a fair amount of low yielding fixed rate assets in their balance sheet they don't have to contend with against the backdrop. >> what about wells fargo? >> wells continues to make progress. they're an interesting -- outperformed the other certainly bank of america over the last year or so. they're still dealing with some consent orders from several years ago. we look for continued progress

there and to instill a loot of room for them to have on expenses, efficiency ratios, cost ratio, relative to jpmorgan or bank of america, still underperforming there by a fair amount. >> which of the four banks would you buy, which would you hold, which would you sell? >> of the big four, i would say we're constructive on the group in general. jpmorgan's probably the standout, and i think you'll get announcements last night, shows how citigroup has a fair amount of work to do in their recent restructuring announcements. >> thank you for coming in. >> thank you. coming up, we'll talk to moh mohammad el-erian about the kickoff to the earnings season. december cpi due at 8:30 a.m. eastern. "squawk box" coming right back. i'm so glad we did this. i'm so glad we did this. i'm so glad we did this. life is for living. let's partner for all of it. i'm so glad we did this.

edward jones at morgan stanley, old school hard work meets bold new thinking. to help you see untapped possibilities and relentlessly work with you to make them real. with nurtec odt i can treat and prevent my migraine attacks all in one. don't take if allergic to nurtec. allergic reactions can occur even days after using. most common side effects were nausea, indigestion and stomach pain. talk to your doctor

about nurtec today.

good morning. a game changing moment for the crypto industry. the s.e.c. approving spot bitcoin etfs. what this means for investors, pricers and new regulations. inflation watch. the market is now waiting on the december consumer price index number. mohamed el-erian will tell fuss the data will push the fed to move on interest rates. and es skacalation risks in middle east. will there be a direct confrontation between the united states and iran in the second hour of "squawk box" begins right now.

good morning and welcome back to "squawk box" right here on cnbc. we are live at the nasdaq market site in times square. i'm andrew ross sorkin with joe kernen and becky quick. take a look at the futures. we will get to crypto in a moment, given all of the headlines. right now the dow looks like it opens off only about a point down, down two points really. nasdaq up 66 points. looking at the s&p 500 up about 5 points. treasuries right now, take a look at the ten-year and two-year note. ten-year under 4%. 3.987%. that would be something if it was under 2. and the two-year note at 4.341%. oil, the wti at $72.76, up about 2%. it has been a slow, steady

move higher and we're at the 471 now. we knew the news on bitcoin, but it was 46.2, 46.3. but it is over 47. now 47.1, the story of the morning. some calling it historic, a water shed moment, a game changer. the s.e.c. finally kicking and screaming dragged into approving the first spot bitcoin exchange traded funds, 11 funds will begin trading today. some of the improved applicants include blackrock, fidelity, bit-wise, ark invest, invesco. and bitcoin president now moving higher, topping the 47,000 level, 47,100. that's up, i don't now, up 4%, 5%. ethereum i think is up 10% this morning. bitcoin is up 3.4%. ethereum is up to 2600.

and that is at -- what is that? that's a much bigger percentage, almost 11%. grayscale, bitcoin trust, is among etfs approved. michael sonnenshein joins us with his reaction. that was apicture we took of him right after it happened, apparently. >> super happy. >> he turned to look at the camera, he said, oh, and then he just -- right? no. we have seen that picture. there he is. congratulations, michael. >> and just under 90 minutes, we'll get the latest reading on consumer prices. the key cpi inflation report is expected to show that higher prices were still on a downward trajectory in december at the core level. for insights on what that report could mean for the fed, and the markets we want to bring in mohamed el-erian, chief economic adviser at alliance. mohamed, a group of students

were in with us yesterday and they asked a question about how we prepare for the cpi and it got me thinking, you know, we used to not really give a whole lot of credence to a cpi report. in the last four or five years, it has gotten much more important. the last four years as inflation spiked. this is a key number of what will you be watching and if the number comes in at 3.8%, as expected, how should we react to that? >> good morning, becky. first, it is a key number. not just because of what it tells you about the economy, what it tells you about fed policy, it also tells you about markets, it also has a political dimension and social dimension. so, it is among the most important numbers right now. and the hope is that we're going to continue to see the smooth disinflation. so this report in particular should have core inflation coming down, headline inflation will be a bit more sticky.

going forward, it is going to get trickier. the so-called last mile is going to get a lot trickier. we're not going to have the tailwinds that we had, and we're going to have some headwinds. so i'm not really worried about this report, but the next three are going to be particularly interesting. >> what are those headwinds? >> so we are seeing further disruption on the supply side. what is happening in the red sea is significant. if it persists, it will have a stagflationary impact. that's one. second, the base effects are not going to be working for you anymore. and then, third, there is a limit to how much good disinflation we are going to get. we need to see services disinflation come down. so far we have benefited because certain goods have been outright deflation. and that has dragged the averages down.

but we now need to see more on the service side and the service side tends to be a little bit more sticky. keep an eye for the next three. we had a good run and we expected a good run, but a lot of people keep on talking about this last mile, and ultimately and john williams used the phrase yesterday, a longer term goal of 2%. it really matters what longer term means. if it means a couple of years, then we will avoid the -- another fed policy mistake. if it means this year, then we risk sacrificing growth unduly. >> so you think if the fed were to not cut rates, are you thinking the first half of the year, the second half of the year? >> i'm thinking more toward the summer. i think the -- i think right now the market is too optimistic on timing. there is an almost 60% chance priced in of a march cut. and it is too optimistic we get

almost 150 basis points. i think we're more likely to see first cut in summer and more likely to see closer to the 75 basis points that the fed has signaled. >> but your implication here is that they will make a significant policy mistake if they don't cut at that point? >> yeah, i think if we end up the year with them hiking, very unlikely hiking all, not cutting at least 75 basis points, that will be a policy mistake. >> even though all of these headwinds that you just mentioned could mean that we have seen the end of the disinflationary curve? >> yeah, and there is a very active debate going on right now among economists on two things. one is to what extent is the fed responsible for thereduction in inflation? and, secondly, how do you define restricted. so, john williams yesterday said it is restrictive and he's looking at the real rate and he's looking at the real rate versus neutral rate.

if you look at the chicago fed, it suggests that financial conditions are as loose as they were in the beginning of 2022. we're going ing to learn a lot during the year. if you don't validate the 75 basis points, you may end up getting quite an economic and financial reaction in particular. >> mohamed, you mentioned that the cpi number is so important because it has so many aspects, including economic aspects, but also political. and we are in an election year. so if you're thinking the fed is going to be cutting rates in the second half of the year, summer, as we head into the fall, i mean, that puts you smack dab in the middle of the election season. how much more complicated does that make it and is it less likely they will act because they don't want to be seen as acting politically? >> no, i don't think they're going to be influenced by the political calendar. if it means stopping them. some people are worried it goes the other way.

look, the inflation number is critical. if you want to understand why is it that the average american doesn't give this administration the benefit it deserves in terms of creating jobs, 3% inflation -- 3.7% unemployment rate, it is because inflation has really hurt and hurt in such awe a way that people now expect not just low inflation, they expect deflation. they expect prices to come down. telling them inflation rate is down to 3.9% or 3.3% headline isn't good enough. they expect. c prices to come down and that's not going to happen. >> can i just -- before you go, since you're a renaissance man, i'm in shock with the aaron rodgers controversy. your qb. and then the deeper story of what is going on at espn.

your great paper today, this article on pat mcafee and calling out an executive. i never liked the guy because he wears these ridiculous shirts. >> aaron rodgers called him out. >> no, mcafee called out -- you need to read the story. he called out an executive at espn, norby. mcafee did, said this guy is leaking -- rodgers was calling out -- >> the other guy. >> jimmy kimmel and it is a mess. >> he also called out an espn guy too. >> and you're not allowed to do any of that at -- we should never, you know, we don't call out on the show or colleagues or management or anything. i'm kind of liking the guy because of that. is he going to be the quarterback or not now? he's really a sort of damaged his whole brand, i think. i don't know if he should have. it all had to do with antivaxx comments initially. >> so, joe, i haven't kept up with that, but for the simple reason i've been watching over and over the replay of the jets beating the patriots. the first time, 16 games.

>> without aaron rodgers. >> that's all i've been doing. watching it over and over again. we beat them. >> do you think his leadership helped on the sidelines? >> i think it did help. i think our defense helped. and we end up with hope next season just to be disappointed all over again. >> i know we're going to run out of time. can i ask one little quick question. >> is it about bitcoin? >> it is about bitcoin. i was reading on twitter, on x, and you were saying this is a momentous day in terms of what it means for crypto or what it means for bitcoin. but then you went on to say, as notable as that may very well be for making crypto an anchor in the investment world, none of this effectively doesn't propel its role as a potential global currency. and my question to you about that is part of what brian armstrong was saying is he thinks, and we'll see, that as

you get more and more investors effectively interested in this, that's just going to get more and more people invested -- interested in crypto writ large. if you get more people interested in crypto writ large, maybe it does become a currency. >> that distinction is important. look, i agree with brian. it is a monumental day. it is a game changing day. what happened yesterday at the s.e.c. is going to result in three things that is really meaningful for crypto. as an investment, as an investment. not as a currency, as investment. one, it will deepen and broaden participation. two, it will provide legitimacy at a time when a lot of people were worried about scandals. and third, it will give cover for some other regulators to follow suit. that is really meaningful. and as an investment, as an asset, crypto, this is a monumental moment.

but, to go further and say as a currency, and that's a really important distinction, as a currency, no. you will find the regulators much more hesitant to allow crypto to evolve into a global currency. and there is lots of reasons for that. so, i am all for this is really important as an investment, but let's not get carried away. the global currency objective that some people have is still as far ahead of them as it was before. >> mohamed, we're almost 4800 on the s&p. you squeaked by on that bet. we're at 4,000 and we're either going up 10% or down 10%. you got 3595 and i took you to a jets game. don't you think now that i basically have provbeen proven t that the market is going higher, don't you think you owe me tacos. >> higher forever? >> higher --

>> i totally owe you taco bell. i won that bet, but i wanted -- >> but you won by the skin of your teeth. five points. for like a mill second it went down there and everybody would say -- >> it wasn't a mill second. joe, it was the close. it wasn't a mill second. it was the close. >> winning wins. >> we're at 4800 now. we were at -- we're up 20%. >> i will deliver taco bell and i suspect my good friend, the head of yum brands, is watching your show, because he always does, and i suspect that he will help me deliver taco bell to you. >> mohamed, before we let you go. congratulations. i know you just came back from winning the great arab lines award in the economic category that was handed out by the ruler of dubai. congratulations on that. >> thank you, becky. >> thank you. we'll see you later. >> bye-bye. coming up, we'll talk about the u.s. headed for what appears

to be a direct conflict with iran. attacks on both commercial and military ships in the red sea by iranian-backed houthi militants, raising tension levels. what should the markets watch if the conflict escalates? we'll talk about that and debate it right after this. ♪♪ ♪♪ ♪♪ ♪♪ ♪♪

welcome back to "squawk box." we have a developing story out

of the middle east. an oil tanker previously involved in a dispute between the u.s. and iran was boarded in the gulf of oman by armed individuals, now appears to be changing course towards iranian waters. that's according to a reuters report citing advisory group run bit british military and a private security firm. so, the story there escalating in a big way, joe. let's get to -- for the latest on this, on the tensions in the red sea following the recent large scale attack by iran-backed houthi rebels, let's bring in retired u.s. army colonel jack jacobs, medal of honor recipient and nbc news military analyst. so many different facets to this, colonel. i guess what do you think the u.s. and its allies should do and are going to be able to do? >> well, what they should do, and what they're able to do are -- is something that we haven't done. and that is to attack the houthi rebels where they are in yemen.

we have been reluctant to do it. not necessarily because we're concerned about bringing iran into some sort of conflict, but our stated objective is to avoid starting up the civil war that is in yemen and now has been in acquiescence for some time. how important it is to keep things relatively quiet in yemen is probably going to be overridden by the deleterious effect of continual houthi attacks on international assets in the red sea, straits of hormuz and so on. that can't continue. we should have attacked sometime ago. we're now talking about how we are liable to attack and if it continues we probably will attack. >> do you think it would take a

lot to raise iran's ire further than it is? do we have some leeway? they don't want to -- they probably don't want to be directly involved. they like their proxiyies stirrg up trouble. they have no interest in confronting the united states and its allies directly right now. >> no, agreed. and that's exactly why they're using proxies like houthis, hezbollah and so on so do their bidding. they don't have very much interest in engaging the united states. they think we won't attack them on their own ground. and they're probably right about that. and as a result, they continue to arm, to train, and to finance proxies like the houthis with the understanding that the united states is not going to attack iran directly. all the while, they're continuing to develop nuclear weapons as long as they can keep

the west and international interests away from attacking them directly. they will continue to encourage houthis and others to attack international interests in that area. i heard somebody saying recently, well, it is all because of israel's attack on gaza. neither the houthis, nor the iranians, need any excuse to attack western interests and international interests in the gulf or in the red sea. and they -- the houthis have been doing it for quite some time, long before israel attacked gaza. >> they're very honest. they say as long as israel -- this continues, we're going to continue. i don't know what that means that the united states should do. we try to back israel, but i don't know what is going on behind the scenes. what kind of murmurings are you hearing. at the speech the other night, president biden intimated something that behind the scenes

he's trying to tell israel to calm down or something. i don't know. could you figure out what exactly is happening now? they're walking a tight rope. >> well, yeah, there are a couple of things going on here. netanyahu has got a real problem here. he's got to satisfy his domestic interests in getting the hostages back. but they're not likely to get all of them back if they get any of them back at all. he needs to fulfill his promise that he was going to destroy hamas, but he can't do that with the international program on israel asking them, demanding that they slow things down. the slower the attack goes on hamas, the longer it is going to take. the longer it is going to take, the more difficult it becomes both internationally and domestically for netanyahu. so it really is a catch-22. on top of that, israel already

started to withdraw some of their forces for a couple of reasons, not the least significant of which is the war itself has such a deleterious effect on the israeli economy, it is down 2%. you've got 300,000 israelis in uniform instead of being in front of computers and behind counters making money and generating results for the economy. they got to put these people back to work. all these things make it extremely difficult for netanyahu. >> all right. appreciate it, colonel. thank you. thank you very much. we'll see you soon. you watched "fauda", great actor and singer, fighting, hurt one of the main guys, got hurt. >> i saw the headline. >> doing much better, removed shrapnel. i know that guy. i know him well. getting married.

>> when we come back, we'll get a rundown of this morning's stock movers including a deal in the energy sector. "squawk box" will be back in just a moment. >> announcer: time now for today's aflac trivia question. what year did baseball's american league adopt the designated hitter rule? e sw wn quk x" returns. who do you think taps out first? i think the duck goes the distance! alright, you about ready to get out? what's this? a hospital bill?! for a thousand bucks?! gaaaap! did this goat just say 'gap'? he's talking about expenses health insurance doesn't cover. but with aflac, you can get money to help close that gap. aflac, huh? -aflac! -ahhhh! okay! oh! duck - 1, goat - 0. get help with expenses health insurance doesn't cover at aflac.com -you want to race? -for real?

fresh, warm hot dogs! when i'm not selling hot dogs, i invest in a fund that advances innovations like robotics. fresh, warm hot dogs, straight out of my torso! one for you, one for you. oh, you're a messy one. cool, right? so cool. anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. hot dogs! fresh, warm hot dogs! before investing carefully read and consider

fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

>> announcer: now the answer to today's aflac trivia question. what year did baseball's american league adopt the designated hitter rule? the answer, 1973. the idea of adding a player to the lineup to bat for the pitcher had been suggested as early as 1906 by manager connie mack. and welcome back to"squawk box." i'm dominic chu. let's start things off with morning movers with the merger chatter from the last week or so that has come to fruition. chesapeake energy will buy southwestern energy for roughly $7.4 billion. about $6.69 a share and chesapeake stock for every southwestern share out there. the deal combines the two biggest independent natural gal producers in america. when the deal is done, it would

become the biggest overtaking current number one eqt. stocks of both companies on the move for a week or so after reports of that deal over that span. so keep an eye on those shares now, moving to the downside. our next check is on citigroup, one of the big banks that kick off the earnings season tomorrow morning. ahead of that big quarterly report, the big bank disclosed a slate of charges. it will be set to take as part of the earnings release, including higher than expected amounts because of the drop in value and the argentine peso and the restructuring cost tied to jane frazier's plans to simplify and focus citigroup. the bank will take a hit of $880 million from currency conversion losses and $780 million in restructuring. that is significantly higher than the couple hundred million dollars that cfo mark mason got investors towards at an investor conference held by goldman sachs last month. speaking of the earnings report now, we'll cap things off with a check on apple, higher by roughly half a percent, 100,000 shares of volume after a half a

percent gain yesterday. the iphonemaker and app services giant has seen over the last couple of weeks analysts at goldman sachs have tagged apple as a top tactical or shorter term trading idea, heading into its earnings report on february 1st. that stock remains buy rated at goldman and on the firm's u.s. conviction list. the shares up half a percent now, citi down 1.5%. i'll send things back over. >> okay. coming up, grayscale's bitcoin trust is among those etfs approved. michael sonnenshein will join us with his reaction. and then later, ark invest ceo cathie wood will be with us in the 8:00 a.m. hour. don't miss that. we have mike novogratz and so many others as "ua b" sqwkox rolls on right after this.

welcome back to "squawk box." a water shed moment with crypto industry happening today. really happened yesterday. 11 bitcoin etfs set to begin trading in two hours from now. a very long road to regulatory approval, particularly for our next guest, whose grayscale bitcoin trust is among those approved. joining us now first on cnbc

grayscale's ceo michael sonnenshein, good morning. you were getting a shoutout earlier because a lot of this would not have happened had you not pursued this in the way you did. i want to ask you, broadly, did you celebrate last night? what is going on here? >> the last couple of hours have just been a complete blur. when we got that phone call yesterday that our 19 b 4 had been approved, it was almost an out of body experience. >> you knew it was coming? >> you know, i think we knew it was coming, we were optimistic, we were steadfast in our conviction around this. but this is really the culmination of ten years of work. and investor support, the grayscale team, everybody has been working tirelessly toward this outcome. >> what does this fundamentally mean for grayscale? >> it means it is the beginning of having gbtc trade on the new york stock exchange. we have now have a whole family of investment products that have been following very prescribed life cycle from private

placement, now all the way to etf. gbtc is the first of the products to do that. now the rest of the gray scale family of products can start to move along that continuum. >> let me ask you a question, though. you were in a monopoly of sorts prior to this. if you wanted access to bitcoin, not owning it directly, but in the form of a fund, if you will, you were the only way to do it. now you're going to have to compete against 10 plus others, many of which are going to try to do it at a much lower fee schedule than you do. what is that going to do? >> well, we have been prepared for a world in which there are multiple spot products. we look forward to the path for all the other issuers to come to market. our court victory, our operations our disclosures, our work with the s.e.c., investors should have choice. but we're coming to a mark net a differentiated way. it is going to be as of this morning the second largest spot commodity etf in the world. it has $28 billion of assets

under management. and other issuers may try and differentiate on fees for gbtc, it is about size, liquidity and track record. >> one of the things, i don't know if you saw anthony was on the broadcast earlier in the 6:00 hour, he made an interesting point given your fees are going to be materially higher than blackrock or just about almost everybody else, he said, look, these guys may not need to go after new money. they need to keep the money they've got. and maybe build upon that with other etfs and other funds. is that the strategy that you're pursuing or is there something else going on? >> we're focused on building the ecosystem around gbtc. for example, gbtc trading on the otc market since 2015, never had listed options, right? now that it trades on nyse, you can see the development of an options market around gbtc. you really can see how investors can continue to compile their bitcoin exposure around the market. >> what is the distinction between me going off and buying

the blackrock fund versus buying yours? >> it is about the asset manager behind it. we're a crypto specialist. we weather the all different types of speed bumps and advancements within the crypto ecosystem for a lot of asset managers and issuers, this is the first time they're dealing with the complexities that go into running these types of products. >> you don't think blockroc blackrock is up to the challenge in. >> i'm not going to speculate on how well other asset managers will or won't navigate that. what i can say is over the last ten years we have learned countless times through countless cycles that this is not a straightforward -- >> why are your fees higher? >> we talked about fees, we promised investors we would lower fees, we did, we reduced by 25%. you have countless examples across the space where you have category leaders that are not the lowest cost option. >> but when you look at the

screen, we put up the fees for everybody across the board, you're significantly, significantly, multiples higher than everybody else out there. >> yes. because gbtc has differentiated characteristics. there are not -- there are no assets in these other products. they're starting from zero. and gbtc, again, has that market leading liquidity. it traded over $650 million yesterday alone. >> black rock is like the biggest of the big. if you're looking at that liquidity and where you have things backed up, i'm really curious, make the case for me why i should pay 1.5% versus 0 to 0.2%? >> we did a lot of research around this the market in the u.s. is just starting today. if you look at other geographies around the world, you have seen products that have fees that carry anywhere from 125 basis points to even 175 basis points. whether that's in europe, canada, elsewhere. so there are market precedents for crypto products as well.

>> what are the pitfalls? you said you learned a lot over the last ten years. to the extent that we have to watch and be careful about everybody else, i'll just -- where can they screw it up? what are the problems that these funds could have? if you're -- >> you're going to have to come down. >> no. >> he's going to have to come down. you can stand on -- >> if you're a customer, if you're a customer buying an etf, how can it get screwed up? tell me how it gets screwed up so i understand why going with you might be better than going with a newer player who can screw it up arguably. >> we're a crypto specialist. there are times over the course of bitcoin's history when transactions have gotten clogged in the pool, there have been forks and air drops on the bitcoin network, we had to work proactively with whether it is accountants, auditors, to transform accounting systems, to account for eight decimal places that bitcoin has. >> you have a lot of assets

already and you are basically gaining them by keeping them there. >> we are not gaining assets at all. >> not in legitimately -- he said -- >> just that the concept is that a lot of those people who already are with you may not want to leave because of the taxes and therefore they will stay, arguably, longer and you can pay -- they'll pay a higher -- >> might as well keep it. >> making sense to you? >> sure. i think a lot of investors will stay with us. they have a lot of experience. whether a brokerage account, retirement account. >> can you speak to the prospect of consolidation. we're speaking about a dozen or so of these things. >> sure. >> a year from now, if we're sitting together here at this table, are a dozen folks really selling? maybe there is even more. in terms of major players? >> it is a great question. we have to continue to monitor it. i did see anthony's answer this morning when he was sitting down with you, and i think he's pretty spot on.

no pun intended. there will be some consolidation, right? you will see some of these products either peter out or you will see that a couple of them amass significant enough -- >> when was it when we decided it wasn't going to happen? remember when the s.e.c. person was on and they said probably won't necessarily -- that wasn't that long ago. >> six months ago. >> was it six? >> when we filed our lawsuit, look where we ended up. we had a unanimous victory. >> i want to go back to the consolidation idea. do you see yourself as a consolidator, you imagine trying to buy up other companies so you can have a bigger market share in this space, or do you stay strictly crypto, do you get into other types of funding mechanisms? >> certainly anything is possible. >> would you sell your company? >> anything is possible. we have continued to file for

other etfs which i would love to come back and talk to you about, opening up other categories of investing, such as privacy, where we're bringing together privacy within the digital asset realm and privacy within the equities realm as well. >> final question, for me, you had two board members, barry was one of them, digital currency group has been accused by letitia james of allegedly defrauding more than 230,000 investors, including 20,000 new yorkers, more than $1 billion. he stepped off your board about two, three weeks ago now, ahead of this. how much of that was a related issue, which was that you were worried you would not get approval if he was on your board and what does it say that he is a big investor still in your company? >> zero connection to gbtc's up listing, barry stepping off the board. if anything, this entire community owes credit to barry for thinking of launching

grayscale and grayscale bitcoin trust in 2030. pe people thought he was insane. it is really his vision that has been carried out today. >> michael sonnenshein, congratulations. >> thank you. >> quite a day. quite a day. thanks. >> okay. we have much more on the s.e.c.'s landmark bitcoin decision. house financial services committee vice chairman french hill, ark invest ceo cathie wood and galaxy digital michael novogratz all joining us in the 8:00 a.m. hour. but, next, will boeing 737 max 9 problems spell doom for the stock? jon fortt puts the company on spotlight in this edition of "on the other ha." quawk box" will be right back.

hi, i'm janice, and i lost 172 pounds on golo. when i was a teenager i had some severe trauma in my life and i turned to food for comfort. i had a doctor tell me that if i didn't change my life,

i wasn't gonna live much longer. once i saw golo was working, i felt this rush, i just had to keep going. a lot of people think no pain no gain, but with golo it is so easy. my life is so much different now that i've lost all this weight. when i look in the mirror i don't even recognize myself.

welcome back. boeing is under scrutiny yet again to start 2024 after one of its max 9 aircraft had a portion of the plane rip awayduring a flight last week. will boeing's latest mistake doom the stock? jon fortt is here to weigh in. hi, jon. >> becky, yeah, boeing and its stock are in deep trouble. this is just the beginning. so to recap, during alaska airlines flight 1282 on friday, about 15 minutes after takeoff from portland, oregon, at 16,000 feet, a piece of the boeing 737 max 9 airplane, the size of an exit door, ripped away from the plane.

pilots made an emergency landing, no one died. but it was a fresh nightmare for a company that was just getting us to forget about two crashes five years ago that killed 346 people. the malfunctions were very different, five years ago about a faulty flight stabilizing feature. this time an issue with the plane's fuselage. the common problem, though, boeing quality control. the stock chart reflects that. boeing closed at all time highs about $440 a share the days before the second max crash in 2019. today it is about half that, and you can bet it goes lower when calhoun reports earnings on the 31st. boeing's major competitors, airbus and airbus has been beating them on aircraft deliveries since the first max disaster five years ago. this is going to slow boeing's ability to deliver quality aircraft and it is going to dent margins and when investors realize that, the stock is going down, becky. >> calhoun does seem to be taking responsibility, albeit

belatedly. but it is not like airbus has extra planes to sell disgruntled customers in all of these issues. so is that something that could potentially cushion the blow? >> yes, becky. on the other hand, the punishment a lot of people are expecting from boeing is already priced into the stock. its market value is half what it was before the max nightmare began. airbus this week hit all time highs. airbus is about $10 billion away from beating boeing in annual revenue, which would have been unthinkable a few years back. all that to say, boeing stock is in tension, not just because of problems with 737s. the business has been suffering from margin pressure and labor cost as the commercial plane problems weren't enough, boeing is also finding engineering headaches in satellites and drones. despite all that, boeing has a lot going for it though. missile and weapons products and the apache helicopter are in high demand with the rise in global conflict. as the lone domestic rival to european airbus in commercial

airplanes you can be sure boeing has support from the u.s. government in a time of need. these are reasons why the stock won't do much worse than it has already. airbus, though, watch out for news there. they could announce a contract with delta today that would be more good news for that stock. >> okay. so, i guess it has all of us at this point trying to figure out what the worst case scenario is. >> it seems to be reflected in the positive side on airbus' stock, versus boeing's. just because a stock, you know, isn't going to crash, doesn't mean it is going to take off, could just get stuck on the tarmac here. >> jon, thank you. >> and got to mention the on the other hand newsletter. we might even have the qr code on the screen. do we? do we? happy new year. there it is. now you don't have to type in -- sign up without having to type in. >> can't say happy new year. >> two days, says larry david. "curb your enthusiasm" about that issue. >> now that we're like 11 days in --

>> way too late. >> if you're not happy now, it's too late. >> already off the resolution. >> just new year people. not that new. just be happy. all right. sign up for the newsletter. >> don't worry, be happy. >> i heard that. coming up, the race for the white house and where the candidates stand on tax policy. the tax foundation is tracking it all and we'll see where they differ when it comes to vials in businesses. "squawk box" coming right back. that first time you take a step back. i made that. with your very own online store. i sold that. and you can manage it all in one place. i built this. and it was easy, with a partner that puts you first. godaddy.

you know what's interesting these days? bitcoin. look for bitwise, my friends.

♪ ♪ ♪ ♪ ♪ ♪

. welcome back to "squawk box." news alert. just out from car rental company hertz. made the strategic decision to sell 20,000 electric vehicles from its u.s. fleet. about a third of the global ev fleet. rec nix of $245 million charged net depreciation on those sales. reinvest a portion of proceeds in the purchase of an internal combustion engine vehicles going forward, it will continue to actively manage the size of the ev fleet. last october hertz said it would pull back on initial plans to buy 100,000 teslas. talking about cathie wood next hour, but it is, i don't want to say a nail in the coffin. i don't any it's dead but take a lot longer for ev adoption. >> not know how to work it, charge it, what to do with it? >> infrastructure is not there for the charge. >> buy it, you're going to have

the infrastructure at your house. >> buy gas guzzlers, it's just unbelievable. >> interesting. i think obviously an expectation that the infrastructure would be there, or more interest and you have so many stories. go on social media, folks who went to car, get to the airport and think they're going somewhere, have to drive three hours. right? tesla's a great product if you're going to work every day and 45 minute an hour thing. >> mustang ev, right. >> and a longer thing -- >> complicating factor. i don't want to borrow a new phone to try it out on a trip either so stretched thin. trying to figure other things out. this is not a tesla issue. this is an ev issue. ev issue a et large. >> the tax foundation put together a tax policy tracker where each's presidential candidate stands on taxes. the tracker let's you compare tax plans by candidate. tax type and topic. joining us now is tax foundation

senior economist erica york. i like the exercise of doing it, erica. did you do it when there were, like, ten republicans? i mean, sort of a, any reason, really? care where any of these other candidates are on taxes when we kind of know at least -- narrowed down to three or four at this point total including president biden. >> yeah. we've tracked it before. tracked proposals in 2020 as well. this year i think the big difference is that there's a sadder picture emerging's that is, most candidates don't have tax plans. those who have really some information on taxes really lack any details. some of the proposals that are being floated would take tax policy in the wrong direction and harm taxpayers and the economy. so we have a range of proposals from, that are just in the talking point stage. like haley's proposal to cut

middle-class taxes. no specifics there. we have proposals that are what i would say detached from economic reality, and not realizing the fiscal constraints the government faces now, like desantis's idea he's recently floated of a single-rate flat tax that would somehow cut taxes for all taxpayers. and then at the other end of the spectrum you have proposals that president biden has outlined in his fiscal year budget that would raise the corporate income tax rate. raise taxes on capital gains and the idea that trump has floated to impose a universal baseline tariff of 10% on all imports. so we really have a range from talking points to more harmful policies, and it's not a good direction for tax policy on the campaign trail. >> are you strictly non-partisan? because i just, just listening how you characterize things. i can walk out on the street,

say, here's a proposal. is that good for tax pacer or bad for taxpayers and run person says, oh, yeah. really good for taxpayers. because, you know, soak the rich. i want more benefits, you know, i want -- more safety net for people that aren't in a position, same position i'm in. other people that think any tax increases would be bad, you know,ing writ large for people to possibly hurt the economy. how do you do it? are you naurnon-partisan. >> enough details to model their tax plans. what effect on wages and jobs, who bears distributional and what 0 wwould it do tore r to r.

at this point we don't have the detail to model any of the candidate tax plans, but we can see what direction they would go. are they pro growth, economically harmful? do they -- add to -- >> tell me the perfect tax plan according to the tax foundation, erica? what should we do? what would you do? >> yeah. we've actually put forward a proposal that outlines some principles to follow when it comes to tax policy. we've taken a look what's worked internationally, and has been sustainable and pro-growth. find it on our website. call it our growth and opportunity reform plan. it would fundamentally change income taxes for businesses, move to a distributed profits tax like that used in estonia. greatly simplify the income tax for individual taxpayers. the system we modeled off of

estonia takes the average takespayer about three minutes to file taxes. gearing up for tax filing season here sounds amazing. we know it's taking longer than three minutes to do that process. it raises sufficient revenue and pro-growth. so i think there are a number of changes you can make from -- tax reforms incrementals to improve the tax system. >> okay. income taxes never going to happen. i guess not one of the -- okay. i know. i know that's a pipe dream. thank you, erica. >> thank you. okay. another big hour ahead. in just a moment financial services vice chairman congressman french hill is with us and also talk to ark invest cathie wood. happy about her new bitcoin etf galaxy digital's mike novogratz, what's next for crypto after spot crypto etfs.

coming back right after this. ye market from wherever you are. e*trade from morgan stanley. you founded your kayak company because you love the ocean- not spreadsheets. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

good morning. crypto history. the s.e.c. giving the go-ahead to a big batch of spot bitcoin etfs. 25 years from now, 50 years from now, where's this day going to stand in the historical context of business and money? >> maybe right up there when the first bitcoin purchase happened for a piece of pisa for 25,000 bitcoin. >> that was ceo of coinbase weighing in.

the next 60 minutes talking all about the government's big decision. the future of crypto regulation. what it all means for investors. a big lineup you do not want to miss. final hour of "squawk box" begins right now. good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe kernen along with becky quick and andrew ross sorkin, and move through these u.s. equities futures quickly. show you bitcoin, won't show that. nasdaq up 66 points. futures ahead, call change -- cpi data comes out. due at 8:30. treasury yields this morning. also -- sort of in a trading range that we've seen. you can see the ten-year now

just below 4%, but top story, the s.e.c. approving the first u.s. listing of spot bitcoin etfs. nearly a dozen applications given a green light trading expected to begin today. it's likely to open the door to wider ownership of cryptocurrency. in a statement s.e.c. chair gary gensler made sure to say his agency was not approving or endorsing bitcoin saying investors remain cautious about what he called "the myriad risks" associated with the asset. i think we, you know, telling you all about it. show you where bitcoin is this morning. that's what i would have done. probably, instead of the different ones. there it is. bitcoin up now 4.337. didn't jump like the other day when there was the false x posting about the adoption. but it has been kind of a slow,

steady climb higher. i think above 48,000 on the fake tweet, but you can see 473 and etherrien or ether actually was up 10% at one point. up 7%. joining us with washington reaction and to talk about regulating crypto, arkansas representative french hill, vice chairman house services financial committee and chair of the subcommittee on digital assets. fintech, an inclusion. with your statement, would it have been similar to the s.e.c.s or the gary gensler, did he sort of, you know we're going to do this, but buyer beware. still not, you know, completely enthralled with it, and you certainly shouldn't just think it's a slam dunk. you're not going to lose your shirt. that's sort of what i got from the s.e.c.'s statement. >> hi, joe. good to be with you. look, gary gensler and the

s.e.c. could have done this a long time ago. we've had futures on the, for bitcoin on the cma since 2017. futures etf since 2021. you've had etfs and bitcoin outside the united states working quite well. so i really do agree with hester purse, the commissioner, who says it was an arbitrary capricious sell. propelled to lose a court case and turned it down over and over again no direct correlation between the futures market and stock market. court says that wrong. math says it's wrong. it's good for individual investors to be able to experience and buy bitcoin through an etf and not have to try to buy it directly. so that's a positive, but we need a change in the regulatory posture here in washington, which is why i've authored legislation bipartisan legislation, to create a

regulatory framework that directs the s.e.c. and the cftc how to regulate crypto assets. >> where does that stand and what are the prospects? >> i think the prospects of good, because we did get good bipartisan support in the house. that bill needs to come to the house floor. we're working with majority leader's office are and speaker's office trying to find time to schedule that on the house floor. we've also written legislation that could give clarity to what is a stablecoin, when you take fiat money and buy a tokenized stablecoin, what are the rules about that? how can that be effectively regulated by the bank regulators and others? and that also is pending. we've made progress on that on a bipartisan basis as well. these two pieces of legislation give the foundation to allow innovators, investors and consumers to have this safe, sound outlook for investing in digital assets and innovating, but we won't really have that

comprehensive view, in my mind, until we get this legislation passed. >> do you think that the feet, foot, i guess feet dragging, i guess. might be foot dragging. i don't know how many it -- only drag one because the other -- did the foot dragging of the s.e.c. do you think the ftx situation or any other sort of debacles we saw in crypto, really didn't involve underlying asset, it involved some of the companies that were, that were operating globally, were, you know, there's really no ground rules. did that sort of grease the skids for some of the bad behavior, do you think? should have been involved -- now saying, look. buyer beware. you can do this but we're not enthralled with it, but maybe had their eye on the wrong, where the risk really wasn't in the first place? >> well, look. members of the house on both

sides of the aisle are not impressed with the s.e.c.'s oversight of ftx where we had money lost by individual investors and institutional investors in the united states. where were the cop on the beat there? yes, you're right. there is -- if we don't have a framework we'll have continued fraud, manipulation in the market. why i think the ftx collapse and others that we've witnessed the last 18 months speak to why we need the regulatory frarmmework. does two things reduces arbitrary decisions by the s.e.c. and dreirects them how t carry on their responsibilities. they need that. chair gensler in my view doesn't appear to be willing to do that on his own. legislation, i think, is definitely needed. >> do you think there's any residual just a reason to, to not want to head this way?

because it disintermediates established sacred cows in the u.s. economy? i don't know whether jamie dimon looked closely into this or government agencies would protect the -- the u.s. dollar and its preeminent status. do you think there's any of that, french, at all? they like the status quo. there's a lot of people that benefit from the status quo. and -- >> well, i think -- >> go ahead. >> i think you raise a good point, joe. look, status quo is powerful ma in blockchain and tokenized payments on a blockchain can be very disruptive. putting assets on a blockchain can reduce costs make it more efficient and more reliable, more auditable. more effective and as i say, low are the agency costs of many different kinds of transactions. jpmorgan itself is experimenting with blockchain and tokenized payments for international settlement purposes. so i think companies of all sizes will benefit from a

regulatory framework laying out rules of the road for both innovators, consumers, whether talking institutionally or households, and better off if we get this legislative process put in place on both sides of the capitol. >> can you explain, then, to me? a month ago. said, to me, this should be illegal? to trade in bitcoin. can you explain? where does that come from? >> i don't know. i haven't talked to him abpersonally. he may be skeptical about cryptocurrencies using those at the platform or speculating cryptocurrencies on crypto exchanges but i think he believes and jpmorgan work confirms that blockchain and use aring tokenized payments in blockchain can lower agency costs increase could efficiency and auditability of transactions on 0 global basis. that's in the interest of big companies like jpmorgan chase

and also the heart of what innovators are trying to do, to disrupt the marketplace make it more effective and better for the future. >> got to run, congressman. we had brian on, andrew talked to him saying the next big thing can be when a central bank actually hold some bitcoin. i tried to figure out what that would mean, and could you ever see something like that happening in, for example, by the fed? i can't imagine. >> i can't see it in the immediate future. i'd like the fed to have a smaller balance sheet not a bigger balance sheet. you know, let's see what happens. i mean, my view is that consumers, innovators and entrepreneurs are benefited with clear rules of the road an not arbitrary capricious decisions like we've seen from the s.e.c. commission and also an outlook people were can in0 e vat and not put in jail or a notice

served on them or force investment in our country offshore to foreign jurisdictions when financial transaction on a blockchain are real and are going to continue to grow. >> i know. the agency can change every four years. and it can go 180 degrees, which is no way to run a -- financial system. >> right. and the f stock. financial stability versight commission set up in dodd/frank set up legislation to set these up for digital assets and stablecoins. that's what we're trying to do. >> congressman, thanks. >> you bet. great to you with you, joe. >> okay. still to come this morning one of the key players responsible for pushing those now approved spot bit coyne etfs forward. ark invest cathie wood joins us next. first on "squawk box," we'll be right back.

(grunting) at morgan stanley, old school hard work meets bold new thinking. ( ♪♪ ) partnering to unlock new ideas, to create new legacies, to transform a company, industry, economy, generation. because grit and vision working in lockstep puts you on the path to your full potential. old school grit. new world ideas. morgan stanley. the first time you connected your godaddy website and your store was also the first time you realized... well, we can do anything. cheesecake cookies? the chookie! manage all your sales from one place with a partner that always puts you first. (we did it) start today at godaddy.com

welcome back to "squawk box." s.e.c.s green light on spotcoin etfs to start trading. joining us now ark invest ceo and cry canno cathie wood. good morning to you.

>> good morning andrew. happy day. >> it's a happy day for a lot of people in the space that you've been living in now for quite some time. the big question i want to ask you and it's really, now talked to a number of players in this space. as you introduce your etf, how are customers, the public, supposed to see think of the distinctions between the way you're doing it, the way blackrock's doing it, fidelity is doing it, grayscale and how should they think about the distinction distinctions? >> we think arkb that three competitive advantages. the first is the infrastructure and operations competitive advantage. we are partnered with 21 shares, which is the largest pure play crypto etp provider in the world. it has $2.5 billion of assets. 40 funds over 5 years through

all kinds of markets and forks and havings and airdrops. so it's been through it all, battle tested. so our infrastructure is there, and i think it's the only one, we're the own ones with both the crypto and the etf expertise. two -- our research. we have been researching bitcoin for ten years. actually more than that. with our chief futurist, and we are giving our research away. we have been educating the community. so has 21 shares. i think we're recognized for our bitcoin research, and, in fact, many people know us for our tesla position, but bitcoin actually was more controversial first, when we gained exposure to it, in 2015, when bitcoin was only $250.

then on a more competitive advantage, which i don't think people should underestimate. our distributor resolute has been a partner since 2016. so that sales force had to learn what bitcoin was, and they had to study it, and they had to read our research, gain conviction. they know how to hold clients' hands. we think think arkb has those three very important competitive advantages. >> longer term, we can now ask similar question to others this morning as well. how many etfs do you think can win in this space? given the competition among them, the commoditization of it and the pricing? >> sure. well, i don't know the answer to that. typically it's just a few. and i do think the fees make a difference. we have approached this differently from some others.

we believe that bitcoin is a public good. what we have here, we believe, is a financial superhighway. it is the layer of the internet that developers did not build in in the early '90s, because no one ever foresaw commerce or financial services. a public good. and so we're not looking to maximize profits here. 21 basis points. 21, 21 shares is our partner. 21 million bitcoin is the number that will, the maximum number that can be printed. >> okay. now let's talk pricing. shouldn't say pricing. but the price of bitcoin. you and i have had conversations now over many years. we talked about bitcoin being worth something on order of $500,000 literally only a couple years from now. do you stand by that? how does this etf change that? speed that up? slow it down? what do you think? >> yes.

so you'll find in our big ideas, that's ark-invest.com, building blocks for our price forecast. and our base case is in the 600,000 it dollar range. our bull case, we think the probability of the bull case has increased with this s.e.c. approval. this is a green light. our bull case is $1.5 million by 2030. you can see the building blocks. you can see how conservative we are in terms of those building blocks. this is a big idea. it is a, it is the first global decentralized digital rules-based critical there, rules-based monetary system in history. it is a very big idea. >> and let me ask you, the separate question, which is, do you believe that if we were to get that those type numbers it has to become a currency, not just an asset? one of the things armstrong talked about he thinks just

going to create more interesting crypto across the board. and that that is what's going to actually propel this and change the dynamic with which bitcoin is used, which is currently today digital gold on something like that. potentially actually could leapfrog into the currency that people talked about for many years? >> yes. our first paper on this was in 2015. the white paper still on our site. and we tried to figure out, could bitcoin serve the three roles of money. store up value, you say most people agree with that one. means of exchange. unit of account. the answer to that was, yes. we put out a bitcoin brainstorm with our partner bitcoin park in nashville, and it examines the convergence of artificial intelligence and bitcoin, and you'll hear, nicknamed roast beef, on that podcast, talk about that convergence and how

it's going to redefine the division of labor. probably going to put the gig aeconomy on steroids and it's starting already in the emerging markets. in africa. in particular. so it's very exciting. i don't think people understand how hard at work the developers around the world have been. lightning network is a big part of leveraging. leveraging the base layer of bitcoin. so we're very excited. we're so happy that arkb is going to be part of the ecosystem. >> cathie, before i let you go, pivot a moment to tesla. one of the other big topics you've been bullish on quite some time. did you see the news crossed earlier. hertz selling about 20,000 evs in part because they have not found the interest among users who get to a hertz. i know there's a commuter system in it. every tesla, tell you where you can go find the pump, but folks

using them first time sometimes or other people get to an airport know they have a three-hour drive, appears clearly interest is not there just yet. what do you think of that? >> when we first saw that announcement yesterday, we thought, okay. is this the turnover of cars that i think every eight months hertz turns over cars. so there may be some of that. i don't know about you, but when a tesla shows up, an uber shows up and it's a tesla, i'm delighted. and people will pay up for this. we know that the maintenance on electric vehicles is 60% lower than that of gas-powered vehicles. that's a consideration. one thing that you might be hitting on is, people have to get used to this ecosystem, and, yes, you're going to be at a charging station for many 15, 20 minutes, if you're going on a

long ride, but i doubt they're getting rid of teslas. >> so you think that among those 20,000 vehicles, those are not going to be teslas? that's your gamble? >> i believe that there is a demand. we've talked to uber drivers. they love it. they get paid more for teslas. >> i don't disagree. i love getting in back of an uber if it's a tesla. no question. the bigger question we, whether the infrastructure issue as relates to the rental industriened a the fleets they have as relates to either tesla or more broadly evs? >> i think it's education. that's the issue i think. i have known people who just figure they're going to hop into a tesla first time. renting from hertz, and other places, and they learn, oh, okay. this is the ecosystem i have to get used to, but by the end of those trips, once they've gotten used to the ecosystem, they actually are thrilled and are thinking about buying a tesla

for their next car. >> cathie wood, appreciate your time and perspective this morning. talk to you soon. >> thank you so much. when we come back, breaking cpi inflation data on the way in just minutes. looking for a consensus, december crip aye 3.2% versus 3.1% month before. stay tuned. you're watching "squawk box" and this is cnbc. ♪ (upbeat music) ♪

( ♪♪ ) ( ♪♪ ) ( ♪♪ ) -awww. -awww. -awww. -nope. ( ♪♪ ) constant contact delivers the marketing tools your small business needs to keep up, excel, and grow. constant contact. helping the small stand tall. rylee! from rylee's realty! hi! this listing sounds incredible.

let's check it out. says here it gets plenty of light. and this must be the ocean view? of aruba? huh. this listing is misleading. well, when at&t says we give businesses get our best deal, on the iphone 15 pro made with titanium. we mean it. amazing. all my agents want it. says here...“inviting pool”. come on over! too inviting. only at&t gives businesses our best deals on any iphone. get iphone 15 pro on us. (♪♪)

inflation data. with the december cpi and market reaction, all happening on "squawk box" comes right back in, like, three minutes. the fuel you need to take flight. cirkul is the energy that gets you to the next level. cirkul is what you hope for when life tosses lemons your way. cirkul, available at walmart and drinkcirkul.com. we

december cpi. a number markets are awaiting getting check on consumer inflation. dow futures up by 33. s&p up 10. nasdaq 88. rick santelli standing by. rick? >> yes. our consumer price index read for the month of december by bureau of labor statistics expected to be up 0.2% up 0.3%. and if you strip out food and energy, it is exactly as expected. which is up 0.3%. just like in the rearview mirror. that headline number is 0.2 higher than the rearview mirror up 110 and prior at seer since may of 2020. let's go along here. year over year cpi.

expected to be up 3.2. it's up 3.4. up 3.4. the best it's been was 3.0 in june of last year. best since march of 2021. finally, there is progress. my favorite, cpi core. year over year, which has not been below 4% since may of 2021, i cannot take that out of my repertoire what i say on cpi day, because 3.9%, 3.9%, which is the best since 3.8 in may of 2021. now, here's something i normally don't discuss. if we look at the index itself. the non-seasonally adjusted actual index, it came out 306.746. why is that interesting to me? because the all-time forever high was in september at 307.8. very close, but here's something. if you take core cpi, the actual

index, which is seasonally adjusted, the read there is 313.216. that probably doesn't mean anything to you. means something to me. that's the highest it's ever been. it's ever been! remember, if you're a libber statistic -- labor statistics brings out the number. and a number meaning the most updated prior to about two minutes ago. go on the website look at cpi inflation calculator and you put in feb of 2020. it takes $1.19 of $23 to buy what bought a dollar pre-covid. do it if you don't believe me. now, initial continuing claims. initial claims, 202,000. 202,000. that's the best since second week in october of last year. and finally, on continuing claims, 1 million 834,000.

1 million 834,000 is the lowest level since the last week in october. and -- we see interest rates shooting up. it's all on the cpi data being hotter than expected. you know those annualizations, .3 changes that math just a bit. becky and the panel! back to you. >> okay's here we go. rick, stay with us. joining us now for more on that new inflation data, wendy el edelberg, jo joe griffith and our very own steve liesman. pick aport these numbers, steve. >> just a topical comment first, becky, which is that i think this is something the fed tried to prepare the markets for. the idea that, yes, there is improvement in inflation and john williams fed president said yesterday, new york, it's significant. no doubt, despite the numbers.

trajectory, getting from here to there is not a straight line. data can be both noisy and can bounce around quite a bit. interesting numbers here that not all of which make a lot of sense to me. one thing we see here is that in december there's some reversal of some of the declines we had in prior months. first thing i will say is, we did not get any help on owners of equivalent rent part. up 0.5% continuing same level at last month and kind of defying what we're seeing out in some of the market-based metrics what's happening in rents. bottom line, cpi has not picked up decline in housing. we saw new vehicles up 0.3%. used up 0.5. airline fares up 1% and actually the energy sector added to inflation as well. leave it there,ing except to say all categories essentially on the decline at least the month of december reversed themselves. this is the sort of thing i think, sort of report, which gives the fed patience and part

of the reason why the fed has said, you know, don't get ahead of yourselves, market. there's still a lot of stuff that has to work out here. >> wendy, ask you, when do you anticipate that the fed is likely to cut rates? >> i think it's going to have to be when the fed looks at expected outcomes and says if we don't cut rates, we are going to undershoot our inflation target, and persistently undershoot. not just a one-month thing. it has to be that they get to a point where they think, monetary policy is so tight, that if they don't cut, they will overshoot on their inflation target. and i don't think we're anywhere near that. i think the numbers say today that the fed's doing the right thing and just need to stand pat. >> how about you, joe? >> federal reserve has been overshooting inflation target close to three years now. you still see even with federal

reserve nearly declaring victory inflation is still 1.5 times target translated into a $4,000 real income decline by families. interesting to look at. credit card balances. increased by almost $4,000 per family over the past three years, compounded with interest rates, you see credit card default rates highest since 2012 and interest close to $1, 600 per year and middle-class families are feeling it most. >> and yesterday mohamed el-erian was on and three h headwinds reaching the last mile, whatever you want to call it, of inflation. one issue, sea. input costs going up because of problems along the supply chain. second is the change in the base. it's going to be tougher. headline comparisons from here on out, talking lower numbers relative to what you talked about 12 months before. third would be this idea that we've seen goods deflation if

you want to continue to see inflation come down you have to see a services inflation come down. he's not sure how likely that is. how about you? >> i'm a little more optimistic on that third element there. actually on the other two. i kind of believe in the, i guess, capitalism and ability of the market to provide supply. i think there's this thing going on i'm working on, which is supply phobia, becky. everybody's afraid because we have all of these supply chain issues from the pandemic that if you have growth, that the supply chain won't be able to meet that growth and cause inflation. it's not the way the economy used to work and i think there's still going back. a constraint when it um cans to labor, but somehow we have found workers to power the growth this year. i'm a little more optimistic of the ability of industry and ability of business to meet supply if there is more growth. on the service side i do still think we have in our future this decline in housing costs because looking at this data out there

from zillow and others showing rents declining. and i also think that you have that sort of ten uation in wage gains. that should enable those on the service side to eventually begin to reduce. i think there's a path. i think we're on that path. that path is downward. it perhaps is slower now because of what mohamed talked about. better numberis base not at strong but i think bumpy and i feared from the very beginning, the moment the market priced in wednesday six rate carts the market gone too far and would not behave the way the market wants it to behave. >> and rick in agreement. they don't think cuts are coming as soon. what do you think, someone watching the markets trying to figure out the market's anticipation? >> you know, the federal reserve had an interpretation of the data. markets, markets only can divine

inputs. that's the interpretation of the federal reserve and most fedspeak and most of the implied language over the last several meetings that basically hinted at the notion that the tightening cycle was pretty much done. it was accomplished. annualized rates are well within the area to come into our target. the market priced exactly what the market was supposed to price. the interpretation of the agency that's basically in charge of short-term interest rates. what's changed? why is the market moving? it isn't because the market was wrong. it's because the data proved some of the perspectives of some of the federal reserve officials that the market believed was misinterpreted. inflation, whether annualized, look at the indexes, or try to understand why the average american just doesn't feel as good as wall street once again, i say, go to that it calculator on blx website. updated data. my guess, still going to show basically 19 to 20% inflation

since pre-covid and that's what americans feel. there's nothing that's going to take that feeling away. >> okay. wendy, get to that, because that's pretty significant. especially in an election year. how do you see this playing out? >> i think a lot of what's happening -- >> i'm sorry. >> oh -- >> we should be laser focused on what the consumer is doing. so the consumer continues to spend on goods in a way that i find incredibly perplexing's strength on consumer spending on goods is well above pre-pandemic trends and shows no sign of abating. as much as people are saying they are pessimistic about the overall economy, and maybe even pessimistic about their own financial situations, they're spending like their very optimistic about their financial situations. and i think part of this is because the disconnect between

the prices that are most salient to people. the ones seen in the cpi and what's overall happening to people's purchasing power. what's overall happening to people's purchasing power is a fair bit healthier than we see in the cpis. i think people's financial situation is actually pretty good, and i think they're spending like it's pretty good. but they're pretty annoyed going to the grocery store and see food prices are still high, and i will say we are not going to get inflation under control without a lot more progress on goods prices. goods prices were flat last month. we need to see a lot more deflation in goods prices to really declare victory. >> rick, quickly looking at the ten year. it did hit session high 4.053% but come back down looks like since then? >> yeah. today could be the sixth consecutive close above 4%.

i really do think issues we're k discussing long dated different than short dated. fed officials saying yet short end is expensive. it they think that, my word the long-dated end, not only inflation nervousness also debt, paying the debt, supply, 2.1 trillion sovereign supply for 2024. >> rick, steve, wendy, joe, thank you to the panel. super jam-packed show, but thank you, guys, all? coming up, much more on the s.e.c.s approval of the spot bitcoin etfs and what that will mean for the digital asset industry. michael noev vogratz will join . stay tuned. you're watching "squawk box" on cnbc.

(ella) we now get more control of production, efficiencies, and greater agility. (marquis) with a custom private 5g network. our customers get what they want, when they want it. (jen) now we're even smarter and ready for what's next. (vo) achieve enterprise intelligence. it's your vision, it's your verizon.

♪ (upbeat music) ♪ ( ♪♪ ) with the push of a button, constant contact's ai tools help you know what to say, even when you don't. hi! constant contact. helping the small stand tall. dad, we got this. we got this. we got this. we got this. life is for living. we got this. let's partner for all of it. edward jones 25 years from now 50 years from now, where's this day grog to stand in the historical context of business and money?

>> hmm. maybe right up there with, when the first bitcoin purchase happened. you know, for a piece of pizza i think for 25,000 bitcoin. >> that was coinbase ceo armstrong. custodian for most of the newly approved spot. next guest behind one of them. joining us, ceo mike novogratz. saying the day would come for a very long time and here it is. >> and we're here. >> you're here. spoken to people who have an etf like you and talking about the different fee structures, everything else, but has will ultimately make your fund distinct from cathie wood, distrink from blackrock, fidelity, grayscale? say to themselves, make i want to buy one actually decide? >> long run two or three that actually win. i don't think just one winner. a couple winners.

we have an etf in canada with ci group. we started in second. in second place, and now largest etf. i looked last year, tracking year. as an investors does it attract bitcoin? less than 1% tracking error. largest competitor 11%. all are not created d equity. the hidden fees. done it before. in germany, canada, brazil. we know how to run a cash etf. >> when people say something could go wrong, that's what you're talking about? >> tracking error. today is going to be chaos. right? you got 13 sales forces trying to pull in money. you've got grayscale, a giant that lots of people will redeem from. and so end of the day at 2:30,ut in redemptions and creates there's going to be -- >> you say a lot of people

redeeming at grayscale. why do you say that? >> listen, people bought grayscale at a 30%, 40%, 50% discount to na v and with bitcoin far lower. so the chance to now get out at par, they're going to do that. >> it's all -- before today, if you decide to buy bitcoin, you had been sort of ready to do some things. a lot -- i mean, you know resistance i'm talking about from the average person. they're everywhere. not mention names but they're everywhere. people that would never do it. open a coinbase, get your own wallet. now easy to do it with $10,000. put up a 50 for bitcoin, someone with a lot of conviction. anyone that can buy ten grand now and cathie woods says going to $750,000, people put ten

grand in have $150,000 in a couple years is too easy. i think you could make a case that the, you know, the people that had the nerve to do it and step out and not be part of the pack that just were anti-bitcoin, already made their money. not everyone else is going to get rich now. it's too late. >> listen, you know, the earliest were get richest. >> you think going to 750? >> her lips to god's ears. i think over time this will continue to appreciate. do i think it's going to 750 in the next year or two, three years? no, i don't. i don't. hope it doesn't, quite frankly. if it does it means the u.s. economy has fallen into a dire, dire strait. >> smart money institutions are in, bag holders are -- >> what i think you're missing is, this is a limited supply asset. we don't have a lot of limited supply assets. there are a lot of people that believe in this like a religion and are not selling. >> that's right.

70% won't sell. where's it come from? >> drive up price get to-ish did. >> short term say to yourself a bunch of people bought in the last three, month four months sell into this? fold? >> i think today literally see 50,000 and 40,000 trade. you'll see a lot of volatility today. traditionally, etfs weren't the high. short-term high. right? almost every one of them came out. then a sell-off and then the rally. >> i imagine we'll start seeing advertising. you know, cnbc on and "wall street journal" and other places, because all of these folks who have these it etfs are desperately going to need customers. >> invesco a sales call. i imagine the others doing the same thing. bitcoin has always been about adoption. sold bitcoin. bought it. convince people called orange

pilling. hence my beautiful jacket. >> it fits. a jacket, didn't have glasses -- >> my warby brothers broke about a week ago. >> i've seen blue glass, in all kinds of crap. you don't have glasses? you don't need a safety pin? >> glasses faster than most people go through coffee. >> but you got the orange, and none of my jackets fit as well as they used to. >> can you speak to the idea of consolidation among these players? gray scalie, is that a company, given how many customers they have, that could be a valuable group of customers, maybe to somebody else? >> i can't get into their heads why they put their fees five times higher than everybody else. >> all the reasons you just gave. >> etfs broadly get sold by rias, and you got to go through morgan stanley and goldman-sachs, and it's a huge odd process, due diligence process. my guess is grayscale is saying,

we're not going to clear that hurdle for all the reasons in our past. and therefore, we're going to hold on to our assets as long as we can. and there's a lot of people that just -- >> they're melting it down for the clients? >> that's my bias. i could be wrong. >> where, then, do you put fidelity or blackrock in this? >> i think there's going to be a war between invesco, fidelity, and blackrock. >> what does it take to win? are these guys going to have to lose money snn >> there's not a whole lot of fees. for the consumer and the institution, this is an amazing product, and i think who's going to have the best tracking error? we think btco is going to have the best tracking error. >> market cap's a trillion dollars, give or -- $950 billion for bitcoin. how much does the etf universe aggregate, and what percentage of the -- does it even move the needle on $950 billion? >> it does.

prices are always set on the margin. >> and people don't want to sell. >> people don't want to sell. listen, yurm, in the first three days of this week, issued $108 billion of bonds. three days. it was wednesday afternoon, $108 billion in bonds. governments around the world are issuing too much debt. they're printing too much money, and that's why bitcoin is going up. this is a historic day, because the u.s. government, kicking and screaming, mr. agagensler, i do think, really wanted to do this, says, you can buy bitcoin. >> if you read through the decision, he is the most reluctant approver, begrudging approver you could find. what does that mean about ethereum, and do they all require a lawsuit? meaning, is it all going to happen because someone's going to sue over ethereum and solana? >> gary gensler will not be the head of the s.e.c. forever. there's 11 months left of biden's term. there's going to be an election. someone's going to win,

someone's going to lose. even if the democrats win, there's not certainty -- >> you think gary gensler is not in that job if biden wins again? >> i don't think so. >> since you're talking politics, you just hosted a fund-raiser for dean phillips. >> i did. >> what dunkin hio you think his are? what was that about? >> it was about me saying and wanting to meet these people that we have to do better than 82-year-old candidate and a guy with more indictments than i have bitcoin. like, that -- you know, we have trump-biden. that's embarrassing. everywhere i travel, people are like, i can't believe that's america. >> if that's the set-up, though, where do you land? >> i pledged i'm never voting for anyone over 76 again, so i will vote for the -- i probably wouldn't vote at that point. i just am not going to endorse this gerontocracy, partly from a

bitcoin perspective. the biden administration has been horrible on the two things i care about, criminal justice reform and crypto. i think crypto is a progressive movement, and they don't even -- can't even have a conversation. and so, to me, it's frustrating. you've got to get people closer to the -- >> you've also spoken against former president trump. >> i think he would be a disaster. and so, listen, i'm sitting here -- >> so, in -- if these are relatively bad choices for you -- >> i would still take biden over trump. i would. i just think trump is a -- just a -- he's going to be angry. he's going to be vindictive. he's not going to be able to get the gary cohns of the world to work for him again, mcmaster. he's going to have a cabinet of people that you wouldn't want to work with. >> but you'd vote for nikki haley over biden? >> i would vote for nikki haley over biden. and i haven't even met nikki yet. i'm going to meet her at the end of the month.

>> you think about even evs. they invite the ev companies to the white house. they don't invite tesla. they call gm the leading ev company. they sold one freaking car in the same period that tesla sold -- >> it's all about -- that was about the unions. everything's about something. >> which will be better for, maybe, for the fed and the economy or maybe not and therefore bitcoin? >> biden would be better for bitcoin. >> i don't know. you always think the republicans are fiscally responsible. trump was one of the worst with the checkbook. he increased spending a monster amount before covid. biden has done no better. so, i have no faith in either of those two to really balance the budget. we need a simpson bowls amendment. i don't see it happening. we have populism on both sides, so i stay long gold, silver, and bitcoin. >> would you be happy if dean phillips was your president? >> i would. he's smart, thoughtful, he's got

integrity. >> are we all going to get free ice cream from him? >> free ice cream and free vodka. >> forget about that. mike novogratz, thank you. >>wee t re> 'vgomo coming up. don't go anywhere. "squawk box" returns after this.

trading at schwab is now powered by ameritrade, giving traders even more ways to sharpen their skills with tailored education. get an expanding library filled with new online videos, webcasts, articles, courses, and more - all crafted just for traders. and with guided learning paths stacked with content curated to fit your unique goals, you can spend less time searching and more time learning. trade brilliantly with schwab.

a few quick headlines for you. chesapeake energy says that it will buy southwestern energy in a $7.4 billion all-stock

transaction. that deal will make chesapeake the top natural gas producer in the united states. google taking another step in its cost-cutting drive. the tech giant says it will lay off hundreds of employees across multiple teams, including the voice assistant team, the hardware team, and the augmented reality team. and netflix ad-supported streaming tier now has more than 23 million monthly active users. netflix president of advertising, amy reinhart, reported that that figure at the consumer electronics show in las vegas. it is up 8 million from the numbers the company released just two months ago. wow. no more sharing. could be the reason. >> yep. >> that's right. final check on the markets. found something on netflix finally. there's not a lot, andrew. i'm watching "the crown." princ princess di is 8' tall. couldn't they find -- anyway, you can see we're now down 75. i don't know, was it hot, the

cpi number? nasdaq down 31 or so. the last mile might be difficult. maybe that's what's indicating. i guess we check out where bitcoin is going to close out at least this session. it trades all the time, though, right? there it is. when it was all said and done today, it's at $4,700,355. "squawk on the street" is next. ♪ good thursday morning, welcome to "squawk on the street," aii'm carl quintanilla with jim cramer at post nine of the new york stock exchange. futures are lower as investors take stock of cpi. bit hot on headline, although the first three handle on annual core in almost three years. ten-year does touch 4.05%. our road map begins with inflation picking up in december, what that means for the fed and rate policy ahead. bitcoin rallying almost 8% this week, best week since early december a