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 is on location this morning in new york. he has some breaking news. andrew, good morning. good morning, becky. we have breaking news. breaking right now. blackrock making the biggest changes to the firm in more than a decade. it is acquiring global infrastructure in a cash deal valued at $12.5 billion. in a memo, larry fink saying the infrastructure deal is one of the fastest growing areas of our industry over the next ten years. the largest asset manager announcing a reorganization. ishares business embedded in blackrock. the changes to the structure of the company as well.

international business with blackrock out with q4 results. adjusted earnings at $9.60 a share. that is better than the street anticipated at $8.84. revenue of $4.63 billion in line with the total assets now open efficiently under management growing 16% compared to last year with $10 trillion. that is a "t." $4.5 billion holders. joining us right now in a first on cnbc interview is blackrock ceo larry fink as the news is just crossing the tape. good morning. >> good morning, andrew. happy new year. happy new year to becky and joe. >> there has been speculation for months there would be a major transaction in the future of blackrock. a lot of people speculated you would buy a private equity firm. this is a different deal.

you are zigging and others are zagg zagg zagging. this is going to make you one of the largest infrastructure investors in the world. >> it puts us in the top few. thank you. let me be clear. we were not looking at any private equity firms. we believe the future in the private markets infrastructure. if you think about blackrock, over 65% of our assets are retirement assets. what is a better asset than long duration assets and high coupon and inflation protected? you overlay the needs of governments and companies. i have been long advocates that deficits matter. the future of governments funding their deficits on their own balance sheets is more and more difficult. we're in a conversation with many governments of doing more

public-private transactions. we are seeing more and more corporations, instead of selling divisions, they are selling blocks of assets. sometimes 100% and sometimes 50% and building the infrastructure. we all know the need of re-calibrating our power grid as we digitize everything. we know more and more countries are focusing on energy independence and some of them are focused on decarbonization. across the investments, we are talking trillions of dollars. we believe the macro trend in the future is much heavy reliance to co- invest with companies and governments with infrastructure. we have had a long relationship with gip. >> the first boston days?

>> yes. we all left first boston. we were partners at first boston. this came together quickly. we had dinner together in september and we saw the merits of it. we had our key partners together in october. we moved rapidly. >> the lead director at goldman sachs is stepping down in that role? >> at the time of closing, right after closing, he will join blackrock's board. he will be standing down from the goldman sachs board. he has been the lead director. he has been on the goldman sachs board now for 12 years. i know he's sad to leave a great firm, but happy to be part of the new firm. >> how does this change blackrock? there was a transformational deal with bgi and brought in ishares years ago. that was transformational. you put this in that same kind

of bucket or context. >> i would put it in the context when we bought bgi and ishares in it. today, ishares has $3.5 trillion. these are long term trends we see in how the markets evolve. much of this we made a fundamental belief that the world's capital markets and this is good for cnbc that it will be a larger component of economic activity across countries and across the globe. as i said, if we are going to really elevate our infrastructure as a world and the need for stronger, better airports and power grids, and infrastructure as an asset class must grow. we believe we are seeing that. we are making a large statement

that we believe in the private markets and the future of growth and infrastructure will be faster than almost any other. >> in the bet you can grow this with the investors that put you in the place to compete against the brookfields of the world? >> our investors have been notified. they are right ialready excited the transaction. combined blackrock and the gip team will have over $150 billion in infrastructure. we see more and more opportunity. we're working right now with two or three major companies that are looking to restructure themselves. we are talking $5 billion of equity needed to do the deals. we are in conversation with the government that they are looking to transform some of the power

grids. all of these things are requiring not a few hundred million, but billion dollars. the need is great and the power of gip and blackrock really allows us to be in the front of the pack. >> how should investors think about this this morning in terms of alternatives? a small piece of big piece of the earnings the future? what multiple do they want to apply to this business relative to the ishares business? >> it doubles our fee related revenues related to the private market. it puts us over $1.5 billion. that is a big block. it is still small to the $18 billion revenue platform, but it is giving us a larger engine. ishares crossed over $1.5 billion in revenue. the platforms in my mind

identify the strength of the blackrock and we are able to bring the totality of investment ideas with the investment technology. this gives us a much bigger conversation beyond public securities and public equity and public debt. investment technology as well as the utilization across the spectrum. then being a large player in the infrastructure private markets business. >> i want to talk about etfs and crypto etfs in a moment. let's talk about the earnings picture. you are now back over $10 trillion in total. what about the broad based institutional investor with the markets? >> let me frame it. in the last five years, clients awarded us $1.9 trillion. no other firm has come close to that organic growth rate.

we're winning more share wallet. more clients are looking to us to help them out. another reason we believe infrastructure is part of the conversation. you know, i'm pleased to say retail and the new generation of investors are actually more excited about investing in new ideas. they are much more active in the markets than my generation or your generation. so, they are excited about being in the markets. that being said, there's huge pools of money in cash. in fact, in the fourth quarter, we saw because of the big rally in fixed income, we saw people sell to go back into cash after the rally with the ten-year yield below 4%. we are around 4% right now. overall, i think if you can look back over the last two years,

obviously 2022 was the worst market since 1980 with bonds and stocks falling dramatically. those who ran away from the markets really missed a major opportunity in 2023 where both bonds and equities were back up. so, what we are trying to advocate for our wealth management clients, but you need to be in the market the whole time and you need to focus on the macro themes you need to work over the 5 or 10 or 20 year period of time. more and more clients are looking to re-risk. that was one event in the fourth quarter with 96 b$96 billion of inflows. that inflation number yesterday is not a surprise to me. it will be very hard to get below 3%. you know, we have most coos i talk to are still in need of

hiring talent. there is still some wage pressure in many parts of the country. >> you think the 3% number -- if up don't believe we get to 3%, what does it mean for what jay powell has to do and what the markets are expecting will happen? >> you know, i think the central bank is talking about employment. they are following employment more. inflation is down quite a bit from the high levels of where it was. i don't find that to be a troublesome fact if inflation stays at 3% or 4%. we see less wage pressure and less commodity pressure. i think that will be fine. i believe the federal reserve is going to be more accommodative. i am not a believer we will see three easings coming up this year. >> you think the expectation is three easings. one coming as early as march?

>> unless we have real significant change in economic data, i think we probably should expect it by june. >> you think there is one? two? will there be a need for an easing? part of the argument -- >> i don't believe there is much of a need. i believe the conditions are far better than they were a year ago. could they ease a little bit and see what happens? >> what does that mean for the equity market? the equity market is keying off jay powell the whole time. >> at the same time, the equity market is resilient because we have become the dominant country in new technology. the transformation of medicine and drugs that are weight reducing that slow down dramatically alzheimer's.

i actually believe we are spending way too much time on the negatives and not enough time on the wonders and good side of technology. there are many great things that happened the last year that are truly inspiring. this is why i spend more time talking about hope. unfortunately, we live in a world where people want to talk about hate and fear and i think i do believe those who are investing and investing for the long-term hope are the winners. >> we are all headed to davos next week. a place you have gone historically. >> yes. >> there is usually a lot of hand wringing. there are now questions of taiwan and yemen and what gives you the hope now? >> we know about the problems. they are not a surprise now. they were a surprise earlier in the year. we are going to hear from

president volodymyr zelenskyy in davos. i know the israeli president will be there. i know there is talk to reduce the tensions. you know, the negatives are known. i have a belief over the long run some of the negatives will be resolved. we have more elections in the world than at anytany time in o history. to win elections is not about fear, but hope. i believe we will do that. >> what about the politics here in the united states? a lot of fear on both sides. >> i believe that. if i'm wrong about inflation, it is because the dialogue around election of fear and hatred will slowdown conconsumption. we know when people are frightened, they slow down

consumption. >> how does the election play into that? >> we have to understand the dialogue. i think this is why chairman powell has a much harder job than most people think. the election is going to shape economic activity. if people feel very frightened about our future, they will not consume more. we are going to see the economy sinking. if we can talk about the good things that are going on in the economy, the opportunities we have -- >> come next fall, where do you think the u.s. economy is? >> the u.s. economy in the fall is positive. it will be fine. it is not going to be growing at a robust pace that we need to do to overcome the horrific deficits. >> let me pivot to another topic in the news. the first time we had the opportunity to talk to you about it which is bitcoin. bitcoin etf. we will talk to gary gensler, the chairman of the s.e.c., who made that decision.

we talked a lot about it yesterday on the broadcast. how big a deal is that for blackrock? this was, for you, a big switch. you were a in nay sayer for a l time. >> about two years ago, i switched. as i said in last two years, i'm a big delbeliever. >> is the fink family a pebuyer? >> i'll buy mutual funds and single etfs. i have an opportunity to do that now. i'm a believer because i believe it is an alternative source for wealth holding. i don't believe it will ever be a currency. i believe it is an asset crass. we will create digital currencies. we will use the blockchain. >> how important is that to the

long-term value proposition of bitcoin? if it doesn't become a currency or digital gold and asset of some sort, what does it pmean i terms of price? >> i believe it goes up. if the world is more frightened and fearful of the geopolitical risks, then it is no different from gold and what it represented over a thousand years. it is an asset class that protects you. unlike gold, we manufacture gold, we are almost at the ceiling of the amount of bitcoin. >> when you hear cathie wood who said her base case is this turns into a $600,000 bitcoin valuation. base case. you know, $1 million plus in a super optimistic case.

are you anywhere in her herealm? >> i haven't thought about it. we are trying to create an instrument to restore wealth. i think gold will represent a bigger value. if you think this is digital gold, there will be a reference point with gold and digital bitcoin. let's get back to what happened yesterday. part of the announcement in the opening where we changed the architecture of our firm. much of it has to do with how they think about ishares and etfs. when we bought bgi, few people bought into that position. we were mistreated for a couple of years. we said active and passive can coexist. we were right in that. we said the fixed income market

is transformed into etfs. that has now happened. yesterday was first day of bitcoin etfs. our reorganization is taking that eethos of what has happene in the last ten years. we believe etf is the technology to transform every asset class. we believe everything will be done through etfs. we believe this is just the beginning and we need to embed etfs. >> what about rick? >> rick is doing more etfs in his space. we have taken an active investor and putting it into an etf plat fo platform. etfs are step one in the technology revolution in the financial markets. step two is the token digitalization of the assets.

we are looking at bitcoin and we are looking at etfs in the same manner. these are technological changes that will allow us to move forward. >> what did you see yesterday, by the way, in terms of inflows as it relates to bitcoin? >> we were very happy with the flows. we received 40% of the flows yesterday. one day doesn't make a difference. >> are these customers coming out out of other funds? grayscale. are you trying to take shares from them from taking those clients over or are you trying to create a new class of customer? >> we are trying to create a plan for new customers to invest in the financial instrument. over the long run, do we believe? think about the fee difference with the fees and trusts. these are 120 basis points. >> we were talking about the head of grayscale yesterday.

>> these are 20 or 30 basis points in the etf wrapper. >> it is still difficult to sell your shares with taxes. >> yes. this is the big issue with the s.e.c. this is something you may want to ask gary. the industry asked through transfer inkind with the etf. >> the industry, meaning companies like yours, asked the s.e.c. to allow folks who own shares via grayscale to transfer to blackrock or fidelity? >> to have no tax ramifications. they wanted to create from scratch cash only. we were all respecting the s.e.c. reasons. >> it creates an opportunity for grayscale to keep the customers. >> over the long run when you add up the feesfees, people wil

into that. >> do you expect other cryptocurrency etf? we will talk to gary later. will he have to approve ethereum? that is something the s.e.c. has to do or all of these things will go to court first? >> i couldn't respond to that. i see value of the ethereum etf. these are stepping tones toward t to tokenization. we have the technology to tokenize today. if you have a tokenized security and identity, you, andrew, the moment you buy or sell an instrument on a general ledger, means you want to talk about us issues around money laundering, this takes out the corruption.

>> let me ask you this before we let you go. there is a massive backlash around with the weaponized politically issues. there are things happening in the country that are pushing back on esg with dei and how consumers are buying different products. you have been a big advocate around climate change and new climate products. just this week, we saw hertz selling evs they bought because there is not enough demand. that's a real economic issue. that is not a filphilosophical issue. what is your position? >> there is more money going into the decarbonization than ever before. more companies are talking about it. what we announced with occidental.

it has the leading technology in air capture. we invested on air capture. the amount of demand from climate money in investing in two things. energy security and decarbo decarbonization. >> i guess the question is are they good investments? lots of money has gone into the climate invesinvesting. a lot of people took their money from the firearm industry and it turned out that if you were purely investing on the economics of it, you should have been investing the whole time. >> same with cigarettes way back when. i can assure you every inn vecht v investment we made was for economic purposes. there was no social aspect. the top investment we're making,

we have floors of 9%. the companies that are doing this are so constructive on the technology and opportunity and they are giving us an 80% off take. with we have a floor of 9% return. they are bullish and they are asking for a ceiling because they feel they will are more upside. some of the investments, we have a 9% floor and 60% ceiling. how good is that for the retirement asset? there is a lot of money chasing some directionality. at the same time, we are seeing more and more demand and more money. i can tell you the amount of money that is coming from sovereign funds now going into more decarbonization whether it is air capture or potential of

hyd hydrogen. we will see how it plays out. >> do you worry about the politics of it? getting money from the sovereign wealth fund from one side and maybe a state on the other side? >> look at texas. it is the biggest energy complex state in the united states. it is the largest wind and largest solar state in the united states. it is about having energy independence. this is how every political leader that i talk to is focused on. how do we become more self reliant on our power? when you think about india, the growth of india. 9% a year with the power needs that continues at that growth rate. they have to continue to grow. the demand they are focusing on with wind and solar in india alone is unbelievable. at the same time, they are using coal.

what i'm hearing and this was not part of the conversation three years ago. what i'm hearing from more and more people is energy independence. at the same time, they don't own much energy in their country. they may have coal and they will be using that. in the long run, they want to become more energy independent. >> larry fink, thank you for joining us. thank you for joining us with the risk conversation. >> thanks. >> becky, back to you. andrew, thank you very much. thanks to larry fink. when we come back, huge lineup. delta airlines ceo ed bastion will speak with us. we will hear from s.e.c. chair gary gensler about the spot etfs for bitcoin. we will hear about the issues with the boeing 737 max 9.

we have the extended interview with bill ackman. we will hear from bank of america and jpmorgan chase and wells fargo and citigroup. all of that micong up in the next two hours. "squawk box" will be right back. good hands! hospital bill for prime?! gaaaaap! did you just say gap?! he's talking about expenses health insurance doesn't cover. good thing coach prime knows about...say it one time! aflac! because aflac gets you money to help close that gap! now how do we get this goat outta here? (whistles) aflac! meet one of my new homies! gaaaaap! get help with expenses health insurance doesn't cover at aflac.com. elephant would've been scarier. (grunting) at morgan stanley, old school hard work meets bold new thinking. (laughter) at 88 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities

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delta airlines just reporting. phil lebeau is joining us now with more. >> joe, this is a beat on the

top and bottom line. the company earnings $1.28 a share in the fourth quarter. 1.17 was expected. revenue was better at $3.66 billion. let's do the numbers within the numbers in the fourth quarter. revenue total per seat mile negative 3.4%. operating cash flow of $499 million. free cash flow of negative $695 million. cost per seat mile is better than expected. up 1.1%. the street was expects a little bit higher there. 9 9.7% operating margin in fourth quarter of 2022. now for the guidance. in the first quarter, delta is earnings for 25 and 50 cents a share. the street is consensus of 38 cents a share with revenue going up 3% to 6%. for the full year, delta with

free cash flow of 3 to $4 billion. they had $2 billion of free cash flow in 2023. that would be an increase in 2024. capacity up 3% to 5%. also delta announcing what many have been expecting for a couple of days. the company is buying 20 airbus a350 1,000 planes. the a350s start in 2026. we will speak with ed bastian at the top of the hour. we will talk about the q4 results and guidance and what they are seeing in terms of demand for 2024. guys, back to you. >> thanks, phil. i guess we are late. i guess we are late. "squawk box" will be right back. >> announcer: executive edge is

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welcome back to "squawk box." we are live from the nasdaq market site in times square. you will see the futures in the red.

dow futures off 75. s&p down by 6.5 and nasdaq off 50 points. this is happening with the treasury market showing you gains with the yields. ten-year yields at 3.98%. the two-year yield at 4.25%. dow's united health out moments ago. the insurer reporting higher than expected medical costs, but topping expectations with adjusted earnings of $16.68 a share. that pete the estimate. revenue growing 5.t8%. that is also a beat. unh affirming the 2024 outlook for adjusted earnings and revenue. that stock is off 3%. we will dig deeper into it and see what is causing the disruption. not totally unexpected after some of the actions yesterday during the day. overnight, the u.s. and uk

launched more than 60 air strikes on houthi targets in yemen in response to more attacks on merchant vessels in the red sea. targets include airports and ra ra radar installations and launch sites for missiles. the iran-backed militants will target commercial vessels much t very soon. this is all in response to israel and gasza. they won't stop until israel stops. president biden says this is a clear message the u.s. and allies will not tolerate attacks on personnel or allow hostile actors to imperil freedom of navigation in the critical commercial routes. we can take a quick look at crude which is up 3%. back to $75 after what it has been. >> 4%.

>> yeah. 4%. charts are hard to read. >> this is a huge issue. >> i'm kidding. >> not just from the economic perspective. this is the question of whether the war expands in the middle east and beyond. if this draws us into the war more deeply or if it draws iran in. the houthi and hamas and hezbollah watching all of these issues. i think that is what people are paying attention to here. you are still looking at wti at $75. that is a little surprising, too. that is because the demand picture on the other side of it and concerns of a slowdown globally and economically. >> they like stirring things up. i'm talking about the iran proxies. >> right. >> i don't think we lost a guy. we had injuries. >> this was very well targeted and telegraphed in advance as a result. the houthis are claiming five

people were killed in the attacks overnight. it would have been more if it hadn't beentelegraphed clearly ahead of time. these are steps, but steps we're watching closely. >> what is five? someone with a broken arm? new overnight, tesla saying it will suspend car production at the factory near berlin general between january 29th and february 11th with the attacks in the red sea. tesla does not plan to change the production schedule for the shanghai factory which produces cars for europe. that fact industory is set to cr a week with the chinese lunar new year. the pressure on the shares for united health was85% with the

expectation of 84%. the costs were higher and the company is beating expectations, but people are focusing on that. the stock is off 3.5%. >> inverse of profit margin. coming up, bank earnings on deck. we hear from bank of america and jpmorgan chase and wells fargo and sticiti in the next 90 minu. hard to imagine. people at home are cancelling plans to see this. get the best of "squawk pod" with your favorite podcast app and listen any time. we'll be right back.

hi, i'm kevin, and i've lost 152 pounds on golo. i had just left a checkup with my doctor, and i'd weighed in at 345 pounds.

my doctor prescribed a weight loss drug, but as soon as i stopped taking the drug, i gained all the weight back and then some. that's when i decided to give golo a try. taking the release supplement, i noticed a change within the first week, and each month the weight just kept coming off. with golo, you can keep the weight off. goldman sachs is out with its market outlook for 2024. this year, the thesis is titled "america powers on."

last year, goldman said investors should be positioned neutrally. for details this year and i insights on the market, we have charmagne ramane at goldman sachs. neutral? >> well, you said last year. it was neutral. you tortured me about our equity investment last time. >> it was a good year. much better than neutral. >> we had a 50% probability of 13% for the s&p 500 and 20% probability for 27%. we had told our clients could be fully invested. >> why call it neutral? >> we didn't say it was neutral. >> that is what i read. that's not true? you did not have a neutral position at the beginning of

2023? >> it depends on what you mean by neutral. full allocation to the u.s. equities. we are overweight u.s. equities strategically for the long run. since the beginning of the global financial crisis, we told clients to be overweight u.s. equities relative to market capitalization. we told clients to remain invested. >> how bullish were you at the beginning of last year? >> on a scale of 1 to 10, with a 70% probability of 13% or higher returns, that is more an 8 or 9. that is not neutral. neutral would be 6%. our base case is 60% of risk return. we have a 20% probability of a 13% return. you look at those together. we are seeing 18% probability of

6% or higher. >> the probability? >> always. always a probability down. last year was down 4% with probability. this year is down 10%. >> okay. i guess things are happening and leslie picker will bring us numbers. leslie, what happened? >> reporter: bank of america reporting fourth quarter earnings. a beat on the bottom line and a near match on the top. a bit of a noisy quarter here. bear with me. adjusted eps coming in at 70 cents per share in the quarter with adjusted revenue of $23.7 billion on the fully taxable basis. boa had two items that impacted the quarter, including the $2.1 billion pre-tax charge for the fdic special assessment with the bank turmoil last spring. there was $1.6 billion charge to revenue from de-designated

interest rate swaps. adding in those items, boa reported 35 cents per share and revenue of $22.1 billion. net interest income, the profitability from loan making was down 5% to 14.1 billion due to higher deposit costs. ceo brian moynihan said it would trough in the near term and go back up in the middle the of the year. we are seeing that occur. much of that has to do with the trajectory of yields which pressured the boa stock through 2023 due to the size of unrealized losses on the balance sheet. that figure came down to $98 billion in the quarter from $1342 billion last quarter. $34 the billion improvement as bond prices gained in the fourth quarter. average deposit balances loans grew. ticked higher to 3.07%.

compared to 2019 levels. bank of america reported a full year sales revenue of $17.6 billion. it had zero days of trade losses in 2023 for the first time since 2017. >> leslie, the stock is down 4.5%. it was down 5.5% earlier. a lot of the news you just reported was pretty good. what do you think the standout is with the tradeoff? >> i think a lot has to do with the net interest income figure might be. this is just first glance here. any tick down has been a tailwind throughout the course of 2023. that was down 5% in the quarter. that is indicative of a new interest rate regime. we saw a pivot in terms of market rates in the fourth quarter. we are seeing the effects of

that in nii. bank of america is the first to report this morning. it is the gunea pig. upon first glance, that would be it. i'll dig deeper to see what could be spooking the market a bit. >> leslie, thank you. i'll be speaking with brian moynihan in the interview today at 2:10 p.m. eastern time. we we will dig into it there. we have wells fargo still to come and along with two other big banks. we'll talk about all this this morning. back to sharmane. when you said the u.s. powers on, i took that to mean that the year will be another good year in the united states. i thought maybe not quite to the

level of last year. you are saying the u.s. is the important part of the statement. the u.s. will power on better than the rest of the world? >> we had the investment theme for well over 15 years. the idea is clients should have more equity exposure than market cap benchmarks suggest. we cap benchmarks suggest. we start with the premise that one should be overweight u.s. equities relative to developed markets and relative to emerging markets, and relative to china specifically. we generally had that view and that has served our clients very well. if you think of u.s. equity performance versus other markets, since the trough of the global financial crisis, you're looking at u.s. equities up 16%. developed non-u.s. up 10, emerging markets 8% annualized, and china, 6%. so if you had 100 million, you would have just under a billion dollars today if you invested in u.s. equities. if you had invested in china, you wouldn't even have a quarter

of that. so the theme -- the main theme is invest in the u.s. because of its ability to generate incredibly strong earnings growth, and incredibly consistent and persistent earnings. that's what differentiates it, because it is such a big diverse economy. >> what goes into your bullish thesis this year? it is anelection year, that's pretty good. last year was surprising to a lot of people. maybe you were more bullish than most of the street, but almost across the board, it surprised people how strong it was. would you be surprised if we equalled that performance in the united states in 2024? >> if we had a market that was up 26%, it would be very surprising. our good case is up 13%. our base case is up 6. last year our base case was up 13, our good case was up 27. so clearly if we reach the kind of numbers we had last year, it would be an incredibly -- >> what would be the fundamentals that would drive

that, there is technicals like an election year. would it mean six rate cuts? what if we get three? would it mean no recession? what if we get a mild recession, would it be earnings growth of 10% plus? what if we don't get that. would any of those things cause you to think we could have a flat year? >> our base case is that earnings grow 6% to 7%. and we have four fed cuts and little bit earlier before the fed pivot, we were at three cuts. so we have increased by only one cut. there were people who increase by a lot more. our view was three cuts and now four. >> sounds like larry fink, if you were listening to him. >> he was making the argument there might be even less. >> less. >> less than three. >> i think if you agree that the inflation trajectory is downward and pce is going to be a little

bit lower than cpi as it has been for the last several reports, then generally you would say inflation is heading towards their targets. >> he's already been -- he thinks it is just going to hang at three for persistently long time and they're not going to necessarily feel like they have to, you know. >> to get to three from where we are today is a lot of cuts. how do we get to three if they don't cut a lot? right? so i'm not sure the logic. you have to get down by a number of cuts to get to three. maybe he meant three is the long-term for rates? >> no, on inflation. >> oh, he doesn't think we're going to get below three. >> he doesn't think we're going to get below three so there's not going to be a need to be cutting. >> if you look at the goods component, you see the inflation come down. what held up the latest cpi number, a bit of housing. all the more current latest indicators on housing, whether you look at rent, whether you look at zillow rates is headed

downwards, that's a big part of cpi. one has to have a compelling argument why you think inflation will be higher. the question becomes do you think we're going to have a much faster growth than about 2% growth in the u.s. >> i love all your percentages and probabilities. do you have any probability for any black swan events or terrible geopolitical events or like the end of the world, ie trump gets re-elected. no, no, i'm kidding. that's what some people -- some people would think that would be the end of the world. but i'm just talking about the actual end of the world with what we're seeing in ukraine, what we're seeing in iran proxies, gaza, i mean, it is a dangerous world right now. there is taiwanese elections this weekend that could cause, i don't know, even more instability in that region. do you have a 10% that something geopolitically could really go

wrong, a pandemic, spreading middle east war, anything like that? >> when we go through our risks to our outlook, we basically go through a series of items. the number one risk we have this year is an escalation in the middle east. so, israel-hamas war and we're saying we're already seeing some regional escalation. and we published the report before the strikes on the houthis, so obviously we're seeing some escalation. nobody wants -- >> before anything real serious, we already have ships going all the way around the tip of africa. >> that would be a risk. the risk would be to oil prices. the risk would be to basically equity risk premium. the risk would be all risk on all risky assets would underperform. >> you don't do black swan. >> it is not a long-term issue eventually. >> you don't do nuclear -- you don't doanything like that if one were to be used or grid going down? >> nothing like that. the hurdle for that is very

high. we think taiwanese elections are very important in terms of china's reaction. but the likelihood of china being much more aggressive than they have already been over the last year or so is unlikely. so they'll continue doing what they're doing, going to the no-fly zone, doing things like that the idea of it escalating at this point is very low. >> you're at goldman. you have people who can do this for you. you get some of your probabilities from other people, don't you? >> we rely on very good external experts. we have a series of people who are geopolitical experts. some of the more standard ones you would know, like ian bremner. we also have other advisers we talk to, people in the military, people, former people in intelligence, et cetera, to get their opinions. >> very good. thank you. thank you for coming all the way in here. >> thank you. my pleasure. let's look at wells fargo this morning. the bank out with its earnings. and stock is under a little bit of pressure. down by 1.75% after coming in with earnings that they're looking at of 86 cents a share

on a net income basis. that compares with 75 cents from a year ago. higher from a year ago. if you try to compare this to the expectations, it is not necessarily apples to apples. there is a lot of noise in this. you got 40 cents a share they're taking for that special assessment from the fdic. that was with the collapse of the banks last spring. this is the big assessment being given, especially at all the big banks. another 20 cents goes for severance expenses for this bank and they got a gain of 17 cents for tax benefits that come through this. so you strip it all out, little tough to say, revenue did come in slightly above expectations. $20.48 billion, versus what the street was expecting. and net interest income that leslie was pointing out was a problem potentially for bank of america. net interest income coming in at $12.77 billion. street account was looking for around that level, $12.74 billion. not necessarily out of line, but obviously the street is going to

be looking at that very quickly. as rates have come down, it is going to be an issue whether the net interest margin gets pinched. 2.9% and return on equity, 7.6%. we'll continue to watch this, but that stock right now off by 1.7%. and a programming note, wells fargo cfo will be on monday must havers today in the 11:00 hour first on cnbc. jpmorgan is also just reporting and we'll get to those numbers when we actually are in a position to report. we can show you a couple of the key details, but it just happened. the earnings per share number as you can see right there, $3.04. this stock at first blush also is down. down about 2.3% so far this morning. that's 2 out of 2. >> 24.2 billion is 3 out of 3.

all under some pressure. some comments from jpmorgan's ceo. jamie dimon saying the economy is being fueled by large amounts of government deficit spending and past stimulus, but that the economy continues to be resilient and consumers are still spending. he says inflationcould be stickier and rates could be higher than the markets are expecting at this point. also points out just what the wars in ukraine and the middle east that they do have the potential to disrupt energy and food markets. migration and military and economic relationships. that's what we have seen this morning already in the oil markets. we'll continue to dig into this and bring you the highlights. again, jpmorgan has turned around, shares are up by about 70 cents now as people dig a little deeper. >> first real trade. may have been down on the other banks. >> again, three so far, we have one more yet to report this morning, citigroup, still on deck. >> a lot going on this morning.

we should tell you it is now 7:00 a.m. on the east coast. you are officially watching "squawk box" right here on cnbc. i'm andrew ross sorkin with joe kernen and becky quick. and as we just said, we got so much going on, becky. let's dig into it. >> in fact, let's talk about some of the big earnings right now. stephanie link joins us from hightower chief investment strategist and portfolio manager and cnbc contributor and, again, stephanie, we're digging through the numbers too with all of them hitting around the same time. jpmorgan chase is trading a little bit higher. what have you seen off the very quick numbers on this and i'll tell you again, net interest income at jpmorgan since it is still hitting, i don't know if you've seen it $24.2 billion. >> so, there was a really tough setup for the banks heading into the print because a lot of these stocks are up 25 to 35% from the lows. and fourth quarter is typically very messy for banks. and we're seeing the mess here

today. the fdic assessment, everyone is going to have to do -- see that hit and that's not a surprise at all. but the quarters overall, they're kind of mixed, right? net interest income is -- was expected to be, like, steady to down a couple percent for the group. fees really disappointing on investment banking and trading, offset by strong credit cards. kind of seeing that. but very good expense control. so the bottom line number is coming in better than expected. i think the asset quality so far of what i've seen, fine. and the deposit flows actually is a little bit better. bank of america, i don't think that net interest income number is a surprise at all. in fact, $14.1 billion is a little better than the $14 billion that the consensus was looking for. and brian moynihan, the ceo, has talked about the net interest income, we're in the process of seeing a trough. i think that's right for the

group. again -- >> the market is agreeing with you at this point too. bank of america was down 5.4% at one point right now only down by 20 cents, a decline of ab about .7%. it has come back from what the knee jerk reaction was. jpmorgan chase is up by better than 2.1%. wells fargo is now up by almost 1% too. this could be a knee jerk reaction to a very noisy and messy quarter with a lot of moving pieces in this. joe what are you seeing? >> they're saying that -- so jpmorgan, i guess, earned 357 last year. this was down 302, which would have been a down year. now excluding one time items, it is 397. >> it is up. >> it is above the consensus estimate of 335. they took -- kind of interesting, we forget, jpmorgan, the other big banks did have to pony up for some of the problems at the regional banks. $16 billion and $3 billion is going back intothat fund. jpmorgan, i guess, earmarked

that to go back in, one of the reasons it was down from 357 last year to a gap number of 302. >> some numbers were already explained. bank of america explained in december that goldman sachs conference, but because there is so much noise, i think it is just taking some time for people to roll through all of this and try to figure out whatthey really think about some of the numbers. but, steph, go ahead, what are your thoughts? >> yeah, i would totally agree. again, really messy. we have to dig into more of the numbers, but i think they kind of are as expected. the question is, again, the stocks rallied so much from the low, from the october lows, so maybe just a little bit of giveback. these stocks are really cheap. i mean, you're getting bank -- you're getting bank of america, one times book. and wells fargo one times book. even jpmorgan, which always trades at a premium is at 1.6 times book. that has been over two times. and so, you get pretty good yields.

the capital levels are really great. just looking through some of these things, the cet 1 ratios are all better than expected. and so you feel pretty good about that. and so, look, if you think that the net interest income is at a trough, and you think that capital markets is also improving, which i do, and that wealth management throughout the year should be better, then i think the stocks, the setup into the year is pretty good. >> let me tell you right now, the forecast on some counts from jpmorgan, because this is probably more important than what the numbers are that we're just digesting from what has already happened. they're looking for 2024 expense outlook of $90 billion. they expect fiscal year 2024 net interest income of about $90 billion market dependent. they're looking for $88 billion in net interest income, ex-markets, 2024. and they're expecting 2024 card services nco rate of less than 3.5%. what does that tell you?

>> well, i think -- i always care about the expense line because they can really rein it in when they need to. they like to spend, obviously, on investments and technology and that's what they should be doing. i think it is pretty good. that's pretty good. yeah. i think that's fine. they probably this year did about 84, 85 billion. so not runaway expenses. i think that's good. yeah, no, i think that's fine. i also think -- >> go ahead. >> i was going to say, i was going to say, on wells fargo, i want to listen to what they have to say with regards to net interest income. remember this year, wells fargo raised net interest income three times. so, the expectations were high. they guided lower for 2024, but i think it is not as bad as expected. we're going to hear more of the inputs there. >> okay. stephanie, thank you, for bravely getting on and running through this as we're digesting the numbers. we always appreciate it. great to see you, stephanie.

>> sure. coming up, delta airline shares under pressure after reporting and ceo ed bastian will join us next in an exclusive interview and programming note, a big lineup next week from the world economic forum in davos. anyone look at the weather? >> super cold. i did look. you need to bring heaters, everything, there is one day, i think, tuesday, at the moment that is looking potentially in the teens. in the teens. then it gets up to the 20s and maybe trsbyhuday we might be in the 30s.

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welcome back to "squawk box." delta airlines reporting results in the last hour. we have a bevy of results from others as well. phil lebeau joins us now with a very special guest this morning. phil? >> thank you, andrew. ed bastian, ceo of delta airlines. beat on the top and bottom line. let's talk about the end of last year, more importantly what is going on in '24. strong end to the year. but it was a clean quarter and

that's what you expected if you had a clean quarter, right? >> that's exactly right. thank you for coming down, phil. i know you had a busy week. appreciate seeing you down here in atlanta. i want to thank our team, our team did an amazing job, all through the fourth quarter. we did deliver a great set of results. starts with the operations, our operational reliability was best in class across the industry, all through the quarter. holiday periods, christmas, new year's, that's our super bowl. we showed that 15-day period during that stretch. we served a report 9 million customers on 60,000 flights, 90% on time, and less than 40 cancellations in aggregate over two weeks. so, that speaks to the health of the business, the demand set is following through accordingly. we set a record this year on revenues. 20% above prepandemic levels already in '23. '24 is starting off in a good spot. we set an all time high sales day in our history on tuesday. >> so let's talk about '24.

'23 transatlantic was booming. strong domestically. when you look at this year, where do you see the strongest growth? >> i think the strongest growth will continue to be international. that's where you see a lot of the carriers, both u.s. as well as international continue to play too. last year particularly europe was on fire. i don't think one busy season is going to quench the desire for americans to go over to europe. i think europe will be a very healthy environment for us. latin america is picking up and that also is a strong market. we'll continue to see what is happening in china, china is a bit limited. other parts of asia are doing well. the most interesting thing of all is what we see happening in the domestic system. our domestic market, particularly in the lower end markets, in the back half of the year, a lot to challenge, the budget carriers and low end. >> a lot of capacity. >> that capacity is getting rationalized, supply and demand are coming into better balance. we expect to see an inflection point in the first part of this new year, in terms of our domestic unit revenues turning

positive. and also, corporate travel is up. finish the year strong, and it is picking up again. we're now probably back almost 90% of where we were prepandemic levels and continuing to build. >> you announced an order this morning for buying 20 airbus a-350. you're not starting deliveries until 2026. this speaks to adding the capacity, especially for the long haul flights. >> yeah. well, our future is international. domestic system is largely congested. we continue to grow, we continue to build, but it is bigger planes, not new runways that are being created. the skies are congested. i don't expect that to change anytime soon. the growth in our business has to be international. and we're using this position of strength that we have together with our partners to grow that book of business and the airbus 350 is a great product and we're going to expand, that's our flagship and we're going to be expanding that with the 1,000 coming in. >> you do not have any boeing max 9s in your fleet. but you do have max 10s on order.

and you have boeing planes within your fleet. have you lost confidence in them as a manufacturer? are you more concerned about future aircraft you may take from them? >> i am not. i've not lost confidence in boeing. boeing is a great company. boeing is so pivotal to our industry, pivotal to our economy. and they will figure this thing out. we don't operate the max. i can't tell you anything specific to the max that you probably know more than i do, phil. but when you look at boeing, i think the issue is certainly isolated to the max. we fly over 500 boeing airplanes every single day, day in and day out. with magnificent performance. i expect they will solve the issue. and when they do, that's when we'll take the 10. >> quickly i want to ask you about what you said with regard to demand and corporate demand. up to 90% prepandemic levels. is it just a steady increase in terms of the number of companies saying you got to get back out on the road? >> i think as people say getting back out on the road, business is continuing to open and mandate that people be in the

office, because if you're not in the office, there is no one to go visit in that respect, particularly with consultancies. the tech companies are the area we're starting to see growth and the other thing that hit us toward the back half of last year with strikes, in detroit, as well as l.a. with the writers, those are two hubs, those are the biggest providers in both those markets, now that they're back, that business is coming back strongly as well. >> ed bastian, ceo of delta airlines, on a day where they beat on the top and bottom lines. guys, we're going to be back, i will be back in about half an hour, we'll talk with mike whitaker, the faa administrator will discuss the situation with boeing and that's coming up at 7:40. back to you. >> okay, phil lebeau, we appreciate it. thank you very much. we'll see you in just a little bit as you just said. in the last hour, we spoke to blackrock ceo larry fink about the s.e.c.'s approval of spot bitcoin etf. here's what he had to say. >> these are just stepping stones towards tokenization. and i really do believe this is

where we're going to be going. we have the technology to tokenize today. if you want to talk about -- think about this, if you had to tokenize security, and you have a tokenized identity, you, andrew, the moment you buy or sell an instrument, on a general ledger that is all created together, want to talk about issues around money laundering and all that, this eliminates all corruption by having a tokenized system. >> coming up, right after this, we're going to talk to s.e.c. chairman gary gensler on his big decision this week, despite his caution about bitcoin and crypto. he'll join us right after the break. it is something you do not want to miss. at 8:00 a.m. eastern time, first on cnbc interview, hedge fund billionaire bill ackman joining us for the first time, he's spoken out on television about his battle against anti-semitism and now plagiarism

accusations agait s rern.nshitu all that and more when "squawk box" returns after this

welcome back to "squawk box." on wednesday, the s.e.c. approving 11 spot bitcoin etfs, nearly $5 billion worth of shares across the etfs on one day. following that decision that some described as historic is s.e.c. chair gary gensler. chair gensler, we appreciate you being with us. let me start by asking you this, do you consider the decision historic and it appears that it is a decision you made either reluctantly or perhaps even begrudgingly. >> well, look, andrew, this has been considered for a long time, as you know, starting under

chair clayton, we had disapproved a number of these over the years. and something had changed. i believe deeply in the rule of law and respect for the courts and taking a new court decision into consideration, we moved forward. i think this is the most sustainable path forward. >> so, it appears, though, from what you're saying, and reading through the decision as well, that what changed is not necessarily something inherent to crypto or bitcoin per se, but what changed was what the courts did. is that the way to think about this? >> again, we do everything here at the exchange commission within the law and within how the courts interpret those laws. and that's what the american people expect and that's what we do here. >> what is your message to investors about bitcoin now? we're going to have all sorts of public investors now potentially have access to bitcoin in a way they didn't before, we were just

talking to larry fink, he said that he got a huge wave of new investors getting into bitcoin through this etf. you have still suggested to be cautious about it, and i'm trying to understand how you think about those cross currents in terms of the message you're telling investors? >> well, look, bitcoin itself, we did not approve, we do not endorse this is a product caught in exchange traded product, a way that investors can invest in that underlying nonsecurity commodity called bitcoin. but, yes, investors, i think should be aware that this -- the underlying asset is a highly speculative, volatile asset, and amongst its use cases is really for illicit activity, money laundering and sanctions and

ransomware and the like. and i know that you asked other people over the last few days, is it being used as a stored value? it is a speculative value store value. is it being used as a payment anywhere? are we buying cups of coffee with it? not really. the only payment mechanism that is being used for in a primary sense is illicit activity. so i think you have been spot on about that, andrew. >> so, on that note, mr. chairman, someone -- this is -- i'm not going to take, you know, either side on the whole thing. it is kind of funny, but these are -- i don't know the exact units, but if you look since 2017, what has been used to launder money, 20,000 is the unit for -- 20,000 is the unit for a dollar. 33 is the unit for bitcoin.

so, that is a multiple of i don't know how much for dollars being used for money laundering versus bitcoin. now i could see bitcoin saying, really? it is not even good for money laundering, it has zero value. i could see that as another arrow in the quiver for the bear case. the question i wanted to ask you was let's take the continuum, let's take the rat poison, jamie dimon, charlie munger, versus we had yesterday on our coinbase ceo, did you hear him make the case for bitcoin? it was almost like a symphony to bitcoin bulls, chair gensler. the proof of work, akin to gold, every monetary aspect we had for thousands of years is represented perfectly and tom lee, there has never been a

mistake on the blockchain out of trillions of transactions. you understand it, you taught at m.i.t. which is it? is it a beanie baby in your view, or is it something that has inherent value that is going to be part of the financial system decades from now? which is it? >> look, no doubt there are innovations within this field and those innovations which i taught about at m.i.t. around a ledger system, just an accounting system called the blockchain technology. but there is an irony in the midst of this, satoshi nakamoto said this would be a system. and this led to centralization. think about the irony who said this week is historic. this was about centralization and traditional means of finance that investors who could already express themselves in bitcoin, you could already, before this

week, buy it through major brokerage houses, but now you can buy it through this thing called an exchange traded product as well. centralized. >> the underlying asset still has the decentralized distributed ledger, all those characters. that sounds like a, i don't know -- >> with our respect, there is a lot of centralization here. and even the underlying ledger, largely the bitcoins produced by a handful of mining companies and the like, and so i'm saying in terms of monetary history, monetary history, we have a dollar, we have a yen, we have the rem mb and there is a reason for it. because we do have a common some that relies on those currencies. >> let me ask you this, is there a possibility, despite the fact that this has been now approved, that this spot etf has been

approved, that you could see a day where bitcoin itself in some way would be outlawed? i ask because if you recall, there is a lawsuit taking place between coinbase and the s.e.c., they went public and they now made -- you have come back and said there are certain unregistered securities and the like that are on their platform, they say, well, you approved us the first time, how can you come back and say this is not kosher? and so i think there is this other question about it, i know you're not endorsing bitcoin, does that still open up the possibility that bitcoin could somehow come under fire from the s.e.c. or some other agency? >> look, let me talk about this field more broadly. the american public is aware of this. it is rife with conflicts, it is rife with fraud and abuse, without prejudging any one token, many of these tokens, i would suggest majority of these

tokens are actually securities under the securities law. and so the platforms, the various places that you might buy or sell these crypto security tokens need to come into compliance with the federal laws. >> what did you make of what elizabeth warren who was very supportive of you taking this role originally coming out and saying the s.e.c. is wrong on the law and wrong on the policy? >> i have deep respect for those who may have been on the other side of this. but, again, deep respect for the law and how courts interpret the law. we had d.c. circuit, three judge panel rule on this. we looked at it, i thought this was the most sustainable path forward. >> how do you think about other cryptocurrencies, people now talking about whether there should be an ethereum etf and the like. is that something you think you

would take on proactively? is that something that ultimately in the same way that gray scale had to go to court, does the court decision around bitcoin to you act as a precedent on other currencies? >> i look at what we did this week as it is cabin to one nonsecurity commodity called bitcoin, like we had gold, spot exchange traded products and silver exchange traded producproducts approved in the past. >> larry fink made a fascinating point earlier this morning that the industry including blackrock campaigned to you to ask for the ability for those who owned bitcoin through, for example, a grayscale, that fund, to be able to transfer the assets to others of fidelity, blackrock, ark, some of the others and do so

without effectively selling that and creating a tax at that moment. you have said that that is not allowed, however, when it comes to stocks and i believe most commodities, you could move those from different funds to funds, no? what was the decision process and thought process around that? >> of course i think you can probably understand we're not going to get behind any discussions between one asking staff for guidance about these things. but what we did this week was cabin just to these filings from the stock exchanges about listing these exchange traded products. i would note that one of them, the largest as you said, grayscale, was already trading in the over the counter market. in essence, you get the added investor protection of the stock

exchanges surveilling the market and surveilling them for fraud and manipulation and trying to help and protect the public in what otherwise is a highly speculative, volatile asset that is by and large been trading in the spot market on noncompliant conflicted exchanges. >> you emphasize that a lot. that's a thing. you said it three or four times. highly speculative, very volatile, and you make the point that the court decision is really paramount in your decision and that you still give me the impression you think investors really, really need to be protected and you're unable to do what you would like to do because of the rule of law. which is to not allow for a spot etf. and then you mentioned gold spot etfs, do you think there is the same protection needed for investors that invest in gold etfs? do you think bitcoin is completely different in terms of

the risk and the amount of warning that investors should get if they tread here? >> look, each have their risk and we're, by statute, we're merit neutral, but we also have an investor education perspective and i would say broker dealers and investment advisers have obligations, the investment advisers have fiduciary duties and broker dealers have a rule on the books looking after people's best interests, and so that's why i'm raising some of the risks. >> chair gensler, thank you. it is a longer conversation and we hope to be able to have that with you in person at some point soon. we appreciate you joining us first here on cnbc after what, as i said, some people have seen as a historic decision, you may differ on that, but we'll talk about it again, i'm sure, with you very soon. thanks again. >> i think the volatility is key too. he did point out.

>> there are a lot of things that are very volatile. it seems like when we say kicking and screaming, if it goes badly, the s.e.c. can say we didn't want to do this, right? >> sure. >> he's been very public about that. >> that seems to be the -- >> the other question is the could they be taking this to the supreme court, could you have a legal perspective if you felt so strongly about it, but i think they saw the writing -- >> isn't it amazing that people can look at this same math and he's probably and -- and come up with -- think of an orange -- >> i think jamie dimon is one of the smartest people in finance and he has a very particular -- >> got a lot of other -- just saying. andreessen, peter teal. >> bye. we'll be right back.

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york. >> still to come this morning, the markets will have more inflation data to deal with today. yesterday was the cpi. today we get the producer price index for december. that's hitting at 8:30 a.m. eastern time, less than an hour away. our next guest, we'll hear her case next. and later, an exclusive interview with bank of america ceo brian moynihan, that's live at 2:10 p.m. eastern time. bank of america shares now, let's take a look, bounced around a little bit this morning, initially we're under some pressure. right now off by about 1.5%. that company reported in the last hour, beat on the bottom line, but we'll talk about a lot of the moving pieces there. "squawk box" will be rig bk.htac new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria.

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welcome back, everybody. our next guest says that she expects the fed to begin cutting rates in march. that's in direct contrast to cleveland fed president loretta mester who will vote on interest rate decisions this year. she said yesterday that march is likely too early for a rate cut. a ann walsh, first of all, thanks for being here this morning. >> thank you very much for having me. >> yesterday, the cpi came out, it was a little hotter than had been anticipated when you look through some of the lines.

today we get ppi. and obviously we're all trying to figure out what the fed does next. where do you think we are on track with this economy, what do you think the fed will do? >> so, as was introduced, we do believe that the economy is continuing to slow down. inflation is also in a disinflationary track. yes, the cpi print headline level came out pretty hot, particularly as regards to owner equivalent rent. if you look through the component parts of the report, it indicates core pce, which the fed looks at, is on track to be around 2%. and i think that's critical. additionally, what we're seeing evolve in the economy is a bifurcated economy, and that is there is the -- those companies that are doing pretty well, and then there is sections of the economy that are really slowing down significantly, for example, manufacturing has been in a bit of a slowdown, maybe a recession even over the last, say, 18 to

22 months. so as a result, what we're seeing is a bifurcation happening and the economy is continuing to slow down. we remain in the camp of believing that we are still seeing a recession. although mild, it always has been our expectation it would be a mild recession. and i tend to refer to it as a rolling recession. depending where you are in the economy is how you're going to feel about the economy. and what is coming next is really commercial real estate, office properties in particular, and so we're still in this sort of evolution, if you will, of slowing parts of the economy down. we think this leads to the fed being more in line with historical precedent in terms of recessionary environments, where they will be lowering rates and a little sooner than market participants now believe. >> what you're saying about the economy makes a lot of sense. where you're seeing the rolling recession work its way through. but what we're seeing coming down the pike could be concerning too. oil prices up 4.5% today after

the u.s. and its allies made the strikes on the houthi rebels on land. that's a big provocation. and it is a huge issue to see shipping costs start to climb up too. you wonder if that's going to work at all, if it is going to work its way spthrough the supp chain. i think the fed would come down on the side of fighting inflation rather than saving the economy on a downturn? >> agree. they're still keeping conditions relatively tight. remember, they're still reducing the balance sheet. and quantitative tightening is occurring sort of in the background. a lot of people aren't necessarily paying attention to it because they're thinking about rates. and, by the way, the market does a poor job of pricing in geopolitical risk and the e expanding geopolitical risk. it is one of our macro themes for 2024, the evolution of the hot spot around the globe. and so, yes, that is still a

risk to the downside. >> mohamed el-erian was with us yesterday and said the chicago federal reserve has this argument going that conditions are looser now, monetary conditions are looser and you're seeing this activity. so, even without that, the fed may be having this internal argument about what to do. >> absolutely. and, but what we're seeing is real rates are still elevated. if inflation, particularly core pce is running around 2% and you're looking at 5.25% or 5.30 on fed funds and so forth, then you're looking at a pretty tight real rate of interest for borrowers. so, that has a very significant slowing impact as well for the future. >> what are you telling clients to do this year? you like fixed income, especially high quality? >> high quality fixed income has performed very well in periods of time where the fed goes on pause. or starts their easing cycle. we think that's going to continue to be a very good place. we anticipate rates to continue

to come down. ten-year hanging around 4%, our target is -- evolve down to 3.5% as, again, inflation continues to decline and the economy slows. and that's done -- that's very well positioned for investment grade fixed income. corporate credit does well. structured credit does well in this environment. so we really think that's the best place to play the market. >> ann, thank you very much. good to see you. >> thank you. back to phil lebeau with breaking news on the boeing 737 max 9 investigation. and another special guest. hey, phil. >> thank you, joe. let's bring in mike whitaker, the faa administrator who this morning is announcing that he would like to see greater oversight of boeing's max 9 production including the delegated authority, which is the process for reviewing the aircraft as they're coming off the assembly line. mike, thanks for joining us. explain exactly what you would like to see increased in terms

of faa oversight. >> thank you, phil. thank you for having me. so, what we're doing is we're increasing over sight of the manufacturing process. so, we know there are problems with manufacturing, there have been problems in the past. but these are continuing and the aircraft that was involved in the accident last week at alaska was less than three months old. this is a brand-new aircraft, has just come off the line and it had significant problems. and we believe there are other manufacturing problems as well. so, this is all about finding where the risks are, identifying the risks and mitigating them. we're going to increase oversight by auditing the production process at boeing and at spirit. increasing our oversight on the ground, also our oversight of data. and, frankly, as you mensetione we have to look at who has authority to make approvals and how that works. this delegation of authority, we want to commission a review of that, and see if that's a risk in the system as well. >> should there be a third party, mike?

should there be somebody independent of boeing on the floor in the boeing plant saying, yes, this is good to go, or, no, there is a problem here? >> well, i think it is an option we should look at. and there has been a lot of debate around delegation, used to be faa that did quite a bit more. that was moved by legislation to the private sector. that works great in a lot of instances. but sometimes it doesn't. and so, rather than debating whether it should move back to faa, i think we should look is there a third party option, could we get a technical nonprofit organization that provides that approval or oversight and then we oversee that organization? it is just an option, it may not be the right option, but we need to have that debate. >> michael, i want to ask you about the discussions with boeing on an inspection protocol for the max 9s that are grounded. when do you think that you'll have that worked out so that they can start these inspections and potentially get those planes back in the air? >> we think it will be worked out when we're sure that it is

going to be safe. so, we need to make sure these aircraft are all inspectioned and all returned to the condition that meets the certification requirements. there has been a huge amount of work as you can imagine this last week, really around the clock, by faa safety teams, by boeing, by the carriers, and we're working on an engineering solution, so when we're satisfied that that's safe, that will be issued. >> just to be clear here, no time frame. in other words, not something you're expecting in the next day or two? >> i think you can count on me to never give you a timeframe for when something is going to happen if it involves a safety issue. we'll go with it when it is safe. >> mike whitaker, faa administrator, mike, we have to keep this a short interview, busy day. we appreciate you joining us exclusively on "squawk box." we'll talk more in the future. joe, back to you. >> thank you, phil. coming up, u.s. and british forces conducting retaliatory strikes, air strikes on more than a dozen houthi rebel

targets in yemen after weeks of attacks on ships in the red sea. former deputy assistant secretary of defense elbridge colby will give us his reaction on the latest escalation in the middle east and we're going to talk about the taiwanese elections, the favored candidate is -- would not make china very pleased if that were to pass. we'll find out what the anchces are in just a minute. gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

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a u.s.-led coalition launched air strikes on the iran-backed houthi rebels in yemen in response to the shipping attacks in the red sea. for more on this, let's bring in elbridge colby, an official in the trump author of "the strategy of denial: american defense in an age of great power conflict." good to see you. a panel with our friend ro out. i can start in ro khanna, start with his comments. he thinks that president biden, and ro's a democrat, he thinks that president biden needed to clear this with congress. i see that every once in a while when a president does something that wasn't going to happen. right? >> right. i think unlikely. great to be with you again, and, no. congressman khan out early saying some republicans, like senator mike lee from utah

needed congressional authorization. like most presidents in the modern era, president biden has moved forward with what he thinks is the right course. >> do you think it was the right course? and didn't have much choice? >> i think we're in a really bad situation here. we're getting sucked into a middle east conflict. i mean, i think stepping back, you see geopolitical factor es popping up around the world. more than papping up. becoming worse in europe, now the middle east and the looming confrontation with china potentially in the pacific, and we are not prepared to it. our military is not capable of handling maltultiple theaters. the last thing we need, drawn into a middle east conflict. not just because we're tired of it, but because our military doesn't have the capacity. i don't think the strikes last night will make a fundamental difference. the administration itself is already saying they're anticipating houthi reaction and possibly escalation and continuation of the strikes against shipping isn't the red sea. >> then what?

do you think would be the proper course for us? we don't have great options. >> we don't have great options. look, i think that we have a set of bad options. the least bad option is to get local partners, like the israelis, like the saudis, we frankly alienated over the last years and now in a pretty bad way, to take more responsibility for security. european partners. they're nor exposed what's going on in the red sea than the united states. we are as well indirectly giving shipping implications and inflation and so forth. we immediate to push this around and fundamentally consistent with what president biden and frankly some republicans as well saying we're the global policemen, everywhere, we're america, we can do everything. that's not the right attitude and becoming more and more glitches in the matrix are appearing here again. the idea getting involved in a war in yemen in addition to our active involvement, although possibly quite a bit less, in ukraine. potential for something breaking

out in the korean peninsula and, of course, taiwan. i think 2024 is going to have a lot more geopolitical intensity and possibly surprises unfortunately. >> we've hadpeople come on and say, yeah. there's some important elections coming up. god, i don't know how loudly or -- i don't know how to say it. really gives it enough import to, for people to sit up and take notice. let's focus on taiwan, which a lot of people have no idea what's happening. can you give a handicap? three possible outcomes, and the most likely could be significant in that china really wouldn't like it, and would leave it with only, really, military options at that point? >> i think that's right. i mean, basically, there's an election coming up over the weekend. dpp ruling party for eight years traditionally leans towards independence. the candidate of that party

na named william la in english, and not pro--prc but a third party candidate that isn't expected to do as well. the handicapped outcome is that lai, dpp candidate wins presidency but kmt might have plurality so a split government. the key point for markets here is the election is, is a significant point, but fundamentally very, very clear journalists reported this the other day. n there's no path for peaceful unification to china. the former president of knt listen to xi jinping. no traction on taiwan. in beijing you know that. no peaceful unification scenario. xi jinping pledged to resolve the issue and his leadership believe was the united states is trying to strangle them. there's been a lot of attempts by the administration and china to downplay the risk of

confrontation over this decade. but china acting in a way, continue to look at what their lips are saying but what they're doing. they are preparing for confrontation. not changing economic course despite economic headwinds they're facing. a costly figure what the future holds. administration officials admitting they are too tied down in europe, middle east and with the re-election campaign. this is a very dangerous situation and we haven't even seen what might happen on the korean peninsula. leader there, kim jong-un said, giving up prospects of peaceful reunification, more or less. could be bumpy and if lai is elected, beijing signaled a potential predicate for more forceful action. can't say what it is but buckle up. >> we'll know in all likelihood that's going to be the outcome. could start happening early as next week. you say it's a non-zero

probability that some day there's some type of armed conflict with chine ta? >> i'm not an investor. if you are hard to imagine getting out of the 2020s without a war or think of a cuban missile crisis. they have a timeline, a sense of urgency and acting to prepare for it. whether it happens this year, i don't know. might be a little early, but a number of factor that could make that more attractive. i think an invasion is what you would see. here are the key point. they need to act with surprise or relative surprise so people are not going to get a long runway of warning about it. >> thank you. great, great having you on. hope to see you again soon on this and other matters. thanks. >> okay. joe, when we come back, move around the city with lots of big exclusive news and interviews all morning. another big one right after this. billionaire hedge fund manager

bill ackman, our very special guest getting into so many headlines battles against anti-semitism in harvard, dei and the plagiarism allegations against his wife. talk about activism and everything and more in the next hour, after this.

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and i think that ambition fuels with the energy. everything can be a reality. good morning. earnings kicking off with the big banks. standing by for citi's fourth quarter results and breaking inflation data following cpi yesterday. due to get new surprises in just 30 minutes. bill ackman, on the rides of anti-semitism leadership at top american universities and the debate flaring up over what constitutes plagiarism. joining us live for an extended conversation exclusively as the final hour of "squawk box" begins right now. good morning, and welcome to "squawk box" here on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin.

u.s. equity futures at this hour take a quick look. not a lot of action. we have 173 points, though, down on the dow. some of that is united health care. haven't looked at jpmorgan. had been trading higher. >> higher. we'll see. >> and dow component. some weakness this morning. i don't know whether it's fed-related. >> morgan still up. >> it is. treasury yields. a quick look. down 399 now on the ten year. probably look at bitcoin. i don't know how closely you watched it yesterday, but it did look like it was off to the races recently. above 49,000 at one point. and -- i think this morning it's down below 46 at this point. 4 45,845. a little back today compared to highs yesterday. it's about -- you know, over $3,000, or 8%, 9% lower than

after the initial excitement about the spot etf. >> and see a big buildup in the weeks and months leading up to this. >> that's it. we wondered. my view, saying yesterday, it was hard to buy bitcoin institutionally. now everyone can buy it. is everybody going to get rich? right away? need a lot of -- or are some of the people already got rich from it, are they going to be offloading? i don't know. holders never sell, but some people sell. >> that's right. >> yeah. meantime, citigroup out with quarterly results. leslie picker has the numbers. take it away. >> yep. noisy quarter for citigroup shares declining at the first read here. going to avoid comparing estimates for now, because the firm put out an ak two days ago several billion worth of chargers not reflected in the full consensus. i see in fourth quarter citi reporting a net loss of $ 1.8

billion and per diluted share of $1.16. so excluding those 8k items including a reserve bill, the fdic special assessment pressure in argentina's devaluation and restructuring and search rance charges, excluding those it citi would have earned 80 cents per share or to eps. top line declined to 17. billion adjusting for the 1ak contact to revenue. saying in the release, "while the fourth quarter was very disappointing due to the impact of notable items we made substantial process simplifying citi and executing our strategy in 2023." the quarter saw pressure innics ifened income and commodities trading that division saw revenue slump 25%. wealth business down by 3%. bright spots as you go business-by-business for services and personal banking. two largest groups by revenue, up 6% and 12% respectively.

investment banking also did surprisingly well in the quarter with gains of 27% to $669 million. the first time citi is are the roing under its new five-division organizational structure. investors sifting through today's release comparing businesses a little differently than they had in the past. we'll sit down with the cfo, mark mason, later today on "closing bell," guys. >> leslieleslie, congratulation. leslie picker. see you a little later today. meantime, a check on the big banks that have reported so far this morning. bank of america off right now by 2.5%. jpmorgan chase up by the same amount. wells fargo down by 1.5% now citigroup, knee-jerk reaction. leslie mentioned, a lot of noise in the quarter with special estimates from the fdic and other one-time charges and

gains, with every one of tof th bank. get a bigger picture what to anticipate in the economy, too. programming note. speaking with slate of the big bank and financial executives next week from the world economic forum in davos, switzerland. bank of america's brian moynihan, jpmorgan's jamie dimon, blackstone's steve schwartzman, goldman's david solomon and morgan stanleys ted pick. coverage starts tuesday. today speaking later exclusively with brian moynihan coming up at 2:05 eastern time. talk to him about today's results, too. andrew? >> thanks, becky. looking forward to do that interview. news that broke earlier, blackrock announcing its buying global infrastructure partners $12.5 billion in cash and stock. acquisition part of increased focus on infrastructure. saying now one of the most exciting long-term investments he says in terms of opportunities, he says, coming

ahead. here's fink on "squawk box" when that news broke. >> the world's capital markets are going to become larger and larger components of economic activity across countries, across the globe. as i said, if we are going to really elevate our infrastructure as a world, and the need for stronger, better airports power grids, infrastructure as an asset class is going to, it must grow, and we believe we are seeing that, and so we are making a large -- statement -- that we believe in the private markets, the future growth and infrastructure faster than almost any other. >> and blackrock reporting fourth quarter up earnings beating analyst profit estimates and matching revenue forecast just over 4.6 billion dollars. when we come back, a very big newsmaking interview. this time with pershing square

ceo bill ackman. much to talk about the battle over plagiarism, what happened at harvard and so much more. you do not want to miss this. "squawk box" returns in just a moment. you can't buy great conversations or moments that matter, but you can invest in them.

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welcome back to "squawk box." our next guest is pershing square ceo bill ackman one of the most outstoken voices on anti-semitism on america's colleges and pushed for three to resign during which leaders seen widely not defending their jewish populations's two resigned one of them a are toer harvard leader became em broimed in a plagiarism scandaled that touched on ackman's only family. bill ackman is here, and this is your first major television interview since this all began. we did talk once briefly on "squawk." you called in to talk about what was happens, but in the past couple weeks -- >> about dei, though. >> about dei. the past couple weeks you have been active throughout on x, outspoken on all of these issues. >> uh-huh. >> especially as there have now

been attacks up against your wife around the idea of plagiarism. i want to sort of just untangle all of this. because i think people are trying to understand what is motivating you, how this all began. >> sure. >> what you're trying to do. there are issues about dei, free speech and other things as well. you've become one of the most influential provocative and polarizing voices in this debate. start where this began back in october for you. >> actually began before october. and it began in this room. this is our board room at pershing square and the place we host our pershing square foundation's board meetings a board my father was a member of and literally every meeting by dad would say, bill, you're not doing enough about anti-accept tich. important problem, very dismissive of my father. >> youty missed your dad. >> he passed away in may. jews are doing great, no the

xpeernts a lot of anti-semitism focus on impairment and enhancing people's ability to, you know, farmers in kenya. and then dad had heart surgery coming up, very concerned about it. life or death. he wrote me three letters. one was, here are my instructions if i die. memorial service, et cetera. this is what i want you to do with your mom. financial and safe money. the third one a long letter about anti-semitism. bill, i want my last words to you to be something that you focus on. and i didn't do anything, to be honest. then -- october 7th happened. really october 8th. it was when 30-odd harvard student organizations, my alma mater came out said the morning after the most horrendous, barbaric terrorist acts in history, at least in modern history for sure. came out and said, it's israel's fault. israel's solely responsible for

these horrendous heinous acts, and then that was the beginning of this journey. >> and you have taken, dare i say, an activist approach to this? >> yes. >> you've also been criticizeds for activist approach. some have been praise-worthy of what you have done in terms of pushing on these issues, but same time, also has been a remarkable backlash, and now seeing that backlash manifest itself in the attack on your wife as relates to accusations of plagiarism. >> yes. >> how has that made you feel and has it changed your view about how to approach these things? because there's some who say this is really great, what you were doing. others say you have taken it to some degree too far and in fact by being such a big figure in this conversation, that it actually has made it harder? to get what you want. >> i disagree. actually, i think, first of all

going out in public eye and make statements, strong ones, about issues that are controversial e you're going to be criticized. hopefully you'll be applauded as well. when they go after your wife you know that you're making some progress. i felt very, know -- worst is this is for she did no wrong nothing wrong publicly, but it means, talked about it, started with anti-semitism on campus. then i got concerned about governance at harvard. not just the president, but on the board, in my view, didn't do the right thing. then broader concerns about higher education generally. then origins of anti-semitism on campus which i think are a result from the so-called dei movement. and you know, i think these are very important issues, and these are issues that will require resources to be focused upon and i would say i was extraordinarily committed before. i'm undeterred, and actually standing up an organization shortly to focus on precisely

this. now, if you -- so just -- >> that organization -- >> it's going to be, i would say, you know, the problem with think tanks, write about your papers, nothing happens. it's going to be a think and do tank. going to be an activist, we're going to -- study these issues, and come up with solutions to problems, and we're going to implement them. >> what are those issues? anti-semitism or free speech or about dei? governance? >> all of the above. all of the above. >> so -- >> day job, pershing square. the job i love. and pershing conveyor, i paid my own bills. not a good use of my time. i hired people to do that. it's to do all of my own philanthropy, a bigger responsibility. put together, set up a foundation, board of directors, hired a team. this, and other initiatives like this. you and i were on tv to talk about child sex trafficking and visas providing payment rails if

you will for sites and viewpoint. 30-minute interview and a few tweets. this is a bigger project, and it's now, this kind of activism now requires sort of a serious team. we've got extra space. i'll rent space, hire people. hire a ceo. put together a board of directors and we're going after these issues in a very aggressive way. >> a lot of people watching you write on x. almost by the hour. constantly. can you just take us inside your own head on this? your home. what this has felt like? because, there's an interesting dynamic at play, which is, you have long been somebody who attacked others in the context of activism. and now in some cases, arguably, you are being attacked, and your family attacked? >> remember, if you're an activist short seller you undergo the most aggressive attacks. i'm kind of a battle-hardened person and iaa tried to put me

out of business, did a pretty good job sicking eliot spitzer on me years ago. remember has? and herbalife end of the earn campaign on both sides. >> is this different? >> yes. much more important. much more profound. effects many more people. not just about a company. right? it's about society. it's about education. it's about free speech. it's about -- you know -- not just higher education. it's about nursery school to, you know, k-12 education. >> but take us inside your home. because part of this is a be your wife. >> yes. >> and about these allegations of plagiarism. >> yes. >> one of the things you did in the context going an claudine gay was originally was about anti-semitism, and turned into an argument about governor nance and plagiarism on her side? >> yes. always about i would say leader s leadership and lack of leadership -- started out about

protests against israel became protests that turned into anti-semitic activity on campus's really that transformation happened because of lack of leadership, lack of enforcement of rooms and ultimately lack of clarity. cadillacic moment, said she should resign. said she should, president magill resign, and point out, you know, one of them is black, one is jewish, christian, you know, it was a diverse collection of people. although all women. >> there have been people accused you of being racist? >> criticize a person's color regardless of credibility of your actions, unfortunately tonight woyou'll be kritsized. that was the catalytic moment. december 10th, december 9th, that congressional hearing.

and two days later the harvard board said, we're woo unanimously in support of president gay, and then this whole plagiarism thing kind of erupted. sort of out there, and then more and more findings were found, and i reposted these findings, because at that point, i was happy to leave for any reason. failed to convince this board on leadership, on moral clarity, on anti-semitism on campus, and then this plagiarism thing started to get legs. it's not like i discouraged it. i didn't look for it. found by others, in fact, thought it was disappointing that she, what perception that the catalyst for resignation was plagiarism as a failure to address anti-semitism. >> ask you about plagiarism charges, however. now you've been on the other side and your wife is accused of plagiarism herself. >> sure. >> you have disputed that it is plagiarism. you've argued around the idea and definition of plagiarism.

able to cite somebody not put quote marks around it. accused your wife of, business insiders. argues similar to what claudine gay had been doing. do you have a different view now of this? >> sure. so plagiarism is fraud, and in an academic context. it's the most aggressive, the most damaging thing you can do to a professor other than accusing them of some kind of rape or 0 sexual harassment or violent crime. so it's maybe slightly better than that. so it's a very serious crime, and it is, for that reason, when a professor is accused of plagiarism, it's a very serious process that goes under way to determine whether or not it's plagiarism. it doesn't take six months. a typical period for assessing a professor committed plagiarism to determine whether there was a footnote or quotation marks. it's an intent. a professor intentionally steals

someone else's ideas, and one is how -- using someone else's words or not putting a footnote. the question is, is that an oversight or is that intentionally a theft? things want to look at in determining whether or not it was intentional or not, trying to get into the mind of the person, is how pervasive is it? right? i don't know today whether claudine gay committed plagiarism or not. i haven't done a six-month assessment. >> out there on twitter saying she plagiarized should nome be president of the university when in fact she stepped down and made her a member of the faculty you raised questions about that based on the plagiarism accusation itself? >> what i said was, i said, in light of her, what has been revealed about her academic record and what we learned about plagiarism, i don't think she's qualified to serve on the faculty. one of the things that came out, which, again, i never focused on claudine gay's record or

plagiarism. i learned she published 11 articles. not a dissertation. 11 articles in journals and if you look at what's required to be a professor at harvard, if you're in the field of social sciences, it's, that's a very, very small, very limited academic record. six of those 11 papers had 51 missing quotations, you know -- if you will, words, still, i would say that doesn't look good, and a point at which, you know, her accusers were people who had been plagiarized from. this worm carol swayne, a member of the faculty professor academic in her same field. said, she took my work. maybe some -- those words plus the record. saying that you're rewarding her with a $900,000 a year can professorship. reality, that was a legal settlement. i said so. but my activism on claudine gay, i want to distract from the fact, was about just yesterday. i just tweeted this out.

a 73-page complaint kind of levelled at hard vard. i encourage everyone to read this. i learned about, went to camp its, a basically 50 pages of anti-semitic acts on campus. a bit like new york city. when new york city was a crime-infested place and giuliani showed up, the good version of giuliani, he instituted what people tall called broker windows theory. cracked down on even small violations like the squeegee guys. what happened at harvard the protesters tested the administration and then incrementally started violating more and more and more rules and no consequences. that's why they felt comfortable going into university hall. >> you are now planning to, if you haven't already begun, effectively scrubbinged records of professors everywhere especially at m.i.t., because you believe that's where the accusations against your wife came from? >> no. that's a bigger point.

0ing? briefly on plagiarism. plagiarism is full fraud. depends on the intent and degree to some extent and getting back to nary. her thesis, 330 pages. a business insider found four paragraphs, okay, where she had used words and gave proper attribution without quotation marks and one sentence missed an attribution. by the way, this same person missed for this referenced eight other times and properly reshsed that person. stick with me. andrew, it's important. it's my wife. if i'm an academic panelist assessing this out of 2,700 paragraphs 4, hadn't attribution, clearly not theft of intellectual property. nothing special about those words. not quoting shakespeare and one sentence. no one's going to con tclude th

fraud. that includes intent. not even an important part of her thesis. all right? that's neri. we're going to know once we finish this interview how many other members of the m.i.t. faculty have this problem. if plagiarism finding a duz paragraphs without attribution and 300 other members of the faculty, makes no sense. what has to happen, panel a group of top scholars, and let's come up with a desks of plagiarism that's consistent with what makes sense and by proving a point, by showing -- standard is find a missed footnote you're a plager izizer. what business insiders said, found four paragraphs and a footnote. so neri the dissertation is march maed by plagiarism.

neri said they're right. there were four paragraphs and one sentence, the next story they wrote, it is neri oxman admits to plagiarism. she didn't admit to plagiarism. admitted to a few clerical errors -- >> are you going to sue business insider? we should say is owned by kkr, and you made calls giving your stature in the world, and your relationships with some of these people, that most people have no access to. when an article is published about them they don't like. >> the first thing we did, first thing i did, was call someone i knew on the business insider board and why we're going to stand up to this organization. unfortunately, businesses -- i'm not the first person business insider or my wife is the no the first person, they've gone after falsely accusing them of something criminal. okay? or fraud. because my wife, accused my wife of fraud. twitter, if you will, x, is it

willered with everyone in the world talking -- >> but they've accused of being a racist, a liar. people accused you of fraud. you care about free speech. >> i do, first of all -- accusing somebody of fraud is a very serious thing, but you're right. the average guy is not going to pick up the phone and call henry on the cell phone or texas, which i did. shouldn't have to be that i call -- >> henry -- >> didn't reach him so i sent him a text. sent him a text saying i'd like to talk to you about something. all outlined in my tiktok, if you read it. >> right. >> then i spoke to a member of the board of business insider. he calmed me down. he said, oh, doing an investigation. i totally agree with you, that plagiarism is not a series of clerical errors, have this in a text on tiktok. only request, withdraw the stories are announce that you're investigating them. he said i'll get back to you. back to my point. yes, i have the ability to reach out to a lot of people.

i'm one person, i know them directly, but a lot of people's lives have been destroyed by media organizations writing a story that destroys a reputation andhave not recourse. that is a very, very bad, bad, bad way for the world to operate, and in a world where online media, the compensation for media is based and clicks. right? the more attention you get the more you sell your advertising for. that model drives people to do sensationalist stories with high-profile people say they commit crimes or the wives are high-profile people. >> what about the facts themselves? this is axel springer's spokesperson talking yesterday saying most people underestimated the way bill ackman is completely losing it, about you, and went on to say the facts of the story stand. their argument i believe the facts are the facts. there's a question potentially about the motivations which you've raised about the editors

and reporters who may have per sued that story. >> i love that statement. let me tell you why. business insider is a wholly unsib area of axel springer. he's a multibillion dollar entity. what axel springer says facts in the business insider story are correct after i put out my 54, 6,000-word thing outlining why the facts are false, most teal material thing is neri oxman admitted to plicherrism. she never did. that's a recourse party, which there is a lawsuit, where you started your question. i hope we don't end up there. >> we're going to take a pause. information is out there. coming back to this conversation to talk about the world of activism. the political prism i want to talk about which a lot of this is looked at, dei issues, and how you have thought about the shift in all of this. stay where you are. i'm going to send it right now if i could back to joe, and

we'll come back with bill ackman in a little bit. >> rick santelli, okay. going to now standing by at cme in chicago. saw what happened with the cpi data. it wasn't slightly too hot. see what the ppi numbers bring and about in about five seconds. remember, rick, it's the rate of inflation rising now. all previous rises we saw, you were still paying those, so i don't know what to think. >> oh, absolutely. it's like compound interest, except for inflation isn't nearly as much fun as compound interest. here we go. the december read on the producer price index. whole sale inflation gauge down 0.1% on headline. that is lower than we expected. and just to put it in perspective, look towards october of last year we had down 0.4%. good news. been there, done that in a bigger way. food and energy unchanged. 0.2 lower than expected.

and that would end up being a third unchanged encore in a row, last time had a number lower than unchanged or zero was april of 2020 down 0.3. x food energy and trade, up 0.2 exactly as expected. a 0.1 hotter than the rearview mirror. last time over september, up 0.3. now, i think the better numbers here that i like to pay attention to year over year. 1.8 on headline. 1.8. 0.2 less than expectations. 0.2 less than the rearview mirror, and 1.8, let's see, how far back we have to go to get a lower number. aww -- 1.8? going all the way back to -- pre-january of 2021, which is where my database comes up with 1.9 and that is lower.

so that is very, very good news. x food and energy year over year, 2.5. that's the same as we were expecting. it was the same as the review mirror but last month was moved down to 2.4%, and just to put a face on it, 2.4% is the lowest going back to february of 2021, but we moved one tick higher in that revision. now, what's the aftermath of this? the market likes this number, joe, better than it likes cpi and i can see why. we've moved down a couple of basis points. we're at 399 prior. at 396, 397. down 6 on the week on tens, down 11 on the week on twoss and european maturities and guilts and boons higher on the week. starting to see a dual speed with respect to central banks and how markets are trying to price slowing of the economy versus central bank activity. back to you. >> grocery prices 30% higher

than where biden came into office and still going up, like, 3.4. when are they going back down? >> i don't thinkthey will, joe. that's the whole point. >> never will. what about energy prices? >> cpi -- cpi energy, yeah. over 80. >> gas, over 80. headline in the journal today, joe. just as we get back on our feet, just as americans are lnging and helping out the world there's pushback now. the biden administration's getting pushback. got to curtail some of this lng natural gat activity. certainly hope not. a lesson to learn. i emailed you yesterday. i remember clearly in '21, mark fields bought all of those teslas and i remember looking at my compatriot in the room saying that's going to end up being a bad trade. that will be poster child why energy prices remain sticky a

long time and we're we're all pay more for everything. that renta car deal, you think translate into lower prices? >> yeah. that was something. deciding what we're all going to be renting. what if they throw a war and nobody shows up at a party or shows up? that's the problem. thanks, rick. steve liesman joins us now. now with more. what's going on, steve? >> well, you see yields are falling. stocks doing better. let me just preface what i'm about to say by if you're not confused you're not paying attention. here's what's happening right now. this is what i think happened yesterday. this ppi number which is really showing, again, deflation of the pipeline here. give you numbers. food down 0.9% on whole sale level. energy down 1.2%. that was up in yesterday's cpi and the trade component which

tries to take a measure of profit margin down 0.8%. what happens now is that ppi, a lot of components feed into the pce, out in two weeks. what happened yesterday, people look at pci, a little hotter. wait. hole whole sale price is positive in terms of inflation improving. feeding into the pce. what's happening, for example, went into this number. fed expectations for that cut 69% now at 78%. of course, moves around, volatile. for the march rate cut. this is a reset from yesterday and the market thas gotten, joe very sophisticated looking at ppi, fits into the cpe and resetting inflation, sorry, fed expectations after that. we didn't used to talk about the ppi. you used to cut me off minutes ago. now it's more important. look how the market is moving.

that what's going on joe. >> going to cut you off now. and the markets -- >> thank you -- >> ljust getting like you, the markets, sophisticated. that's the adjective i always say. thanks. all right. when we return, much month are with pershing square ceo bill ackman. that extended interview continues after a break? and later exclusive interview with bank of america's brian moynihan. 2:00 p.m. eastern time. a look at banks recording results this morning. right now you'll see jpmorgan is up by 2.3%. bank of america down by 2.4%. citigroup up by close to 2% and wells fargo off 1.3%. stay tuned. "squawk box" will be right back. ? changing weather patterns are impacting the way we live and the value of businesses large and small. this can mean disruption to supply chains,

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welcome back to "squawk box." continuing our conversation with pershing square ceo bill ackman. bill, thank you for being here. i want to just talk briefly, though, about the markets before we get back tohenry kravis. where are you in terms of the market what you think is happening or not happening? >> so on the bond market. if you remember i tweeted 5%, gone far enough. we actually reversed our position. short the bond market, went long

through asymmetric instruments at that time. rates come in a lot and kept the position on because we believe rates will come in further. data point came out this morning is sort of -- three cuts in the offing? >> actually thought we may not get those three rate cuts. maybe it's two. >> i think we have three. remember,ing three rate cuts, 75 basis points off of call it 5.25, 5.5 is not a significant move. three rate cuts would be like a 15% reduction in rates. right now we're, with inflation cooling, meaningfully, the real cost of money is very high right now. so i think they're going to have to move early, and i think they're going to have to move -- >> what does that mean -- >> more than three kits. >> what does it mean for equities and the larger economy? remember, in a president's election year. >> good for equities i think as long as they bring rates down fast enough to avoid a meaning

iffal recession. >> by the way, talking just a moment, i mentioned a presidential election. you have been quite active online about the election. at one point supporting, at least talking about, vivek ramaswamy. if he appears no longer in the game. and also a long-time democrat and quite outspoken, seems, against president biden. i think a lot of people are trying to understand your politics today given sort of where things have moved here. >> sure. one, always been a centrist. always believed in supporting whoe whoever's best for the country, democrat, republican, independent. it's important for biden to step down. just on the age, past his prime issue. a good part of the reason we have what's going on in the world geopolitically perceived as a weak president. he will be even weaker in a year kwo. >> that means you would vote for former president trump? against president biden right now? >> i'll make that decision when i have the choice, but i would

say what i'm hugely in favor of and actually coming here right after this interview dean phillips meeting with an organization. he's a three-term congressman from minnesota. considered one of the most bipartisan congressmen. super capable, octentrepreneur. belvidere vodka. high-end sorbet. stick with me a second. gotten to 26% approval or 26% of the vote poll in new hampshire, from nothing in a very short period of time. someone people need to take a look at. biden steps away, love a world -- imagine a world in which we have a capable, young, great motivated energetic person on the democrat ticket and something similar on the republican ticket and you went to the polls and weren't sure who to vote for because they're both outstanding candidates. i think phillips interesting on

the democratic side. high hope, vivek, the person on the republican side. he might surprise people. people think he's out the race. maybe. interesting about haley and interesting about phillips, i think deaths and republicans can support either of those two candidates. >> does that mean you're anybody b b but biden? you talk about former president trump being dangerous. now talking openly about voting for president trump? >> my goal now, have good alternatives to trump. that's my goal. >> if those are the choices -- >> i'll make my decision then based on the state of the world. i can't imagine biden. stunned he hasn't said he's stepping aside. very, very -- he will lose -- >> vote for trump? >> trump will be our next president if biden is the candidate for sure. i mean -- i think -- you know, as neil ferguson has said.

he says, if biden is, is president, we're in -- stick with me. his view is, the u.s. is at great risk with biden staying in at president geopolitically, but the constitution's fine. with trump as president, he'll keep us safe but the constitutionen at risk. that's the choice. >> do you think your politics historically which have leaned to the left have been a mistake and i ask, because part of the whole political prism with which the arguments are anti-semitism and dei and freedom of speech peach, on camp can is and in bigger institutions is now seen that way. do you think you made a mistake? >> i think what the democratic party, what left means today is not a party i want to be associated with, and that's -- i was a bill clinton democrat. and whatthe party morph too is not something i want anything to do with. >> do you want anything to do with the republican party? >> i don't want to be part of a party. i like being in the center.

and if -- and picking the right candidate, tired of the country being about right and left. i want it to be about what right for the country. >> before our conversation was paused earlier. >> yes. >> we were about to talk about henry kravis, accusations about business insider, which kkr owns and whether you're going to sue them and sue him. >> yeah. >> do you -- >> i'm not suing henry kravis. let me be clear. business insider corrupted the story. it's a rogue news organization. that what they are. check around. probably know it already. owned by axel springer, the ceo of which is a crreal guy? okay? had six or seven people close to me call me say, the ceo -- >> yeah. >> anchor good at this. by the way, that's plagiarism. you're toast. >> thanks. >> small error. but -- where we were? >> you were talking about henry

kravis -- >> axel springer i thought was a legitimate company. supposed to be a fantastic person but they're the control person. own 100% of what management owns. essentially all of business insider. their responsible for business insider's acts and best evidence of that is put out the story, we've disputed it. they've confirmed. >> do you think -- my question is, do you think -- >> my point here is -- >> differently -- by the way i've written articles over the years. >> yes. >> you have objected to. vehemently. we'vedisagreements about those articles and you felt in certain cases they were unfair. i remember those cases. is this different to you because of the facts or different because it's your wife? >> it's different because of the facts and also because it was my wife. put it this way. if you wrote a story saying bill ackman admitted to insider trading, the academic equivalent of what they said about my wife, i would certainly call you, but if you didn't change the story,

i would go to your editor, if your editor wouldn't fix it i would go to the president. to the ultimate control person. that's what i've done here. first object to the story to the business insider people. they do nothing. then we complain to the, the axel springer management team or the board and when they doing in, then end of the day, henry kravis controls 48% of the vote of this company. with a phone call he could fix this. so, yes. the fact this has gone on, now a week since this, more than a week. thursday the beginning they said her thesis was marred by plagiarism, neri oxman's thesis is marred by fraud. what they said. second story, she admits to fraught. pr plagiarism. 24erd third story, found fictitious examples -- >> you said your family is off limits. took to twitter saying historically business people are not supposed to go after family.

>> yes. >> yet there are numerous instances where you have gone after members of families as part of some of this activism including around the yu universities. this is tara swisher on x. a-okay to attack we've it's of m.i.t. folks or talk about people being fired from jobs like it's a human hunt, and economically attraction pals like elon go after house speak peekers or husbands of house speakers, file all of this under playing tough guy getting a taste of the endless -- won't use the w0ord, rains down after all of us -- what do you think? >> she's talking about lm elon musk. >> no. talk youing about m.i.t., chair of the board. you effectively says the chair was funneling money illegally at

least for tax purposes. >> i can help you. i know the story better than you. chairman of m.i.t. mark. m.i.t. shared with me do you think this unusual? m.i.t. the only funder of this nonprofit. ceo of which is the wife, chairman of m.i.t., chairman of m.i.t. is treasurer of this organization and m.i.t. in 990, listed, irs disclosure only funder. bill, what's with this? took a look. how can this be? tweeted about it. then someone, a spokesperson said, well, no. that's the m.i.t. donor advise fund and mark funded the money to the donor advice fund and the donor advice fund funded the money to his wife's charity. >> going after his wife? going to impact the wife? >> unless she's involved the in the business. she is involved in the business. the business, by the way, a scoop figured out recently.

it's a dei consultant. nonprofit dei consultant and the wife owns apparently a for-profit company. dei consultant determines whether, nonprofit determines whether supposed to sign a pledge keeping various dei things. a bit like pledge saying you're supposed to keep various dei things. they have a for profit service where they sell you products, services, software or otherwise to enable you to fix your dei problem. this is the chairman of m.i.t., and unfortunately, his wife, who's the ceo of this business. i wasn't -- i'm not interested in the wife, but the wife is inextricably involved here and the reason why this is tax fraud and has other problems is when you're -- when you give money to a do nor-advised fund, the donor-advised fund is not allowed to give money to something affiliated with the donor. the problem number two is this

is m.i.t. m.i.t. has sponsored a couple funds, and the goal is to get m.i.t. money for affiliated things and occasionally other things. a fidelity-advised fund, you can never do this. even though m.i.t. is the only funder of his wife's charity, this could not -- he couldn't give money directly and get the same tax deduction. that's the problem. i attacked the chairman of m.i.t. i thought he was fair game in light of what's going on, and he's putting at risk the tax exempt status of the donor-advised fund. >> larger question about your role as a donor and influential figure in these instances. some people look at this and say, what is bill ackman -- what is his right to be involved in any of this? maybe as a shareholder, you are, but should we be listening to the "billionaire class"? you've seen this critique. should we be listening to these people? should the academics have more

freedom and have more freedom from the money? what do you make of that? >> sure. >> by the way, this is becoming a bigger issue at harvard now. i want to get into the harvard endowment in a moment, because that's the next piece of the campaign that you're going after. >> so, the answer is, if you don't want to listen to me, don't follow me. that's number one. the reason why i can speak freely, and this is an unfortunate thing about society today -- today, if you say something that offends someone, you can lose your job. you can get blackballed. you can get canceled. it happens on universities. i'm not afraid. i'm not afraid of being canceled. i'm not afraid of losing my job, and financial independence gives me the wherewithal to speak. and by the way, i've literally gotten thousands of emails, texts, letters, i can walk you back to my office and show you, they come in every day, piles of them, people saying, bill, thank you for speaking on behalf of all of us. and you know, my biggest driver in life -- i should have answered your question differently. this started pretty close to

when i was 18. biggest driver was independence. i wanted to speak freely, live my life, and that motivated me to be successful, and you know, i argue with success also comes responsibility. if i see something that's a problem in society, i want to do something about it. and there are a lot of people who have a lot of money, lot of resources, you know what? they can sit on their yacht, which is fine, and live their life, and nobody's going to criticize them. in my case, i want to, you know, when i'm 85, looking back, i want to say, i helped solve a number of important problems. if you can't tell by now, i'm a fixer, okay? what is shareholder activism? it's fixing companies. what is this? helping to fix universities. it's all the same. >> let me ask you one more question about that, and then i want to talk about the harvard endowment. if you go back, you have a track record in which you fix things, and times you fix them and you win in a very big way. you also fail in a big way too, right? you could even argue that you're somebody who hits grand slam home runs but also has a whole

bunch of strikeouts throughout the process. >> i don't think that's accurate. if you look back at our history, we have had some big losses, but the successes vastly overwhelm the failures. like the success rate is extremely high. and you should look at our record over time. so, value in herbalife, disaster. jcpenney, smaller disaster. try to name ten. we've made a hundred investments, well more than a hundred. >> let's talk about the next fight that appears to be on your hands, which is that you are supporting, i think, at least the reports have been that you're supporting an overthrow of the folks who control the endowment at harvard. >> not accurate. so, harvard has a board of directors that elects itself. it's the most important board. it's the corporation board called the fellows of harvard. they really control who's the president. then, there's a group of alums that are part of something called the board of overseers. >> right. >> 30 or 32 of those.

each year, there are five or six seats that come up for election. in light of everything that's gone down on campus, a group of four alumni, a very impressive group, you know, navy s.e.a.l., marine, all military people, but also brilliant. i know one of them. a guy named alec williams, princeton, did a joint degree harvard business degree and yale why he was going to afghanistan. super impressive guy. they're very unhappy with what's going on on the harvard campus, and they need 3,200 signatures. by the way, if you're a harvard alum, go sign up and back their campaign. and they're going the put themselves up for election to be on the board of overseers, which doesn't have a lot of control, but the benefit of supporting them is it sends this incredible message to harvard, gives them a mandate to look at things, and their platform includes one of the issues they're concerned about is the harvard endowment earns something like a 4.5%

compounded return for a decade in one of the best bull records in history. the harvard endowment would probably be $500 billion or something, so they're going to look into that. >> so, you think there's -- what are you suggesting? >> well, since we -- what's interesting about being in the position we're in is we get inbounds. i'll share a couple and the world will tell you whether they're true or not. harvard lost, apparently, a billion dollars on a fraudulent situation. >> what fraudulent situation? >> apparently, they bought, like, a forest in the amazon from brazil, and the -- they included in their returns mark to market gains on the forest. but apparently, they relied on marks each year from the person who sold them the forest. kept telling them that it was increasing in value until they, at some point, bad things happened, it blew up and went to zero and had to write it off completely. at that point, it was worth over

a billion dollars. so, the employees who were getting paid incentives based on the increased value of this forest benefitted, and then harvard took a huge wipeout. that's never been disclosed publicly. again, i have no -- >> we have to fact check that. >> i'm saying this is something i heard from a very, very credible source. that's one. the second one i heard was that a president of harvard had a view on interest rates and decided -- and told the endowment to make a bet on rates and that bet lost a billion dollars. >> okay. >> so, i got a couple -- >> i'm a little anxious about putting that out in the public without fact checking that in realtime. >> harvard's not a publicly traded thing. harvard should put out a statement, is it true that the president of harvard did a derivative trade that lost money on rates and is it true that harvard had an investment in a forest in south america or otherwise that they mark to market each year paid a few million dollars, increased to

something approaching a billion and were forced to write it off. let's ask the question instead of presenting it as fact. >> we got to wrap up. >> i have so much more to say. >> i know you do. i want to end with this. when all this is said is done, do you want to be known as an activist investor? do you want to be known as something else? i think there's a real question sort of who bill ackman is supposed to be in all of this in the end? >> i want to be known as a good person who cares about society, a patriotic person who loves his country, a loyal alum that wants to help its university, a loving husband, who wants to take care of my beautiful wife, and someone who really cares about the truth and is prepared to go all in when important things show up, and i have the ability to effect change. >> bill ackman, thank you very much for the conversation today. appreciate it. joe, becky, back to you. >> okay, thanks, andrew. reminder that next week, we will be at the world economic forum in davos, switzerland. don't miss a big line-up of

guests, including bank of america's brian moynihan, jpmorgan's jamie dimon, blackstone's steve schwartzman, goldman's david solomon, and morgan stanley's ted pick. coverage will start tuesday at 6:00 a.m. eastern time. we travel on sunday. do we get that back? is monday a -- >> monday is a holiday. >> so, we're traveling on a holiday. so, they need to -- we need that back, don't we? final check on the markets. take a look at the futures. compared to yesterday, not too bad. but still down about 92 points. united health care is a little bit weak. the ppi number, as rick highlighted, was less troublesome to the bond market and the participants than yesterday's cpi, but nonetheless, we still are down with the s&p, though, right around the flat line. we'll take a look at yields, because those can usually tell you what kind of inflation

number we got, and we're 396. we've been over 4% at different points this week on the ten-year. take a look at oil. we've got some trouble, perhaps, brewing in that part of the world. and then, we have bitcoin, which is giving back a little. i think it's below $46,000. make sure you join us tuesday from davos. "squawk on the street" is next. ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla at post nine of the new york stock exchange. cramer is in kansas city at geha field at arrowhead stadium ahead of saturday night's wild card, which will stream exclusively on peacock. faber has the morning off. what a week. taiwan elections, dow futures are being pinched a bit. our road map begins with the banks' noisy quarter. we'll get to jpmorgan, bank of