2024. "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. snowing in new york. it's okay. >> not a lot. by the way, they closed the schools everywhere. at the moment, i'm not sure that was the right call. let's see where we are in a couple of hours. >> i would say the kids are excited about it. >> it is easy to close the schools now with remote stuff. colleges do it. >> they are saying have a ksnow day. >> this is you are supposed to go sledding if the know works

o out. >> it is supposed to get heavy it may get worse. >> maybe not traveling for business. let's look at the u.s. equities. you will see things are in the red. not any significant losses. dow off 45 points. s&p futures down 16. thes nasdaq indicated down 102. it does come after the dow closed at the record high. up 126 points in yesterday's session. s that nasdaq and s&p on the steep shift with where the markets are headed. the japan's nikkei ended session higher after surpassing 38,000 for the first time since 1990. first time they finally made it back. >> still below. >> long run. >> thestill hasn't hit highs.

>> the weaker yen is driving bullish sentiment. markets in china are closed this week for the lunar new year. we are keeping an eye on the treasury yields in the u.s. 4 if you check out the price of bitcoin this morning, you will see it is almost $50,000. let's talk about the planner. we have a bunch of things worth paying attention. january cpi due at 8:30 a.m. forecasters are expecting 2.9% after the december gain of 3.4%. we while hear from coke and hasbro and marriott and auto nation before the opening bell. we will hear from airbnb and robinhood and mgm resorts after the bell. we are monitoring the

senate. lawmakers voted to clear the final procedural hurdle for considering a $95 billion aid bill for ukraine, israel and taiwan. the vote is under way and the bill does have enough votes to pass. we will let you know when that vote is complete. we will talk to an important member of the house. carl icahn reported a nearly 10% stake in jetblue yesterday. icahn said the stock is under value. he will hold discussion was the company about the possibility of board representation. icahn disclosing his stake after joanna garrity became ceo this month. it comes after the federal judge blocked the proposed mefrger wih spirit airlines. jazz wear, the berkshire

maker of the squishmallow is suing build-a-bear over the knockoff. build-a-bear said this is based on the existing plush animals and advertising make clear who made the animals. coincidence? not. maybe? >> you need a good patent division. i don't know squishy bears. >> if you look like you're trying to trick people, you could get in trouble. >> the name? >> not the same name. if you look at how it is written, it is written in the same pillowy font. >> they know. you have a lot of leeway. >> you have to prove you are

potentially trying to compete. >> you need a patent. how long? you could on squishy stuffed animals? you could have a couple hundred pages on a patent. s >> a patent or a trademark? >> no one is giving you a patent. >> squishy. >> intellectual property. that is why lawyers exist. >> right. >> otherwise, think how life would be? you need lawyers occasionally. tiger woods launching a new brand with taylor made. the brand is called sun day red. it is available first online and only beginning in may. it is all over the tradition of wearing red on sun ddays.

it was okay. it is like payne stewart. if you wear an outfit like that, you better be good. woods said he trusted taylor made to get it right. you may remember last month that he canceled or announced the split from nike. his long-time partner of 27 years. >> it was an amicable split. >> if you remember, he was in foot joy at the end with the nike contract. people speculated. >> this is taylor made. watching shares of arm. the stock now up 100% in the last week. this after the strong earnings last thursday. no obvious catalyst for the stock's 29% jump yesterday. stock has tripled since the ipo in september. still 90% owned by softbank. masa son with challenging days

and having great days in the past week. that stock up nearly 35% year to date. we were talking about the super bowl with average of 123 million people watching across all platforms. initial data showing adobe which makes it the most watched telecast since the moon landing. cbs says the final numbers will be out later today. we will bring them to you and discuss what it means. >> the population of the united states in 1969. 202 million people at that point. >> we had games in germany and england and one in south america. nfl games. i'm not that impressed. billions of people. >> eventually. >> there are billions right now. >> it is a lot of people. largest ever on a single channel. you can get bigger numbers.

>> i want 1 billion for "squawk box." we have a long way to go. coming up, we get you ready for the inflation data. we have the january cpi due at 8:30 a.m. eastern. will there really be a two handle? not all of our guests think so. later, the ceo of waste management will join us. wm is what it is called now. what business is your dad in? waste management. we'll be right back. huh ♪♪ hey, is this thing hard to learn? nah, it's easy. huh. you know, i think i'm going to ride it home. good thing you chose u.s. bank to manage and grow your money. with our 24/7 support at least you're not taking chances with your finances. yeah, i think i'm gonna need a chair.

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cpi data comes out at 8:30 a.m. eastern time. for inn ssights of the inflatio report, let's bring in michelle west and covering the equity angle is carol schleif we said, michelle, there may be a two handle, but you think it is a three handle? >> on the year over year we don't have the core cpi rate getting down we are focused on that more than the headline number below three. i will say the fed's more closely watched measure of inflation, the pce deflator,

does have a two handle. we actually think on excluding food and energy, that core pce number, the fed is watching clo closely, could be down close to 2%. not just a two handle, but 2% by the middle of the year. that, i think, has big implications for the fed this summer. >> the breakdown what goes into the number that we see today, michelle. certain people raise prices at the beginning of the year. contracts and things like that. this is usually a little hotter than expected. >> that's right, joe. these are seasonally adjusted. those things that happen the same time every year, are adjusted out to get a cleaner read. we see despite the best efforts to do that, we see higher readings in january and february

because you see contracts renegotiate with prices increasing. that seems to puts upward pressure on the inflation figures. we have a .20% overall gain in the cpi. expect .30% for energy. we see upside risk with the fact over the start of the year with the surprises. >> carol, you know, nasdaq is down 100. i guess there's a little bit of aw a wait-and-see issue. in the market which has hit the highs, a moderating inflation picture is baked into the cake. >> definitely it is baked in. the markets will watch each individual economic stat. the fed has told us one stat is

not the magic number that allows them to start cutting inflation. they will look for the continued accumulation of data. the trend and cpi is supportive on the core and absolute basis. markets are hinging on all of the data. the fed has pointed us in that direction. we suspect you will see continued disinflation. it will be supportive along with all of the other things going on economically of the continued strong stock market for the year. >> what happened to the last model that was going to be so hard? you think it will be lineal or it will get down to two? >> we don't think you will see a straight line. you will see a lot of volatility in there. that is one of the reasons we are hopeful that longer-term investors don't focus on each data point. they take the combination of all of them and take a look at the

trends. look at companies. there was a lot of commentary that could be extracted related to companies right sizes businesses and stocks crediting for that. also watching the pricing power and sensitivity which we think companies have reached the max of the pricing power and what consumers will bear. there's a lot of information not only with the headline economic numbers, but also buried in the earnings reports. >> let's get back to michelle in a second to get back to the residual inflation. carol, one more question. were you ever at seven rate cuts starting in march? why did the market take the disappointment it will not be that easy? >> we were never quite sure how

the market got so carried away back in november and december assuming early cuts and that many. actually, you don't want that many. you don't want it starting that early. that is indicative of an economy coming to a harder landing. stretching those out and we expected late spring or early summer to see the cut. we think the extrtrajectory is there. the governor have spoken. clearly that is the move for investors. >> michelle, the last inflation is services? we know about the supply chain t.chain. now it is open. it is not because the fed and government overspending. we think it is because of bottlenecks. what's left?

services? i don't know whether wages are going up. i want you to give a really good answer. chatgpt is waiting for all of the white collar jobs. >> the other story said the journal said microsoft copilot was not up to snuff. did you read that? people were not getting value out of it. i'm fascinated by that. >> are all of the people up to snuff? not you, michelle. not exactly -- >> joe! >> sorry. go ahead. >> you are right in a sense that right now we are seeing the stickiness, if you will, on the services side. particularly with the cpi with the housing and rental costs. the large weight of the core cpi. that is where you see firmness. we talked about the fact we looked for the overall cpi up .20%. we looked at the housing and

rental double that. that is where you see the stickiness. a lot of that tends to track the services numbers closely with wages. wage pressures are easing a bit. you are looking at wages running 4% year over year and plus or minus depending on which gauge you look at here. for the fed, that is a concern in terms of creating the stickiness in the last mile of getting inflation back down to 2% and easing and continued easing with the pressure would make them more con fident that the direction can move sustain brsus sustainably lower. >> i'm more worried than you, michelle. about being replaced by chatgpt or max headroom. you actually have a skill. you have to think these things through. we have people that write for

us. sorkin, i want to ask you about that. michelle and carol, thank you. >> here we are. >> we are all tv types. the max headroom -- remember how it used to freeze. have they got the bugs worked out? >> have you seen lathe latest? >> there is no gap in the teeth? >> prettier than you. >> you would behave. >> i not be a problem for management. what do i have right now as far as job security? >> nothing. >> your wit. >> you said nothing? >> i said nothing. >> it wasn't an echo. >> becky was being generous. >> don't we have something to worry about? how long will my wit last?

you see what happens when you get older. >> the things of experience that we have. that's what i'm hanging my hat on. good luck. >> i'm worried about that. we have seen how quickly that can go. >> you talk. >> how long, sorkin? how long? >> did you not get that remark? i forgot we are letting you talk. >> the biden joke. a good joke, i thought. >> generous of you. >> i did think that was good. it showed it wasn't prepared for him. we got to go to commercial. we'll be back with the a.i. bots. on "executive edge," workers looking to picket this week. workers just work. details about that after the break. later, house majority whip tom emmer is talking about the fight funding in congress with

israel and ukraine and all that and more when "squawk box" rolls on. taxes can erode returns quickly, so you need a tax-optimized portfolio. at creative planning, our money managers and specialists work together to make sure your portfolio and wealth are managed in a tax-efficient manner. it's what you keep that really matters. why not give your wealth a second look? book your free meeting today at creativeplanning.com. creative planning -- a richer way to wealth.

welcome back to "squawk box." thousands of drivers for uber and lyft and doordash will strike on valentine's day. the group is seeking fair pay and are not getting the love back and picket outside airports and uber offices as well. flight attendants plan to picket today in an effort to pressure carriers to raise pay. it will not help with the

weather. they are calling it a day of action. flight attendants are picketing in the u.s. and uk. pickets are not expected, they say, to disrupt flights. we will see. the weather may do that for them. >> i think i want to pay them more. i decided. i watch what they put up with. anything goes on these planes now. anything goes. >> they are expected to be bouncers. >> the lady could not get into the bathroom and squatted in front of me. you could not be a flight attendant. >> are you kidding me? >> you think you could be a flight attendant in the service industry? no way. >> summer camp. i won waiter of the year. you don't think i could handle some of these? >> you would smack them upside the head.

>> you could not. i don't know what would happen if you were mypassenger. >> you would get him kicked off. >> i'm giving them raises. who is that lady? the flight attendant lady? >> the head of the union. >> she's underpaid. when we come back, the ceo of waste management firm wm will join us to talk earnings and the rowdy wm phoenix open from last weekend. right now, as we head to break, look at yesterday's s&p 500 winners and losers. how would you like to be somebody working? >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. in the u.s. we see millions of cyber threats each year. that rate is increasing as more and more businesses move to the cloud. - so, the question is... - cyber attack!

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good morning. welcome back to "squawk box." live from the nasdaq market site in times square. more rain now. more people with umbrellas. that's not snow. futures are down a little bit this morning. almost 100 on the nasdaq.

dow jones industrial average down 35 points. we're waiting for cpi data, obviously. not a back up in yields. 4.16 on the ten-year yield. bitcoin above $50,000 most of yesterday. it is below $50,000 right now. down about .50% this morning. shares of wm moving higher this morning. that stock san is up 25% this y. waste disposal company beat on the top and bottom lines in the fourth quarter. the company ses stronger revenue growth in 2024. joining us to talk about this is jim fish. the president and ceo of wm. jim, good morning to you. >> good morning, becky. how are you? >> good. let's talk through some of the numbers. better than expected. pretty importantly on the outlook as you were looking at some strong numbers this year, too. you are looking for revenue to grow between 6% and 7%.

talk us through what's happening here. >> something we have seen over last couple years, 2022 and 2023 and 2024, we have grown by 27% earnings. we are not making a huge change from 2023 to 2024. more of the same. we have really looked at our cost side of the business because revenue is fine. costs needed to be addressed as we look at jobs that are starting to become precious for us. about five years ago, we decided the trade decision, drivers, technicians, those positions would have long-term pressure on those and we hope technology would help efficiency and produce dependence on that labor not through layoff, but normal attrition. now we really see that coming to results this year and next year. >> it is hard to think through

when you talk about positions like drivers. you don't have automatic trucks. how do you use technology to enhance what people are doing? >> when you look at the example of what we call a wheel-loader. the traditional truck we saw as kids on the back and somebody driving the truck, those trucks are going away quickly for us and replaced by ouautomated sid loader. it safer because you don't have somebody outside the vehicle, but one less person. the person on the back is not required. it is more efficient to pick up trash in the photo you are showing there. the automated side loader over somebody actually getting out of the vehicle. we have about 4,000 trucks. we replaced 1,000. we have a few left to replace. that is how we are improving

efficiency. >> that seems great when everybody lines their garbage cans up perfectly on the sidewalk. what happens when things are not as neat and organized as that video we watched? >> they're pretty good of getting around parked cars and obstacles. i'm amazed when i watch the drivers navigate around the obstacles. sometimes they have to have people move cars. for the most part, people know when they are coming. they have their cars or obstacles out of the way. it is seamless. >> these must be suburban areas. i cannot imagine that working in new york city. >> that's right. we're not really in the collection business in new york city. we have a nice disposal network there. you are right. it is mostly in suburban where we use those old rear-loaders and replacing those with

side-loaders. >> jim, another thing for outlook for 2024, revenue is expected to grow 6% to 7%. your price programs are expected to result in core prices of 6% to 6.5%. does that mean you have pricing power? >> it does. i think you have seen that over the last couple years. a couple of things we he e came the year trying to achieve were at least applying price to the margin line. in 2022, it felt like a fist fight with the cost structure with inflation high. we are seeing inflation come down a bit and we are seeing our cost structure being able to put margin on to the bottom line. i think when you look at 2024 revenue, some of it is volume, not a lot. the economy is okay. a lot of it is that pricing program that we're able to use to now not only cover costs, but

to add a few margin points. >> are you going to get pushback at some point if inflation has come down and you are still raising prices? >> we always raise prices just because there is some type of inflation. we have seen prices come down. we are not raising prices nearly as much today as we were a year and a half ago. we are always looking to raise prices annually whether it is on commercial customers or residential customers. >> what about what you are doing with the recycling program and clean energy program? is that at the point where it is profitable? >> it is. in fact, we announced a couple of years ago we will put $2.2 billion in the programs. that is building new recycling plants and building renewable natural gas plants that take landfill gas and turn it into renewable natural gas. that was a $2.2 billion announcement. we increased that to $2.88

billion. we announced that today. about 60% of that is new plants. some of it is inflation. the returns on those are tremendous. you just don't find those types of returns. the earnings for a $2.8 billion investment is $$800 million. >> annually starting a year after investment? so in year three? >> the $800 million run rate is by the end of 2026. >> jim, let's talk about the wm open. this was everywhere. social media, everywhere you saw it. that was a bit of a disaster. fans who bought tickets could not get in. you had to shutdown the entry way. there is the guy who did the dive into the sand pit and did a sand angel and ran back out. people falling. a woman fell off one of the high

bleacher stands. you had to shutdown alcohol sales. this is always a party event, but did you feel like it got out of control this time? >> a little bit. the event is unique. it always has been because of that hole 16 which is the stadium hole. the huge crowds this year with the added complexity which was the 4 inches of rain in four days. the golf course is a stadium course. that means that a lot of the seating, not necessarily on hole 16, but the seating is on the grass and walkways on the grass. when those become impassible because of the rain, those people get forced out on the cart paths. the event organizers and scottsdale police made the safety decision to shutdown all of the ingress points and entrances and shutdown alcohol sales. every year, this tournament has

huge crowds. we will look to address any of the problems with the players and the fans and with the scottsdale police and with the city of scottsdale. we don't want to lose the uniqueness of the event. there were idio diots out there question. you saw the one guy in the trap. we will become more aggressive with the third graders and throw them out of the event. >> knuckleheads, jim. >> exactly right. >> it's twitter safe. it says what you are trying to say. you know, it is not too bad. the "m" word or "i" word. i don't know. knuckleheads. >> no question about it. the players get that hole 16 is unique. you will get booed when you miss the green. there's a level of fun there. fun can go a little bit too far. the guy jumping out of the crowd

and rolling around in the sand trap. we need to aggressively remove him from the scene. >> zach johnson. >> he had enough. you are walking a fine line between the golf clap from the crosby days or wonderful world of golf. you don't want to go back to that, but you don't want to go to i don't know what the hell some of that is. >> "happy gilmore." >> that's right. when you have a huge crowd, you have 1% that are morons or knuckleheads. you have seen us be responsive to the players. we built a bridge between 10 green and 11 tee with the congestion point there. it was 20 yards, but the players had a hard time getting from the green to the next tee box. a bridge was built and the players really liked it. we added a grandstand on 9 to take the foot traffic off.

we will continue to be responsive to the players. we want to make sure that everybody is safe here, which they were this year, but probably could have done a better job communicating this and removing some of the idiots at the top of the list. >> jim, thank you. good to see you today. thanks for talking all of it through with us. talk to you soon. >> good to see you. let's go live to washington. speaking of knuckleheads. senate bill for ukraine, israel and taiwan has passed. emily wilkins has more. >> reporter: joe, $95 billion package passed the senate with strong bipartisan support. you saw 70 senators go ahead and vote for this bill to pass. that's more than what we saw with the procedural votes. that's really going to put the pressure on the house and speaker mike johnson to figure out what they will do with this bill. mike johnson came out last night and in a statement saying the

senate had failed to meet the moment. suggesting he will not be the one to move this bill to the house floor. however, there is a procedure by which if you can get a majority of members in the house to cosponsor a piece of legislation, there is a process where it can come to the floor without leadership. that's one of the things that is being discussed as a potential path forward. we have to wait and see how this goes. certainly the strong bipartisan vote with the 70 senators supporting does put the pressure on the house to move something here. >> doesn't sound very hard to do that, emily. if you had all of the democrats, how many republicans do you need? >> reporter: it depends how it comes to the floor. you know, for some of these, they have done the suspension of the rules votes. they can bring it to the floor faster. you need two-thirds support. there are concerns about israel funding among democrats.

the last vote in the senate, sanders has voted against it with issues over the funding. it is hard to say how many republicans would need to be on board. the biggest trick is if mike johnson is not bringing this to the floor, how does this happen? >> you really do need the craziness of the -- depending where are you sitting and how far on the left and right -- the far left doesn't want to help israel. you can't count on the democrats even if it is -- i need a little diagram. emily, thank you. >> flip it. ouis to help people feel safe. not only our customers but those who matter most to them. just like our company does for us. we have great benefits from principal.

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welcome back to "squawk box." carl icahn revealing a 10% stake in jetblue. phil lebeau has more. >> reporter: carl icahn pushing for jetblue. carl icahn and his firm taken a 9.9% stake in jetblue. they have discussed with the management of taking a board seat. shares were bought this year. january and february. if you take a look at shares of

jetblue over the last six weeks, you see the dip there. that was the opportunity to buy. jetblue has lost twice to the doj since 2022. the strategy of expanding through alliances and proposed mergers has blown up in their face. the company yesterday issuing a statement after the announcement that icahn had taken the 9% stake. we are always open to constructive execute our plan to enhance value for shareholders and stakeholders. look at jetblue and spirit. they are appealing the merger shot down by the judge last month. that is an expedited appeal. how long it takes before that is hurt remainss to be seen. you can tell what jetblue did from the beginning of the year until now. robin hayes stepping down and

j announcing a number of steps, traditional steps like cutting costs and looking at ways to increase revenue by $300 million. looking at ways to defer aircraft purchases. all the moves that if you are carl icahn, you want to see them make. let's see as he pushing for further change and what else he pushes for. you know the consolidation game is played out. they might win on appeal, but otherwise, it is dead in the water. at least under the biden administration. let's see how long and how active carl icahn is if he gets a board seat. >> you want to handicap it? what do you think? >> me? >> yeah, you! >> i don't know. he is -- i don't know. i thought maybe you were talking to joe unless he is looking at the map of the house of representatives. >> hey. >> i think generally speaking,

he is getting most of what he wants. she is widely respected and making the changes you want to see jet bblue make. you know the consolidation game not going to happen. i'm not sure he needs a board seat. he would like to have that leverage. >> yes, he would. ph lea tnkouilebu,ha y for breaking that all down for us. we will be back in just a moment. this is "squawk box." with gold bond's age renew formulations of 7 moisturizers and 3 vitamins. for all your skins, gold bond. [falcon screech] [ominous background sounds] hyah! sheriff! the adversaries are back! [gasps] not again. sheriff, i got this. protecting your business from cyber attacks can be unrelenting. [triumphant adventure music plays] today's adversaries move fast.

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welcome back to "squawk box." our next guest look to secure elections. our next guest serves at cyber security and ran u.s. policy for microsoft. what are we at?

>> nine months out from the election. yep. >> nine months out. i would ask you, what is the single biggest security risk you see at this moment? >> i got to say it's the overall degrading information environment, and the incentive structures in place to push these claims about the election system itself and politics in general right now. it's not great on capitol hill, as you are seeing,the various pieces of legislation that are breaking down that are important for security and safety across the globe and they are being exploited by state adversaries, russia, iran -- >> the voice robocalls we heard about biden, and somebody said it was happening out of texas or something. how are these things happening? >> when you step back, there are likely three sets of focused

actors that we need to be thinking about. first is, i have already mentioned, state security services. again, russia, china, iran and a handful of others. then you will have domestic political groups doing what they have always done, propaganda, and fear, uncertainty and doubt, fud. and then there are domestic actors that are seeking to undermine and upend confidence in public institutions. the last bit is probably the second group i most worry about. when i talk to federal government officials and state election officials the number one request for assistance is on physical security threats. there has been an increase in swatting attacks against federal and state officials, and a rash

of docksing, putting personal information out there, and people are participating as volunteers and officials and that will have an impact on election day and the availability of polling locations. >> there's an under current. i saw a poll where they talked about people, as far as mail-in voting in the 2020 election that they had done things above board, and we know it was coming out of covid so maybe we didn't have the safeguards because we needed to do it, so i just googled it again. we have bipartisan paolicy center, and mail-in is safe and security, and then we have another center saying we should

not vote by mail. is it totally -- can we trust it completely? >> i think there's going to be a high amount of voting by mail just like there was in 2020, and perhaps not as much. again, that was, as you pointed out, driven by covid and the fact that people were concerned about gathering in public places, and now states are starting to go back into their regular voting administration process. i would say, 2020 again, the most litigated and scrutinized -- i could go on and on with the various ways the 2020 election has been looked at, and there's no way to suggest that mail-in balloting was -- >> do you think we should do

more to secure voting? would you limit mail-in votes? would you want to have some form of identification? as somebody who is in the security business, are there things you would want to do that we don't do today that you think are necessary or would -- maybe not necessary practically, but create a perception -- >> make people feel better. >> -- that people would feel it's a better and fairer system? >> transparency is key, and any state that does mail-in voting has to be transparency, and signature verification is key. we have to move towards as much voter verifiable backup with it, and post voting certification has to be the norm.

state election officials are ready and federal election owe fi -- officials are ready, and everybody needs to listen to theilor cal, federal and state officials on what's going on. >> thank you. we're coming right back after this. two big hours ahead. ♪♪ [storms sound] whatever weather comes your way [wind and snow sounds] weathertech has you covered. [bird chirping]

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good morning, everybody. inflation data on the docket for investors as they look for more clues on future potential policy moves. we will preview those numbers. the senate passing the funding bill to aid ukraine, taiwan and israel. we are joined.

the second hour of "squawk box" begins right now. good morning and welcome back to "squawk box" here on cnbc. i am andrew ross sorkin along with becky quick and joe kernen. the dow is off by about 57 points and the nasdaq off by about 125 points, and the s&p opening down by about 20 points. the two-year sitting just about at 4.470. and crypto, almost at $50,000, $49,962 right about now. let's get over to sarah

eisen. >> the forecast on coca-cola for 49 cents up. just going beneath the circus, organic revenue growth was up 12%. it was not just price. a big part of the story on consumer names has been pricing, which has been driving all the growth. coke managed to drive what they call the concentrated sales which is overall volumes, up 2% there. they were down in europe and north america, but they were higher for the rest of the world. they see for the year continued growth, organic revenue growth up 6 to 7%. all these numbers would look better if not for the stronger dollar. i did speak with james quincy,

and here's color on what they are seeing. he said we are managing the pricing environment and have a stra strategic incentive for volume growth. they had to adjust pricing along the way particularly in north america where there's more sensitivity to meet consumers. if you unpack fourth quarter inflation numbers, and he said inflation has moderated to a normal level, and that's a big change than what we have seen in the last two to three years, and the reason we saw higher pricing for coke something because where they operate in turkey and argentina and that skews the overall number.

i mentioned the volume number was negative in the u.s., but nothing extreme there. i asked about china, too, and coke is a business that operates in china. he said last year they started out strong and softened through the year, the chinese consumer, and this year he expect a weaker start to the year but expect to pick up. quincy says he sees growth there this year. overall, look, the brand coke continues to do well, whether it's coke or coke zero, that's what the driver is. they are bringing in new drinkers, new consumers into the coke brand and transitioning diet coke drinkers into zero coke drinkers, and overall coke proving that, as quincy says, they have an all-weather strategy and can take the macro

impact and still have growth. we will talk to james quincy on squawk on the "squawk on the street." >> i wish water could be the greatest business you have, and water and sparkling water is the toughest these days. >> well, as far as the water, it could have something to do with the bottlers and the arrangement, and we could talk that and i will ask him about water and why it's not doing better and more profitable. we are drinking it. >> thanks. also, let's take a look at shares of hasbro. they have been plunging after

reporting quarterly reports well short of expectations. the street was looking for 66 cents a share, so a big miss. revenue dropped 23% from last year to $1.29 billion and that missed estimates at 1.36 billion. the toy maker seesadjusted ebitda. >> we are joined with inflation expectations, a senior reporter with senior moments. steve? >> hopefully not on air, joe,

but maybe off air. the best markets can hope for today is the cpi number this morning adds to the evidence that inflation is falling enough for the fed to eventually cut rates. and that's even a down side surprise would not be enough to satisfy the fed, and that's while critics complain the fed is falling behind the cutting curve. the january consumer price index is a tick lower than december. that's unchanged from the prior month, and higher numbers are dropping out of the calculations from last year, and it's the first handle on the number since march of 2021. the core cpi inflation has come down more slowly than the headline number, and the housing prices have not yet reflected the lower prices that are out

there in some of the market gauges of rents and housing prices we have seen. housing prices, one wildcard this morning, and so are used car prices, and they are expected to climb along with airline fares. markets somewhat less tightly wound than they had in important perfection in the inflation data. it's at 4.20 now, and markets expecting 4 1/2 to 5 cuts instead of nearly seven. and then friday you get the producer price index and that's an important part of the fed's preferred indicator. joe, i think the rise in the stock market lately is a little more -- you have a little more confidence in it because it has come with the fed's fund outlook coming down with the idea of the

cuts out there, and the market seems to be on more solid footing for the fed than it had been previously. >> are you ready, yet, steve, that ai is forming some of the viewpoints on the future wage gauges than the labor market? >> no, i think these are real early days, joe. i have used it a bit. i know people are way ahead of me, and i think these are the early days. i think you are right to point out that it's a major factor out there. i think right now the bigger issue is the expense or the amount of investment going into it, and that's going to be interesting for both gdp numbers and the price of capital. i think ai is maybe there's a slight increase in interest rates as demand for investment

capital goes up. i think these are real early days. >> we have not talked to you since the shrink tphraeugs gate. that's what i am calling it. i will admit, i don't like the packet, the contents may have settled. come on, you are lying to me. i buy only pringles, because you can't gain that system, because the pringles are stacked and it would have to be a smaller stack, but is that -- is that part of inflation, and are companies to blame -- >> sure. >> were you laughing at that or did you roll your eyes? >> we have been talking about this from the get go, and ads soon as the inflation thing has come along, they have been reluctant to raise prices and

they do in some cases lower the amount of product they are providing and that has been around for a long time. what troubles me is consumers to arbitrage between the product and the price if the price is not there. am i going to get peanut m&ms or a snickers bar -- i like a snickers bar better, and i am talking personally right now, but is it .2 less than the snickers bar and the same amount in the m&ms, so it's a little insidious, i would say, on the part of the manufacturers. >> because you know that the pringle is a perfect shape. you know that. it's a mathematical like wonder, it's a hyperbolic pair of

bowloid -- >> yeah, i have seen it, when physicists talk about the shape of the universe, and -- >> yeah, that's what i mean. a pringle. >> maybe we should have neal duh greiss on our show. i know he loves the shape of the pringle, and if you are like me, joe, and you drop the pringle, all of this discussion becomes mute. >> you like snickers more than peanut m&ms, too. >> i shouldn't be doing either, of course. >> that's true. steve liesman, thank you. we'll see you. >> thank you. when we come back, the senate passing a $95 billion aid package for ukraine, iaeansrl d taiwan. that bill now heads for its next hurdle. we will talk to house majority whip, tom emmer, when we come

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the senate passing a $95 billion foreign aid package for ukraine, israel and taiwan. the bill will now head to the house where it's likely to hit a dead end. joining us now, house majority whip congressman, tom emmer. that the current thinking, is that what you are hearing, congressman, it's dead on arrival? >> i don't think those terms -- good morning, by the way, joe. i don't think those are the terms that i have heard from our speaker, but he has effectively said we can't move this without securing our southern border, so we'll see. the congress, the house is coming back into session tonight and i am sure once all our members are back itwill be a clearer picture. >> that sounds like a catch-22,

though, doesn't it? we can't secure the border because former president trump wants people to be loyal to his -- his notion that don't do anything that could help president biden, so it's almost like we won't vote on anything until we secure the border but we won't vote on something to secure the border? >> i would say that's not accurate. there was an effort over in the senate, and our speaker made it very clear that our members would require for -- in return for foreign aid, specifically, ukraine, not only did we have to have certain questions answers when it comes to the ukraine aid, but when you bring it over you have to make sure that it has border security on it. there was a two-month negotiation, joe, that literally turned out a product that could be be done in the house or

senate. in may the house passed a security border bill that had five pieces, end catch and release and restore remain in mexico, which, by the way, our border patrol said by doing the last one it would staunch the flow over the border by 70%, and the bill does nothing with the wall or parole or asylum and does not restore in mexico and codified what they are already doing illegally when it comes to catch and release, you shutdown authority at 5,000 a day coming across our border. insanity. if the president would just undo the 64 executive orders he signed which he took office which effectively opened our southern border, you could solve it that way, too. you have to figure out a way to

get it done. >> seems like both sides are dug in. when we hear the president say that there's nothing he can do, nobody believes that. everybody knows about the executive orders. then on the other side you hear republicans say, yeah, we do want to do -- get border security, but you know they have been told by president biden, former president trump not to do that. the american people are sitting here and looking at this five or 6,000 people coming in every day, and it's -- everybody is disgusting with the whole notion. do house member, gop members want to give aid to israel? maybe some don't want to do ukraine, but why can't something for israel happen? you couldn't even pass that. >> joe, we brought it to the floor in the house last week, last wednesday, and incredibly it was an $18 billion package that included 14.3 that was

requested back in october, and then some additional to actually help our own troops. we have got to take care of more efficient equipment for our troops when we are shooting down the drones that don't come near that costs. it came to the house floor on wednesday and the white house issued a veto threat that was frankly -- to me it did not make sense. 166, almost 80% of our democratic colleagues in the house voted against supporting israel. instead they voted on the side of hamas. >> yeah, we were talking about that earlier, too. it would be possible, i guess, if everybody co sponsors a bill, you don't need the speaker to bring it to the floor, and these are the rules of the house, and then you hear you might not have all the democrats onboard because of the israel component.

but do you see how people at home are tossing up their hands? it's insane. we can't move forward on something -- do you think we should fund ukraine now, congressman? >> so i have supported ukraine aid in the past, and i'm not one of those that says we should not, but there are some very specific questions that our members and our speaker have asked the white house to respond to that we're not getting the answers to, specifically where is the aid going to go to? what is the oversight mechanism to make sure that it gets there? there's more than that, but those are just basic questions, joe, and for whatever reason the white house is refusing to clarify so we can go home, our members can go home to our constituents and say, look, we have all the information and it's important that we do this and then we can get it done. the white house, for whatever reason, back to your point

whether it's the border or aid to israel or ukraine, the white house seems to be playing a political game. we're doing the work of the house, joe. we're not responding to anybody except for the people that sent us here, and those are the voters at home and this is the information they are asking for. >> you can't really give me a timeline on when something actually happens for israel at this point. in your gut, what do you think? when could we see something? >> i think there's a lot of is going to be happening over the next two to three weeks. not just with foreign aid, but with the spending bills. remember, we have a march 1st deadline coming, the first deadline in terms of wrapping up the budget that has been bounced along since the end of september, so i think you will see a lot of this come together by the end of this month. >> yep. >> but it's going to be a ride. >> and mayorkas, i guess there's

an election today in new york. i don't know how you handicap that. when does scalise get back? today or tomorrow? >> scalise is back today. >> when are you going to do the impeachment again for mayorkas? >> i believe it's tonight, joe. we will have everybody here tonight. yeah, that was the issue last week is that we were missing one person, steve, and steve will be back tonight and it will pass. >> all right. congressman, good to have you on. thank you. >> thanks, joe. >> okay. coming up, the ceo of expedia will join us, and we will talk about that company. a lot going on there. meantime, the futures, the dow oklit would open down about 45 points, and nasdaq off about 122 points, and the s&p off about 19 points. we'll be right back. e thing sta.

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probably bad. when we come back, after hitting a one-year high, expedia stock taking a hit last week, and the company's guidance and the announcement of the ceo didn't sit well with investors. the ceo will join us next. the countdown is on for the inflation data. we have the numbers and the market reaction coming up. we'll be right back. there's always a sense that you are not complete and your journey is not complete unless you are giving back and helping others accomplish their goals in life and you are making sure you keep a connection with the community. that's one of the things that i treasure most about my journey and heritage. heat makes it last. feel the power of contrast therapy.

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welcome back, everybody. expedia reported fourth quarter results last week, and the stock

fell over 19% on soft guidance for the company for 2024. the company announced the ceo, pe pe pe peter kern will be stepping down. he joins us now. peter will stay on and will be vice chair. >> true. >> thank you for coming on today. >> thank you for having me. good to be here. >> you did talk about a lot of trends, and softening demand and tough comps and things you are seeing? >> i think people were not necessarily expecting me to be stepping down, per se, and my contract was up and we had not talked about it so that came as a little surprise. the guidance is strong. the macro environment is softening around the world. it has been in the -- north american, and europe was the

first to slow down and they were the first out of covid, and asia is also slowing down. the macro is tougher, and travel doesn't grow to infinity but at a maudest rate. we're actually going to out perform the market, we believe, but the market is slowing so that's a reality. >> we can dig deeper in that in a moment. why are you stepping down? >> it's been a long fouryears and i started during covid, and the covid part in retrospect was not the hardest part, but we are doing the technical side and we have consolidated down to three or fewer brands, and we change

how we go to market and understand the customer, and we have turned over a lot of people in the company, and when i came off the board for this stint and i thought four years would do the sttrick, and fortunately it has, and now we are giving it back to the hands of the board. it's a great company. i could do it forever, but that's not the plan, the plan was i help set it up for the future and we had tough digging to get through and change ourselves but we are in a good position and feeling good. >> why notsignal it to wall street sooner? the idea was that it came as a surprise? >> people didn't know where we were in the transformation and a lot of things accelerated in the back half of the year, particularly in the technology side, and it's exciting to see what we are capable of doing,

and until we saw that and taken hold, we were not sure -- >> what was that piece so people understand it? >> we acquired many companies over the years, different technology stacks and different message stacks, and we have been consolidating that into one stack, and so expedia and verbo are in one stack. we just launched a car capability, a car rental on hotels.com that used to be inconceivable for us, and now we can do that anywhere in the world should we choose to. equally, when we test a new map, a new capability, a new map, a new search, it can go everywhere all at once, and the speed it gives you to innovate for the customer and delivering new

capabilities, it's massive. >> there's always amount of friction when you are combining so many brands and changing the back end, especially on a technology platform, and i have known others that tried to use the same back end, and what did you learn along the way? >> well, it's always messy. you have to really have a team that is, you know, willing to deal with the mess and kind of be tough and get through it. it didn't go how you think. you have to be willing to go backwards to go forwards. there's no free lunch on this one. we had to take licks along the way and it was not perfect at all. if you are tenacious, and you have a team that wants to do it, and we had to change to be technology first, and we had way more people. >> there are 10 to 20 places i

wouldn't go right now, and you are saying the urge to get out, yolo, and i have seen americans warned about the bahamas, mexico, eastern europe, the middle east, and i am not sure we are welcomed into china, and does that factor into peoples' plans? >> well, all those things factor into peoples plans, and if they are going travel they go where they can go. i think this year more americans will travel domestically and europe will settle down, and china will go into europe. you never know about the geopolitical situation, and there are elections coming and all kinds of stuff, but americans love to travel. >> you have been developing ai capabilities, but how concerned are you that one or two or three of these other large-language models will use cirp, but when

is the day going to be when i will say, hey, i am going on this vacation, here are the days, go, and it does it from beginning to end? >> look, you can ask that now or on our app, i want to go to egypt tomorrow and where could i go for a 7-day trip, and you can book it on our app. it's easy to do. the idea that google and chatgpt won't take over and you won't need it doesn't work because we are the ones that have live pricing and ability and we can personalize for you, and for you to teach it to understand andrew will take a lot of time -- >> a lot of time. >> especially for andrew, i assume. >> a lot of time. >> we can know your booking history and if you like the beach and we can provide that kind of personalization. we are among the most equipped

to help you with that, and we are going to use generative ai and other types of ai to make it as easy for you as possible. i personally believe most consumers like the part of research. we don't want the easy button, and once in a while there's a place we don't understand or never have been -- >> i never press the easy button. >> we do the research and it's part of the fund of it, and there's going to be a blend, and maybe not when you need to go to omaha on business, and you say do my trip again, and we will be able to replicate that for you instead of a model out there that is generic. >> mean on omaha. >> no, i love omaha. a look at how hackers are romancing americans out of billions of dollars. that story is next. we're coming right back.

this is "realtime insights." i am here with lisa caldwell. supply chains have been in the headlines a lot over the last few years, and what is next? what should be on our radar? >> there's an opportunity for them to be the epicenter for operations, and driving sales and marketing through development and supply chain functions. >> what is spurring these changes? >> organizations historically used data to drive out costs, and particularly with ai we can

put analysis there. there are a number of examples. one that comes the mind is a large retailer that wants to use ai to manage orders at a store and customer level. that may sound easy, but it required us to evolve our distribution network. working capital reduction and top line, increasing customer service levels. >> thank you for sharing your insights. >> thanks for having me.

cyber criminals coming up with new ways to drain bank accounts of unsuspecting victims, and now they are romancing americans out of billions of dollars. we are joined with the latest cyber scam. hi, ayman? >> the banking industry needs help to stop an escalating crisis costing americans billions of dollars every year, and it's the acceleration since the pandemic of online romance scams, and some reach out online to lonely americans. gangs on social media, avatars spend hours each day slowly convincing the victim they have fallen in love with a real person, and then they introduce the investment opportunity and coach the victim on how to

liquidate assets to transfer them to the criminal. at that point the financial institutions come in when a customer tries to liquidate a 401(k) plan or savings account. >> it's hard because it's the customer's money. we heard stories, and we know a bank teller sobbing and begging them not to do this, the long-time customer, and in the end we have to give them their funds. >> we really need help, though. we need the social media companies to shutdown these people that are putting these out there. we need law enforcement engaged to try and praus osecute some o these folks. unless you put a bad guy behind bars, a bad guy is going to keep doing what he's doing. >> law enforcement officials say the scams are causing a wave of devastation, and victims are unlikely to disclose their

losses after such a brutal humiliation. >> i never heard the depths of despair you get when somebody realizes the life they thought they had is completely gone, and on one day to lose a marriage and every last cent that they have is traumatic for people. >> guys, the experts tell me the scams are hitting every demographic, old and young, male and female, and they have play books targeting each type, a software engineer or just a mom, but they have something in common, they have loved and lost a lot of money. >> such a sad story to think about being preyed on in such a way where everybody is looking for love and happiness and

companionship. the interesting take is maybe the bankers are targeting social media and saying those companies bear some responsibility. it's something we hear again and again how social media changes our lives for the better, but there's a down sidside, too, an not bear any responsibility is frustrating. >> what they are saying is they want the social media companies to throttle this kind of traffic, and when you talk to the experts, the amount of money here is staggering. it's hard to get a fix because a lot of people don't report when they have been devastated like this. the stestimates are tens of billions of dollars every year going from american accounts to the gangs, and you can imagine from the bank's perspective they

are stuck because it's the customer's money, and they can't stop them from ruining their own lives. >> thank you for bringing that to our attention. >> you bet. when we come back, he's the author of best selling books, and this morning he's out with another. jared cohen will be our guest right after this. we'll be right back.

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the snow is falling in new york city this morning. our next guest is out with a new book this morning, it's titled "life after power." it is fascinating. seven presidents and their search for purpose beyond the white house. joining us right now is jared cohn, the author of five best sellers. he founded a unit called jigsaw, before that worked in the state department, was an early advocate of twitter as a tool for diplomacy. today, he's the president of global affairs at goldman sachs.

this is a fascinating book. usually, people take a look at what happened during people's presidency. this is actually so much about what happens after. and i want to talk to you about the book. i also am hoping that you can maybe put some of this in today's context. not just about presidents, but we have so many ceos who come on, who are thinking about, what's supposed to happen afterwards. people don't spend a lot of times thinking about the afterwards part. >> and this elusive question of, what do you do next after you've accomplished what is supposed to be the most significant thing in your life, it's a very persistent and difficult question we have to ask throughout our entire lives. i think ceos have a lot in common with ex-presidents. alexander hamilton, one of the founding fathers pondered the question of if it was good to have a half dozen men wandering around the rest of us like discontented ghosts. and more than 200 years later, we've had an answer to that question, successors can be a tremendous partner -- or ex-presidents can be a tremendous partner to their successors or a bipartisan nuance. >> of the presidents that you

feel like you studied in this, which ones do you think really excelled afterwards, and which ones really failed and why? >> they all had one thing in common, which is, they had something they were tremendously principled about. the problem is in the post-presidency, you get stuck in the past, want to settle old scores and bogged down in vanity. the one that spoke to me the most was john quincy adams, he went on to serve nine terms in the house of representatives, in this much lower station, he wanders around, doesn't know what we wants to do, but becomes passionate about petitions. he finds it in a much lower station and achieves a much higher calling, and mainstreams at the sometime what was a fringe and radical abolition movement. >> i read this part of the book. the question that i had about him is, is there any part of you that says that he should have just walked away, he should have stepped away. the reason he was there because he just couldn't give up, even though he was at a lower station, he couldn't give up the power of being in washington, being at the center of it all.

>> presidents don't like giving up power. look at our 2024 election. this will be likely the first and only time since 1892 that you have a rematch between two presidents of the united states as the nominees of the two major parties, right? why? you have the two oldest candidates in history eclipsed only by themselves four years ago. you have two presidents that don't want to give up power. it's been persistent. of the 45 men who served as president 46 times, minus the ones who died in office, it's hard to let go. it's hard to imagine, how do you top that last thing that you've did. >> who's done it the most gracefully? of all the people you studied. >> the seventh chapter in the book looks at george w. bush. i spent about eight hours interviewing him in 2020 and the chapter is called "moving on," he's the only president that's managed to completely detach. >> and he's happy, by the way. >> seemingly so. what do you think that's about? >> some of it is unique to him. he's a tremendously disciplined individual. so, you know, he's a chapter

guy. so, each chapter of his life has a beginning, middle, and end. and when i sat down with him, i said, look, when it's over, it's over. you can't long for what you can't have, and i don't miss it. and presidents talk about this one president at a time principle. but george. with bush has a real reverence for it. he never mentions his successor by name, and he's now been a painter longer than he has been a politician. and through painting, he's found this post-presidential voice that allows him to advance certain causes without undermining his success. >> so for those who are watching, who think that they're in their last year or two of whatever their role is, what are they supposed to do mentally? maybe it was what bush was doing, but are there others that you looked at that could see that set themselves up for whatever that next chapter is in the right way? >> one of the things i try to do in the book. 've of the seven presidents represents a different model. if you fancy yourself a lifelong founder, you should follow the path of thomas jefferson, who at 82 years old, goes on to found

the university of virginia. if you're somebody who, you know, there's some sort of dream job you've always wanted to have, but the timing wasn't right or the circumstances weren't right, you should look at william howard taft who in his laugh ten years of life, he became chief justice of the supreme court, and at the end of his life says, i hardly ever remember i was ever president. >> how many of them were always grumbling a little bit about the way they were being perceived. hoover is an example of this. there are others in the book that you sort of get the sense that they're sort of living with this this aggita all the time. >> one of my favorite lines, herbert hoover was asked at 89 years old, how do you live with your critics, and he said, i outlive the bastards. there's something about longevity. but the most important thing somebody can do is force yourself to separate from your successor as much as possible. figure out what principle you have that you want to double down on. it's very, very troublesome and

problematic when you look back and george w. bush is the only one, even among the successful ex-presidents, they all grumble, they all gripe, they all throw political molotov cocktails that the their successors. it's a question of whether they also find their own thing to do. >> what about ceos who come back for a second round? >> the story of grover cleveland, part of the reason i wanted to focus on his comeback, one, it's hard to argue with a life after power that brings somebody back to the presidency, but cleveland's story is a cautionary tale. you know, he throws away the presidency in 1888 on principle, and he's, by the way, never been happier, because he's got this young wife he's starting a family and doesn't want to become president again, but much like somebody else, he believes he's the only democrat who can defeat the republican. he runs again in 1892 and leaves office after winning the popular vote three times in a row, less popular than he's ever been, more overweight than he's ever been, less happy than he's ever been, and ends up having a

second post-presidency less fulfilling than the first one. >> is that a lesson for trump or biden? >> it's a lesson for both of them. it's this question of what to do with ex-presidents. we're in this situation, we've gone so politically offscript since 1892, we're not supposed to have these presidential rematches. i think it's a good time to ask the question, what should we do with our ex-presidents. >> i thought it was a lesson for bob iger. >> that could be, too. jared, congratulations. it's a fascinating book. i can't wait to read -- i'm sure you'll be doing an updated version maybe with biden and trump eventually, and that will be an interesting one. thank you, appreciate it. >> thank you. >> the book is called "life after power." still to come the inflation data and market reaction, we'll get the january cpi numbers at 8:30 this morning. we're coming right back here on "squawk box." is a big hour ahead. 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!

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good morning! 30 minutes and counting to today's big number. we'll bring you january cpi data. talk about what it could mean for the fed's interest rate calculations. ahead of that, though, earnings rolling in from some big-name companies this morning. coca-cola, hasbro, and more. and then 70 senators banning together to pass a nearly $100 billion aid bill for israel and ukraine. the question now, will that put enough pressure on the house to okay the measure. the final hour of "squawk box" begins right now.

good morning and welcome to "squawk box" here on cnbc, live from the nasdaq market site in times square. i'm joe kernan, along with becky quick and andrew ross sorkin. u.s. equity futures at this hour are indicated down, as you can see. we're waiting for the cpi number. we'll look at treasury yields, 4.16% or so. we're still talking about that last segment. >> yes, we've been talking -- >> what do you do if you leave the presidency and you're so old, there's no life after the presidency? not mentioning any names, but -- >> you could say the same thing for anybody in a high-powered job -- >> people don't stay in high-powered jobs until they're in mid-80s. >> have you seen "60 minutes"? >> you mean andy? i send people that. he died a month after he retired

at 92. and i'm going to beat that, sorkin. >> among today's top business stories, fourth quarter results out from coca-cola, the dow component matching earnings per share estimates and beating analyst revenue forecast. the key metric of organic revenue growth came in at up 12%. europe and north america saw some weakness in the quarter, but things were better in the rest of the world. for 2024, coke sees continued growth, specifically organic revenue growth of 6 to 7%, and that stock right now, up by about 8/10 of a percent. don't miss an interview with the ceo of coke, james quincey. that's coming up later this morning on "squawk on the street." and shares of jetblue shooting higher after activist investor kyle icahn reported a nearly 10% stake in the airline, saying sththat the stock is undervalued. regulatory findings show that icahn plans to speak about the airline about a possible board seat, board representation in some way. in a statement, jetblue said

that it is always open to constructive dialogue with its investors, and that stock, that is a big muover today, up by almost 16%. and early this morning, the senate passing a $95 billion aid bill for ukraine, israel, and taiwan. after an all-night session, the final vote was 70-29. it's unclear, though, what happens now. the speaker of the house, mike johnson, has criticized that bill. there are questions about whether it will be brought for a vote, although the senate's bipartisan passage of it may put more pressure on the speaker to bring it to the floor. meantime, we've got a new read on small business optimism out this morning. kim rogers is here with that. good morning, kate. >> andrew, good morning. >> small business optimism falling two points in january to 89.9, as sales expectations dampen to start the year along with earnings trends. now, the top issue for small businesses last month, labor quality. inflation actually slid to number 2. 39% of owners reported job openings that they couldn't fill in january. that's down one point from

december. it's also the lowest reading on that metric in three years. the industries with the highest job openings were construction and manufacturing along with non-professional services. inflation, as mentioned, the number two issue. in terms of top issues this month, while it's still in focus for small business owners, it's down by 50% from its peak in 2021. and more owners are reporting that they're lowering selling prices at the highest level since 2020. chief economist bill dunk lberg said in his commentary last month, small business owners can't set economic policy, they can only respond to policy changes, interest costs are still significantly higher, 9% on average compared to 5% in 2020, adding, but despite the headwinds, the consumer remains resilient, moving the economy forward. hopefully this will be enough for the, quote, soft landing that we're all hoping for in 2024. andrew? >> kate, before you go, what interest rates are owners paying right now on loans. do we know that. and what is really the current lending environment feel like? >> so the nfib does track this.

they're paying about 9% right now. that's down from 9.8% last month. so a slight drop, but if you look at january a year ago, the rate was 7.6%,and 2022, just 5%. so obviously, borrowing costs are much higher, about two-thirds of the group of small business owners that the nfib polled said that they're just not interested in borrowing right now and a quarter said all of their borrowing needs were met. certainly an expensive time for owners and many just not interested in taking a gainer on it. >> thank you, kate. our next guest says that the fed's wait, wait, wait, then drip, drip, drip strategy on rates greatly increases the chances of a recession. joining us to explain is campbell harvey, professor of finance at the school of business at duke university and director of research at research affiliates. his model for predicting recessionss is 8 for 8 and has

yet to experience a false alarm and what is it signaling right now, professor. >> so the inverted yield curve model is without a signal and it is signaling slower growth and a recession. and i'm hopeful that that plays out in a soft landing, which would be reduced growth and a mild recession. something like 2001. >> how long between the initial inversion, if we already have gone past historically the period of time, when we were already supposed to be seeing a slowdown. >> so, no. so, on average, the lead time is 13 months. and right now, we're just into the 15th month. so we're around the average right now, and it's far too early to say there's a false

signal here. >> really? where would we start to see some cracks developing? because we -- i think we thought we were seeing those six months ago, eight months ago, some people, barry sternlicht thought we were seeing it a year and a half ago. and suddenly, things seem to accelerate. and i raeead every day on different websites that the economy has accelerated in the last three months. >> yeah, so, it is confusing and it always looks good before the slow growth actually starts. and what happened in 2023 was fairly simple, that the economy was driven by the consumer. so there was pent-up savings from covid and there were very generous government programs that injected money into savings. those savings have been drawn down. so we're at the point right now where many consumers are out of their savings.

and you can tell, looking at the data, look at alluto loans, at credit card loans. if you're paying 20% interest on that, your savings have run out. on the business side, investment was already negative year over year, in 2023. so those are significant headwinds. we've got commercial real estate. we've got a massive drain of deposits from our banking system, because our banks are paying almost no interest, into money market funds. and what that means is less capital available for loans. and this will play out into a credit squeeze in 2024 of. so there's many headwinds here for 2024, but it doesn't feel like it right now. the first quarter and especially in my opinion, the second quarter, are going to be key, but what is pivotal is what the fed will actually do. and when you said "drip, drip,

drip," i just, i just think that they are mistaken in reading what the real inflation rate is. inflation has been within their target for the last year, but they're not seeing it because the very stale shelter data that is skewing our read of inflation. >> that's interesting. we are going to get those numbers today, so, that almost sounds like, you think that rate cuts should be on the table, and maybe more, we switched to not as many, and later in the year, you think they're already too tight? >> yes, i've been an advocate of pausing since january of 2023. so everything that happened in 2023, in terms of hikes was unnecessary and actually pushed us more to the slow growth recession scenario. so inflation, if you look at it very carefully, the most

important component is shelter. 35% of inflation is shelter. and it is running, according to the bls, at 6.2%. and that is so far removed from reality. so if you look at rents, they're running at 0 year over year or negative. so i do think that this is a fundamental misread. the latest fed statement mentioned inflation eight times. and if you have a reasonable or realtime read of inflation, in terms of shelter, the inflation read is below 2%. it has been below 2% for quite a while. i actually think that the reading that will come out in 25 minutes, it will surprise to the downside. so i'm more in the camp of 2.7%, and hopefully, the fed will take action sooner rather than later. >> recession has never come when you're expecting them.

so if you were drawing up a playbook, this would be playing out exactly how you would draw it up. we would be predicting a recession until we weren't anymore, and everyone would, the consensus would be, we've achieved a soft landing, which i don't know if it's ever been done. and that's when the trouble starts, when you're least expecting it. it would certainly make sense if that did happen. professor, did you -- did you get coach k.'s office in that one building down there? is that open, do you know? >> yeah, that's his painting in the background. no, i did not get that. >> it's the best office on a whole -- who's got that? does he still have that? >> yeah, the class dome, everything. >> i want that office. professor, thanks. it was very thought provoking and we'll know, we're at 15 months, should be any day, any day. all right. see you later.

thanks. >> thank you. when we come back, we've got some breaking inflation data. we'll be getting the january cpi in just a few minutes. but next, former u.s. senator joe lieberman will join us on the state of the 2024 race for president. atvo his morning's sene te on aid for ukraine and israel. stay tuned. you're watching "squawk box" and this is cnbc. in the u.s. we see millions of cyber threats each year. that rate is increasing as more and more businesses move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit, we must expand as well. we need to rethink... next level moments, need the next level network. [speaker continues in the background] the network with 24/7 built-in security.

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welcome back to "squawk box," everyone. let's take a look at shares of toy maker hasbro. they've been falling really hard this morning, down by over 10% after the company posted a steeper than expected drop in sales and profit for the holiday quarter. we'll continue to watch it, but that stock down by over $5. >> meantime, our next guest joins us to weigh in on the state of the 2024 presidential race. his efforts to assemble a unity ticket, and more. i want to bring in former u.s. senator, joe lieberman. he's a former vice presidential nominee, founding co-chair of political group, no labels, and senior counsel with kasowitz

benson. thank you so, so much for joining us. what do you think the prospects of somebody coming out of the woodwork as a third-party candidate at this point in the ball game really is? >> well, i think the prospects are still very good, based on the fact that the public, in every poll, tell us that they're fed up with the republican and democratic parties, because they're too extreme and don't work together to get anything done for the country. and 60 to 70% say they want another choice besides trump and biden. and that's exactly where we are. i mean, no labels started about 13 years ago, to break the gridlock in washington. mostly, we worked through congress and had some good effect. but this year, our members, you know, this is not going to get better. if it's a trump/biden race, whichever one is elected, it's still going to be a partisan gridlock and a government that doesn't solve problems. let's look at the possibility of

actually fielding a bipartisan unity ticket. and right now, we're at the moment of the truth. we're going over the data to make sure that the standards that we set for ourselves, that we actually can elect the bipartisan unity ticket, and we won't be spoilers or so far, all of our data tell us that, and that of course, will be time to interview candidates, and we want to do it only if we have a top-tier ticket as a third choice. >> so, i want to talk about those candidates, but i want to start with one other piece, which is, the data and the idea of spoilers. so, one of the great conundrums of the idea of a third party candidate has always been that they're going to act as a spoiler, if you will, for one -- for one party or the other. as you looked at the data this time, and i would imagine it depends on who you run, who does it spoil? because it almost seems impossible to think it doesn't

spoil anybody. >> yeah, well, we're different from, let's say, ralph nader or anybody else, nobody ever thought they had a chance to win. we're setting a high standard for ourselves, andrew, which is that we want to put together a good enough ticket, based on the polling data we have, we think it could actually get elected. and so far, the data shows us that. and that we're basically taking just about the same from trump and biden, from republicans and democrats. and i want to explain, so people don't think i've lost my sense of reality. why do we think we possibly could win? in every state in the country, the size of nebraska and maine, the electoral votes go to the ticket that gets the most votes, not the majority. so you could carry a state with, i don't know, a third of the votes. and that becomes increasingly

possible ifrfk jr. and cornel west are in there taking their own share of votes in certain states. so far, the data tell us that we have a chance to win, and we will not be spoilers for either party ticket. >> senator, i think governor hogan is running for senate now. >> yeah. >> i don't know what that means. i was thinking about you. >> yeah. >> you're the same age as the president. i think you might be a couple of months older. >> i am. >> when i talk to you, i get a different notion. i mean, you're 81. you know what it's like. have you -- do you miss a step occasionally? >> sure i do. >> you do, but do you see a difference between you and how president biden just appears to be, you know, watching him on tv? >> well, i think i feel good and i'm staying busy. i don't want to compare myself

to joe biden. i really -- i've known joe biden forever, we served together for 24 years, i have the greatest admiration for him. excuse me, this is what he's done as president, but i felt terrible last week when that special counsel report came out, not focusing on policy differences, but on his competence, mental. and i think that's just going to get worse during the campaign. frankly, as a friend, and he's not going to listen to me, but i wish he would listen to somebody, he's an extraordinary -- joe biden has had an extraordinary record of service to america, ending up as our president. and i just wish he would decide that it's time to leave the stage with honor and dignity and not let himself get smeared during this campaign. that would be best for him and his family, most of all. >> senator, let me ask you a

question about that. because we've talked a lot about this, almost game of chicken that seems to be played here, which is that president biden feels, and i think -- i don't know if the entire dmaemocratic part feels this way, but whoever's leading the democratic party feels as if he's the only one that can somehow beat president trump. and if you were to introduce somebody else into that picture, it create at least a more challenged environment. i don't know if that's true or not. and i'm curious what you think about that? >> well, right now, based on the data, on the polling, if the election were held today, i'm afraid to say that president trump would be re-elected. can it change over the course of the year if trump is found guilty in one of these legal cases going on or if he upsets people? of course, it can. but the pressure and attacks on biden are going to get worse throughout the year as well. so respectfully, and affection

for somebody i've known for a lot of years, who's worked with him closely, i think the democratic party can come up with another candidate who can beat donald trump. >> who is that person and can they do that, given kamala harris -- >> that's the other thing. >> that's the other thing, kamala harris in the journal today, that's president biden's job security is kamala harris. because no one can imagine that possibility. so the democrats, at some point screwed this all up. in my view. they weren't listening to you. >> that's true. i don't know why, i'm making so much sense, but anyway, the reality is that i'm the last person to decide, because i'm so focused on a third choice, no labels, a bipartisan unity ticket, but there is a process, as you know, i mean, if the president dropped out soon, there would be an open primary that would be hard on the candidates to jump in effectively. but if he leaves before the convention, the convention chooses the candidate,

obviously, vice president harris would be one, but others would jump in as well. and i think the result might be a candidate that actually in the end that has more certainty of defeating president trump. which i think, incidentally, in addition to wanting to break the partisan gridlock in washington, the members and leaders of no labels, that was the goal, not to see president trump return because of frankly his disrespect for the rule of law. even though he had a pretty good record, what happened after the election of 2020 is a real threat to our country. >> senator, i want to thank you so very much for joining us. >> thank you, senator. >> i'm sure we'll see you very, very soon. "squawk" coming right back after this.

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welcome back to "squawk box," everybody. this is cnbc and we are just a few seconds away from january cpi data. we've been watching the futures ahead of that. we'll see right now, the dow futures are down by about 32 points. s&p futures are off by 15. the nasdaq indicated off by triple digits. a loss of about 108 right now, and that's where we've seen things all morning. also keeping an eye on what to expect from treasuries. worth checking in ahead of this cpi number. the ten-year is now yielding

4.15%. the to-year is at 4.45. expectations are up by about 2/20 of a percent, but people watching this inflationary number that the fed will be watching very closely as well. get some hints of what they might want to do next. rick santelli is standing by at the cme in chicago. rick, numbers, please? >> yes, january consumer price index out in a few seconds. all yields are a built lower, and here we're hitting the wires. headline number expected to be up 2/10 of a percent, is up 3/10 of a percent. that's the hottest when it was up 4/10 of a percent. strip out food and energy, even hotter. up 4/10 of a percent. hat hotter than expected, up 4/10 of a percent, when you equal that going to may of last year, you surpass it going to april of last year, when it was up 0.5. the year over year numbers, also hotter, 3.1 on headline year

over year, we are expecting 2.9, but did make progress versus the rearview mirror, which stands at 3.4. now, if you consider 3.1, we've already been there. we were up in november of last year, and we were at 3.0 in june of last year. finally, cpi year over year core, i think one of the ones i'm paying most attention to, 3.9%, exactly as the recent month, december, 3.9. 0.2% hotter than expected and 3.9 is the smallest year over year change since it was 3.8 in may of '21. now, i don't always hit some of these indices, but i think it's important to hit it today. if you look at the headline actual index for cpi, it's 303 308.417, which means if you go back to 1913, we've never had

this index higher than it is right there. and if you strip out food and energy and look at cpi core, the actual index, this is seasonally adjusted. the headline is not seasonally adjusted. this one comes in at 314.43, by far the biggest it's ever been going back to record-keeping in 1957. these numbers are hot. interest rates have zoomed up. these are now recpresenting som of the highest yields of the year by far, 428 in a ten-year, we see pre-equity earnings moving lower, and none of this should be shocking. and this is a cautionary tale for those, especially fed speak, continually annualizing three and six-month rates, as if it's set in concrete. this set of numbers shows that is not true. and the biggest tail risk of any traders that i talk to seems to be higher inflation.

becky, back to you. >> all right, rick, thank you. folks, for those who are listening on the radio, let's just walk you through a couple of these averages that you're watching right now, for equities. the dow futures are now down by 280 points. s&p futures are now down by 54 points, and the nasdaq has doubled or more than doubled its losses this morning, now indicated off by about 266 points. so as rick pointed out, yields jumping on this equities, the futures dropping pretty significantly. this is a message that's coming through pretty loud and clear. you may have seen the markets ignore what the fed has said in the past, but when you look at data, they listen pretty closely. rick will stay with us, but joining us right now talk more about the new data, we want to bring in employ america's executive director, and also e.j. antoni, and our very own steve liesman. steve, let's start with you and dig through what's behind some of these numbers. >> i think a couple of things.

i think this issue that we talked about at the beginning of the year price increases is something that drove inflation this time around. a lot of big increases in medical costs. you had medical care up 0.7, motor vehicle insurance off 1.4. hospitals up, as well. you didn't get much -- you got a little relief on the used car world. you had food prices up. it was just a lousy month when it came to inflation. and of course, real earnings also declined in the month, worth pointing out. i think the other big, big, big issue here is the owner equivalent ramps up 0.6%. so whatever the professor campbell said in the first half hour, and what everybody else in the real estate business is saying, which is that rents have either gone flat or have been coming down, the cpi continues to pick up increases in rent. and not only that, but accelerating inflation in the

housing industry, as well. what's important about that, for the next couple of weeks, is that the pce, the fed's preferred inflation indicator does not have a big weighting on housing. so it won't pick up as much of this, and it still should show, depending on what the wholesale numbers show on friday, some continued decline. i think there's a lot of economists that are going to look through this number and chalk it up to sort of a one-off beginning of the year increases, and still see the inflation trend as down. but, of course, the market's not seeing it that way. the probability of the rate -- sorry, rate cut, in the month of may is down 37%. we would end with it at 61%, becky. >> steve, one of the numbers -- the high test number i heard you quote was auto insurance. what was that up, 1.4%, i think you said? >> 1.4%, yeah. >> so something like auto insurance, i mean, that is something where you can't raise rates until you go to every

single state and ask them for permission to raise rates. it took a longtime, those auto insurance companies were getting hit with dealing with things, because the cost of fixing things was skyrocketing during the pandemic. it was impossible to get parts. you had to pay for a lot of things. they all went and asked for increases. that takes a while to work through. that might explain that in part, but it doesn't mean it's going to go away. as people renew, you'll continue to see some of that stuff. >> i think you're right about that. i think there's this general trend, where it looks like, you know, january is a time when they orient towards those price increases. look, i would say the jury is out. i think the fed has been right to be cautious here. they're the ones that told the market, it's going to be a bumpy ride. that inflation does not run a straight line down. that it's going to be up and down a bit overtime. so i think they had it right. what is good, as pointed out in the 7:00 hour, is that the market and the fed are closer together or were closer together, coming into this

number, with the fed more skeptical, the market more exuberant. and now, of course, the market has taken another step, as you can see, in some of these yields and some of the outlooks for rate cuts, taken another step forwards the fed here. >> let's talk a little bit more about it. e.j., do you want to weigh in on what you think is happening here, and how big of a problem this is going to be for the economy, for the markets that have been waiting for a cut. >> well, in terms of the economy, i think this is a really big problem, because what we've seen is m-2, for example, not declining, not flat lining, but growing ever since october. the fed is allowing it to grow, because they'reallowing all of this money to move out of sterilization, to boost bank reserves, that's causing equities to go up. and it's also causing bank credit to expand. the other thing that we have to really, really worry about here is the fact that the cpi is actually understating inflation. we talk about how there's this lag in housing and rents, for

example, but we don't seem to be talking about the fact that the cpi is only measuring rents. even the component of the cpi flies to estimate the cost of home ownership still relies on rents. and because the cost of home ownership has risen four times as fast in the last three years as rents have, it has grossly understated the cost of home ownership. so, instead of being up about 20%, it's actually up about 80%. but that's not coming through in these numbers. >> hey, steve and rick, let's say that we're trying to figure out a scenario that makes professor that we had on earlier, i don't know if you saw it, rick, but steve was referencing it. this is like the nightmare scenario, steve. the professor thought that they're tight right now. but let's say the economy just isn't cooperating. and neither is inflation. so you've got to stay too tight for too long. even though maybe they should be cutting, they stay tight and eventually we get a slowdown or

a recession. that's like a blast from the past, isn't it? where they can't get it under control. even though conditions are already too tight. is that how we get a recession, eventually, rick? >> well, look, i think that the fed, keeping rates where they're at, higher for longer, is the right decision. i do herethink that there are certain aspects within the economy, where prices will remain sticky, but the issue is, joe, that the fed can't really help those areas. whether it's fire insurance, auto insurance, auto repair, the cost of autos, ev issues, all of these things moving forward are not going to be slowed down in a dramatic way, no matter where the fed pegs interest rates. much of it is government policy. and government policy goes against economics, hence we have many of these issues. i think sticky inflation is going to remain, but i think it's completely different animal than the type of inflation that we're most fearful of in the

' '70s. >> scanda, go ahead. you respond to what you think on that question, too. >> i think if we just take a step back into steve's original point, january is always a pretty volatile month. especially if we compare it to where we were 12 months ago, 6 months, even on the year over year comparisons, we've made a lot of progress. it's true that is a spikier print than what we've seen over the last couple of months, especially after releases have been revised, but nevertheless, i would say, there are still broad trends of progress. it's true that we have seen maybe on the services side of cpi, a little bit more strength for this month. goods deflation is continuing. rent is taking a wild beat in, but the progress on inflation has happened, even as the labor market hasn't broken, and that is itself very good news. we'll see about the months ahead, about progress. january and february tend to be especially volatile months. but i would be a little bit more careful about how to parse

numbers around january and february in particular. these are especially volatile months, where seasonal adjustment is doing a lot of the work alongside, this is obviously a place where prices tend to be raised around the turn of the calendar year. so -- i would just urge some level of caution and take a little bit deeper perspective about how these numbers are actually should be shaping how fed policy should be set going forward. >> steve, that's a fair point, that one month does not a trend make. but as you were pointing out before, one month is enough to push off the idea that the fed is going to be able to cut rates in may. if we get another set of hotter-than-expected numbers in february, how far off are we looking before you might actually be able to have any confidence in the idea that inflation is coming down as expected? >> i think we need to get beyond these months here. and i'm somewhere between, you know, ej's idea of this being a disaster and the other idea that this is nothing to worry about. i would be concerned.

i think the fed has been concerned. i think their idea that you need to take this slowly has proven to be correct. remember, this is a bit of deja vu for them. we were here last year, the exact same place, where we had really several good months of fall inflation, and then, of course, there was the revision last year. this revision wasn't bad. but there was the revision last year, and then some squirrely numbers that happened. so upside surprises in january and february. and the fed had to reset the whole thing. and the market had to reset. what i think you need to think about here from an investment standpoint is to investment with tolerance. invest with this idea inflation numbers and the fed are not going to be priced to perfection. joe brings up a really good point that there is a debate, and we've talked about this over a month ago on this show, which is, where is the right funds rate for this economy? you had an economy that did north of 3% in the fourth quarter, it looks like we're doing somewhere between 2 to 3%, at least above potential in this quarter, so far, we'll see the

retail sales number on thursday. and so, maybe the idea is the fed is not as high or as restrictive as had been suggested. i think e.j. was there, and the question i had, which is, if it ain't broke, as in the funds rate, how much fixing should the fed really be doing? and maybe the idea is, it needs to do less in terms of cutting rates to bring it down to the right neutral rate, then you thought previously with low unemployment and relatively strong growth and still persistent inflation forces in the economy. >> e.j., the one thing i would add to that is the one thing the fed probably doesn't want to do right now is cut rates and then have to come back around and raise them. so, if you've been watching powell and company closely, they're going to wait and make sure that there aren't cross-signals before they actually go ahead and cut rates >> well, we certainly don't want to have a repeat of the 1970s here. i think powell is probably thinking about that somewhere in the back of his mind, although he certainly has a lot of

political considerations to take into account, as well. but even just the idea that we're talking about rate cuts right now is reallysilly, when you go back and you look at what powell was saying and doing in 2018 and 2019. of right? because he's stuck in this keynesian mind-set of somehow fast economic growth is going to cause inflation. what do we have today. we have job numbers that are hotter. we have gdp prints that are hotter. we have inflation that is hotter, and yet he's talking about rate cuts at a time back then when he was talking about hiking rates. and this idea of where should the fed funds rate be right now? we need to remember just how much demand there is on -- in the loanable funds market. we have a treasury that's borrowing well over $1 trillion a year right now. >> all right. e.j., skonda, rick, steve, thank you all. coming up, we are going to talk to former fed governor, fred michigan, who is going to

be joining us on the new inflation data and what it could mean for the fed. also, a programming note. you don't want to miss a special first on "squawk box" interview tomorrow morning with e.s.c. chair, gary gensler. stay tuned. we're coming right back. move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit, we must expand as well. we need to rethink... next level moments, need the next level network. [speaker continues in the background] the network with 24/7 built-in security. chip? at&t business.

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welcome back to "squawk box," everybody. take a look at the futures this morning. they've taken a marked turn for the worse after we got that cpi number that was hotter than expected. 0.3%, versus the 0.2% gains that the market had been anticipating. still the hottest number back to september of 2023. if you look at the dow right now, down by 320 points. s&p futures are down by 60. the nasdaq down off by 300. the dow is down by about 50 points. before that number, the nasdaq was down by maybe 110 points. s&p really looking at quite a bit of weakness here. and it's all in relation to higher yields, too. the ten-year now yielding 4.27%. >> and you know who's looking right about right now?

>> who's that? >> jamie dimon. >> about rates and the economy. >> jamie dimon is looking right, right about now. >> he was exactly right about the election. >> joining us now to talk about what this new data could -- could be -- >> give him credit for one, you've got to give him credit for the other, for the fed. >> former federal reserve governor, rick mishkin. he's a columbia economics university professor, cnbc contributor. my whole world is now changing again, rick. and i don't like when things change. here's where i thought we were. tell me if i'm wrong. the economy was moderating, a little bit. the fed had done its job. inflation was coming down. they hadorchestrated a soft landing. as a result, we would be able to cut in 2024, maybe as many as six times. everything was sort of just right. now, i don't know what to think. inflation is not coming down. the economy with unemployment and the labor market and gdp,

much better -- much hotter than people thought. why would we cut at all at this point? it seems like the fed is not finished, perhaps. and that's what worries me, that we could stay too tight and eventually cause that recession that i thought was off the table. >> well, look, i think too tigh eventually cause that recession that i thought was off the table. >> look, i think people can put too much into one month's numbers. cpi is a little higher. there's a lot of random fluctuation in it. my view has been and still is that the fed should not cut rates quickly, that actually they've been doing extraordinarily well, better than i expected, basically because they did this smart policy of turning it around very quickly and moving the fed super tanker that usually moves slowly, move like a motorboat. we see the glide path has been

good, inflation coming down. the economy has been somewhat strong, but in this case the fed basically always has to err on the side of being tighter rather than being easier. that's because, when you actually have made a mistake and inflation has gotten too high, you've got to be really concerned about your credibility. part of the success of what the fed has done, they lost credibility by being too low for too long and making serious mistakes which i've been very critical of, but then turned it around very quickly, and inflation expectations stabilize and we see actually the glide path has actually been pretty good. i think the issue here is that the fed really has to keep its course, keep rates high for long enough. they have to err on the side of being a little tighter rather than being too easy. the last thing they want to do is start cutting rates and not do the job and have to raise rates further. then we do get a recession. that's really the problem.

they need to be very cautious. i just would say -- i would agree with everything you said until you said they should be cutting rates a lot in the next year. that i'm skeptical about. >> watching the stock markets reckoning with rates not coming down as quickly, we've seen that for the past month, month and a half. we no longer thought it seemed so likely near term that we get a rate cut or as many rate cuts. but the market held up pretty well. that's when the market was still thinking, we've got this nice economy with low inflation, with disinflation. this is the first data point where that thesis -- you may maybe it's a one-off. but now suddenly maybe players are realizing, wait a second. when you have a hot economy, you're not going to have inflation. that's too good to be true. it's not goldilocks. >> i think people were too

optimistic about the fed cutting. i think that was wrong. that's been my view for quite a while. the fed has been very clear that inflation is their number one objective and they're now getting it right and they said continually they would risk a recession. the numbers came in much better. we've had a bad number here, but it really doesn't change the fed's game plan. the fed is very unlikely to cut at the next meeting. i think that's even more true than it was before. i think they're going to be very cautious and lowering rates, and i think that's the right thing to do. this is not out of their game plan. i think the markets just got ahead of the fed. >> it seems like maybe we had thought that the fed had done its job on inflation and wasn't going to have to cause that recession that we all thought -- and even the fed thought unemployment rates need to go up until we really harness inflation. we thought we were going to maybe get a free lunch, that we

didn't have to do that. if inflation stays stubborn, that's when you bring recession back on the table because the fed las to stay too high for too long. >> look, this is a tough -- i thought the probability of the fed engineering a soft landing is very low, and that it's really tough. when you've had inflation go way up and you've made mistakes, getting the glide path down is extremely difficult. in fact, this would be unprecedented if the fed was able to do it. the numbers looked much better-than-expected. the labor markets are not as tight as people might think. really good measure that i think is better performance than the unemployment rate is vacancies relative to unemployment. the fed has actually had a substantial loosening from the very tight period earlier on of the labor market. they've had success there. that's good news. the bottom line is this is going

to be tough to do. i think the good news is whatever happens is not going to be too bad. the fed has actually engineered situations so they don't have to g clobber the economy. they've god a tough job to do. pretty good but not perfect. >> should have never put up that mission accomplished banner. >> absolutely. >> that sn twa'the fed, that's right. that was that happy ex-president. rick, thank you, ric mishkin.

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i. futures a lot lower right now, following this hour's hotter -- hot, hot, hotter-than-expected cpi data. joining us is brenda san tell la. was this on your bingo card? >> it wasn't. we were hoping we'd see more improvement especially in the shelter category which is very important for the overall cpi measure. other than improvement in that category, we saw prices effectively by this measure increased 6% year-over-year on an unadjusted basis. we know in the real world that's not really what we're seeing from a rent standpoint looking at other measures. so it is frustrating to see this number. i will say when we look at the impact from the market currently, i think we're due for a little bit of a pullback. we've had a tremendous start to

the year in a year where we were initially anticipates we would see the s&p probably increasing in line with earnings growth which is around 10% to 11%. already at 5 prior to today. so i do think we could have a bit of a bumpy road here. >> is it, therefore, your expectation we'll see lower equity prices for a long time here on out? meaning is the fed really not going to be lowering -- i don't believe the fed is going to be lowering rates. i don't know what you think it will be pushed out to at this point. are we setting ourselves up for a different type of recession? >> well, i think the fed will lower rates this year. our view is we're looking at may/june as being most likely. there are some other factors we have to consider here, and one being things like within the commercial property market, an estimated 20% of loans are maturing this year and need to be refinanced. i think as the year goes on, we're going to see more impact

from a higher interest rate environment which will further facilitate the fed's plan to lower interest rates this year. >> brenda, thank you for your insights looking at this news crossing the wire, just to repeat where we are in the markets. the dow which was down 50 points, now down 343 points, s&p 500 looking to open off about 61 points. the nasdaq looking to open off 291 points. we can do one of those games where you try to figure out -- >> does it come back or get worse? >> guess what? you all get to find out. we'll talk about it tomorrow. make sure to join us then. "squawk on the street" begins now. good tuesday morning. welcome to "squawk on the street." i'm carl quintailla. cramer joining us from philadelphia. futures are tumbling. a rash of weak