it's thursday, march 7th, 2024. "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. i'm quick quick becky quick along with joe kernen and andrew ross sorkin. i'm here at washington, d.c. we havehave lineup of guests including the ceo of con oco phillips and rtx. we are getting ready to hear from the administration and the president tonight, you have the business community which is concerned about the things which have been going on. the business round table is important because it represents

25% of the jobs in america and close to 25% of the nation's gdp. right now, they are feeling good about the economy. a brt survey came out which suggested the rating right now in terms of how they feel about the economy climbed 11 points to85. that is a little above the reading83. feeling good about the capital sales. those are up double digits from the last quarter. plans for hires have particulared higher. they sent out a survey asking ceos and if they think government policies are undermining american free enterprise. 75% of ceos think that. of those who answered yes, 92 partly s92% cited over regulation. we will talk to the ceo as and what they would like to hear

from the administration and what they feel is most important to growth policies in the united states. that's what we are talking about with the ceos today. >> i can forecast what's coming. some buyback stuff. they don't like those. corporate ceo compensation stuff. a lot of different populous rhetoric coming out of it. what is weird is i don't know whether doubling down is the right move because the recent polls we have talked about means most people or almost double the amount of people think the economic policies haven't benefitted them over the last couple years. how can it be the spring meeting, becky? >> it's march. >> march 20th? i think we spring forward. >> it's march. >> i think we spring forward this weekend. >> okay. it is not the 21st.

the 21st or 22nd is the official start of spring. i'm being opt imistic. >> they don't spend their money. they don't take income. unless democrats win -- this is all rhetoric unless they win the house. >> let me ask a different question. it is really to becky. the dichotomy between everything's great -- >> the outlook for the economy and what they're upset about. >> terribly angry and we love everything we're seeing. that's the true tell. >> 30% more. we don't love 30% more at the grocery. >> you can be frustrated.

>> we don't like having a lower paycheck power than we had three years ago. that's why people feel this way. >> from the ceo perspective, andrew, that dichotomy of thinking things are good for the companies, but worried about a lot of other issues. just in talking to some of the ceos here feeling things out. i think part of that comes from the idea of a very heavy regulatory hand. if you look at things like the three regulatory rules for banking and what is happening on the anti-trust front and the feeling of being shot down by one of the departments. you are right. if you are asking them how they feel about the economy, overall, they are feeling good about things. they are feeling good about the companies. for gdp, they are expecting gdp of 2.1% for 2024.

a lot of ofuncertainty in washington. waiting to hear what happens with the budget and whether they can pass the bills. we don't have the first six passed through congress. i think that adds up to some of the uncertainty and in an election year causes uncertainty not knowing what will happen in trade or the regulatory perspective. all of those things add up to anxiety. >> lots of hand wringing. let's bring you details of with a we are expecting ahead of the state of the union address tonight. in a call that took place with reporters, the white house ret revealing the president will call for denying corporate tax breaks for all salaries over $1 million. current law says the companies cannot deduct ceo and cfo and other executive salaries. this proposal would expand that rule to $1 million threshold.

biden expecting to call for raising the corporate minimum tax from 15% to 21%. he plans to highlight the projections from the budget plan which was released on monday. the white house saying that the plan would cut the deficit by $3 trillion over ten years. we will talk to white house economic adviser lael brainard at 7:45 a.m. joe, you can ask these questions. they are trying to tamp down on excessive executive compensation. i'm not sure this is the way to do it. nonetheless, i imagine we will hear about it. >> that's just populism. they will do corporate jets, too. the corporate ceo pay is not really the issue.

all the taxes that we want to collect in the country come from employees, many, there are government employees, but the private sector is what makes the economy what it is. it is made up of corporations that we want to flourish so they have people working there that pay the income taxes so we can do all of the things we want to do for the government. >> you would say this is a non-issue because it won't happen. why debate it? >> i don't understand the a antagonism? we can write it off to demogoguing and we will hear about shrinkflation. those aren't the real issues we care about tonight. those are not the real issues.

not me. i heard someone last night on another network called it a hate of the union address. >> joe, what do you think about the fact that bitcoin is reaching all-time highs and the market is at this level and ceos are asked about the business and jumping for joy? those are imperial issues. that is not hand wringing or a feeling. those are numbers on a screen. >> bitcoin? bitcoin is probably an caindicor of money printing and worrying about the fed. >> we had an interesting guest yesterday who suggested when you see speculative things and gold going up to new highs, that is a signal of liquidity in the system which raises questions about what the fed is going to be looking out for and if they need to cut rates.

>> it could be. >> you are allowed to bring up bitcoin. don't bring it up with your history. >> bitcoin has risen when the markets have risen and liquidity in the market. that means things are going well. this is imperial. this is not hand wring. >> it is the opposite for bitcoin going up. >> i know he there are -- >> hold on. the reason it is going up is because there's too few coins. too few coins and too many people chasing them. >> you will explain bitcoin to me. that's rich. that's rich. i thought it was 25 and going to zero. andrew, pick another subject, please. you have no credibility. >> let's talk politics. >> exactly. no credibility on bitcoin.

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fed chair jay powell set to go before congress the second time this week. he will testify ahead of the senate banking committee. we have priya with us. will it be any different from yesterday and what did we hear yesterday in your view? >> i don't think it will be that different. i think what we heard yesterday was more interesting what powell did not say. he did not talk about acceleration or inflation being too high. what he talked about is rate cuts are on the table this year. later this year. i think he is trying to retain options. whether they cut in may or june or july, it does ein't mat. the soft landing is predicated on the fed cutting rates. i think jay powell said we will

cut, but we need more data. he didn't say we need better data, but the same data. it will not be a straight line down. every market cheered and that makes sense. >> the soft landing is predicated on cuts. why? things seem to be going well. >> monetary policy works with a lag. the overall consumer is okay. you look at lower-end consumers and that credit card debt is growing. that credit card debt is high with interest rates where they are and there is a lot of debate of what is neutral rate. it may be more than in the 3% level. where is the fed fund rate? 5.5%. it is harder next year. is the fed cutting at 2.5% or are they stopping at 3%? we are at a5.5%. the earlier the fed charts, the

more methodical they can be. i argue policy is restrictive. it takes a while to show up. >> it is the old lag argument. you believe there is a lag. when will we see evidence of the lag? >> yes. i do think the last payroll report was high. i think the december and january data is impacted by season and weather. you will see a slowing. for us to see the policy that restrictive, you need below 100,000 payroll. i don't think you see that yet. when you look at hiring intention, 100 to 200,000 is consistent with a soft landing. i'm not saying we're in recession, but recession is nont

landing. i think we're in a soft landing now. keep that going. start to cut rates. go slow. i do think that labor report will show some slowing. i don't think you see another 300,000 jobs. >> what if you are wrong about the lag? what if we don't see? waller said maybe we don't need higher unemployment which is an indicator of slowing things down? maybe inflation comes down for whatever reason and we continue to have a strong labor market, but the fed could still ease, but why would it? >> it would ease for inflationary reasons.

>> why ease for inflation? you tighten for inflation. >> inflation was 5% or 6%. depending on which metric like 9%, it is now running at 3%. most of us don't think about rates. how do companies respond? if i'm able to charge more prices, i can pay higher interest rates. if my pricing power is coming down, the interest rates we see are nominal. i think the fed thinks of policy in real terms. if i'm earning more, i can pay more at the grocery store. you brought up the jobs report. that is extremely important. that has been coming off. last month, it was a weather impact. if that starts to come down, that's where the fed cuts rates. they look at real rates. real rates are high. restrictive. it is just not showing up. >> adp wages were up yet.

wages were hot. >> less hot than last year. inflation is still high. >> what the fed would like to do is keep interest rates tethered to the inflation rate. even though some people think we can normalize back to 6% or 7% like we had for 50 years or different periods, you think it is tethered at 2% inflation and you get rates where they should be based on inflation and let the good times roll and let the party good. >> you can start normal izing. does the fed end at 2.5%? i think 3.5% is fair if we had a productivity boom and you can argue the real the rates are higher. i don't think they are at 3%. >> it could set up for a good goldilocks scenario if it happens. maybe a.i. will get it there

with the productivity part. priya, thank you. the latest on the funding bill in congress and we will get a preview of president biden's state of the union address tonight. we'll bring you all of that and lko jonathan martin from politico after the break. for 44 years. armacit when i have customers come in and ask for something for memory, i recommend prevagen. number one, because it's effective. does not require a prescription. and i've been taking it quite a while myself and i know it works. and i love it when the customers come back in and tell me, "david, that really works so good for me." makes my day. prevagen. at stores everywhere without a prescription. they're waiting for you. hey, do you have a second? they're all expecting more. more efficiency. more benefits. more growth. when you realize you can give your people everything,

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welcome back to "squawk box." the state of the ounion will be watched by one of the biggest audiences. joining us is jonathan martin. the politico columnist.

good morning. >> good morning. >> you heard us bantering a bit about what we're sexpecting to hear an specifically with the economic issues and comp stuff. what is top of mind for you? >> driving a contrast between himself and former president trump and showing to the american voter that all of these stories they read about his age and vigor are not totally up to snuff. he still has some gas left in his tank. he can still stand up and give a strong presentation and make the case for why the country has improved under his watch and why he deserves another four and a half years. i think it is a real challenge. part of the problem biden has po polit cally is people don't hear it. he looks so damn old.

>> there will be a theater component in terms of the energy he brings and vigor he brings and how he articulates the message. the message itself as well. one of the things he will talk about is the message itself as it relates to the economy and also the things he plans to be pushing for with taxes and executive compensation and the like. >> he will try to drive a more populous contrast with trump on main street. that is the message to portray himself on a populous figure and portray trump and the gop beholden to the big business and corporate america. i'm not sure he will follow through with the message. that's what democrats want him to drive.

>> clearly, what you are saying is so alarming, we are hearing alarm bells going on. >> i am so committed to you and cnbc, i'm sticking here. >> thank you for that. obviously, if you need to leave, you should. i know we're on live tv. this piece about taxing or this idea of taxing or removing the deduction for compensation for over $1 million is new. where did that come from? >> looking for populous contrast with republicans that poll well that he can drive in an election year. if you look at the polling data, tax increases on top earners are really popular politically. this has come straight from biden's political shop. >> jonathan, i think we should let you go. i want to thank you for hanging in as long as you have here. given all of the excitement of where you are, i hope everybody

is safe. >> i'll find the nearest fire chute and exit. thank you, andrew. >> see you soon. thanks. jonathan, oh, becky. andrew, that is a guest who knows how to hold his own. way to go. when we come back, the ceo of conoco phillips will join us live here in washington, d.c. we will talk about lots of things he is seeing right now with policies from the administration and what is happening in the oil patches and consolidation in the industry. also, as we head to break, let's look at the s&p winners and losers from yesterday. encore energy, america's clean energy company, now in production in south texas. energizing america with reliable and affordable uranium for nuclear energy fuel from our environmentally friendly extraction process. encore energy.

good morning. welcome back to "squawk box" here on cnbc. let's show you the futures ahead of what we will hear from the president tonight. dow up 22. nasdaq up 64. s&p up 9 points. we have a lot on the planner to tell you about. several economic data points of

note. we will get weekly jobless claims and q4 productivity numbers at 8:30 a.m. on the earnings front, american eagle and kroger reporting this morning. after the closing bell, we hear from broad ccom and costco and gap. tonight, president biden will deliver the state of the union address to congress. that speech is beginning at 9:00 eastern time today. becky. andrew, thank you. joining us right now at the business round table in washington, d.c. to talk about the consolidation in the energy industry and moves from opec and disclosure rule from the s.e.c. is ryan lance from conoco phillips. >> thank you, becky. >> we talked this morning about the results of the poll released by the brt yesterday. in that poll, it suggested that ceos are feeling good about the economy. i think the outlook on the economy jumped by 11 points to

81 87. above the natural reading of 83. at the same time, when asked about the policies the administration is putting forward, 75% or more than 75% said government policies are undermining american free enterprise by ceos and overreaching. that is a bit of a dichotomy. feel abgood about the economy. >> we are feeling good about the economy. the growth in the fourth quarter gdp has been impressive with the issues we dealt with the last three-to-four years. the business community is feeling good. it is maintaining a competitive tax system. the tax system in front of the senate today is enhancing the work force development and

preventing regulation. when you poll most of the ceos today, it is attacking us from every direction. it is every three-letter acronym. the dea and ftc and s.e.c. now coming out with their rules. it is just that environment that is not pro-business or enhancing what we could be doing today. >> the american public may look at that and say attacking. how does it attack you? how does it make it tougher for you to do your jobs or make it tougher for businesses to expand? >> it makes it more costly and extends the time to do things. like the lng permit pipelines and our particular business. in the course of the last two years, we had nearly 90 new regulations on our industry alone as we think about what we are trying to enhance the

competitiveness of the united states and increase the energy security in the united states and do the things we can do in the industry. that is the microcosm across the industry. that has us worried. >> let's drill down on the lng export. the pause the administration put through. we had people from the administration on and they say it will not hurt things because it is a pause. there is already enough capacity put in that it will not effect anything promised to other nations at this point. what do you say when it is not creating a problem? >> what happens in our business, becky, is the seeds were sow fwsown a couple of years ago and it will sow those for the next couple years. the customers in europe and asia which are buying our gas to get away from russian gas as they invaded ukraine, you put uncertainty on that business. people will not create the gas

supply to feed the lng export chain and feed the u.s. causes the prices to rise. you are sowing the seeds of the next issue that will come in the next couple years. it is not a problem today, but when you put a pause on it, you are sowing the seeds that will happen in the next year or two down road. >> that makes our allies less certain. >> right. why would i sign up for a long-term contract today to get gassed from united states if i think that pause will cause the gas supply not to be there? it creates uncertainty in the market. that causes the regulations and permit pausing and that creates uncertainty that and leads to be risk and that leads to higher costs for consumers. >> let's talk about the oil and gas industry. there are deals in it play.

exxonmobil and chevron with deals over $50 billion they are pursuing. everybody in the industry looks at this and thinks there will be more consolidation to come. are you on the hunt right now? >> we've said our industry needs to consolidate. there are too many players. scale matters. diversity matters in the business. we are going through a natural cycle of that in the business. we are all competing for the small group of investors that are out in the space. it is healthy for our business and the right thing to do. it will lower cost to the consumers. it keeps the competitiveness of the american energy system in tact. it's good. we said all along that it is the right thing to do for the industry. we have been active in the industry the last three-to-four years. we bought lower in the cycle than others buying today. >> in terms of that, though, every deal that has been brought forth from the exxon deal for pioneer from the chevron deal

for hess and occidental deal, you have regulators. >> they are going through the second request which is extensive. probably overblown at the end of the day. when you think about the competitiveness and supply side, we are talking about 1% to 2% of the market. it doesn't feel like there is any legal standing to disapprove of some of the mergers as they go forward. it doesn't feel anti-competitive. it will actually lower costs for the consumer in the long run and it will be healthy for the industry in the long run. >> the questions that come from regulators, does it give you pause? >> absolutely. >> before you look at things? >> you have to factor in a lot of time. it is not something that is going to go through relatively quickly because they will dive all over the top of it and spend a lot of time. that is the issue at the end of

the day. they will go through and it creates uncertainty and time in the community. >> how big of a back drop does interest rates play on this? you have jay powell testifying in washington. he is in no rush. >> what would gdp and global growth rate get and what is the demand for oil and gas at the end of the day? high interest rates stifle the global growth around the world and here in the united states. it does have an impact on demand at the end of the day. that is the cycle of the business. >> ryan, thank you. ryan lance from conoco phillips. andrew, back to you. thank you, becky. when we come back, steven mnuchin to the rescue. the former treasury secretary and investors giving troubled

new york bank corp the latest. and the anti-defamation league's jonathan greenblatt will talk about corporate america and how they battle rising anti-semitism. we are back with that and more after this. >> announcer: currency check is sponsored by interactive brokers. the best informed investors choose interactive brokers.

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shares of hugo boss are plunging in germany. the company warned it may fail to meet the full-year sales

target citing weakening demand with sales of $4.6 billion in the prior year. a gain of 18%. the ceo telling our colleagues at cnbc europe that 2023 was a record year, but signalled more modest growth of 3% to 6% for this year. let's talk about what is going on with new york community bancorp. shares rising after the bank raised more than $1 billion from investors. who is on the list? former treasury secretary steve mnuchin. we will get to leslie picker with more. >> reporter: good morning, andrew. that news stabilizing the stock for now after the roller coaster day yesterday. the inn fusion aimed at $2 a share, but lower than any price nycb closed since the mid '90s.

perhaps better than the alternative that some investors had been pricing in which was failure. i'm told by sources close to this one, the price was decided intraday yesterday. mnuchin has been looking into nycb for a while now. a group was approached on sunday to join him. the deal comes with a refreshed board and c-suite installing joseph otting in that role. it is a rare playbook for mnuchin who bought indy mac and that was sold nine years ago. the nycb transaction is expected to close on march 11th subject to closing conditions. nycb is holding a conference call this morning at 8:00 a.m. to discuss the deal.

we will see if there is a plan and update on deposit levels. andrew. >> leslie, can you take us behind the scenes of how this all happened? >> reporter: it is my understanding that secretary mnuchin has been looking at this one for some time now. weeks, if not months, he has been reviewing and looking at all of the various aspects and key questions with credit quality and what is going on with the econcommercial real es book. he invested $450 million. i'm told that jeffries, the banker placing the deal, reached out to other investors to join him on sunday. there was back and forth in the four days between sunday and ultimately when the deal was signed. i'm told that negotiated $2 per share price came as shares fell

below that level on intraday basis yesterday. that came after the wall street journal and reuters had headlines out saying new york community bancorp was seeking a capital infusion. interesting how this all came together. i'm sure there will be lots of questions on the call today in just about an hour and a half. >> leslie, i was reading about how some of the put activity suggested in the wall street is not convinced this will fix everything. watching the options action and the trading and amounts that were bet on that. what will people watch next? what are the signs to tell us if $1 billion fixes things? >> reporter: i saw that, too. i think ben emons had a good note on that. i think one of the key things is their reserves. obviously, they had sky rocketing reserves in the fourth quarter earnings.

that created a surprise loss and caused them to slash the dividend. i think there are a lot of questions about how much of the reserves do they need to set aside more? are they able to release the reserves? i saw a note that had $350 million and if they were able to release that much, a large amount for them, that puts them back in line with peers. that is the key question. what is the credit quality look like and do they need to continue to set aside more? if you remember, last week, they had the material weakness on internal controls with loan review. that review is still ongoing. have they found more and what does that do for the reserves and provisions that could impact future earnings potential? >> leslie, thank you very much. leslie picker who has been all over this story. see you soon. when we come back, we have

trade talk with the chair of the business round table with judy marks. she will join us to talk about the challenges facing corporate america on that trade front. "squawk box" will be right back. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. s check it out. says here it gets plenty of light. and this must be the ocean view? of aruba? huh. this listing is misleading. well, when at&t says we give businesses get our best deal, on the iphone 15 pro made with titanium. we mean it. amazing. all my agents want it. says here...“inviting pool”. come on over! too inviting. only at&t gives businesses our best deals on any iphone. get iphone 15 pro on us. (♪♪)

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welcome back, everybody. the business roundtable's list of priorities includes securing new high standard trade agreements and joining us right now for more on what ceos are looking for on the trade front is otis worldwide ceo judy

marks. she chairs the business roundtable's trade and international committee, and, judy, thanks a lot for being here today. >> thank you for joining us, becky. it is great to be here. >> we got the state of the union address coming up tonight. we have a presidential election that is less than 35 weeks out, and the one thing that we have heard again and again is that the trade front may be the most significant distinction between the two candidates who are running. what are the business roundtable's prerogatives when it comes -- and priorities when it comes to the trade front? >> so in terms of trade, we are fully supportive of high quality free trade agreements that give us access to markets, and equal footing to compete. that competition allows us to grow our businesses, to create more jobs here in america. if you put all that together, whether there are tariffs or not, the consumer benefits. >> the tariffs, you think they would be productive at this point. would it help, would it hurt? >> we think that there is -- right now there is about $50 billion of tariffs that hit the consumer today. so if we want to get consumer

prices down, we need to eliminate those tariffs. that's structural, that's within the control. we want access to markets, especially in asia. we were hopeful at the beginning of the year we would make progress there and markets in india, southeast asia, those are growth markets for otis, growth markets for lots of people. we have yet to see real structure progress and the other countries will fill that void. >> we have not seen progress made in the trade front in this administration. it is pretty clear the trump administration, if it returns, would very likely donald trump is a fan of tariffs. and that's -- he's somebody who will probably put those back on. how do you look at the two ideas and think what happens next? >> well, you know, both ideas are challenging. and it is probably the best way to put it for a global business like ours. but we continue to find that there is strong business everywhere. listen, the ceos of the business roundtable are pro trade, are very focused on growing our economy, growing jobs, and

creating an economy here where people can thrive. to do that, we need business as well outside the u.s., we need to export, in our case we need to deliver services globally. so we need an environment where we can have predictability, free trade agreements give us those rules of the road, and tariffs really constrain us and unfortunately get passed through. >> you have a pretty substantial business in china. i think you said about 20% of your profits, roughly -- >> revenues. >> revenues come from there. and you got 17,000 employees who are there. what happens? because china's growth has been slowing anyway, with or without tariffs. they have been slowing down and things have gotten a little more complicated there. >> we're in the life safety business. we moved 2.3 billion people a day and many of those are in china. with the 8 million units in service in china, we have a tremendous service opportunity. infrastructure still growing in china, housing has taken some challenges. and we're saying it is going to be a down year, not just in

china, for units and new equipment, but in europe and here in the americas as construction slows until interest rates kind of find their -- the right place for developers to start investing again. but our service business is strong. it is 90% of our profits and we continue to grow and that's driving great returns, double digit u.p.s. >> so interest rates have a huge impact on the buildings and what that means for putting in new elevators everywhere. >> for new equipment, interest rates matter. developers are working the math on when the financing works and when the roi hits. for service and more importantly for the upcoming modernization and refurbishment business, that's going to proceed. buildings are aging, people need new technology in theielevators that's going to be a high single digit growth market for us. >> what happens if the fed didn't lower interest rates this year? >> we have kind of just planned on the u.s. market being down in terms of quantity of units across office, commercial,

residential. and our teams have pivoted again to focus on modernization, refurbishment and we have continued our investments and innovation. that's the beauty of this country. you find that at the brt. innovation wins. and so we welcome competition, but we'll continue to invest in the new equipment side, the service business and our service business driven business model will take us through. >> judy, thanks a lot. judy marks from otis worldwide. we appreciate your time today. >> thanks, becky. right now, we're going to be talking a lot more with other ceos who are here at the business roundtable. we have got the ceo of cummins, jennifer rumsey, chuck robbins and greg hayes. all of that coming up. joe, back over to you. >> coming up, tom lee on market levels to watch and riding the a.i. wave. big bitcoin bull as well. if he still has a crazy target like over 100,000 this year. "squawk box" is coming right ck ba. as an independent financial advisor,

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fed chair jay powell back on the hill today for more insight on the path ahead for interest rates. we will talk markets, bitcoin and more with fund global adviser tom lee. apple escalating its fight with epic games as europe's digital markets acted goes into effect today. we'll talk about what new regulations could mean for the tech giant. and president biden set to deliver his state of the union address tonight. we will preview that speech and talk

good morning and welcome back to "squawk box" right here on cnbc. i'm andrew ross sorkin with becky quick and joe kernen. we got a big show for you today. becky is in washington this morning, where the nation's top ceos are gathering for the spring meeting. it doesn't feel completely like spring right now. the spring meeting of the business roundtable, futures conversations we're having in a moment. the s&p 500 looking to open about 11.5 points higher. treasuries, you can see it right there, the ten-year note at 4.098%. the two-year, 4.553%. crypto news, in corporate news, we'll talk crypto in a bit as well, let's tell you what's happening. boeing responding after regulators accused it of failing to fully cooperate in that investigation into the january door plug blowout. in senate testimony that took place yesterday, national transportation safety board

chair characterizing the company's cooperation in its probe as, quote, beyond disappointing. the agency saying that boeing had failed to provide the names of the 25 people who work on door plugs at that boeing facility in renton, washington. and you can look at that stock down just a little bit there after hours, after that hearing. meantime, an ntsb spokesman saying that boeing had provided the employee list, so a little bit of back and forth there and boeing saying that soon after the incident it provided the names of some, just some, though, of its employees, including door specialists it believed would have relevant information. now saying that list is not long enough. the company confirming it has now provided the full list. becky? >> andrew, thanks. shares of novo nordisk surging to a record high this morning. the company revealing early trial data for an experimental weight loss drug that showed participants lost about 13% of their body weight after three

months. that drug is taking orally as opposed to novo nordisk's other weight loss drugs ozempic and wegovy which are injected. it will move to a phase two trial in the second half of the year with results due in early 2026. novo nordisk shares up by about 4.9% on the news. joe? there was a -- i'll get to this in a second. andrew, i was going to tell you about the latest, when you inject it in your stomach it a gp-3 or something. did you see this article the other day, that it leaves your stomach very quickly and then it seems to -- its mechanism of action seems to be in the brain. >> in the brain? >> i don't think people knew that all along. they were hoping it would give youit was mediating something in the stomach, which i feel a lot more comfortable if that's where the mechanism was. >> it crosses the brain barrier. >> but that opens up a whole

new, you know, that's where you just -- >> it is why people talk about -- it talks about addiction, right? people say it is not just about food, it is about all sorts of addicts and vices, alcohol, all sorts of things, which could be good and maybe bad. >> but just to lose weight, to be, you know, doing things with the whole milieu of the neurotransmitters in your brain and everything else, it just -- i just think we need -- >> shouldn't be done for cosmetic purposes. >> we discovered it by serendipity because of the diabetes -- you know, aspects of it. just reading that the other day, i'm, like, wow, it is brain mediated which -- >> the thing, the only thing i can compare it to, i haven't tried it, the only thing i can compare it to having been sick recently, when you're sick, you don't feel like doing any of that stuff either. i wonder if it makes you feel like you do when you have some sort of a virus. >> if appetite is mediated -- there is only so many neurotransmitters. a few, but not as many as you

would think, like dopamine and, you know, acetylcholine and epinephrine, there is a few, but you may be cutting out your desire for all kinds of stuff, your desire for happiness, your desire for -- i mean, you know, the -- i like the desire of -- >> there are articles about what it does to other parts of your body. >> i like the feeling that i have. there is a good feeling. >> some joy in life. >> a loving feeling for those -- i don't want it to be blah. take a closer look at the markets did -- >> the highs and lows, if it moderates the highs and lo hes lows, that could be a good thing, but if it takes away all the highs, very gray. >> before every one of us is microdosing it and we're all perfect walking around perfectly shaped people, i mean, it is too late for me probably, but before we get to that, i think we need to think about all this.

let's take a closer look at the markets. joining us is tom thlee, co-founder and cnbc contributor. we had recently i don't know what you call it with technology, but at least some of the bloom has come off the rose on the magnificent seven or a couple of them. and on technology in general. though the nasdaq recently hit new highs. do you see any trouble there or at least a moderation of the gains from recent years? >> well, i think it is understandable that technology could be consolidating some of the gains because the gains since october have been prodigious. i think it has been healthy because small caps, industrials, other sectors started to leave. i think it is a sign the market is broadening. i don't think technology valuations are the bubble. i think it has been healthy. >> really? so that is the half empty, half

full viewpoint that we -- either one we have had people express. the generals could come back down to the soldiers, or they could broaden out in the advance and it could continue. do you think that this election year, 2024, will be similar to 2023 or is that is pretty rare and pretty unlikely to be repeated this year? >> it is a question clients are asking us. the stock market seems a lot stronger this year than last year. we have had four consecutive months of gains, which mark newton, our head of technical strategy says is very rare. we already had a pretty nice january, very strong february. to me, if the market gains 20% this year, which would match what it did in 2023, it wouldn't surprise me, but i think the character would be very different that it would be a lot more sectors participating and

in some ways i think if we are up 20% this year, small caps could be up a lot more, as much as 50%. >> we're not going to have a down year. that you're taking off the table or what is it that would have to happen to throw this -- your somewhat bullish or pretty bullish forecast in jeopardy. what would have to happen? >> i think two things would probably derail an equity move of 20% this year. something even pushing the markets down. one would be if inflation reasserts itself in a way that the fed has to reverse its action and become quite hawkish again. i think that would terrify markets. the second is if monetary policy is so restrictive now that we slip into a recession. i don't think we're losing that much economic momentum, but either would be negative for stocks. >> okay. and so it broadens out, do you have a feel for interest rates?

how important is that to you because we have a jobs number tomorrow, that could move rates and the prospects for cuts later this year. you probably would be more bullish if you could say we're going to have four cuts this year, wouldn't you? >> yes. to me, more cuts would be easier for markets to sort of feel comfortable because it would also have -- as you're pointing out, downward pressure on interest rates. i've been pretty surprised that interest rates have moved up this year and the stock market has been able to sort of look past that because i think they're viewing it as rates are rising for the right reasons, but, yeah, you know, better scenario is, of course, inflation is falling visibly enough for the fed to begin cutting with confidence. >> when you -- when bitcoin was 4,000 and came down from 20,000 and you used to come on and say, yeah, by the end of the year it going back to 20,000, i don't know how you feel confident doing those things. you've done it again, really,

and with the -- i don't know what did you say by the end of next year? where could it be in your view? >> i think the -- you know, sometime in the next 12, 18 months, bitcoin can be over 150,000. but that's because, you know, back the drop for bitcoin is so much more favorable today, we got more visible demand from the spot etf, and we know the supply dynamic is improving with the halving coming up, less than a month away. it does help that the fed is becoming dovish. that's easier monetary policy. and i think from a regulatory perspective, we had so many hammers dropped in the last 12 months, 18 months, that unless it is going to be worse over the next two years, bitcoin already faced sort of the peak of regulatory backlash. >> and it got through the old highs. we had a true bitcoin bull on earlier saying that in previous

instances where it has reached a new high that it doubles fairly quickly after that. he said 18 days, the minute it hits a new high, it sold off $10,000 to 59, back to 67 today. how long before it doubles again? could you see that in the near term, another doubling? >> near term, it is -- it is hard to know near term, joe. i know our digital strategy pro said it is difficult to consolidate after making a new high. he thinks for the next nine or ten days we'll be chopping around here. but, we saw it with the spot bitcoin etf inflows. blackrock seeing 800 million in inflows. i think as long as there is strong spot demand and aren't eager sellers, you do have a market that is out of balance, that there is too much demand for bitcoin, not enough supply created through the block

reward. >> right. and as a measure of risk on, i guess the nasdaq sometimes tracks bitcoin, doesn't it? >> yes. it is a study we did several years ago showed that the best years for bitcoin occurred when the s&p and the nasdaq had their best year. i think it does sort of confirm the idea that bitcoin is a risk on asset today. >> did you notice the other day that "the wall street journal" and the headline, it was describing the move in bitcoin and it said a new high for the currency. i had never seen that in "the wall street journal" before. usually i don't know what you call it, i don't know what to call it really, but front page, it said currency. is it a currency? >> i missed that, that's a great term. it certainly is better than someone calling it sardine cans or tulip bubbles. but to me, it is --

>> so, just to -- just to put a fine point on this issue about the correlation with the markets, how do you -- you're saying it is correlated to the markets, and we have a market that is doing quite well, and as we said, it appears the economy is doing quite well, the idea that we do very well in a bad economy, which is what a lot of people have been trying to suggest, i think on this broadcast earlier today, is that right or wrong? >> you know, i think bitcoin is a hedge against unsound money. and that's why when joe, you know, talked about his currency, that's how many people do view it because, you know, bitcoin has its own unit value and it is measured against dollars and i think it is the same way people measure gold against dollars. so, i think if there is an event and we have seen it in turkey or

venezuela, that when those currencies collapse, bitcoin has been a way for people to preserve wealth. so i don't want to see that test sort of put in the u.s., but i think that's one reason people own bitcoin. >> yeah. not really for good times usually. all right, tom, we appreciate it. thank you. okay. all right, when we return, the ceo of cummins will join us live ahead of today's business roundtable events. the designer and manufacturer of engines and power generation products has seen its stock rise 14% so far in 2024. we'll speak with jennifer rumsey about the state of the economy as she sees it, workforce development and much more. that's next. also, coming up at the top of the 8:00 hour, cisco ceo chuck robbins will be our special guest right here live from washington, d.c. chuck is the head of the business roundtable. so we'll get his perspective on

what's happening here in washington. right now, look at shares of victoria's secret. the retailer is staying conservative when it comes to guidance in the near term, citing four straight quarters of falling demand. check out that stock. it is down by about 30% this morning. "squawk box" will be right back. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

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policies in washington. you are the chair of the energy and environment committee and yesterday the s.e.c. voted in a controversial proposal, this was watered down a bit, wasn't quite as strong as before, but it does require more disclosures for companies when it comes to the risks that could be associated with climate change. what do you think about that? >> as you said, they revised that from the original version, which had some really concerning things including expectations around scope three and level of reporting. we continue to study that, it was 800 plus page document, but fundamentally the question is this a scenario we should be asking companies to disclose and what is the level of reporting or work required? we're committed to decarbonizing and addressing some of the environmental challenges in our businesses. many of these companies, including cummins, has sustainability goals and we want to make sure we're able to invest our time and dollars into driving those real benefits rather than creating risk.

>> do you think the rules will be challenged. scope three said you had to figure out how much climate risk there was in the supply chain, other things down the line. companies pointed out that could be tough to track down and be able to provide reasonable looks for it. with that part missing, do you think this will be challenging? think the s.e.c. has the authority here? >> i think that's a question, really, and we're assessing as a brt and other groups are going to assess is this really, you know, the right place for the s.e.c. to add regulation, even with the changes that they did. acknowledging some of the feedback we all gave. >> jennifer, let's talk about what cummins is doing, because you all have made some pretty big bets on the future of electric vehicles, commercial electric vehicles, including this $2 billion you're investing with some partners in a battery plant that is due to open down in mississippi. it is a tougher issue than even consumer evs because in the case of commercial evs, it can cost three times as much as a diesel truck and so it is some big

commitments from the customers to actually put these things together. right now there are a lot of rules and regulations that both the states and the federal government are pushing to make it more palatable or to put the stick to them if they want to buy diesel trucks. if there is a new administration and those rules change, will it be much tougher for you to be able to make a profit on some of these investments? >> look, here's how we see the landscape. destination zero is our strategy. it is about decarbonizing our industry because we recognize that there is real issues with climate change and commercial vehicles and industrial applications, you know, they're large equipment. they contribute meaningfully to co2 emissions. that said, our customers, the products at the heart of the economy, they're running businesses. as you noted, this is a different challenge than it is for passenger cars, how do you decarbonize commercial vehicles. that's why our strategy is really dual path. we have to work on improving engine-based solutions and we're downin

doing a lot of work in investing in next generation engine platforms including diesel and alternate fuels and driving adoption in electric and even hydrogen-based solutions and applications where they make sense. that's a critical part of our strategy and you need incentives and you need the right regulatory framework to help drive that adoption in a way that makes economic sense for our customers. because as you said, they cost more today, and they need infrastructure. they need infrastructure that doesn't exist today and so on the one hand, you have to move forward with this, with eff to -- we have to do it in a way that makes sense and we'll work on both sides of the iaisle as e have been. >> it can mean big swings in the federal guidelines and federal regulations that are there. how much tougher is it as a business? >> we need regulatory certainty. our industry works closely with regulators, epa, california

resources board, what does that look like, it is important that we have that certainty because it takes us years and we're making big investments. let's talk about some of the investments that we're making in this strategy. a billion dollars in our u.s. engine manufacturing plants for these new fuel agnostic engine platforms and you noted this new partnership that cummins has that we're going to invest $2 billion in battery cell manufacturing in the u.s., for commercial vehicles and industrial applications and creating 2,000 new jobs in the u.s. it is helping to create jobs, it is helping to drive the economy and we need the right regulations and incentives that can do that and also ensure our customers can continue to be successful. >> it is a jobs week. we're going to be getting the official government jobs report on friday. what is the economy look like from your perspective right now? >> from our perspective, we're coming off a record year. we have $34 billion in revenue,

which is record for the company. we had record at operating cash flow. really strong year. we saw strength across many of our markets. we also saw some softening late in the year, we're forecasting to be down 2% to 5% this year. we're in a cyclical business. it is typical for us to see that. i would say this is not as deep of a down cycle as we might see because of supply constraints have really limited our industry's ability to produce through the -- so things still look pretty solid for us, and i'm feeling optimistic that we'll see another improvement in our business in the not too distant future. >> where did the softening come from. >> heavy duty truck market in the u.s. if you look at spot rates, they have been down for 18 months. some of those customers are seeing more challenges. really the supply constraints and pent-up demand if you will that allowed our business, our business to remain strong. construction, another area that is down. power generation, data centers

are driving continued really strong. >> interest rates matter. >> yeah, interest rates matter. customer's ability to buy new equipment is impacted by those interest rates as well as the other factors. >> jennifer, thank you very much for joining us. jennifer rumsey of cummins. andrew, back over to you. thanks, becky. when we come back, the digital markets act in europe goes into effect, it is happening today. and in an effort to regulate big tech, we're going to talk about what it could mean and the major implications for apple and third party apps, all of that and more. that story next. we're coming right back here on "squawk box." >> announcer: time now for today's aflac trivia question. which punk rock singer made a cameo appearance in adam sandler's "the wedding singer" in 18?99 the answer when "squawk box" returns. that's like the gap in my health insurance. gap in your health insurance? yeah, it didn't cover everything when i got hurt. good thing i had aflac. hmmm the cash i got from aflac helped pay for

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>> announcer: now the answer to today's aflac trivia question. which punk rock singer made a cameo appearance in adam sangler's "the wedding singer" in 1998? the answer, billy idol. >> a lot of commercials, billy idol now. workday, able to do -- and then he steals rory mcilroy's golf cart. >> it is a good commercial. >> there is a few that are good. big test for apple as steve is here. test for apple as europe's

strict new tech laws kick in today. the digital market act would force apple to allow third party apps on the iphone or face billions -- additional billions in fines. steve kovach joins us now with more. >> that would be on top of the $2 billion we were talking about on monday. the digital markets act better known as the dma only hours old and apple is testing the law's limits. this morning, the european commission, which is responsible for enforcing law, tells cnbc it is investigating apple's compliance with the dma, that includes that it still wants a charge other app developers and kicking epic games out of the app store yet again this week. let's explain what the dma is. it affects companies like apple, google, meta and amazon and there are lots of new rules in here, most of the tension is on apple because it is the most profitable of the group and the most resistant to regulations like this. the dma forces apple for the first time to allow third party apps for its own iphone and make

it easier for users to choose things like default web browsers, and make payments outside of apple pay. now, apple weeks ago announced how it plans to comply with the law, which includes new fees for app makers if they want to work on a third party app store. t spotify and epic games want looser rules and lower or no fees, like the way apps work on open systems like the mac or windows computers. now, regulators in the eu will have their say whether or not apple is, in fact, complying with the new law, and if they find apple or any other company in violation, they could be fined up to 10% of their global revenue. so let's put a big fat number on that one. apple's case, that would be a $40 billion fine, joe. >> how many? >> $40 billion. >> that would actually -- >> that's global revenue, 10%. >> 2, i think they're, like, okay. but 40 ing the $2

billion, by the way. that's why this law was designed like that, so manufactuy of the fines are like wrist slaps, like a parking tia couple billion is -- >> all right. steve kovach, thank you. >> thanks. when we come back, the anti-defamation league holding its never is now summit where ceos are attending to talk about the rise of antisemitism and strategies to try and end it. adl national director jonathan greenblatt will join us next. and later, white house economist and nec director lael brainard will join us to talk about the president's state of the union address tonight. "squawk box" will be right back. 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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anti-defamation league is hosting a summit in new york city this morning with leaders in business and other sectors focusing on addressing rising antisemitism in the united states. for more on all this, witant to welcome anti-defamation league ceo and national director jonathan greenblatt. jonathan, great to see you. tell us about the impetus for what this summit is, what it is about and what you're trying to do here. >> when we started this conference, it is called never is now, back in 2016, we had maybe 400 plus people who came together at the grand hyatt in new york to have a venue to talk about the rise of antisemitism

we were seeing then. in the ensuing years, andrew, it has become an onslaught. and now today this conference never is now, we have almost 4,000 people gathering at the javits center to talk about this tsunami of hate. and what is interesting is its diversity, we have republicans and democrats, orthodox jews and reformed jews, business people and community activists, all attending workshops and panels. we have over 100 speakers, all focusing on how do we get through this moment, how do we address this rise in tide of hate that affects everyone? >> let me ask you this, jonathan. the other side of this, i get emails from folks and we had you on the broadcast many, many times. they say you have jonathan on and you talk about antisemitism, but you don't talk enough about the humanitarian crisis that is taking place with the

palestinians. and why don't you -- why don't you push more on that issue, and if you understood that issue better, you would understand why there is this hate out there. now, i am jewish, i always say there is a conflation here that is going on, but i'm curious how you react to that. >> well, it is hard to -- it is hard to answer that almost with a straight face. and in your defense, andrew, that you're jewish doesn't make you collectively responsible for everything the israeli government does, nor does it make me. i mean, can you imagine if during the rise of asian hate back in 2020, when asian americans were being assaulted in the street, if someone wrote to you and said, why aren't you covering what is happening to the uyghur people in ginjiang? you can have strong feelings about what communist china is doing, but that doesn't justify hate here in america. you can have strong feelings about what the israeli government is doing, but does that justify vandalizing a

synagogue, spitting on college student because they happen to be jewish? i mean, are people that morally depraved that they lack the kind of clarity and common sense to realize holding american jews responsible for things you don't like around the world is textbook antisemitism. it is bigotry plain and simple. >> i want to ask you a related question, which is i talked to a number of ceos, some jewish, some not, who have talked about trying to put antisemitism programs in place at their companies. and some of them say they are fearful of doing so. i don't know if you heard something like this before privately, where people say, look, you know, if we -- we can do it, but we have to do it in a very particular way and we can't push it too far, if we push it too far, we're going to have people who are going to come out again on this other side, this two sides issue, and say, well, this is unfair, that you're

not -- you know, you're not speaking enough about, again, these other humanitarian issues, there is fears that consumers are going to come after them. it is fascinating to hear the sort of private back and forth. >> you can't be afraid of the bigots and the bullies. we learned this in kindergarten and it still applies today. if your company is looking at fighting all forms of hate, racism, homophobia, and you don't address antisemitism, when jews are the most targeted religious minority, i would ask you what you're thinking. but even more importantly, when you make these decisions, and, you know, to reference those pathetic university presidents, you say, they're context-dependent, before the hamas massacre in israel, before 10/7, 2022 and 2023 were the

worst years we saw in antisemitism. look, and it may come from the antizionist left. it may come from the white supremist right, but it is never okay. so, to those ceos who say to me, can we really take this on, my response is how can you not? and if you let, like, the thin fringe bully you into saying, oh, wow, this is political, there is nothing political about protecting your employees. period. >> you had those conversations. so what -- just tell us about the conversation -- i'm curious what you heard from ceos who either push back on you or say, you know what, jonathan, i would love to try to do something, but they sort of then are a little wishy washy about that they're doing. >> i hear that. i hear that. leadership is not about being led. it is about leading. this is why we're recognizing julie sweet today at our conference, andrew. we're giving her a courage against hate award. she's a good example. very large global employee, diverse workforce, and they have

stood up clearly and unequivocally, not just against antisemitism but all forms of hate. last night we had mark rollin who was interviewed by elliott management's executive dan senor and mark talked about moral clarity. so, i -- when i get asked by a ceo how do i handle this, i talk about people like julie sweet or albert borla or mark rollin and i remind them that the path to doing the right thing, it might not be easy, but being a ceo isn't easy. and, yes, you have a fiduciary responsibility and also a moral one. >> we're going to hear from the president this evening, who i believe is going to speak about what is happening in the middle east and specifically in israel and what is happening with the palestinians. what do you want to hear or by me even asking you that question, is that a conflation of the issue you're trying to work on? >> well, look, it is hard to ignore the humanitarian catastrophe in gaza.

and so, yeah, i'm focused every single day in fighting hate for the jewish community, fighting hate against the black community. this is my focus. i get why you ask me that question. it is the state of the union. so, what do i want to hear from the president? number one, i want to hear moral clarity about the butchers and barbarians from hamas. so many other world leaders haven't show what joe biden has. and number two, i want him to recognize the humanitarian disaster happening there. but let's not lose the fact, andrew, that while every innocent life needs to be mourned, we also need to understand why is it happening and if hamas released the hostages today, it would be over before you know it. >> jonathan, thank you. wish you well with the summit and look forward to seeing you again very, very soon. >> always good to see you. whether we come back, a lot more on "squawk box." we'll bring you a preview of tonight's state of the union address, what the president is expected to say on so many issues when it relates to the

economy, compensation, and so much more. at the top of the hour, becky, who is in washington is going to be speaking with cisco ceo chuck robbins at the business roundtable. we'll bring you the latest on their deal to buy cybersecurity firm splunk and the state of a.i., tech and so ch me.muor "squawk box" returns after this.

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with a buy. buy rating and $16 price target. jeffries saying the evmaker has looked closest to tesla in spirit with its own strong brand identity and global potential. becky? >> oh, thanks, joe. when we come back, we have a preview of tonight's state of the union address. and what the president is likely to say about the economy. also coming up at the top of the hour, the ceo of cisco will join us live from the business roundtable. chuck robbins is the new chairman of the business ro roundtable, so the person most responsible for speaking out about policy and what the business community would like to see. we'll hear what he has to say. and then the ceo of mattel joins us ahead of the company's investor day. "squawk box" will be right back. you know doug, ever since switching to workday you've been a real rock star. rock star? what do you know about rock stars?

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house lawmakers voted yesterday to pass a package of six spending bills to fund part of the federal government at least and avoid a partial shutdown that would have happened this weekend. the senate is expected to vote by the end of the week and send it to president biden's desk. negotiators are still working on the remaining six bills with the deadline of march 22nd. those bills are considered tougher to negotiate because they involve splitting up more than $800 billion in defense spending and include controversial issues like immigration. and in the meantime, fed chair jay powell said yesterday he expects interest rates to start coming down this year, but he's not ready to say when. speaking to a house committee, he said policymakers remain attentive to the risk of inflation and don't want to ease too quickly. powell will be testifying before senate committee later this morning, and obviously the street will be watching that very closely. still to come this morning, from the business roundtable here in washington, d.c.,

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welcome back to "squawk box." president biden said to address the nation this evening with the economy front and center. on his agenda joining us, lael brainard, director of the national economic council. good to see you always. looking over some of the provisions and we know, this is, a wish list -- is that the right term to use? because a lot of these things are just things that the administration has a a priority, but not necessarily any chance of it coming into law anytime soon with a divided congress and the like, but what i'll say is, there is a distinct anti-business, or at least populist tone to a lot of these provisions. why does the president and the administration think that's the right way to go at this point? >> well, the president's going lay out his vision for building our economy from the bottom up,

middle out. he's going to want to talk about all of the things he's done that have gotten us in a strong position today. remind everybody just how difficult the economy was when he took office, and lay out the work that lies ahead to have an economy that works for everyone, a tax system that is fairer and a variety of ways to make life more affordable for middle-class americans. >> i know that -- i know a lot of thinking goes into how to approach this, and i'm not saying he's raebdoubling down o things heard in previous years but in light of the recent polls that we've seen indicating the country's approval or disapproval with the president's economic policies. i know you saw it in the "new

york times." it's gotten uncharacteristically flak from the left but 40% of voters said that mr. trump's policy helped them personally. economic. only 18% said the same about mr. biden's policies, while 43% said mr. bind's policies had hurt them. now, if were you to ask a biden supporter what were trump's policy? cutting corporate taxes. so 40% think that trump's policies helped, and you just back to the same old playbook of trying to raise taxes on corporations. going after ceo pay. private jets and -- just seems like class warfare and i'm not sure that's what americans really want to hear. >> so we do actually know a lot about what americans support. americans strongly support having a tax system that's fair. a large majority of americans

support making sure that billionaires pay the same rate of taxes as a schoolteacher or firefighter. the large majority of americans just don't think it's fair that people who make hundreds of millions of dollars pay 8% in their taxes compared to 25% for a schoolteacher, or a firefighter, and if you look at sentiment actually just to reference a ceo survey from the business roundtable yesterday, jumping over the last quarter above historical averages, lots of excitement about capital expenditure and consumer sentiment, of course, has jumped 25% over the last three months. so we're really seeing the turnaround in the economy, and don't forget just how dire things were when the president first took office.

we've seen 15 million jobs, inflation coming down by two-thirds, unemployment below 4%. so a lot of people are seeing the benefits of those policies and want to see tax system that's fair. >> it's always possible to pick and choose some things from business roundtable. we talked about that disconnect a little earlier. while being optimistic about business conditions, there was concern about regulation from the biden administration, and not just regulation but the government being too involved with the private sector and actually hindering things. that was part of the survey as well, lael. >> yeah. so it is the case, very much the case, that a lot of americans talk about, for instance, health care costs. one of their primary concerns, and with drug prices in this country two to three times higher than other countries, it's necessary for the president

to put forward some of these proposals, and, of course, he's had major legislative victories. now able to cap out of pocket drug costs for seniors at $2,000 starting next year. insulin prices at $35 rather than $400 per month. those really put money back in the pockets of american working families. i think it's good for business. it is certainly good for the middle class. >> well, if -- trying to figure out how the 25% would work on the real high net worth high-income earners. what if they don't pay themselves income? how do you --what's the mechanism of getting at it? we've talked about that over and over gagain. take a loan against stock and never really report any substantial or significant income. therefore, your overall tax rate

looks and is much lower, but how do you get tat it? what's the mech simple you think would work? >> you're certainly right. there's all kinds of ways currently that billionaires avoid paying their fair share of taxes, and so it's just a simple proposal that would have billionaires pay 25% of their income including unrealized capital gains, and it would phase in over a period of time. no double counting. like prepaying those taxes, since they need to be paid ultimately anyway, and it would phase in and nobody who's already paying 25% would pay a penny more for those billionaires that are already paying 25%. there are some. so it's very well-crafted. it won't create any additional burden. it is simply getting

billionaires to pay their fair share, similar to schoolteachers and firefighters, and, again, just strongly supported by the american people. >> i just wondered whether it would include the unrealized gain, nightmare, trying to implement it, get it through, everything else. i don't know whether that's feasible, but i wondered if -- has to be. i don't see any other way to approach it, if you don't put that on the table, but then you start getting into the very difficult enforcement. just getting it into law would be difficult, but i understand that these are things that are, the president's priority, and look forward to hearing it tonight andappreciate you being on today. we always like that as well. >> just to say again, it's really the american people's priority. they really do want to see a fairer tax system, and the president wants to support that. so, thank you. >> i would like to see -- i wish i could, 25 -- saw mail coming in. who pays 25?

it's like, not me. not normal w-2 people. thank you. appreciate having you on. i'll sign on right now. 25. it's 8:00 a.m. on the east coast. you're watching "squawk box" on cnbc. i think both my co-anchors, should we go ahead and agree with that at this point? becky, ready for 25? andrew? 25 sound good? >> gladly. >> i'll take less, but i don't know how we're going to get enough money. that's the problem. happy to pay that. as you know. i think a high-class problem. >> maybe flat, maybe consumption. >> paying taxes is a privilege. >> spending too. here's some of the nation's -- becky down with some of the nation's, coming up. u.s. equities in agreement so far this morning. >> okay. tell everybody about today's top business stories before we glet back to becky in washington at the business roundtable.

watches bancorp shares coming off a wild session yesterday. look at the screen. losses of more than 40% and then gains nearly 30%. the bank announcing a $1 billion capital raise from firms including former treasury secretary steve mnuchin, his firm. liberty strategic capital. mnuchin joining the bank's board part of that transaction. don't miss an interwith the former second happening next hour on "squawk on the street." becky? >> andrew, thanks. kicking things off this hour here at the business roundtable in washington, d.c. with the chair of the organization. chuck robbins who is also the ceo of cisco, and, chuck, thank you for being here today. there's a lot going on. got the state of the union coming up tonight. we just talked about what we're expecting to hear from the president, and you've taken over the reins at the business roundtable, which, by the way, is probably the most important policy group from corporate

america. you've taken over the reins at what could be a little bit of a difficult time to be out front and center. a lot of ceos are trying to find ways to keep their heads down at this point. you've got to be the spokesperson here and talk about the issues that corporate america is facing, and weigh the risks between speaking out and staying ing quiet when there arg issues to tackle. what are your priorities as incoming chairman? >> thanks for coming down spending time with us. great interviews. the ceos interviewed already this morning covered most of what we're focused on right now. we obviously want to figure how to navigate a complicated year. that we know we're going to face this year. it's going to be a difficult one. secondly, we are focused on corporate tax. tax expenditures now that need to be renewed and we also are

focused on trying to ensure that there's not overreach on regulation. and obviously, when you talked to judy earlier a lot of focus on free trade agreements we think are good for the american people. so those are the top four but other things obviously. those are the things we're really focused on. >> why is this going to be a difficult year? we've talked this morning about the survey the business roundtable put out that shows more ceo confidence when it comes to the economy? >> politically difficult year. complicated year. how about that? >> because of the election cycle? >> yeah. interesting year. the thing to remember about the confidence survey that just came out is, it was 85, above the average. it's been below average the last several quarters. historically it's hit highs of 124, 126. so i wouldn't say, not a euphoric report. better than last quarter, but there's a lot of things we could do. the economy is actually growing, but could be growing faster. we think it could be, we could be doing more for the economy,

if we could solve some of these problems. >> are those problems related to the special question on the survey? the question put to the ceos was, are government policies undermining american free enterprise? over 75% of ceos said, yes. 92% of those who said, "yes" excessive regulation worried about. 63% cited overreaching antitrust actions. what's going on? >> think about some of the regulatory things, like the s.e.c. we would like to see the s.e.c. stick to their congressional remit, right? and some onerous things suggesting may ask corporations to do. >> like yesterday's vote from the s.e.c. where they decided to say, yes, corporations are going to have to report more about the climate change risks? >> yeah. we're all committed to it. everybody here is committed to climate change, or controlling or carbon footprint and doing the right thing, but some of the requirements, first of all not sure it's in the s.e.c.'s realm

to do that. secondly, it's -- >> congressional authorization? >> right. but it's -- it's just an incredible amount of work that actually increases costs at a time we're talking about inflation and talking about the costs that the american consumer is dealing with on daily goods, and as regulation increases costs on corporations, those costs will flow through. no different than tariffs we see now. those costs pushed through to the consumer. >> talk about the tariff situation, because, in the past i would say a lot of the priorities of the business roundtable and other business leaders, they could find a friendly republican party. a little trickier these days because tariffs are kind of loved by all. >> look, i think that when you talk about tariffs there's a couple things going on. number one, putting tariffs on household good reducing choice for the american consumer to increase cost to the american consumer, just math. in other cases there are tariffs

on electric -- electronic components that are largely still only available coming out of china, as an example, and companies that actually do have manufacturing in the united states are paying millions of dollars in tariffs to keep manufacturing jobs in the united states. and you hear now ceos talking about moving those jobs out of the united states to avoidpay ing tariffs. >> is a lot of this -- >> it's an active discussion. >> manufacturing then goes where? >> can go to mexico, could go to southeast asia. could go anywhere. >> has there been a response from the administration when ceos raise those issues? >> latest response exemptions given actually under the trump administration i think and a current planned action rollback of those exemptions exacerbating the actual tariff problem.

so it's going the other way. >> do you feel the business community gets a response from this administration, from the former trump administration? what is the -- they're engaged for sure. i've been engaged this week. absolutely there's open communication. always is. that's not the issue. it's just you know, they're trying to do what they think is right, particularly in an election year, and we're trying to run our businesses and effective and try to reduce the burden on the american consumer, and we just probably think a little differently how that works. >> what about the messaging we're expecting to hear from the state of the union address tonight? just heard a little about it. things like higher taxes on corporations. targeting executives who make more than $1 million going after things like private jets. does that matter? >> i think what we have to focus on is what is it that creates jobs in america? and so when we think about the

tax extenders we're looking for right now, expiring soon or expired, not able to expense r & d costs in the united states means where do you put those jobs? somewhere em. t somewhere else. help fuel the economy, take that confidence factor up from 85, what is was today. those are things we're focused on. >> talk a little what you see in the economy. this is a jobs week. we expect we'll hear about the economy from the president tonight, but from your perspective looking at both the united states and globally, where do things stand on the economy? >> it's growing. our survey, ceos ximted growing 2.1% this year. >> this year? >> this year. general belief it can grow just not more. europe's holding up better than we expected. all things considered. and what we see is asia's still a little tough right now.

>> that's because the economies there are struggling. it's because of what you see from central banks around the globe? >> a little of all of that and i think one of the big concerns is all the money pumped into these countries all around the world, and what the resulting challenge might be sometime down the road. >> when that money stops pumping in? >> stops pumping in. >> or inflation kicks off. >> stagflation. yeah. could be a problem. >> i think joe has a question from back at headquarters, too. joe, go ahead. >> hey, chuck, it's go to see you, and -- i'm glad you said that. so if it was -- if 100, like, thinking back in college. 85. aww. i would be happy with an 85. i think done really well with an 85, but the way you just explained it, to say that corporations are just, you know, rubbing all over themselves this economy and it's just amazing. it's been as high as 125.

that's not in fact the case is what you're saying. so those concerns that corporations are talking about are real. when you see the populist plank and you're nice and said we engage, corporate jets, ceo compensation, higher taxes. all of that stuff. all it does is play to a certain base that we're going to hear tonight. doesn't do engendering growth and we know the corporate sector hires employees that pay the taxes that go into the corporates, to the government coffers to do everything we want to do. so i don't understand. do you understand the anti-business rhetoric that -- you just roll your eyes it's a state of the union and you're going to get what you're going to get. is that what all the ceos do? >> i don't think we have a lot of belief we're going to influence what the president says, but i do believe that we stand by the fact that we do create the jobs in america, and

that even working. we, we've had discussion here this week wei want to work with the administration to solve the biggest population. a quarter of the population feels left behind haven't had opportunity. want to help solve that. at cisco we're going to, we run training programs around the world. close to 5 million students go through that this year to try to give them digital skills to have a future. most every company here has a program like that. workforce development day here earlier this week. there's a lot of discussion how to continue to drive this. so i think the belief from this community is that we do believe that our free market system in the united states is better than any system in the world and we believe that it creates jobs. that it drives growth. and that we should sfuel it, no try to restrict it. >> andrew's got a question as well. >> hey, chuck, question. look, in the end this is going

to be become a binary choice for the american people when it comes to selection. you're talking about policies and the like. what i'm trying to understand is, are you suggesting that you're trying to improve the policies that the biden administration has? or do you believe effectively that a potential trump administration would have quote/unquote better policies, but also ask if you're thinking that way, how you think about the president himself recognizing that historically, if you remember when he was the president, many of the ceos that you lead were on business advisory councils for the president all of which ultimately were disbanded in part because many of those ceos left objecting to the way the president behaved himself and how you consider that as in this new role that you have? >> look, we've talked about a lot of this, this week. end of the day, what you have

here is a serious group of patriots who believe that they have to work with whoever's in the white house. our job is to work with whatever administration is there to try to improve conditions in america. make america more completive and creat -- completive and make more jobs in america. depending who's in the white house certain things to work on depending who's there. president biden, worked on ships with him, supply chains worked on -- other issues over the years and if it's a trump administration we can work with corporate tax and other things and so our commitment is to work with whoever's in the white house to try to just improve the american economy. >> chuck robbins, chairman and ceo of cisco and chairman of the business roundtable. thank you for being here. andrew? >> thanks, becky. still to come this year trifecta of can't-miss interviews. in a little bit speaking with

ceo of mattel and south carolina senator tim scott with us. talk to him, of course, about nikki haley and what's happening in the republican party. then ceo of rtx. all that and more. "squawk box" returns after this.

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up next, an inside look at consumer spending and a key quarter of the month in toy sales. the ceo of mattel will join us

as we head to break we want to let you know that the ecb left rates unchanged in its latest meeting. expected. stay tuned, you're watching "squawk box." definitively uhaedncng. watching "squawk box" on cnbc.

welcome back to "squawk box." mattel holding a venture capital day happening today. shareholders eager to hear the

outlook for the toy industry and anything about the american girl and fischer price brands, activist investor said last month should be candidates for a sale. joining us now, chairman and ceo of mattel, ynon kreiz. and barbie is having a big birthday on saturday this week. right, ynon? >> yes, andrew. great to see you again. a big year for mattel. 2023 was really a milestone moment for the company. not only had this incredible successie "barbie" movie expanded in key toy categories with significant share gain and overall strength in financial position. in fact, achieved strongest balance sheet we've had in years. currently investment grade rating, and 700 million dollar free cash flow generation more than 2 1/2 times of prior year and recently announced a $1

billion purchase share and in excellent position to execute our strategy. >> so, ynon, explain this, then. barrington capital, i just said top of this, sent you a letter i believe february 1st, suggesting that you sell the american girl franchise, that you sell fischer price. i think they are happy with certain things happening in the business, but less happy with other things. revenue beating expectations. earnings below expectations. how do you respond to that letter? what did you think when you first read that letter? >> without commenting specifically on any letter, i can tell you that we always welcome shareholder feedback and engage with our investors. as a company, as a management team we always evaluate our portfolio and position the company for long-term growth. as relates to fischer price and american girl, both are very storied brands. american girl is a valued asset

within mattel portfolio with significant fan base and a great product. we continue to optimize the footprint and consumer experience. saw sales trend improving fourth in quarter. and fashion store in l.a. saw all three flagship stores achieve same-store sales growth for the year and now an american girl movie in partnership with paramount and announced another collaboration with disney princess and "frozen" and looking to move american girl headquarters to los angeles to leverage the rest of consumer capabilities and drive demand and, really, benefit from this incredible expertise within the doll category. >> i mean, look. my daughter is an american girl aficionado. we've got a lot of american girl dolls in our home, but how important is that franchise for you? clearly you're irnvesting in it.

what is misunderstood, to the extend it is misunderstood, in the marketplace around american girl and also fischer price and as related to all of this is, how important are all of the franchises to each other, to your ability to sell through various channels? meaning, how easy is it for you to take one brand, if you decided to sell it, to do so and does that, therefore, impact other distribution deals? >> well, you're asking the right question, because we manage a portfolio and within a portfolio inevitably puts and takes but idea leveraging our capabilities in dolls, vehicles and infant to preschool where we are a global leader. managing a portfolio within this category gives us scale and expertise in capabilities to benefit from our size and the creation capabilities, supply chain and a global commercial infrastructure that is second to none in the industry.

the -- it's also fair to say that both american girl and fischer price have been declining, and have been performing relatively, not as well as barbie. for example. and other brands. as relates to fischer price, it's a good example, because when you look inside the category, which has been declining, fischer price scored, which is by far the largest part of the category, has been stable over the last six years. we have been practically exiting underare performing parts of the business and low margin business, which drove much of the decline and believe we're positioning the brand and the category as a whole to grow and improve profitability. and we talk about it in more detail today at our investors presentation, but the point is, we're very practically managing our portfolio and believe we have the capabilities, skin and expertise to achieve long-term

growth and margin improvement. >> right. quick, speak to the strength of the consumer right now and also margins and how -- how are you being attacked by margins by some of the online retailers who are selling some of these products at very low margins relative to what you see in stores and how does that play for you? >> yeah. for mattel we've been improving or margin. we actually have margin improvement and expect it to continue, and continue to dot that in 2024 and 2025. so we are continuing to managing our balance sheets, and our profit -- profitability profile to continue to drive long-term growth. the industry declined 4% in 2023. sorry. 7% in 2023. but after record growth, in 2019

and 2022, 25% growth between 2019 and 2022. we did see decline, but it's still 70% higher than pre-pandemic in 2019. so the industry is healthy. not with standing decline we expect it to return to growth in 2025, and continue to grow thereafter. >> ynon, thank you. wish you luck with your investors day and happy birthday to barbie coming this saturday. thank you again. "squawk box" coming right "squawk box" coming right back, after this. billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star. workday.

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futures ahead of the day's economic data, you can see up 83 points now. on the dow up almost 100. on the nasdaq, rick santelli standing by at cme in chicago. rick, numbers, please. >> yes. well, let's start out with initial continuing claims. shall we? initial claims almost spot-on with expectations. 217,000. interesting part here is that is the highest level of claims since first week in february when it was 220,000. look at continuing claims, back above 1.9 million, and 1.9 million two moss nths in a row. last month's 109,000 as i'm speaking down graded to a

whisker under. technically first back over 1 million. 1 million 906,000 to be exact. comes to the second week in november over 1.9 million. prior to that you have to go back to november of 2021. now, we see interest rates moving lower. i think that will get to some of those reasons in a minute. trade balance minus 67.4 billion. bigger negative than looking for. that is the biggest trade balance going back to april of last year and i do want to point out pre-covid these numbers were much smaller. minus 40 billion camp. non-farm productivity. 3.2%. 0.1 better than expected. and 0.1 lighter than rearview mirror. a couple things to go over quickly. tomorrow's big jobs report. what did we learn last month? workweek. 34.1. the only two timing you can mind to recent memory we had less hours than that, peak covid and

credit crisis. okay. what's productivity? simply, output purchase hour. i think there's distortions here. not sure i trust these numbers on productivity. terms of interest rates moving down, most likely because, a., revision with respect to continuing claims. but everything's kind of well-behaved pretty much as expected. we see interest rates really plummeting in the long end. i've been wrong the last couple weeks and always thought some of the debt and supply issue wos have bigger prominence especially after we're kind of playing around with one of the first rate cut is. that's become a powerful dynamic and seems to be overwhelming everything. no matter what the chairman said yesterday certainly seems as though the market has its opinion what's going on. it's probably going to be june but we have to wait and see, but ultimately, whether or not we top 4% could be a key factor here with respect to preopening equities. approaching up 100 on dow futures. joe, back to you. >> all right, rick. i don't know if you've ever

weighed in -- are we restrictive now? get to steve, but are we in restrictive territory now far as the fed goes, do you think? >> you know, i think that when it comes to restrictive, i do think that we are making a difference. i think higher for longer will work, but when i look at the notion of restrictive i keep it much more simple. restrictive to me means a lot less green in equity space, my opinion. i would say that we are definitely more restrictive than the decade we had zero interest rate policy. i don't think we're as restrictive as many believe and i think some of the very slippery inflation, sticky inflation numbers, will give evidence to that, and i don't know. everybody time i go out, joe, can't get reservations at a restaurant i think that also answers that question. >> i don't think that ever happens. once you say rick santelli. try mike santoli instead of rick santelli and i think you might have a little more luck. steve liesman -- >> i need to try that.

>> try that. steve liesman joins us now. ste steve, out of the blue. a tweet check it out guy name the bob weir. picture unfortunately, it's not him. kind of a common name, i think. >> i mean, my heart leapt, but, anyway, go ahead. are we restrictive, steve? >> joe, i really love the conversation you were having with rick. here's my take on things. i think the fed right now and for the last several months has been caught between the theory and the reality of what's going on in the economy. okay. theoretically the fed is way restricted. and where do you start? start by looking up what they're long-run rate is. 2.5%. the long run, essentially the neutral rate that doesn't slow down or speed up the economy. where are they now? 5 3/8. restrictive, the theory. look how the economy is working.

rick can't get reservations at restaurants. i can, because the maitre'ds seem to be very kind to me. thank you all you maitre'ds out there and i bet rick doesn't have much trouble, too, actually. at any point, consumers are doing well, reasonably. economy reasonably well. jobless views not huge. the big story, unifying theory of all this could be the productivity numbers. nice piece in "the journal" about that today whether or not this is the reason we've been able to have relatively strong growth and bringing inflation down. if that's the case. in other words, if this theory is right, we should have continuing progress on inflation. as for powell today, i hope becomes less of a banking conference as we had yesterday, or interrogation and more monetary policy one. they were not asked very much about this question, what is the long-term neutral rate? how much restraint are you

putting on the economy? and how much restraint does the economy need? questions i hope are asked today as well as additional questions on the balance sheet and what they plan to do with it. we have to wait for the upcoming meeting and press conference, joe. i hope bob does actually write you, joe. >> i sent to your email to tell you -- honestly wasn't kidding. i don't think it's him. i know it wasn't him. fed chair -- thanks, steve. fed chair jay powell set to return to capitol hill in remarks to house members yesterday reinforcing his message that the fed will cut rates. interest rates. this year. said first wants to see more evidence that inflation is falling back to the fed's target level. today powell will face the senate banking committee, and joining us now is the lead republican on that committee. south carolina senator tim scott. senator, always good to see you. always good to have you on. >> thank you. >> sounds reasonable. i don't know what you think, but

data dependent. >> absolutely. >> and if we're too restrictive right now, and we get a chance to bring rates down, lower rates are always better for economic growth. inflation's under control. i think -- hard to disagree with what chairman powell said. >> no doubt. key for us, however, he's making an economic decision, not a political decision. in the year 2024 when presidential elections happen from my perspective the most important should not be politics and should be economics. look at our economy. inflation up slightly more than expected last no. i suggest that interest rate cut is good for the american people. millennials today cannot afford a home. home ownership is struggling because it's been 40 years since there have been, it's been this expensive to home a own. interest rates cuts take that

make that easier. 30 years since this hard to put food on the table. interest rate cuts throughout the entire economy. i hope there is good news but i want the news to be delivered because we're looking at economy data, not political realities. >> senator, i don't know if there's ever been a president that didn't like lower interest rates. >> i don't think so. >> but the guy you've been standing behind, i see you on all of those shots with former president trump, and i know you've endorsed him. and, like i said, all presidents want lower rates, but do you remember the way he used to -- as a real estate guy, the way he used to talk about interest rates and jay powell? you're actually saying you don't want president biden forcing his hand? president trump was all over poor jay powell constantly about -- do you remember that? it wasn't that long ago. >> of course i remember every president likes lower interest rates. whether this president, the question is, does he deserve lower interest rates?

because lower interest rates are nor for presidents they're for the american people, for the strength of our economy. the question we should ask ourselves is in 2018, 2019, when inflation was at 2% and we had lowest unemployment rates for african americans for hispanics and asians, 70-year low for women. was the economy strong? absolutely. could we sustain the low rates because we had low interest rates? i think the answer is, yes. the question today is, with inflation questionable, when do you cut rates? i hope he cuts rates because our economy deserves that kind of stimulus in the economy. economic activity is good for america's future. we should all embrace that concept. my point is still the same, however. we want economic decisions not political decisions. especially in a year of a presidential election. also go further to say that this morning you'll hear us talk about the importance of

inflation, regulation and immigration, and its impacts on our economy. we have to be clear. immigration, illegal immigration, is having a disastrous impact on our economy. regulation. basel 3, heard positive comments yesterday and will follow-up on those comments today. basel 3 sidelines more capital makes it more difficult for entrepreneurs to start their businesses and for having cash to get your first home. so everything that we can do to have a responsible level of regulations as opposed to the oppressive level of regulations, i.e. basel 3, important to the american economy. >> you're going to probably -- you're going to hear probably firsthand the president, and i -- you have seen, i guess, what's going to be contained a lot of the substance of the state of the union message. i wonder what republicans think about that?

i mean normally you'd say, oh, higher taxes, populism, corporate jets, all the same old same old, but -- i'm not sure -- we talked, someone from the biden administration. that's like doubling down on a lot of policies that most americans don't think have really helped them according to recent polls. maybe playing right into the republicans hands on this, senator? >> well, it's bad for america. bidenomics devastation of the american economy and devastated the average american working. working paycheck to paycheck, it hasn't been this hard to put food on the table in 30 years. 60% of americans do not have $1,000 in their savings for an emergency. people working paycheck to paycheck, they don't want to hear how good the economy is. because trying to figure out where. they're not going to restaurants. they're trying to scrap together enough cash to put food on the table, and gas in the car.

still, 30%, 40% higher than just four years ago. so what i hope that the president, president biden, starts tonight is an apology tour apologizing for bidenomics that devastated average americans. apologizing for chaos and crime in our streets. apologizing for the open border that has led to deaths untold throughout this country, and 70,000 americans die because of fentanyl. things we can do, things he can do specifically to reduce illegal immigration, to strengthen our economy, and to push back on regulatory environment that hasbecome oppressive. >> senator, are you -- is it presumptive, as a nominee now, i guess, president trump. former president trump. is there a presumptive vp nominee? do you know yet? do you have any -- any insight there that you can share with us? >> i have no inside information but i certainly hopes he pick as

vice president strong on our border good for our economy who understands the inners working of our government and frankly puts the american people above american politics. >> sounds like -- you mean like tim scott? >> well, that's funny. you know, sometimes i'm speechless. amazing on tv. >> okay. andrew? >> senator scott, one question just as relates to inflation, because it's a point obviously the republican party has brought against president biden. when you look at what i would argue is the natural experiment that we're seeing around the world as relates to inflation, the u.s. has come out so far ahead of just about every country postpandemic. especially looking at what's happening in europe and all of those countries, which are suffering from much, much higher inflation. now, how do you consider that on a relative basis since that's what's happened happened here? i only say that, talking higher prices. higher prices are here.

no question. but on a relative basis to the rest of the world it's like two different worlds are happening here? >> well, we hope america has always been the city on the hill. we hope that economically we remain the city on the hill. the question we should ask ourselves is where were we pre-pandemic? and the answer to the question, where was the rest of the world? we were having decent growth in our country. europe was not. japan, 200% in debt based and, versus their gdp. what we've seen around the world historically speaking is america's economy has always been the strongest economy on the planet. the question is, how do we survive? how do we remain resilient through the next crisis that we have? the answer is, go in to a crisis as strong as humanly possible. and how do you do that? always be strong. why? because you don't know when the crisis is coming. when 2020 hit us we had just gone through the tcja. impacts of tax cuts were monumental. we saw 3% increase in 2018 to

the treasury. 2019. another 3% increase to the treasury but learned the lack of curb still works. ultimately having more money come in to the treasury and more money about $4000 in the pockets of the average american, gave us a strong economy, the most inclusive economy. an economy that grew 7 million jobs in less than four years. with that kind of strength, that's wind to your back. many nations around the world had wind in their face. so trying to figure out the relative nature of why our economy was strong versus others would be great. relatively speaking much stronger. objectively speaking when you go into a crisis with wind to your back and not to your face, you will survive that crisis. so the question we should ask ourselves is, i think germany was having .3% growth in their economy somewhere around the 2020, 2022 time frame. we were already starting to come back because we went into it so

strong. going to face the next crisis, the question is, asking federal reserve chair powell today, if we parked so much capital on the sidelines that we have no ability to system lasse growth in the private sector, how does in a help us enduring next economy, the next crisis. one more point, the more money the federal government spends the less money for the private sector. >> very good. okay. senator, thank you. appreciate it. up next, rtx ceo greg hayes joins us from the roundtable. stay with us. "squawk box" will be right back.

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welcome back to "squawk box." right here on cnbc. i'm at the business roundtable in washington, d.c. today. joining us now to talk about u.s. defense funding and spending is greg hayes. he's the ceo and chairman of rtx. he's the former chair of the brt tax and fiscal policy committee as well and, greg, thank you for being here today. >> thanks for having me, becky. >> i think about washington from your perspective, and i think you must look at capital hill and think, what is going on? the idea that you're still dealing with a continuing resolution for defense spending. the implications of the billions of dollars in cuts that could mean if something doesn't get passed. what are you thinking? >> well, i'm actually pretty heartened in terms what happened yesterday. mini buss pass very, very strong bipartisan support. i think in the next two weeks see final spending pack amps

including the defense appropriations passed as well. so despite all the rhetoric, end of the day the folks up on the hill know they've got to get these bills passed. you cannot put the defense of united states at risk by partisan politics. why we take a very bipartisan view here. it's not here. it's not about republicans, not about democrats. it's about doing right for america. i'm actually more encouraged than discouraged at this point. >> there are some reports overnight that president biden when he puts out his budget for 2025 on monday is going to be looking for a 1% increase in defense. that's below what had been anticipated earlier. what would that mean? >> well, the problem with a 1% increase is when you have 4% inflation, what you're talking about is a 3% decrease in defense spending. quite frankly, i hate to say this, as much as we spend on defense, which is about 3% of gdp, is a relatively historic

low, given the challenges we face geopolitically. i'm assuming the president's budget will be met with some skepticism when it gets to the hill. again, the good news is there's a process there with the ndaa, the national defense authorization act that takes a look at each individual program, each capability, each requirement and come up with typically a very sound baseline for the budget. i think 1% is just a starting point. >> the president has been in favor of extending additional funds to ukraine. and that's met some resistance on capitol hill. you can say from the extremes of both parties. really there's more on the conservative side of things where people are raising questions about that. why is that important? >> i think, we talk about the supplemental and spending another $40, $50, $60 billion for ukraine's defense. the fact is what most of that money will do will go to support american defense industries here

in the u.s. to restock the stockpiles that have been depleted by the transfer of material, of weapons to ukraine over the last two years. i think people think we're sending a big check to ukraine. it's really not the case. 80% of that money will be spend right here in the u.s. and go to replace stockpiles whether it's himars or patriots or missiles. those are american jobs it's going to create. it's not welfare to the ukrainians. >> look, a lot of people will say, why should we be spending that money to help other people overseas when we have so many problems at home? how do you make that case to the american public, outside of the jobs equation. >> the security situation is, i think, paramount importance that people understand, the fact is ukrainians are fighting an existential battle for their existence. and we have a moral obligation to defend that democracy. and the fact is if we don't help ukraine defend democracy, there's no telling where putin ends. you know, would you want to be

in the baltics, estonia, latvia? can you imagine if all of a sudden putin decides to take on a nato ally? then you're talking about american lives, american military supporting our nato allies. this is -- it's an existential threat to democracy, but one we can afford. i think again, we're not talking about the difference between guns and butter. we're not giving short shrift to americans. but this is money well spent. hundreds of thousands of ukraines have lost their lives defending the country, no americans. we have to keep in mind this is the right thing to do. >> yesterday, palantir won a defense contract for a defense program for mobile locations that can really help with ai and advanced learning, advanced computer learning on the battlefield. how much of a setback is that for rtx and what's the future of ai when it comes to defense?

>> well, first of all, kudos to palantir and to alex, they have a great product. great ai pruth. we compete against them in a number of different applications, but in this case, they won a big program. disappo disappointing. it's not the end of rtx in any way, shape, or form, but the fact is ai is the future of defense. when you think about how do you connect the battle space? one of the challenges you have today is all these disconnected systems. if you're on a ship, a submarine, character, how do you make all of those systems talk to one another. that's where ai is going to come in, to give the combatant commander realtime information instead of waiting weeks or days for information in terms of how to prosecute the battle, we're going to give them that information instantaneously through the connected battle space. we're just at the very, very beginning of seeing what ai can do, but i think it's going to be

the preeminent technology or game changer as we think about defense policy in the next decade. >> chairman powell from the federal reserve is here speaking in washington once again today. most ceos we talk to will say, they need to see lower interest rates. that would help tremendously with business. you have been one of the few outspoken ceos who says you don't think the inflation problem is solved, and you have concerns about that. what do you see? >> well, look. inflation is not dead. we still see inflation around 4%, 4.1%. we see unemployment at 3.7%. >> the most recent readings are closer to 2.7% inflation. >> terms on what you're looking at, in terms of core inflation versus what we're seeing across the board. inflation is still out there and it's driven by labor cost. when you have 3.7 unemployment in this country, there are not nearly enough workers for jobs. that's putting upward pressure on wages and upward pressure on

interest rates, i think. so it's hard to say we need to drop rates back down to what they were during the pandemic. what that will do is drive inflation higher. and that's exactly the opposite thing of what we want to do. you go to the grocery store today, it's incredible how expensive things have become. we need to figure out how to create more jobs, more opportunities for people that have good paying jobs in this country as opposed to lowering interest rates. again, it's just not the solution today. >> greg hayes is the chairman and ceo of rtx, greg, thank you very much for your time. great to see you. joe. >> thanks. up next, we'll check the markets and get you ready for the trading day which is coming up in about 34 minutes. "squawk box" will be right back. s known as glp -1. but these treatments are largely administrated through cumbersome injections. enter lexaria bioscience with their patented oral delivery technology. early studies were glp-1 suggest reduced side effects

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final check on the markets for this morning. and what do we have, a lot that could change between now and tomorrow at 8:30 or after 8:30 tomorrow. the s&p indicated higher. nasdaq up over 100 pounds. nice rebound there. and in the dow as well. we'll look at treasuries. jay powell in front of the senate today in the second day of basically yesterday he said inflation, if we are convinced it's coming down, we'll cut. we have a jobs number tomorrow. we have a state of the union address tonight. all that to look forward to.

every day is -- every day is a blessing, is it not? >> that much is true. 100% agree. >> okay. make sure you do -- >> good to see both of you guys. >> we'll be together again some day. you're back tomorrow, becky? yeah, we'll see you tomorrow. >> all right, "squawk on the street" is next. good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at post nine. premarket has a little pep as some of the eco data is encouraging. unitcosts revised lower. big job numbers tomorrow. regional bank stocks mixed after new york community bank corp secures that $1 billion cash ingentian.