"squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. on this tuesday morning, you will see the dow futures are below fair value. down 35 points. s&p futures are up 10. nasdaq up 70. this comes after a second down day for the major averages. down two days in a row, but you are still talking about minor declines from all th-time highs. dow and s&p down 1% from the all-time highs. nasdaq down 2% from the all-time

highs. if you look at what is happening with the treasury market, this is the one to watch as we get the cpi later this morning. yields are lower. ten-year yield at 4.09. two-year yield at 4.53%. if you have been watching the price of gold, that has hit a new high yesterday. bitcoin is flat. just below $7$72,000. let's talk about the concerns at boeing. faa saying during the audit, it found multiple instances, many, in which boeing and spirit aerosystems failed requirements. now the report is revealing details of the issues citing materials from the slide presentation that it reviewed on it. reports said boeing failed 33 of the 89 audits that looked at aspects of the production process.

spirit aerosystems failed 7 of 13 such audits. at one point, the faa observed mechanics using a hotel key card to check a door seal. it showed mechanics applying a liquid dawn soap to the door as a lubricant and cleaning with a cheese cloth. when asked if these were appro appropriate, the representative said they were reviewing all identified issues for corrective action. the spokesperson for boeing says we will developa comprehensive action plan to show strength and safety. none of this is reassuring. that was my comment at the end. not the quote. >> if we were there and they said you have to do a couple of things, we might come up with

let's try some dawn soap. >> if we were working without any safety practices that had been taught or put on the line? >> if they said figure it out, we would jerry-rig. we don't know how to do it. you try to find some things and that's what we would do. i don't want to fly on a plane that i'm fixing. >> or putting together or building. >> what's cheese cloth? >> i feel i know what a cheese cloth. >> you strain stuff. it is like a rag. >> what is going on with this company? >> spirit or both? >> both. both. >> you have that many failures when the faa watches you? >> 713 of 13. >> the whistleblower found dead in the middle of testifies of problems he had seen there. he was a retired safety

standards manager complaining about everything that had happened and how safety and standards procedures dropped dramatically, this his words, i watched the video of what was going on. i don't know the details. he was found dead of an apparent self-inflicted gunshot wound. whatever the details vandsurroug his death, the video i watched him of describing the problems there sounds like massive issues. he said it was happening. they were cutting back on the safety standards in order to get the planes out faster. again, this is just testimony, but testimony from a retired boeing employee who would have seen a lot. >> yeah. is bastian on today? >> yeah. other things. oracle shares higher. $1.41 beat estimate of $1.38.

re revenue was below expectations. the cfo said the company added several large, new cloud st infrastructure contracts. microsoft was one of the large orders. oracle is good. oracle is building data centers for microsoft and azure. disney turning up the heat with the proxy battle with nelson peltz. here is part of the ad. >> what is the harm of letting nelson peltz have a seat on disney's board? the answer is simple. if they succeed, disney could suffer the same fate as other great companies peltz infiltrated such as ge and dupont.

nelson attacks companies to the shareholder value detriment. >> the video also criticizes peltz's board nominee saying he was a former disney employee which was passed over for a row mo promotion a decade ago. the presentation was long on as aesthetics and excuses. you want to talk about that? >> no, it is interesting to see it. >> what do we do? >> the bigger question i would ask is on the nelson peltz front, he sold shares in the company in the past couple months. if you are an activist investor and trying to demonstrate to the

world that you are committed to the company, you shouldn't be selling shares in the hidmiddle the proxy contest. >> how much does he have left? >> 6 million. >> i asked that question yesterday. 0.001 is enough to amount that wealth? >> that's what is happening. >> he has more than i have. >> he has more than you do. >> maybe not comcast. probably comcast. coming up, jpmorgan chase's ceo jamie dimon urging the fed to wait before cutting key interest rates. we will get you ready for the cpi report due out at 8:30 a.m. eastern. "squawk box" will be right back. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

♪♪ [storms sound] whatever weather comes your way [wind and snow sounds] weathertech has you covered. [bird chirping] [laughing] with our laser—measured cargoliners. no drill mud flaps and floorliners. to secure your phone don't forget the cupfone. order yours today at weathertech.com. you never know when it's gonna be a weathertech day. perfect weather today...

my name is oluseyi you and some of my it's gonna favorite moments day.

throughout my life are watching sports with my dad. now, i work at comcast as part of the team that created our ai highlights technology, which uses ai to detect the major plays in a sports game. giving millions of fans, like my dad and me, new ways of catching up on their favorite sport. jpmorgan chase's ceo jamie dimon out with a market warning saying he would to the take the prospect of the u.s. recession off the table yet. speaking at the australian financial business summit, dimon said the world is pricing in a soft landing at 70% to 80%. he thinks the odd of recession

is rouaround 60%. he says that doesn't add up. indicators are discotorted by t pandemic. he said the fed should wait past june before cutting rates. he said the fed's credibility is at stake. it is interesting. we will get to our guest in a second. dimon thought the economy would stay hot. he said don't assume a soft landing. he is in the camp that it will stay so hot that the fed will go further than they like. >> he is worried about stagflation. that is more. >> stagflation implies you get the slowdown, not that you stay hot. that the fed has to do more than it wants. >> in a declining -- >> he said that the whole time. that is not the shift. >> he is saying the economy is

good and we should -- i didn't know combined with that and he is saying that makes the fed's job harder and result in recession. >> he doesn't think they should be cutting in june so quickly. wait and see. >> he has been trying to keep the rates high the whole time. interesting. >> i don't think he is talking -- >> no, no. he is offering the market is wrong about the idea we will have the cuts. everybody says cuts in february, march, april. he kept saying no. >> he said it will stay high and we won't get a soft landing. you would like it. >> unless there is hasn't gone away. the february cpi out at 8:30. there is an increase of 88.4

month over month. jpmorgan chase private bank. you didn't talk to jamie? >> i missed him. >> you saw he called. you didn't answer. that's not true. >> i was here. >> would you wait until june? you have a different -- let's not talk about jamie dimon. what do you think as you are part of the company ? >> our case is it will be june. the cpi data and the three that follow that before the june meeting are going to dictate the direction. it seems clear to us the fed is balancing the risks of overtightening and slipping into recession and easing too soon and potentially skating us into the scenario where inflation does exaccelerates and we have bigger problem. >> when you talk about it, it seems like threading a needle.

for us to assume it is a soft landing is a stretch. they have to get it right. >> i think with the way data has been shaking out is not a stretch. that is why the market has come around. >> a miracle. first time ever? >> you can look back to the '90s and argue we had a soft landing there or rate before the pandemic, if the pandemic never happened, had we gotten the soft landing? we have the optimistic outlook on equities and we are reminding to not get complacent and we are making sure people have a full position in case things don't go your way. >> of all of the difficult we experienced in trying to handicap this, it all depends whether growth and inflation or a strong economy and inflation are definitely related. lately, we have been saying it is not necessarily a direct

link. you could have a decent economy and inflation could slow as pandemic supply constraints goes away and you can have both. you don't need to go to 5% unemployment. >> right. >> to have inflation come down or are we back with growth and inflation being the same thing? >> a couple of years ago, we were in the same camp thinking in order to solve the inflation problem, you probably did need to see the weakness in the economy especially with the labor market. what is causing us to shift our view is the labor market tightness has been solvedly by e fact you have the increase in supply. it helped release some of that tension. combine that with the fact that corporate america is more resilient to the level of interest rates and the growth picture still looks to be holding up okay.

>> even consumers have fixed mortgages. that may be the fed not getting the bang for the buck for that. would you say that as a firm that you changed your opinion? waller? there is that thinking now. that is different than what we used to think or a modification of it. >> absolutely. >> you have changed that? >> right now, our call is that growth can hold up while inflation continues to come down. i think it is this process of learning and recognizing the pandemic brought about a lot of the distortions that made the models harder to apply. >> that is the opposite of stagflation. >> right. >> that's not at the top of your list of concerns. the other issue is horrible. growth comes down and inflation holds up.

that's doom. that's death for financial assets. i've seen it in the '80s. ' '70s and '80s. you get the misery index. >> of course. we have been fading the stagflation concerns for a while. they hit a fever pitch when russia invaded ukraine and the commodity price spikes. it is not our base case. if you are someone concerned about stag applfstagflation, mau have more than stocks and bonds. we look to real assets as a hedge against that. >> i think you are very brave. you just said, jamie, you have no idea what you are talking about, kind of. >> not that at all. as a client -- >> you should have taken his call today. you made him feel better. >> perhaps. >> he is a little bit concerned about these things. you are looking at 0.4%?

>> 40 basis points. big picture is the longer term trends. obviously, we know option markets are telling us to brace for one of the biggest post-cpi prints. they are calling for a 90 basis points move if the number is hot or lower than estimates. by and large, we are looking for a transmission of the cooldown in the labor market to come through. >> if you see an increase for the second month in a row, does that concern you? people say january was a one-off. >> i think there was seasonality in the january data. given we're in the position with the fed staying patients with t with the resilience of the economy. >> that is not different from what jamie dimon is saying.

>> it did set us up. it was a one-off. the either one is not surprising. it will be a surprise. no one knows. thank you. >> thank you. coming up when we return, we will talk tiktok because the tiktok ceo is on capitol hill today ahead of the vote expected on the ban in the u.s. later this hour, delta airlines ceo ed bastian will join us on the set. we'll be right back.

why choose a sleep number smart bed? can i make my side softer? i like my side firmer. sleep number does that. the queen sleep number c4 smart bed is only $1,599, save $300. shop now at sleepnumber.com

you know doug, ever since switching to workday you've been a real rock star. rock star? what do you know about rock stars? 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. for a changing world. billy idol just stole your golf cart! welcome back to ""squawk

box." 1 in 5 teenagers say they use tiktok almost coulnstantly. the 38% of those teens argue with the parents over the use of social media. joining us right now is founder sonny who has been on the broadcast many years ago when you had an awesome service, which i loved. i don't know if you remember. the handwriting service that writes the notes for you. sold it and made a small fortune at the time. they shut it down. i was saying during commercial break that i want his service back. let's talk about legends this morning. >> thank you for having me. >> tell us about what you are doing. i will say without outing my kids, there is a little bit of this going on all the time and it is so close to the face that it makes me upset/sad.

>> i think a lot of parents feel this way. legends is a platform to teach kids confidence. we use videos and activities and a.i. assessments to give kids practical tools in challenging situations. box breathing or reframing. i started doing it. >> what? >> it is meditation. how do you slow down and take it easy? as a parent, i see the mental health issues as young adults. online is a big role to play in it. however, all of our kids will get online. i spent the past three years talking to thousands of families and experts and say what will we do about this problem. i see the problem, but not a lot of solutions. the most susceptible kids are

the ones that lack confidence. right now, i think that kids are losing confidence quickly between the ages of 12 and 14. confidence is a skill. >> 12 to 14. that is when they hit tiktok? >> kids in middle school. the confidence rates are declining. >> because of cyber bullying? >> they are always there. we cannot ban bullies in school. we can't ban the bad guy. we need to actually arm kids with skills they need to improve. it turns out confidence is a still you can practice. >> how do you out the addiction? part of the challenge is not just building confidence through an app like legends or platform, but getting kids to want to do that and use your service rather than keep scrolling? >> i think we think about technology as a bad thing right

now. i think that is the biggest mistake we will make for the next generation. technology is a powerful tool. we need to use it to help kids. when we do things -- it turns out of 65% of people used tiktok to do their homework. algorithms can be good. we use short-form video to put good content on. a couple of generations ago, the bad screens were tv. tv is bad. when they decided people are watching tv, let's put something good on. "sesame street" was a good show and they mapped it to jim henson. >> is this an app? how does it work? >> it's a program you use in a mobile web app on any phone.

we send parents to do it alongside their kids because learning is best with parents and children together. we send you a text every day. everybody loves videos as you all have seen with your kids. it is a great video of "the rock" talking about how he dealt with not getting into the nfl and identifying the inner critic. you do an activity of naming my own inner crcritic. they use that tool for the challenge and we assess how they are doing. we can give them more content like that. these personal learning programs will be the future of how kids learn. >> what is the age group? >> 7 to 11. we focus on elementary school kids to build skills before they have issues. right now, everything is an intervention. an issue and throw somebody at

it. we need to prepare people before issues arise. that's why we focus on it. >> what is the riprice? >> $10 a month or $70 a year. >> consumer? >> direct to consumer product. it is difficult. schools have not changed in a listen long time. americans want different skills for their kids. new skills for a new world. technology is going to give a huge opportunity to add new ways to learn and new things to learn. >> sonny, thank you for coming in. you had one successful venture already. i want to get my kids to use it. >> thank you very much. >> with me. i need it. >> that's what i'm saying? what is the upper limit for age? >> i am learning so many things.

we were never taught these skills. we wonder. you do it alongside your kids and we find most people love it because it is quality time you spend with your kids. it is just five minutes. it is an interesting video, but you feel good about it and you learn a lot in the process. >> thank you, sonny. >> thank you. when we come back, we have details on consumer spending from the cnbc nrf retail mo monitor. steve liesman will join us next. as we head to break, let's look at yesterday's s&p 500 winners and losers. wall street forecasts over 100 billion in sales for anti-obesity drugs 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 and better blood sugar control with reduced spikes. lexaria bioscience. transforming the future of glp-1 drug delivery.

at morgan stanley, old school hard work meets bold new thinking. to help you see untapped possibilities and relentlessly work with you to make them real.

breaking news from 3m. the company says ceo mike roman will step aside as ceo and take over the role of executive chairman on may 1st. bill brown has been appointed as ceo. he has been the chairman of l3. the board waived the retirement age for roman and brown. roman talks about how they have been on a transformation journey over the last several years. the journey has yet to payoff for shareholders.

the stock is down 9% versus the market up significantly. we will continue to watch shares of 3m. up 69 cents right now. fresh data on the consumer and whether the january spending slump continued into february. steve liesman joins us with the nrf retail monitor. good morning, steve. >> reporter: good morning, becky. bouncing back from the january dip with the help of the leap day, of course, but extra ganchs f gains for the day. we get spending data which showed a 1.1% gain using data without autos and gas. 0.2% decline in january. the year over year showing 6.3%. core retail which includes

restaurants up 1% compared to 0.4% decline in january. a very strong year over year. a lot of that coming from the leap day. those 1% gains go away, however, down to 0.4% and 0.3% which is modest, but still on the positive side when you adjust for the leap day. they show a rebound from the january decline and maybe not the consumer slowdown. consumer goods and hobbies is strong. beverage as well up 1%. non-store retail is up 0.8%. the 0.2% decline in the retail monitor last month was matched by 0.5% decline in the census retail report. unlike the census, the retail monitorderived from the personal data numbers.

economists are looking for 0.8% increase in the census retail data on thursday. that would be a reverse al of the decline in january. take the forecast and if it is right, the cnbc retail monitor suggestion the january decline is not the beginning of the slowdown. >> steve, we were talking about the comments from jamie dimon and what he anticipating he happening with the economy. everything that has been built in with the 70% shot of a shoft landing and he puts it at half that. he sees the strength of the consumer, but it is hard to read the traditional data points post pandemic because so many things got so skewed. >> reporter: i think he is right. i think it is not in the bank just yet. you have to bring inflation down.

the fed can ease back on the redes restrictive rates. the cpi data is really important. i guess i'll be wrong in predicting this is the month we see the housing data come down. i thought it would be january along with other folks and that didn't happen. if you get it in february, we can start to say, okay, this one component which kept everything up and really played a big role in inflation has started to come down finally. >> if it doesn't, what is the narrative then? >> reporter: well, you know, it is interesting. you asked that because i have been thinking about that and thinking about how the fed has been thinking about it. they might eventually look through it. they might say it is not showing up in the data. it is a methodological problem. they want to see the numbers come in and come down on the

service side without housing. that is another way they are looking through it. they will remain higher for longer if that a's the case and the discussion joe had earlier with the woman from jpmorgan chase, they are separating the idea that you can have strong growth and inflation will come down. it has happened and that is part of what jamie is saying. don't rely on that. that is not the normal course of things, but we are in the post-pandemic period and still with the supply chain is the case. >> if we can have terrible growth and high inflation, stagflation, i don't know why you can't? it means the inverse or converse or something. if you have one, you can have the other. >> reporter: it ends up being transitory. the supply shock eased off not

in the time period that the body politic was happy with the success of the word transitory. it took two years. >> unless we never get to 2% because of what we did. >> reporter: joe, i'll tell you this, if somebody told me you were at 9% and you were going to 2.9% and not 2% -- >> you would be happy. >> close enough for rock 'n' roll, my friend. >> no cuts from where we are then. >> well, you can ease back a little bit. i think they can ease back and then wait and wait and wait and ease back again and see how the economy responds. that's one possibility. they are pretty tight by almost every metric. >> okay. we keep asking about that. are we really restrictive? yes, we are. >> a little bit. i think there's a half a point

easing off the top, joe. >> okay. >> steve, thank you. >> pleasure. coming up, more on "squawk box," and ed bastian will join us on the set. we have so many questions for him. reminder, you get the best of "squawk box" in our daily podcast. follow on your foravite podcast app and listen anytime. we're coming right back. they're . more efficiency. more benefits. more growth. when you realize you can give your people everything, and more. thank you very much. [applause] ask, "now what?" here's what. you go with prudential to protect, empower and grow. with everything you need to deliver, you guessed it... more. one more thing... who's your rock? learn more at prudential.com

the all new godaddy airo helps you get your business online in minutes with the power of ai... ...with a perfect name, a great logo, and a beautiful website. just start with a domain, a few clicks, and you're in business. make now the future at godaddy.com/airo

welcome back to "squawk box." time for the "executive edge." today is the equal pay day. this symbolizes what women earn over men. 8 83.6 cents to the dollar for men. that amounts to $10,000 a year and $500,000 for the career. the gaps are bigger for women of color. the gender pay gap is closing from 82.1 cents a decade ago. joe. coming up, spring is in the air. we are getting close a couple of weeks. travelers are looking to get away. delta airlines ceo ed bastian gives us earnings guidance next on "squawk box."

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

welcome back. delta airlines just providing an investor update. affirming the outlook for the full year and the march quarter. delta expects to deliver year over year revenue growth in the top half with the first quarter profit above what the streetwas expecting. joining us is ed basti bastian delta ceo along with phil l lebeau. ed, it sounds like this is not far off from the street expectations. you are looking for 36 cents. you are looking at $6 a share

for 2024. you had forecast first quarter revenue growth of 3% to 6%. what are you seeing that gets you to put out the guidance? >> the revenues are coming in strong. we are coming in to the top half of the guidance range. fuel prices have moved up. that netted out. the guidance range with the eps is coming in right in line with where we thought the start of the quarter. we are running a great operation. reliability is back and better than ever. it is interesting because it is four years ago this week when covid was officially acknowledged and everything started to go down. you look at where we are today versus where wie have been the last four years, we are in a good spot. >> you have a good family here. >> i appreciate that. i do pappreciate that. >> for delta.

i don't know if he is as effusive with you here, because you are not that close to delta, but are you willing with him here? >> you heard me say it on the air. >> now he's here. don't just say it to scott. >> scott kirby. >> yeah. >> we said this often teamime notitimes in the context of unions. you can look at the different polls and customers and satisfaction scores. employees are happy. one reason the customers are happy. >> it is working for you. >> it relates, unfortunately, relates to some of the union issues that they don't have. >> this is acndrew talking positively about an airline. i don't know i have seen it

before. it is like a unicorn. >> airlines are tough to run. my job is to take the best. >> here is a question. what do you think you have done and i'm curious that you have done with the employees and with the company so it frankly has not become a people, full stop. >> what you have done with the employees and the company so it, frankly, has not become unionized? >> it's in the culture. this is not something i have done but we have done and it's an employee first culture, and our people are by far the best performing in the industry. you witness that, andrew, every time you are onboard. the results they deliver are the very best. their way and rewards are the very best and you put that mix together, and it's the perfect alignment of customer, employee,

management, shareholder. our pilots are unionized, and it's not about unions versus nonunions, it's about people. my job is to take care of them and not allocate that and let somebody do that for me. in the last ten weeks we have had nine of the top ten sales days in our history in the last ten weeks. >> the idea of the consumer being done with travel, is that over? >> this is travel in total continuing to accelerate, all forms of travel. business travel has taken another step forward. we are back pretty close to business travel before covid

hit. the summer will be very busy. >> can you see putting more planes in the air? is there enough space at the terminals to put more -- i mean, part of the demand issue is there are not enough planes these days? >> there's a lot of supply constraints, supply and demand issues and air traffic control -- >> good for you in terms of pricing with the competition, or no? >> well, it helps us get our reliability to where we need it to me. we have been focused on growing the next few years to get back where we are now. there will be marginal improvements, but for a couple years we are where we are going to be. >> phil is here, too. >> ed, good morning. >> hey, phil. >> over the weekend by

southwest, you said you are not expecting to get the max 10s, and do you think that holds because i am sure you saw the article about more details about it, frankly troubling details as you read the article in terms of noncompliance issues found in the safety audit by the faa. do you think you get the max 10s by 2027? >> i was asked if we expect to receive them over the next few years, and candidly it's not an integral part to our strategy. we have not taken the max, and we don't have any max, and we have airbuses that is providing us the lift, and when the plane

is ready we will take it. >> how confident are you in the boeing planes in service right now, because some of the reports are -- >> enormously confident. >> the safety record goes back -- >> yeah, years. >> they would have suddenly been terrible at what they do, and they never had a history at what they do, and do you think it's over played by the media? people do look for everything -- >> there's clearly been changes to the development of the max platform, and i am not saying it's troubling but it's different than what they have historically done. >> change meaning? >> in the reliance on spirit, aerospace, and all the changes with the max have been a

differentiation compared to what we have seen from boeing historically, and the faa and everybody else is properly focused on. dave articulated what he has to do. we will continue to hope and watch as he delivers. >> phil has another question for you. phil? >> ed, i have one other question for you. you talk about the fact that you are pretty much back to prepandemic levels in terms of business travel and how strong demand is now. what is the biggest change you notice in travel bookings and patterns now compared to four years ago, before the pandemic? >> well, i think one of the things is the premium continues to accelerate. it's our highest margin product. we continue to put more of it out in the marketplace. international is also something that at its highest level. last year our highest performing routes in our system were

international, specifically trans-atlantic, and i think the spring and summer is yet again going to be a busy period for trafrl. busy, by the way, is not just back but business is traveling in all sorts of forms. >> the reports we have heard from people suggesting that -- some people in the industry suggesting that revenge travel may be waning a bit. you are not seeing that at all? >> i am not seeing that. it's not happening at delta. delta, we have a unique situation, we have a strong international arm and strong business arm and strong focus here on the coast. delta is doing well. >> i know we have to run. private aviation, and some viewers out here have enough to do it, and you put millions in what was called a rescue package of sorts. what is the state of play with that company? >> we are going through a turn around. there's a new team running

wheels up and they are doing a good job, and they have delta now standing behind them, which is a difference. there's no private aviation operator out there. >> you look at the stock and it's still 2 bucks, 3 bucks. >> it will take a couple years before the turn around starts to take hold and we get out of the danger zone there. the focus is driving great reliability. >> you don't want to own the entirety of that business? >> i don't. i don't. i think there's value we can bring. >> phil, did your delta flight get canceled? why aren't you here? >> i will be with ed in atlanta for earnings. sometimes i cannot be with you, joe. >> you could have taken wheels up? could have taken -- >> all right. >> thanks, ed. >> good to be with you. micong up on the other side

of this, we will have the cpi countdown, mohammad el-erian with us. ♪ unnecessary action hero! ♪ -missing punches? -unnecessary! -check reversals? -unnecessary! -time sheet corrections? -unnecessary! -unentered sick time? -unnecessary! -go! -unnecessary! -go! -unnecessary! -when you can take this phone, you'll be ready. -make the unnecessary, unnecessary. let your employees do their own payroll.

you know doug, ever since switching to workday you've been a real rock star. rock star? what do you know about rock stars? 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. for a changing world. billy idol just stole your golf cart!

good morning. investors getting ready for inflation data that could provide insight to the fed's rate policy. we will get a preview of the number and what it could mean for stocks. the president's proposed $7.3 trillion budget and his plan to raise taxes on the wealthy. we have a break-down of his budget and how republicans will respond. that's ahead. and then congress is planning to vote on the parent

company of tiktok. the second hour of "squawk box" starts right now. good morning. welcome back to "squawk box" right here on cnbc. we are live at the nasdaq market site in times square. i am andrew ross sorkin along with joe kernen and becky quick. as of now, if the market opened literally this second the dow would be up 6.34, and nasdaq about 83 points and the s&p 500 up about 13 points. the treasuries, the 10-year and 2-year, and the two-year note standing at 4.532. and then cryptocurrency, right

now you are looking at bitcoin at 71,900, almost near its all-time high there. joe? >> breaking news in the last half hour from the dow component, 3m, and the ceo will step aside, and the stock was down when the news broke and it since has turned around. bill brown will take over as ceo. he was the former chairman and ceo of l3 harris technologies. the board waved the mandatory retirement age of 65 years of both roman and brown. that head shot must be old. doesn't look 65 there. maybe he's very youthful. >> maybe. southwest airlines out with an investor update. it's cutting its forecast for

the number of aircraft it expect to receive from boeing because of the boeing delays. it's down from a previous expectation of 79 jets. the company says it's not planning deliveries of any 737 planes this year based on current certification status. southwest airlines this morning down by 5.3%. in an hour we will get the latest information on inflation, and this is the last one before the fed policy meeting next week. expected to see a rise of 0.4% month over month, and that's up from january, and the cpi is expected to particular lower month over month on an annual basis. for the possible implications from the fed, we want to bring

in mohamed el-erian. how much is riding on this number today? >> a lot, you know. after last month's hotter than expected number, people are nervous and are hoping last month was a fluke. remember what happened last month, when the release came out, stocks sold off and yields went up and people really changed expectation of rate cuts this year and even had people talk about a rate hike. the hope is that this month we will establish that last month was a fluke. i think there's a bigger picture and that was picked up by the new york fed inflation expectation, and that was that we are stuck. >> the inflation expectations, that's a leading indicator? >> it asks people what do you expect this year, the next year,

and the next five years. the next year is 3%, and when you go to three to five years, it's 2.7 to 2.9%. it's still far away from what people tend to think about the fed's inflation target. >> if the number is hotter than anticipated, what does that mean for the fed's possibility of rate cuts in june, which is kind of what the impression was from powell when he spoke this last week, and that was that they are ready to cut and that time is coming sooner than later? >> the market has been on a roller coaster, and we have been pricing in seven cutsand then four cuts, and now we are from march to june. the fed held a steady course. three cuts most likely starting in june, and that was reaffirmed by jay powell. i think, becky, that's the right

outlook. that's what should happen given the economy we are living in today. >> even if that inflation number comes in hotter than anticipated, you don't think that will push things off? jamie dimon speaking yesterday said he thinks maybe the fed should not cut in june but wait and see how it goes and give the fed room, and he thinks the fed's reputation is at risk if they cut too soon. >> yeah, and they could wait too long. what is the right underlying inflation rate, or what economists call the neutral interest rates? what do you think the equilibrium rate? if you think it's 2%, then they should hold off. if, like me, you believe we are

living in a world where supply is flexible and you should aim higher than 2% and tolerate more than 2% for a while, 2.5 to 3, then we are restrictive and we should cut. all of the discussions lead back to something that people don't like talking about, which is what is the right inflation target for the world that we live in today? >> what do you think it is? >> i think it's 2.5 to 3. i think the biggest likely error is that the fed gets too data dependent and continues to be too data dependent and focuses on only 2%, and in the process sacrifices what has been an exceptional economy that has outpaced all the other economies in the world. >> too data independent because you think the data is wrong or outdated? >> first of all, i think the data is lagged, and the tools

act to the lagged future. if all you do is look in the rear view mirror driving a car, then you will likely crash. however, if the rear view mirror informs you but you are looking forward, that's a different way of policy making. >> so you think -- go ahead. >> well, they dismissed it as transitory, and because of that they are overly dependent on the data. at some point they have to transition to a broader view of the economy. >> steve liesman was pointing out in the last hour how the housing numbers, that's the most stubborn part of the inflation data, and they may at some point say forget it, we are not going to pay attention to this because we think it's flawed data. >> there's good reason for that.

we have become experts on single family, multifamily, what underweights between the two, and there's a lot going on there. it's the owner equivalent rent that causes the inflation number to be hotter than what was expected last month. i don't think you can ignore it totally, but i do think the fed will see through a lot of it, as steve said. >> if the number is hotter today, you would say take that with a grain of salt, too, even though it would be two months in a row of higher inflation coming in under the cpi number? >> i would say understand that because it was happening on the supply side and what will continue to happen on the supply side, we are going to live in a world where inflation is nearer to 3% than 2%. it's not the end of the world, and the economy is functioning well and people adjusted. we will go lower, but if we force it, becky, that's what i am worried about, if we force

it, we will push the economy into a recession, undually so. the economy doesn't need to be in a recession, and it will cause more financial accidents. at the end of the day there's a judgment to be made here, as to what is the new equilibrium inflation rate? i think the numbers will tell us that it's higher than the 2%. >> perfect. mohamad, thank you for your guidance this morning. >> thank you. coming up, inside the shadowy world of organized retail crime. cnbc gets an exclusive look at selling stolen. that's next. and president biden unveiling his $7.3 trillion budget plan,

and we will talk about that plan and what it means for the economy when "squawk box" comes right back.

business. it's not a nine-to-five proposition. it's all day and into the night. it's all the things that keep this world turning. the go-tos that keep us going. the places we cheer. and check in. they all choose the advanced network solutions and round the clock partnership from comcast business. see why comcast business powers more small businesses than anyone else. get started for $49.99 a month plus ask how to get up to an $800 prepaid card. don't wait- call today.

sev welcome back to "squawk box." organized crime ring, and we are going inside the criminal police investigations that target those rings that set up the thriving businesses to steal and sell online. here's courtney reagan, "selling stolen." >> it's a chilly clear morning in the picturesque foothills of san diego county as we head to a suspect the crime scene. a convoy of law enforcement vehicles is about to descend on

a unlikely place, a mansion rented out as a wedding venue, and police believe it's headquarters for a theft ring where items stolen are being resold on amazon. as we pull up, authorities tell us they have the suspected ringleader in handcuffs. >> there they are right there! >> it's happening everywhere. for months we had exclusive access to the california highway patrol, and a total of $40.5 billion in the u.s. according to the national retail federations most recent estimate. on another day in another california city, we see more truckloads of what police say is stolen clothing, mostly from t.j. maxx. >> i think people feel like it's

hopeless. i want the retailers and victims to know that's not true. >> retailers specifically pointing to theft as a growing problem in recent years include target, footlocker, walgreens and ulta. but many are raising questions about whether retailers are using theft to cover their own miss steps. according to the search warrant, this woman is in charge giving a group across the country a list of retail stores to target, and the ulta beauty products eveneding up on the online makeup store at deep discounts. they have stolen $8 million worth of merchandise since 2012.

officers sorting and carefully organizing everything, most of it $387,000 in stolen items from ulta, according to authorities, but some items from sophora, victoria secret, bath and body works, and sun crafters. donna washburn bought her daughter a $42 makeup item from christmas. >> did it ever occur to you that buying off amazon, the items could be stolen? >> no. you think they are checking these things. >> and now the macks plead not

guilty. >> the onlinemakeup store stealing stolen items, year after year. >> we asked how this could happen? >> if you are amazon, should you have had some kind of algorithm that flagged it? >> this is not just about amazon. there are other online marketplaces that serve as fences for the sale of the stolen product, and i don't see the online marketplaces raising their hands saying we acknowledge this is dirty money. >> ulta beauty ceo spoke to us in an exclusive interview about the issue. >> we are absolutely fed up. it's impacting the experience we work hard to deliver to our team, and it's intaimidating an it could be traumatic peufplt what could amazon have done to know these were stolen goods? >> what i would say more

broadly, there's technology available, you know, and there's use of advanced analytics and capabilities to try and understand behaviors indicative of reselling stolen goods? >> are you shocked by the shear volume that one ring could have been doing over more than a decade? >> unfortunately i am not that shocked because we have seen it in other parts of the country, and the magnitude of this one is significant. i do believe that the marketplaces and online distribution of stolen goods is part of the problem. this is not some individual that, you know, bought too many lipsticks and they want to resale it. >> amazon declined an online interview but told us it's untrue the company is praofitin from stolen goods. the company added that it uses

sophisticated detection and prevention solutions to spot a range of organized retail schemes. as far as t.j. maxx, the company tells us it's laser focussed on fighting retail crime in its stores. we have a youtube version of the story. it's amazing. there was so much great stuff and multilayers to this. >> how much of this is about what the stores are doing to prevent the theft verses the districters and the amazons of the world are doing to prevent the sale, if you will? >> totally. we asked the ceo that same thing, and he said we have invested in our asset protection team, and many of them are law enforcement, and extra technology tools and training employees, and we are locking up 100% of their fragrances. if you are ulta, part of what

you are offering the customer is to try the lipsticks and eye shadow. >> it's a horrible experience for the customer. >> who has the leverage -- i assume amazon has the leverage, but if i am a seller that i am being robbed, sophora being robbed or i am the manufacturer of some good, and amazon wants to sell on that platform, too, and this is kind of like the nike story. the reason why there are few counterfeit nike sneakers on the amazon platform is because amazon cares about what nike is saying and doing, and why is that not true for some of the other companies? >> that's a good point. the amazon business model, or to be fair, thewalmart marketplace goods model, and those are first party relationships and they are selling directly in cahoots with

those customers. >> wait a second. wait a second. back up. that sounds like if you don't do a deal with me and sell your goods directly through me, i am not going to bother policing -- >> well, if you are a small manufacturer in this country, your relationship with amazon, unfortunately is different -- >> that proves amazon can police it if they choose to. >> that's what the argument is, amazon is one of the most sophisticated companies in retail, and they have algorithms, and these items were deeply discounted -- >> that should be easy to identify. >> they didn't identify this one, but they said we don't profit -- that's false. >> yeah, i do agree because -- because even in this case, it was a third-party marketplace

seller, and amazon did not touch the product and didn't hold it for distribution or ship it out, and they were paying amazon commission in order to host the site. >> yeah, you don't get to be on there if you don't pay them. >> they did make money. they didn't touch the product, but they made money. we asked amazon you have been asked to turn over the money and they did not directly answer that question. >> what is the -- we keep saying amazon, but what you may be talking about, too, is ebay? >> ebay has been a problem, and facebook marketplace has been a problem, particularly because a lot of the times the exchange is good and there's no currency exchange on there, so facebook marketplace operates in a different way than what the other apps offer up. it's happening in lots of places. >> what percentage of the

business -- >> we don't know. >> the reason i am asking about amazon and we keep talking about amazon, and most merchandise like this would be down ranked on amazon, and they would say they are not using their di distribution platform, and it's more buried on the page. >> yeah, you have to go to the back stacks. >> yeah, that's part of the problem is the data is hard for law enforcement to collect, who is the biggest problem. when i did a story like this in 2019, it was all being run through facebook marketplace, and that was a problem, but previously it was the local pawn shops, and a law was passed in utah that says if you bring me a good and it's still in the box or tagged, you also have to give me a receipt to prove you bought it. that's something they were doing personally in the pawn shops, but it's not the same online.

to your point, the executive said it's not just amazon. >> it's definitely not, but why aren't the laws written to say you are liable for it just as if you were a physical retailer selling stolen merchandise, where is the liability? >> well, if you have the high-end sellers, you have to be tracking it better and we don't know if everything that gets flagged it gets turned over. to play the devil's advocate, in this particular case, it was called the online makeup store, and it was registered to a p.o. box, and if it was flagged, they could open up another storefront and call it something different and give it a different address. >> what is going on shopify? >> well, shopify powers a lot of

these websites, right? i think they may say the onus is less about them because they are not holding the merchandise. >> to me shopify is no different, and are they taking a commission or -- >> it depends on how it's set up and what tools you are using as a business from them. >> i agree. >> it's a very tricky problem. >> thank you. >> thank you. when we come back, we will look at premarket movers, and then what you need to know about the president's budget proposal. american airlines, the company says it now sees its first quarter adjusted loss to come in the lower end of the prior guidance range, and they said that's driven by the fuel costs. that's different than what we heard from delta this morning, and theyaid eyre sth a looking

at higher expectations because prices are higher. we'll be right back. wall street forecasts over 100 billion in sales for anti-obesity drugs 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 and better blood sugar control with reduced spikes. lexaria bioscience. transforming the future of glp-1 drug delivery. we really don't want people to think of feeding food like ours is spoiling their dogs. good, real food is simple. it looks like food, it smells like food, it's what dogs are supposed to be eating. no living being should ever eat processed food

for every single meal of their life. it's amazing to me how many people write in about their dogs changing for the better. the farmer's dog is just our way to help people take care of them. ♪ this is our future, ma. godaddy airo. creates a logo, website, even social posts... in minutes! -how? -a.i. (impressed) ay i like it! who wants to come see the future?! get your business online in minutes with godaddy airo

let's get over to dom chu with a look at this morning's premarket movers. are you at headquarters? is it up to you or down to you? let's get up to dom chu -- >> i think it's up. >> or over the river, maybe? >> well, north. anyway, joe, we will start off the morning movers story with a moving one, and that's oracle. 300,000 shares of trading volume. this is the business for tech services and most importantly cloud computing giant. profits were a beat, but revenues narrowly missed expectations and it was optimism over stronger growth over oracle's cloud computing, and those results leading to more positive analyst commentary this

morning. they are talking about more robust demand for the oci offerings. for more on that part of the story, head over to cnbc.com/pro, where pro subscribers can read more about that. oracle shares up big. and then next upl, acadia f pharmaceuticals. it's halting more clinical trials and there's a late-stage study of the treatment did not show signs of symptoms tied to schizophrenia. the shares dropped 23% or two to date. and then advanced auto parts, higher than 1%. gained about 3.5% yesterday due to a "wall street journal" report about activist hedge

funds third point, striking a deal alongside another activist site. those shares up after a 3% rise yesterday. i will send things back down to you in new york city. >> good work. thanks. next, a breakdown of the president's 7.3 budget proposal. and then we will hear from former boston fed president. we're coming right back. today half of public companies in the u.s. offer paid parental leave for primary caregivers, and 49% offer some

leave for secondary caregivers, enabling ptnarers to actively share childcare responsibilities. celebrating women's history month, i'm julia boreston. because when you experience europe on a viking longship, you'll spend less time getting there and more time being there. viking. exploring the world in comfort. - so this is pickleball? - pickle! ah, these guys are intense. with e*trade from morgan stanley, we're ready for whatever gets served up. dude, you gotta work on your trash talk. i'd rather work on saving for retirement. or college, since you like to get schooled. that's a pretty good burn, right?

at pgim, finding opportunity in fixed income today, helps secure tomorrow. our time-tested fixed income suite, backed by over 145 years of risk experience, helps investors meet their goals. pgim investments. shaping tomorrow today.

president biden unveiled his $7.3 trillion budget plan for next fiscal year. the proposal would raise taxes on the wealthy and corporations. let's bring in former congressman of texas that served in the house, and then we will start with congressman israel. significant tax increases, and i understand the reason we need to do it is because of the amount of spending that will go on. i don't know if you have looked closely at this, but people complained about how the deficit kind of got blown out in 2024 when we were not trying to do that because it was post pandemic. this doesn't -- this lowers it

just fractionally for 2025, the deficit. as a result, fortax receipts we are talking about 19% of the economy is going to be taxes, it's going to be taxes. that is verses a 20-year average, and actually it goes back to 1974, so much longer than that. a 50-year average was 17%. it will be 19% going up to 20.3%, so we are raising taxes to keep spending. do we need to do that post pandemic? why raise taxes if we don't need to increase spending? >> well, a $34 trillion debt is unsustainable, and this decreases the debt by over $23 trillion. thank you for having me on, especially where my old friend, kevin brady. a president's budget is not a

budget, is it and always has been a political statement. it dies almost as soon as it arrives on capitol hill, and the republicans in the house adopted their n contrasting budget last week. so this is under both parties, it's a statement of values and priorities. it's meant to draw a contrast. the contrast here is a budget that is does decrease the debt by over $3 trillion, and that provides tax cuts for the middle class and reduces costs of prescription drugs and other costs and it's a document that is intended to play fairly well with the electorate. i agree with you that while we can squabble on some of the details, it's absolutely urgent for both parties to find a way to reduce our debt. >> i know you are saying it reduces the debt a little, but for a long, long time, and even

as recently as 2019, congressman, the debt is a percentage of gdp was 79% in 2019. in this budget it's at 102%, and it stays there all the way through the next decade. it goes up to 106%. that's so much money we are spending on maintaining the debt that it almost constrict everything else. i know you said it would reduce the debt by $3.3 trillion, and that's assuming all the new taxes don't hurt the economy in some way. that's assuming that nothing bad happens from taxing all of this private sector investment, if you will. >> well, look, the increase -- look, you have to do two things in order to bring down debt. it's no different than any household. i own a small business on long island, and it's no different than what i went through. you have to increase revenues

and make cuts where you can. this budget does both. it increases revenues by asking the wealthiest of the wealthy to pay more, and it creates an alternative minimal corporate tax, and it increases the corporate tax, and anybody that says to you that we can balance budgets without seeking revenues can -- >> why continue to spend it at crisis levels? that's the thing, even if i grant you that you have to raise taxes, you are supposed to spend less when the crisis is over, and we never seem to. let me get to congressman brady, because republicans definitely have some answering to do here. the defense budget goes down in real dollars, so in a world this dangerous, the president is proposing a defense budget that is even into the future that is less than what we are spending right now, and that's the deal that kevin mccarthy had already

agreed to with the president. >> yeah, joe. good to see you. steve, thanks for joining. great to see you, old friend. yeah, the world is getting dangerous and we have to have stronger military and resources there, and that budget needs to be strengthened in one way. in the budget, $25 trillion in taxes with investors and family owned businesses and farms will do economic damage. if you want to grow revenue, don't tax, you grow the economy. in fact, i think the two elements you need for getting this budget back at least in the balance and get that debt down is you need growth, economic growth, and you need guardrails around spending. there's bipartisan bills that start to track that. but here's the key, we are supposed to be competing head-on against china, so why does

voluntarily driving our corporate tax rate to the worst one-fourth of the world, how does that help us create jobs and bring more revenue and manufacturing and research to the united states? it does economic damage. and on the corporation rate, we didn't lower the rate on corporations, but we lowered it on them. we did that because our economy had been under 2% for far too long, and wages werestagnant for a decade, and every month, joe, you were reporting on another u.s. company moving their manufacturing and research and headquarters overseas, and we lowered that rate to become competitive and reversed all that. >> we had former president trump on yesterday, and we talked about the tariff proposal, and by some estimates by economists,

it could be a tax on families -- >> well tariffs are taxes, and they drive up prices and make it harder for average families to succeed in. we know higher tariffs had an impact on the economic growth while republicans held the white house. so i would respectfully urge the president to rethink those tariffs, in fact, the way we compete against china and the other countries is to keep the pro growth tax code and make it permanent for the long run, and that makes us far more competitive, i think, than tariffs will ever create. >> congressman, is it just touching on the entitlements for a second. yesterday, on that interview with president trump, he was talking about entitlements, and he said there are plenty of places to cut in terms of waste, and the biden administration,

either side is wanting to do cut the video right off at there are cuts to make and say he's going to cut entitlements, and joe biden won't. it probably would be good if somebody would be honest and say we need a means test or do something, and that's not what he was doing, but that is what was immediately tweeted out to 39 million of the president biden followers. it gets tiring. both sides know whether -- what somebody said, and they completely cropped it so it looked like he said something he didn't say. >> i didn't -- >> go ahead, kevin. >> i'm sorry, steve. i think what steve, both he and i recognize is that without both parties coming together, there's going to be serious cuts in social security for seniors, and serious problems for medicare. the fact of the matter is we have -- no one party will be

able to save both programs, both will have to come together and find common ground on a way to save those for the long-term. i think the president was talking about cutting the fraud and waste that we do have in entitlements, but the truth of the matter is we have to save them. >> steve, you're the director of global affairs, and is your office in the andrew ross sorkin building at cornell? >> you have to be much smarter than i am to have an officer there. >> yeah, we are still working on that. i have some work to do. >> is that gold plating on all the fixtures in the bathroom? >> we have to talk to the development office about that. i am sure they will be calling after. >> i was kidding. there's not a sorkin building yet? >> not yet, and yet is the operative word.

>> we have to go. thank you. when we come back, we will get a check on the state of small business. then, is a ban on tiktok coming tomorrow? we will look at the challenges for the company and the creators. "squawk box" will be right back. this is real time insights. i am here with a consumer markets leader. how are companies cracking that code? >> a consumer is not just somebody that buys a product. as a patient or employee, when you are watching the television, you are a consumer. it means companies have to

understand how to generate true consumer insights. think of order to cash and the new new is search to purchase. >> how are you seeing that actually take shape? >> the number one request from our clients is help me master a consumer experience, and that starts with the fact that consumers interact with brands passively and actively, sometimes good and sometimes bad. we help our clients use ai to move from dabbling in personalization to curating an end to end experience for that shopper. >> what can be learned from companies that already have been doing that? >> three things. you have to segment those consumers, and know what their needs, wants and expectations are. second, you have to use ai to build journeys that include content services and product, both in the real world and online. third, you have to earn loyalty. it's not a transaction anymore, it's a relationship. >> interestinginsights. kathy, thank you so much. >> thank you.

small business seeing a drop in optimism last month. kate rogers joins us now and has more details from that report. >> becky, good morning. the national federation of independent business is out with its monthly read on optimism for february showing a slight decline as inflation continues to weigh on owners. this is a nine month low and tied for the lowest reading so far since president biden took office. the top concern for the month was inflation as quality of labor fell to number two. taxes ranked as the third most important issue. the chief economists said inflation is sticky, goods prices have fallen as expected

but service prices are resisting a decline, two-thirds consumer spending. for most small businesses, wage costs are the top operating expense for the labor intensive firms. they were raising selling prices, and that's high, but retail, construction and services a sufrl lining on the employment front, concerns over quality of labor fell to nearly four-year lows. it still ranks as a key issue, but inflation was more top of mind for owners surveyed as labor costs are coming into focus. back to you. >> that is a big concern about the inflation they'reseeing, kate, especially with the number that we'll be getting in just about 40 minutes' time. cpi number coming up. kate, thank you very much. >> thank you. the clock is ticki ing for tiktok. congress set to vote on a ban of the social med aiapp. what it means for the company and creators, that's next. "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? 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. for a changing world. billy idol just stole your golf cart!

welcome back to "squawk box." congress will vote on legislation tomorrow that will force bytedance, the owner of

tiktok, to divest or face being banned in the u.s. joining us right now is axios business editor, dan. let's first handicap the chance of this happening, but assuming that this actually gets enacted, how quickly do you think a sale would happen and who do you think the real interested parties will be? >> on the handicapping, i would say it's kind of, i would go 70/30. not that it won't get through the house, and biden has said he would sign it if it got to his desk. the real lobbying effort ison the senate. they have slightly, they don't love the house language, but my guess is they'll get a combined bill. as for the most interested party, this ultimately doesn't come down to the u.s. government, it comes down to the chinese government. we can say whatever we want, but if china doesn't allow bytedance to divest, whether that be through a share sale or a regular sale or van ipo, then it doesn't happen.

>> you know, there has been these comments you've seen out of china that somehow they wouldn't allow this to happen. they would shut it down first. do you believe that? and what about all of the u.s. investors in bytedance? because the value destruction would be real, i'm thinking of general atlantic being one of the biggest investors in the u.s. in that business. >> i think it's possible. you see what china's done with some of its other home-grown tech giants. think of alibaba. think of the didi situation a couple of years ago, the uber rival there, that was essentially shut down by china briefly. they are willing to play hardball with their local companies. as for the u.s. investors, they kind of have to sit and wait here. this is -- there's not much they can do. this is one of the downsides of investing in a chinese company, is that there is a lot of government control there, and that's something that you kind of have to buy into. but the value destruction would be massive. tiktok, even though it's not all of bytedance's business, and maybe not even a majority of its

business, it is its crowned jewel, particularly here in the u.s. >> dan, can you just walk through the american investors in bytedance? i'm not sure that the public fully understands what that list looks like. >> yeah, there's a lot -- it's kind of a lot of big silicon valley firms, although you mentioned general atlantic, which is based on the east coast. firms like sequoia capital and others. some of it's a little complicated, because some firms have invested through chinese facilities. susquehanna is a big investor. they have jeff yasz, their cofounder, the guy that met with trump, and then trump flipped, even though he claims yesterday they didn't discuss the tiktok issue. there are hundreds of millions of dollars invested into bytedance out of the u.s., but that represents billions of dollars in value. and for a lot of these venture capital firms and private equity firms, they've been telling their investors, this has been sitting on their books for quite some time. if this was to disappear. if tiktok was to get shut down and the value eviscerated. the carrying value of these

funds, what they've been telling their investors to expect for years and years and years would disappear overnight. >> you don't think a number of those firms would ban together to both try to buy the company and roll their stakes? >> i think they would try, but again, this comes down to, does the chinese government allow that? bytedance might want that. the u.s. investors would want that, absolutely. there's a lot of ways to get this done, and we almost saw that in late 2020, when trump tried to do something similar via executive order. they almost had a deal in place, but there was always questions, was the chinese government going to sign off. those questions still persist today. >> we've got to run. dan, we appreciate it. we'll be watching this one. i'm sure we'll be talking a lot more about it over the next several months, if, in fact, this does come to pass. thanks. >> thanks. coming up, february cpi and market reaction. plus, former fed president, eric rosengrant will join us for his comments and reaction with futures right now. ppin d quick look, not a lot

haeng,own 14. nasdaq strong. we're coming right back.

the future is not just going to happen. you have to make it. and if you want a successful business, all it takes is an idea, and now becomes the future where you grew a dream into a reality. the all new godaddy airo. put your business online in minutes with the power of ai. good morning. 30 minutes and counting to the data everyone is waiting for on tap, february's look at cpi inflation. meantime, airlines on the move. some major players out with investor updates and a perspective on the ipo that you'll want to hear just ahead. we have a wide-ranging interview with the former reddit ceo,

ellen pao. the final hour of "squawk box" begins right now. good morning and welcome to "squawk box" here on cnbc, live from the nasdaq market site in times square, i'm joe kernan along with becky quick and andrew ross sorkin. and the nasdaq is looking the best this morning. we're at the nasdaq and, see, it's not us, probably, but the nasdaq is up 83. the dow is actually down -- s&p is doing okay, up about 12 points this morning. you know, we had a great 2023, 2024, started out okay, but not much has been going on. we've hit some highs very quietly, it seems like. >> we're not far from those highs. >> no, we're not. but it seems like the going's gotten a little tougher. maybe not.

could change quickly. the treasury yields have not been the issue. yields have been behaving. we'll see what happens, though. supposedly, people are set up for what could be some big moves one way or the other, depending on the cpi. we had a really hot number in january, and those sort of fears came back about inflation, and whether the fed could cut. maybe it was a one-off because of seasonal factors or maybe we get a confirmation that inflation is going to be harder for the fed to handle than we thought. i don't know. it's a big number today. >> it is, it's very important. one month, you can brush off. two months, you start to be a little bit more concerned about things. we'll start this hour with developments on boeing and some new guidance from the airlines, as well. phil lebeau joins us from that. hi, phil. >> hey, becky. let's start with boeing. by the way, shares of both boeing as well as its main suppliers, spirit aerosystems, both under pressure, following really a damaging story that was

out in "the new york times" late last night, giving greater detail about the safety audit that was conducted by the faa following the 737 max-8 blowout of a door plug. and basically, what the faa found when they were looking at the compliance. 89 product checks as part of that safety audit. 33 times, they were failures. so they failed on 33 of the 89 production checks that were conducted by the faa audit. 97 instances of non-compliance. reached out to boeing for a comment. it says, based on the faa audit, our quality stand downs, and the recent expert panel report, we continue to implement immediate changes and develop a comprehensive action plan to strengthen safety and quality and build the confidence of our customers and their passengers. take a look at shares of boeing and spirit. we've talked about it. it has been reported that boeing and spirit are considering a

deal, essentially, where boeing would buy spirit aerosystems, bring that production in house, and in theory, clean up a lot of the problems that have started at spirit. but clearly, there are also problems at boeing, as well. also want to talk a little bit about the airline guidance that we received this morning. and with regard to boeing and the fact that it has slowed down production, basically production is capped at 38 per month, that has led southwest to cut its max delivery plans for the year. it is now expecting just to get 46 max plans and because of that, it is re-assessing its full-year financial guidance. we'll get the full-year financial guidance, the new one, when the company reports its q1 results at the end of april. also take a look at shares of american, all of the airlines, by the way, out with new guidance this morning ahead of a jpmorgan analyst meeting. american expecting a q1 loss near the low end of its guidance. so it's not expecting greater,

but it is expecting it to be near the low end of the guidance. the ceo of and for the full year, and in q1, it does expect its earnings to be near high end. jetblue, a number of the other airlines. the bottom line is this, becky. this is the guidance period. we usually get this from the airlines, about this time every quarter, ahead of the q1 results in april. and for southwest, that stock is down 5% after the company said, look, we're not going to get into it this year, and we're re-evaluating what our full-year financial guidance will be. >> phil, thank you. and delta is looking at international travelers, high-end travelers, business travelers, and that may be helping them as well. thank you, phil. >> for more on the markets, as we count down to the cpi data, at 8:30, let's welcome ron

temple, chief market strategist for lazard's financial adviser, an asset management -- that's a heavy load, ron. sblourlds. so the buck stops with you at la lazard, right? >> i think it might stop with the ceo, but thank you. >> we know that guy. you're not feeling that disturbed or distressed. you think the soft landing, unlike jamie dimon, you still think that's likely? and zero rate cuts this year would be very surprising to you. >> definitely, i think the probability is, we do have a soft landing. the economic data looks good, but what's important to me is you see easing of tightness in the labor markets, the inflation in january clearly was a big surprise. today's number is really important, but when i look at the data over the last year or more, i see decelerating growth, less inflation pressure, and what i've been calling an immaculate disinflation. let's see if today's data proves

that to be right or wrong, but i think we're on a good course. >> what are you expecting today? in line or could it be softer? >> my base case is it is in line, basically. look at last month, we got 39 basis points. the consensus this month is 31 basis points. there were a bunch of moving parts last time. last month, we shouldn't forget, used car prices were down the most since 1969. that subtracted 8 1/2 basis points from core cpi, so the number is a big uglier, but we had evaluated inflation related to shelter that didn't really accurately reflect the story. that leaves behind services, excluding shelter, which were shockingly high at 85 basis points, month on month. so that annualizes it at 10.5%. doesn't fit any other data i see. long story short, about 30 basis points seems about right. if we do get an upside surprise, may is already off the table in my view for a rate cut. that could really bring questions around june.

>> you think inflation continues to cool. do you think the economy is decelerating? >> i think the optimism has gotten overdone in the economy. if you go back to october, the consensus for gdp growth this year was 50 basis points. it's now 210. now, i look at it, and yes, the consumer has been more resilient. the corporate sector has been more resilient, but let's not get out over our ski here is. there's a lot more pressure on consumers, the excess savings that help support spending for the last three years is largely depleted. and look at the job numbers. the quality of the job creation has started to deteriorate. so i don't think we should be assuming another 2, 2.5% real gdp here. i'm kind of more in that 1.5% camp. with soft landing being questionable, but i don't think we should with expecting exuberant growth this year. >> the stock market could be where it is right now, based on this scenario that you've described, which is a very positive one. we may be in the market already, or you don't think so? >> yeah, i mean, i think there

could still be some upside. what worries me, a lot of people are assuming that when the fed starts cutting rates, you'll get lower long rates, i actually think the ten-year yield has given you all the benefit you're going to get. 4 to 5% is my fair value, probably closer to the high end of that. and if we look at the deficit forecast coming out of drk for the next decade, i think there will be increasing pressure on the upside. >> you saw that today. those are horrific. this budget is not going to become law, but if it did, where would 105 to 110% of debt-to-gdp, forever. and we've never been there forever before. >> and honestly, we all know this budget is a signaling tool for politics. but regardless of who wins the election in november, i think you're going to have deficits-to-gdp at 6% or more every year for the next decade. >> which is in this budget and the -- >> it's a problem. it's not sustainable. election year have -- make you happy, sad, doesn't matter?

>> i look forward to it being over. >> but in terms of the markets, you don't think it helps -- >> i don't think the election year has an impact on markets. i also don't think the fed changes policy on election years. if there's one institution in d.c. that's desperately trying not to be politicized, it's probably the fed. >> did you get a pep talk? did he say, knock it out of the park. >> i want to come in and talk about inflation. >> do you think he's watching? are you nervous because of him? >> no, no. >> no? >> we have a very good relationship. >> you do? >> confident. >> we all do. >> coming up on the other side of this here on "squawk box," breaking inflation data. we are counting down to the cpi number. it's coming up at 8:30 eastern time. but first, reddit getting ready to take the ipo plunge. after a break, we'll talk with the company's former ceo, ellen pao. don't want to miss that. stay tuned, "squawk" returns after this. let's check it out.

says here it gets plenty of light. and this must be the ocean view? of aruba? huh. this listing is misleading. well, when at&t says we give businesses get our best deal, on the iphone 15 pro made with titanium. we mean it. amazing. all my agents want it. says here...“inviting pool”. come on over! too inviting. only at&t gives businesses our best deals on any iphone. get iphone 15 pro on us. (♪♪) 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, and more. thank you very much. [applause] ask, "now what?" here's what. you go with prudential to protect, empower and grow. with everything you need to deliver, you guessed it... more. one more thing... who's your rock? learn more at prudential.com

welcome back to "squawk box." reddit getting closer to making its public market debut. targeting a valuation close to $6.5 billion, according to a filing, reddit and existing

shareholders plan to sell $22 million shares in a range of 31 to $34 each. joining us right now is ellen pao, former ceo of reddit. she is the cofounder of the nonprofit project, include, and she retains a stake in reddit. it's great to see you this morning. i think we're all trying to understand, ellen, what this ipo means, how to think about the value of this company, and you've lived inside it for quite some time and watched it for quite some time. when you think about the valuation of reddit today, what do you think? >> i think reddit has all been a strange company, it's been hard to manage, hard to understand its users, and it's been a very unique set of users. they don't like advertising, they don't like being told what to do and in a public company, there's a lot more regulation, a lot more control, a lot more limitations, and a lot more informationshares. so hii think it's going to be a

sbr interesting ipo. i'm curious to see where the price ends up over next few months and how they deal with moderation,under a more careful lens. >> one of the things that the company is now touting is the prospect that revenues from ai, and allowing google and others to potentially train on the content, on reddit, is going to drive growth in the future. what do you think of that? >> i do think the data is very valuable. data shares a lot of information. it's interesting, because in my time, we did not sell the data. we were very careful about the privacy of users, and there is a lot of data that people share over time, that can tell who they are and can often share a lot of private information. it's a different world right now. i was there a while ago, and it will be interesting to see how the users respond. it's a group values privacy and

sharing data is a counter to that. >> this company is 19 years in. it's not a baby and not a start-up, and yet it's still not prof prof profitable. what do you think about the path to profitability? >> it's one that's a difficult one. it requires selling your user's data, it requires limiting the content to content advertisers are comfortable with. it's counter to everything that reddit has been for so long and that the users have rebelled against restricting so it's going to be a tough path. and i think that having the public market watching everything that you do is also hard, but i also think that there is something core to reddit that is extremely powerful, where people do want to share on reddit, and people do want to see what's going on, and a place you can find

unfettered viewpoints. and sometimes that's good, sthooims bad, but it does drive a lot of engagement. >> for people that aren't familiar, you know first hand how powerful that community can be. you resigned after being the ceo for a couple of years, after you fired a very popular employee and some of the volunteers who run these reddit groups shut down access, locked out something like 8 million users, because they were so unhappy with it. you ended up resigning after that. you wrote something in "the washington post" at that time, that just talked about how you're worried that the trolls were winning the internet. where do you think that battle stands right now? this is almost a decade later. >> yeah, i wish people had listened to that op-ed piece, because i do think it's gotten much worse. i think it's gotten much harder to be on the internet. it's harder to be in social media. it's harder to be public. it's an area where there is less real information, where there is a lot of disinformation, there's

a lot of foreign actors who are trying to influence people in the united states and beyond. it's a very -- it's hard. you know, i think for children to understand what's actually going on in the internet, and now you've got deep fakes, and artificial intelligence driving a lot of content, it's a different world, and i don't think it's for the better. >> do you compare reddit and twitter? do you put those in the same category? >> i compare them. they're not the same, obviously, but it's a place where people share information, go for information, and where they try to build an online profile. >> what do you think should be the comp, if you will? if you're an investor thinking about this company, what are the comparable other companies that you should put it in the same bucket with, and then start to look at the multiples, for example, that might have been assigned to those businesses, that maybe should be assigned to

this one? >> obviously, any online advertising company, so if you look at the parts of facebook, the parts of google that are tied to sharing content online, i think twitter is a good comp. it's hard, because it's not public anymore. it's hard, because reddit has always been this unique creature, where it really has this mechanism that's driving a lot of usage in a way that is deep, but it's also shallow, because there aren't as many users who are actively engaged. there are a lot of lurkers. it's harder to get on to reddit. it's harder to use the product or find content, but there is a tye where people go back. >> and ellen, we appreciate your perspective on this. before we let you go, i wanted to get your perspective, if you have one, on what's happening with tiktok. do you have a view? should this be a business that's banned in the united states?

>> i think it's hard to ban businesses. we know people use vpns to get around it. i think it's an area that should be regulated. i think the u.s. company should also be regulated. recently, elon musk tweeted that he's moving his trust and safety groups to focus only on compliance with u.s. laws. we need better u.s. laws if that's going on the threshold for so i would companies. so the fact that we want to get involved is important. i don't know that it's going to be successful, if we try to ban tiktok. it's something that i think a lot of people are using and a lot of people really enjoy. and i think it's going to be hard to stop it. >> do you think it should be considered a national security concern? and the reason i ask, obviously, that's the pretense for which this bill is being introduced. and interestingly, yesterday, when we talked to former president trump, someone who originally said he believed it was a national security risk, and actually said it was -- he still thought it was, but then,

seemed to reverse at least his position, in part because of the popularity of this. so, is popularity verse national security -- how do you weigh those things? >> obviously, national security is more important than popularity. but in this case, i'm not sure that we're -- that tiktok is the only company that is a national security risk. i remember twitter had -- you know, i think there were reports that twitter had people from other countries who were taking data and sharing it with foreign governments in a way that didn't feel secure nationally. i think there's a lot of foreign actors who are trying to manipulate or u.s. social media. there's -- so, it's not clear that actually banning t ning ti going to solve those problems, and that's the only path that we should be taking. and i think there are -- i wish

tl that there were rules around the data and around security and privacy that apply to all of these companies, that would try to limit the harm that could happen from national security security risks that are at hand. >> ellen, i want to thank you for your perspective on all of it. it's fascinating. and we'll, of course, watch the future of this reddit ipo, over the next 24 hours, the future of tiktok. thank you. >> all right. thank you for having me. >> when we come back, breaking february cpi data. economists expecting a core reading of plus 3.7%. that would match up to the previous read of up 3.9%. checking out the futures this morning, we've actually turned into positive territory across the board. nasdaq continues to lead the way. it's up now by about 92 points. dow futures up by 22. the s&p futures up by 15. we are just 7 1/2 minutes ayaw from that next inflation data

read. "squawk box" will be right back.

business. it's not a nine-to-five proposition. it's all day and into the night. it's all the things that keep this world turning. it's the go-tos that keep us going. the places we cheer. trust. hang out. and check in. they all choose the advanced network solutions and round the clock partnership from comcast business. powering more businesses than anyone.

powering possibilities. welcome back. according to a new report published just a short time ago, former president trump asked elon musk last summer if musk wanted to buy trump's social media platform, truth social. this is being reported by "the washington post," which adds that trump and musk had other conversations aside from the one about truth social. now, under musk, "x" re-activated trump's old accounts, which was banned in the wake of january 6th, and the post cites people close to trump in saying, one reason the former president hasn't been posting on "x," is he wants to create and preserve value for truth social. i thought we were going to run a sound bite, but we asked the former president about his meeting with elon musk when he

was on yesterday. when we come back, the breaking number of the morning. february cpi. quk x"ilbeige.er "sawbo wl rht back. power e*trade's award-winning trading app makes trading easier. with its customizable options chain, easy-to-use tools and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. e*trade from morgan stanley power e*trade's easy-to-use tools make complex trading less complicated. custom scans help you find new trading opportunities, while an earnings tool helps you plan your trades and stay on top of the market. e*trade from morgan stanley

♪ (upbeat music) ♪ ( ♪♪ ) constant contact's advanced automation lets you send the right message at the right time, every time. ( ♪♪ ) constant contact. helping the small stand tall.

welcome back to "squawk box." we are just a few seconds away from that february cpi number that will show us the latest read on inflation. it's something the markets and fed are watching closely. ahead of that, you're looking at the futures indicated slightly

higher. dow futures up by about six points. the nasdaq is up by about 90 points right now. and treasury yields have been lower for the most part. you're looking at the two-year this morning picking up a bit. it's now at 4.54%. the ten-year is yielding 4.08%. just below 4.1%. we've been watching for this number, and rick santelli is standing by at the cme in chicago. rick, take it away. >> all right. our february read on the consumer price index headline number expected to be 0.4% is up 0.4%. now if we look at the most recent lower number in this series, we had 0.3 in january, and we had 2.2 in november zand december. this is now a firming issue, as we've had back-to-back reads -- excuse me, we had up 0.4, now ex food and energy, also up 0.4.

0.1 hotter. we have back-to-back on headline and core, up 0.4. now, 0.4 equals the look we had last month on core, and the most recent lower number was october. that was up 0.2. that happened to be the lowest since february of '21. so we're firming here. now the year over year number's also hotter than expect. 3.2 on headline year over year. that's 3.2. that will be the highest since it was 3.4, january remains at 3.1. if we look at year over year core, 3.8. now, this is interesting. this is .1 hotter than we were expecting, but cooler than the rearview mirror. because we had back-to-back 3.9s, which were the lowest since may of '21, which was 3.8, which equals our current lower read on core year over year. you're going back to april of '21, when it was 3.0. it should come as no surprise

that interest rates shot up in ten-year, up to 4.13. they're hovering around 4 .11. pre-opening equities were really volatile. right now, with you see it minus 60 and counting. now, that doesn't mean these numbers are going to stick, but as you look at the two-year note, around 454, has moved up to 455. it certainly seems the long end, which moved up from 408 to 411, 412, you want to pay close attention to the long end, especially after we're talking about budgets and deficits that the short end. we had the following set-up. we had 60 to 60% of a june 12th cut, and i'm sure those numbers

are on the move. becky, back to you. >> stay right there. we have a lot more to talk about. joining us right now with reaction to this new inflation data, we have peter earl, american institute for economic research, senior economist. scanda amornath, and our very own senior economics reporter, steve liesman. i want you to dig down on the details. but first, tell me, second month in a row that you're seeing higher core than expected. is that a big problem? does that change the narrative here? >> it's a problem. i think rick used the word "sticky," and another word for is. it was not -- it's not coming down at the pace it was. it is lower. worth pointing out, the 3.8 is lower than the 3.9. but not coming down as much as had been expected. 3.9 was two months ago. 3.7 was last month. it did tick up a little bit. here's the thing. i got a goose egg on food. i have owner's equivalent rent did come down.

that's an important number, down to 0.4 from 0.6. used cars down, new cars up. that's what i was able to see in terms of what the details were. the fed will look at this and say, our idea of being patient here, i think there's also a question, and i was sort of onboard with this idea, to the extent in which january was an anomaly. maybe there's a certain plateauing of the cpi numbers, and the fed has to stay where it is right now, at least for a little while longer in order to break the back of and it get it down more towards the 2% area. i'll leave it there. >> peter, weigh in on this. what do you take away after getting numbers that are a little hotter and inflation not slowing the way people had hoped or expected? >> i expected the february cpi to be hotter, month over month. we had some seasonal effects.

gasoline is up. it's interesting to see fed pri prices up a little too. it's interesting to see what happens in supercore. talks have shifted to a little bit of business, but they have the idea they'll be patient. i think if we have -- if employment softens and if we see, you know, unemployment tick up to 4.0, 4.1%, and it's the usual suspects, i think we're up for a rate cut in june, maybe july. >> okay. maybe july. maybe pushing that up a little bit. scandal, let's talk a little bit more about what this means for americans, who are kind of waiging through how they feel about the inflationary situation. >> thanks for having me on. even last year, we saw upside. take a look back at the year

over year readings, they're continuing to trend down, maybe for some consensus, not as fast as expected, but still trending down, january and february in the last three years have been on the spikier side. and if you look through the details of this print, you see a lot of volatile prices driving up, so used cars, airline fares, these are things that tend to be pretty volatile month-to-month. the fed has some reason to take some heart from the fact that we're finally seeing progress on owner's equivalent rent. what peter said, it's all very reasonable to me, as far as the summer being a time that the fed might consider interest rate reductions. but it's going to ultimately depend on further progress and inflation. we've kind of gone through the january/february cycle. this is a time where new year, new prices shows up in the cpi data. and it seems to be more pronounced, post-pandemic. but by and large. >> do you think it's fair to think that the fed is looking at patience as a key word? and that's the right way to take it. >> i think they have grounds for patience in the short run, but

if we see further progress in march and april, that probably puts them in a better position to evaluate interest rate deductions. and they need to balance this against what the labor market is telling them. at the time, we have mixed data, the unemployment rate ticking up, but at the same time, job growth looking reasonably strong. all in all, i think the fed has the time to evaluate whether inflation is coming down, as fast as they'd hoped. i would actually say, in the details, and especially from a pce perspective, there's a lot of good information here that goes beyond what core cpi tells us. food services inflation also slowing. there are signs for the fed to have confidence, but they will want more data. that's natural. they have a better ability to evaluate what's the underlying trend when we get to the may meeting and maybe the june meeting to see what's really appropriate. >> let's talk a little bit more about the reaction in the treasury market. that probably tells us more about what the market is thinking the fed might do after this >> i think interest rates are

pretty well behaved, considering the number. i disagree with our guest, peter. the notion here is we're not goingto 2%. looks like we'll settle out around 3%, maybe a little bit higher. but the issue becomes, will the fed assume, will they lower 1 to 3 times. the equity markets is looking at treasury rates, thinking, wow, they haven't moved that much. you actually have pre-opening dow futures hovering around up 80 points. so they're definitely looking at this and thinking the fed is going to see this data and stay higher for longer, but they're still going to ease. and that really is the issue. so they bring rates down. let's say they bring rates down to 3.5 or 3.75 or 4%. if inflation looks like it wants to hover out around 3%, they could hold it there slightly

higher for longer. and i think that's what the market's looking at. now, if you look at two things that we normally don't talk about, but i bring it up now every month, if you look at the non-seasonably adjusted cpi index itself, which goes back to the beginning, or the seasonally adjusted core index, which goes back to the beginning, both of those indexes today are at new all-time highs. they are almost every month. your middle class looks at that, and the inflation compared to 2017, 2018, 2019 is significantly higher. the rate of change is what the fed is looking at, and even the rate of change, still, no matter how you slice it, does not look like 2%. >> hey, steve once something earlier this morning that i've been thinking a lot about. just the idea that if the numbers don't start to match what the fed is thinking they should be, when it's looking at owner's equivalent rents, some of the housing inflation that's there, they might kind of look at other numbers instead. and take that one out of the

picture. we keep talking about patience from the fed, and that says the opposite to me. that says that, no, they're looking to cut rates and they're going to find a way to do that. >> yeah, i think you can look at it that way, or this way, becky. you don't make a suicide pack with bad data, right? you don't say, aislei'm going t religiously follow this data, no matter what, even while i have other good data that should say, this should not be happening. it did come down this time, so the fed doesn't have to make that choice. you hear them saying, look, they have acknowledged that the z zillow data, some of the other rental data, diana olick is the one all over that stuff. she brings it to us on a monthly basis. almost every week, there's new data on it, which shows rents around the country is coming down. and there's this statistical quirk, i don't want to bore everyone with, it happened with the single-family rental rates that are out there they look at it and say, you know what, there's other data out there. and powell has said, we expect

this to come down, we expect it to happen. so it's probably something that keeps them at bay from hiking again, and also something that makes them say, you know what, as powell said in his testimony, we're not far from where we need to be in terms of inflation. they expect the numbers to get there. i do think they need the numbers to get there, though. and rick actually makes a really important point about what the american public is looking at versus what the fed is actually aiming at. the goals are the same. americans want lower prices, the fed wants stable prices. the story here is that the fed has to worry about inflation expectations. they've been relatively well anchored. if you turn around every month and say, you know what, prices were up 3%. well, what do i think is going to happen next month? prices will go up 3% and i'll act accordingly. what the fed is going to want to do here is get that back down to 2% and have the public believe that, in fact, and that's why jamie dimon was talking about the fed's credibility, because it's really the fed's

credibility that is what essentially allows it or is the effectiveness of its inflation policy of getting everybody to believe that 2% is the target and 2% is where we're going to go. >> let me ask you one question, just looking at the numbers. it was not the headline number that was hotter, it was when you strip out food and energy. those volatile food and energy numbers. you're looking at core that's hotter, that's a problem, because that's the number we've always pointed to as being the one you want to watch, you don't want to look at the volatile up and down swings. you also have this situation where owner's equivalent rent, the housing component, was not the problem. it was not the issue that jumped out more at this. there's something else that's taking place. something else that's moving around in those numbers. and that's a little tougher to write off and say, don't pay attention to it. it's a one-off thing. >> yeah, and i mean, we have a service-based economy now. to some extent, the fed is using a tool box that was developed or

in an industrial and manufacturing-based economy, and the last time they had to poull these tools out in earnest was in the late 70s and early 80s when we still had a manufacturing and industrial based economy. one of the things that's happening right now, the other guest made a reference to january and february price changes. but we have a couple of major insurance companies out there, that are going to be raising their rates 1020%. more than half of u.s. states are going to be raising minimum wages. so we're a service based economy, and there's a lot of non-monetary sources of, you know, that will be coming up, disinflation as the year goes on. we have this service-based economy, because a lot of sources of these price hikes, or at least of the slowing of disinflation, are going to be things that are hard for the fed to fight. >> yeah, add to that what kate rogers was reporting earlier about the national federation of independent businesses, out with their monthly numbers, just saying, inflation is their

biggest concern, that they think it's pretty sticky. it's a lot to think about. gentlemen, thank you all. peter, sckanda, rick and steve. coming up, a lot more on "squawk." how the fed will be looking at all of this inflation data. we'll speak with former boss and fed president, eric rosengren. first, as we head to a break within an earnings alert. check out shares of oracle. the software giant surging in the epre-market after a top analyst topped expectations for its fiscal third quarter. revenue rising 7% from a year ago. net income jumping 27%, and that stock on the move. you're watchin"saw a iss bc. quk"nd only at vanguard you're more than just an investor you're an owner. that means your priorities are ours too. our retirement tools and advice can help you leave a legacy for the ones you love. that's the value of ownership.

your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do.

indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire welcome back. the breaking economic news core, february cpi coming in above expectations. joining us to talk about the impact of the new report on fed

members, eric rosengren, former federal reserve bank of boston president, and ceo, market immediately snapped back. we did see a slight bump up in yields. did you think that this confirms that there's a little bit of a resurgence in inflation, or that the last mile is going to be more difficult for the fed. or is it still somewhat seasonal, do you think, really not that hot? >> so, i think it's not that hot. obviously, it was a little bit firmer than market expectations. there's still slow progress on the core component. so i think the real question is not whether the data just a tiny bit firmer, a tiny bit less firm than expected, but really, is your forecast for the underlying pressures for inflation changed dramatically? and i think we are seeing shelter prices decline.

i would say some of the service sectors, particularly medical and transportation are not coming down quite as quickly as i'm sure the fed would like, but i think they'll take some comfort in that the general outlook for the forecast, which is continued improvement in the shelter component, which gets overweighted in the cpi, relative to the pce, is probably pretty consistent with what they're expecting, which is a gradual decline. when we look at the core pce, it's currently at a place where they're probably comfortable, fit comes down a few more tenths by the june meeting. my guess is that this doesn't really change the outlook for that likely to be happening. >> so june is when -- and you think a cut makes sense? we're in restrictive territory?

>> we're clearly at restrictive territory. if you think the inflation rate is trending down to 2%, the federal funds rate, even if you have a pretty high equilibrium, real interest rate, it's still going to be pretty rate, it's s to be pretty restrictive. my own view would be that they have plenty of room to still be restrictive and ease three or four times over the course of this year. so i don't think they're going to be in a rush to ease, but june is not really being in a rush. i think it's actually important that they do have more confidence. so rather than being data dependent, they should be forecast dependent. i don't think this release changes their forecast very much at all. >> so, the amount of restriction that is present right now will do what to the growth rate of the economy at this point?

is it severely restrictive so that we do see it reflected in a slowing labor market? or is it just enough to bring inflation down and there are many positive things with the consumer and still some savings left over? what i'm trying to get at, we love low inflation, good growth. the worst thing in the world is high inflation, no growth. so we're between those two extremes. which is more likely? >> so just put a little context to that question, the second half of last year was expected to be quite weak. we grew fasterthan 3% real gdp. it looks like this quarter is not going to grow as fast as the second half of last year grew, but it's still going to be a respectable 2 to 2.5% growth. given where the employment rate

is, which is right around what many economists think is potential, that's probably the kind of growth that we would expect. it does seem that the federal funds rate is restrictive enough to get us on the path that we're looking for which is to being pretty close to 2% by the end of the year. we'll probably be a little north of 2% by the end of the year, but not by a lot on the pce inflation. i think the fed is going to be happy that this is pretty much confirming the direction they thought the economy is going, maybe not quite as fast as they were hoping, but nonetheless, i don't think it dissuades them that their overall forecast is appropriate. i think consumes is likely to be weaker in the second half of the year than we were seeing in the second half of last year. you are seeing some stresses for the consumer. so if you look at particularly for the lower quartile of the

income distribution, you are seeing more delinquencies on consumer loans, both credit cards and autos. that's not particularly surprising. that probably is going to be consistent with a little bit slower growth and consumption. but growth that's probably still stronger than people would have expected if you thought about where we were nine months or a year ago. so i view this as actually pretty positive that we're still getting positive growth, about what you would expect, roughly 2 to 2.5% growth rate, inflation gradually coming down over the course of the year. i think the big question if i'm at the fed is do we continue to see progress on getting wages and salaries more consistent with what i would expect to get a 2% inflation rate. so that would be wages and salaries growing roughly at 3.5%. they're probably growing a bit

faster than that right now. but over the course of this year with a slightly higher unemployment rate, maybe a little bit more easiy labor market conditions, that's going to be conditions where they probably get pretty close to what they want. >> it sound good, eric. that sounds like a description of a soft landing, and we get wage gains like that, we might finally get back to even. not quite there yet after inflation in terms of average weekly earnings. thank you for the quick take on what we saw at the bottom of the hour, thanks. >> great. good talking with you. when we come back, we're going to talk about the markets and get you ready r fothe trading day ahead. "squawk box" will be right back. . 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. (♪♪) 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, and more. thank you very much.

[applause] ask, "now what?" here's what. you go with prudential to protect, empower and grow. with everything you need to deliver, you guessed it... more. one more thing... who's your rock? learn more at prudential.com

a little more than half an hour to the opening bell on wall street. joining us, chief investment officer at u.s. bank asset management. given the news of the morning, where we are on some of these numbers and just the way things seem to be going, what are you doing? >> andrew, we think this is

still a time to let the winners run. i know there's discussion about how the ai trade is overdone. the backlog is stick there. data today suggests the fed and what chair powell said last week, look, this is a continuation of progress. again, it's not the massive sis inflationary environment we're looking for. still an environment where we think you can own stocks. we'd like to let winners run as opposed to getting more bearish here. >> are you in the jamie dimon camp of hoping jay powell doesn't do anything until june? >> we think probably june to july is a more likely outcome. there's still enough, let's call it cover for the fed to sit tight. fed funds effectively andrew at 5.3%, that's twice what the fedex pekts long term. the fact we may see a little waddling between now and june and july, we think there's probably two to three cuts this year. the fed is going to err on the side of less as opposed to more

because the economy is still really strong. >> what do you think about big tech, the magnificent seven, the fancy four, whatever you want to call them. >> the mag seven, probably less of a good moniker for stocks. we think the difference asian within the space is actually positive. still a huge backlog. you think about theamount of concentration of the larger oems and really where that sell is coming from. there's still an opportunity we think for that diffusion to happen. the backlog is still there. there are many battles to fight in macro right now. wagering against ai is not one we'd be advising clients to be involved with right now. >> eric, thank you for joining us and providing your perspective and doing it so succinctly. we appreciate that, especially because we're handing it over to our friends on "squawk on the street" moments from now. before we do that, a quick final check on the markets in terms of where things stand. you're looking at green on the

screen, 68, 69 points on the dow. s&p 500 up about 23 points. the treasury boards right now are 4.116. the two-year note at 4.551. make sure you join us tomorrow. we've got another big show ahead. we'll hand it over to our friends on "squawk on the street." see you tomorrow. ♪ good tuesday morning. welcome to "squawk on the street." i'm carl quintailla with mike santoli. david faber is at hq. cramer has the morning off. future holding on to gains even though monthly core cpi comes in about a tenth hot, more han half driven by gas. rate cut odds largely stable. future swing as inflation does tick higher. jamie dimon says the economy is booming but a recession may still be on the table. >> plus, quote, enormous amounts of demand.