spring should start anytime. is it march 21st? >> it was yesterday. the 20th. >> are you sure? 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. andrew is off today. the fed's signal of three interest rate cuts ahead this year is sparking a record-breaking rally for equities. the futures are indicated higher again after yesterday's strong gains as well. looks like dow futures are up triple digits. s&p up 16. nasdaq indicated up 125. that comes after the dow and s&p and nasdaq took off after 2:00

p.m. and never looking back. all finishing at all-time highs. the dow tacking on 200 points. s&p added 46 points to close at 5,224. treasury yields were weaker before we saw everything yesterday. we heard from the fed and jay powell and company. we see the ten-year yield at 4.22. you see sharp movements. you can check out gold which is on a record run as well. it is over $2,200. bitcoin is coming back from yesterday's lows of around 61,000. check it out now. 67,000. joe, what he said yesterday sounded, to me, they are being patient in terms of when they raise rates. >> cut rates. >> took the idea -- >> when they are going to cut. >> yes.

he said these are the highs we are looking at closely. >> now i sound like kevin morris. starting with the "so." six months ago, they said three and people said five or six. we like five or six. then, we slowly come to realize that we would kill for three and maybe we don't get any. now he says three and water happy. >> he didn't say three. the dot plots said three. >> the fed is basically saying that these hot inflation numbers that we have seen the past two months on transitory. we're back to transitory. >> yes, i would take it deeper and i'll talk to steve about this in a second. to me, he probably didn't want to switch positions and potentially have to take them back. he is trying to say as little as possible. every reporter that is pushing him -- he had opportunities to

sound hawkish. >> 400 points on the dow. >> you don't want to flip flop. >> the numbers have been hot. a lot of people are saying do not cut. it seems steve liesman was there from the start of the rally. he is here with us, somehow. what a booking for us to get steve. he joins us now with more on the fed rate path. we have had hot inflation th numbers. it looks like the numbers are transitory. we are back to transitory inflation. that got us in trouble in the first place. maybe it was transitory all along. >> joe, pardon me, i'm a little on your side in terms of this being a dovish in context. i don't think it was dovish in and of itself. if you skip to the graphic i

have there. look at what they did. this was the question. he upgraded the gdp and inflation forecast and downgraded employment and the funds rate is the same. three cuts are in there. this is not one person doing this. this is the collective action or collective average of all of the forecasts that were put in there, joe. that was my question. how do you do that in this context? i think becky was on to something. this was an opportunity for powell to be hawkish and maybe gain inflation credibility he didn't take it. i'm not sure why. the market took off with that saying come hell or high water, the fed will find a way to cut. there was an interesting quote from christian who said and i don't know if you have that in the background. i think it was a good comment.

krishna said the fed wants to cut in june. it is responsible to do so. i don't think they are being irresponsible here, but he sees that inflation numbers will go away. january is a good argument. i'm not sure about february. look, come march, guys, if we don't have better inflation numbers, you will start to write down one of the cuts or two. >> i agree. i think they're on the verge of it. you looked at 19 dots. >> 19. >> eight of them suggest that they think it will be two. >> becky, we have a graphic on that as well. guys in the back, if you can do that. this is a dance. this is what the old projection is against the new one. i did it relative to the median. you can see a right-facing ship. this is more hawkish than before

with that committee. nine above it and eight below it. nine at the median compared to the six below it. that is the way to think about it. they are hawkish. more on edge. i think, becky, you would agree. if the fed hasn't done anything yet, you cannot blame them. this is the explanation. this isthe way he feels. joe, he hasn't committed a sin, essentially, of cutting rates in the face of the numbers. >> to me, to me, it seems like he has shifted or the fed has shifted its main concern away from, you know, not being tough enough on inflation to being more concerned about the possibility of causing a slowdown in the economy or even recession. i don't -- we've got numbers

that look like you have to worry about inflation. i don't know whether we have seen it. maybe you can tell me. which numbers is a slight uptick? what numbers would cause them to shift their concern more to recession? where have we seen the slowing economy or the stock market numbers or the risk asset numbers? where are those to show that the risk now is to recession and not to inflation? >> joe, i imagine you at 2:30 in your leisure wear with a bowl of popcorn watching the press conference. >> i thought 2:30 a.m. when i wake up in abject father of the a fera of tfear of the alarm cloc. >> my observation in the room

yesterday, joe, there wasn't anything to hammer powell about being too tight. you look at the spectrum of economic data out there and most of it coming in at or a little bit above expectations. the gdp forecast was interesting. they upgraded it to 2.1. we end in with the cnbc wrap up at 2%. that was pretty much in line where the fed was which is a good thing to get people a heads up on. i'm not seeing the thing where powell is missing this thing which is hanging over the head of the economy like an anvil about to drop. do you know what that thing is, joe? that thing we're missing. >> not an anvil about to drop, but iceberg that is harder to see because it is under water. we keep talking about the soft landing. a soft landing, you can watch a

plane coming in and see what is happening. this is more of a guiding ship and hoping you will not hit the iceberg and hoping you are not the "titanic." it is easier to see after the fact when you are measuring all of the data points. >> the mistakes. >> it is amplified. there are no breaks. >> we are back to lags, i guess. >> that's something. >> we didn't believe in lags. we do. we don't. you told me in the past there are no such things. i don't know. are there t? >> i haven't ceased my belief in lags. we are having a hard time seeing them in the economy right now. there's the idea that governor waller has which is a policy hits the economy more quickly than it has in the past.

i have been a little skeptical about that. i think he is winning that argument right now. you haven't seen it. you would think, joe, it would hammer the consumer, but it is not hammering the consumer. >> you have the government spending so much money. >> yes, that's right. >> billions of dollars on the chips act. >> the inventor of the yield curve indicator says this is right the where it has happened. it happens every time. we are running out of time. that means it will not happen this time. >> joe, the embedded yield curve is trying to sell the patent right now. >> he insists it still works. he says it always works. >> i get it. i thought by now we would be there. if you look at the brookings institution, they have the helps you measure of addition to the

government. it is a high level of government spending, but when it comes to measuring its effect on the economy, it has actually been negative this year as far as i can tell. i think that's a piece of what's going on. i think it is jobs. i think you have sub-4% unemployment rate. people are not confident in the overall economy, but other data shows relatively personally okay in the financial situation. >> if this is the "titanic," then looking back at the best party with kate winslet and leo snuck up wthere with billy zane. the captain said not to worry. >> why is this the "titanic" and

not the "qeii." it doesn't have to end badly. >> it could be a great cruise. the problem is you don't know because it's too hard to tell. we are data dependent. >> it could be a virus on the cr cruise or go on the sundeck and have a nice sun tan. >> it could be a neuro virus. >> maybe you ate too much. >> the toilet is here and the pipes for the kitchen. >> maybe it is everything is fantastic? >> 6:12. n thank you, steve. we will have more on the fed rate path at 6:30 a.m. eastern time. roger is hawkish. i don't know what he is thinking. >> he said he would think they

were cutting it to two cuts this time around, not three. we'll see. when we come back, one stock not rallying this morning and that is apple. the tech giant could soon be in the anti-trust cross-hairs of the justices department. we'll have more on that next. right now, as we head to break, check out shares of micron benefitting from the a.i. boom. the company beating expectations and providing strong guidance. "squawk box" will be right back. you know what's brillian >> announcer: this cnbc program is sponsored by t. rowe price. invest with confidence. hurtl? boring does. great job astro-persons. over. boring is the jumping off point for all the un-boring things we do. boring makes vacations happen, early retirements possible, and startups start up.

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welcome back. check out shares of apple off 1.2% this morning. bloomberg reporting that the justice department could sue as early as today for violating anti-trust laws. we have steve kovach with more on this. >> let's talk about it. apple was the biggest company in the world and first company to hit $1 trillion market cap and $2 trillion market cap and $3 trillion market cap. products are loved. this is a big deal. what is the doj going after apple for? we don't know exactly, but potential things on the table is the app store. this is a big deal in the eu.

apple allows its own store on the phone. the only way to download software is through the apple app store. it can jack up prices for software and people don't know about the subscription prices. another thing that is less significant is the iphone is the hub for other devices. payments is a big one. if you are paypal, you would love to be able to use the palpal app and let your customers use your phone for payments. you can only do that in the apple wallet app. we see apple cave to that and allow payment. that is another thing they will go afternoon. >> do you think that is where

they need to make the changes? >> we know congress has done nothing. there have been bills proposed and amy klobuchar addressed the issues. it has gone nowhere. if anything will change in the u.s., it is up to the doj case. >> why can't we make up our minds? jay clayton said that. why are we farming out our anti-trust pov to the europeans? we know what they are like. they don't like us. they haven't -- again, this reminds me of apple which is so good at what they do. if you have a company that is really good at what it does to corner the market, is that a monopoly or a really good company? in the lina khan universe, it is a monopoly. >> they are of the same mindset. they appeared together with the anti-trust theories and nipping

transactions. they don't want another instagram situation. this is the eu doing this and this started under the trump administration. this has been a five-year investigation. >> it doesn't go away no matter who is in charge. >> it doesn't seem like it. that is another question. if there is a trump administration next year, you know, his dxoj attacking this, his former administration was going after it. >> it would not take much. all tim has to do is send over a couple million and the whole thing could flip. the doj could flip on apple under trump. >> tim cook was really good during the trump administration getting what he wanted. donald trump took him to the the factory. >> he went to the trump tower. >> yes. he was close to melania.

he played trump like a fiddle in a lot of ways. >> it took guts. >> he got his tariffs. >> every interview he gives with state media is wild. >> your point of how consumers love this and competitors do not. the story in the journal about meta and microsoft and x and spotifyand match group filed legal petitions joining epic games. >> all those companies benefit if apple rol loses. >> leave those companies alone. have they had success in the private sector? no. >> i don't think jonathan taylor has. >> of course not. they would not be there. coming up, elon musk's neuralink startup is putting out an interview with the update on

the first brain implant patient. that is next. plus getting ready for reddit. we look at expectations for the social media company ipo which is priced at the high end up of the range. later, house speaker mike johnson will be our guest. we will get into everything from averting a shutdown and the ukraine funding and president biden's budget and more. "woo "squawk box " is coming right back. helps yo an your and stay on top of the market. e*trade from morgan stanley.

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welcome back. elon musk's start up neuralink posting the video of the first brain patient. the patient moving a cursor on a computer to play chess. the implant helps the patient using neuro signals. the company implanted his brain

chip in january. >> basically, it was like using the force on a kcursor. i would stare where i wanted it to move. >> you felt like a wizard? >> it's crazy. >> all right. that is really, really cool. a massive improvement for so many patients. the fda approved the human trials last may. way to go. >> this is elon musk? >> it is. >> the left hates elon musk. >> that's one of the coolest things i have seen. >> what did he do wrong? he said maybe from -- you say that and the left hates you for everything else. >> this is what i'm most excited about. >> we're going to mars, too.

it's just -- >> the mars thing is impressive. getting back to the moon is impressive. for anybody who had a family member who has been in a situation like this. >> a hobby? he spends 2% of his time on and it is already pworking? online forum reddit is set to start trading today on the new york stock exchange under the symbol rddt. it prices the ipo at $34 a share. joining us now is hope king. axios business reporter. hope, the macro environment with risk on everywhere. we're jonesinging for an ipo. there hasn't been a social media ipo in years. people are excited about this high end of the range. it is not valued at $10 the bil billion anymore. for a company that doesn't make

a profit, $6.5 billion is pretty good, isn't it? >> i think jonesing is the right word here. people are excited because it is social media and it is a.i. adjacent. it is one of the first companies that will come to market that will be impacted. the value will be impacted for better or worse by a.i. a lot of media companies should pay attention to the ipo. every quarter they will talk about how much they bring in with licensing and how much these llms are siphoning off data and users and media companies looking to strike similar deals. i think paying close attention. as you mentioned with the macro environment changing with rate cuts, maybe this is the year. we had a slow year last year for ipos. there is a lot of reason to pay attention to this and there will

be the memes. i spent the last three hours on the train reading about wall street questions and articles. this is the platform that berthed the meme. >> a.i. adjacent. i'll start using that. it could be next door. what if it is on the same block or same neighborhood? same town? i guess you won't have to be that close to be a.i. adjadjace. is it meme stock 2.0? all these people which have been jonesing for a gamestop, they will use this? >> i think this is a reflection of the meme stock and i'm thinking about the meme stock 2.0. this is the platform where wall

street bets came together and poured in to amc and gme. you had robinhoodfiasco. to the question about a.i. adjacent, we have the nvidias of the world with chipmakers and manufacturinge manufacturers of the world and google and microsoft and openai with the large language hmodels. in some way, everyone else will be impacted. reddit is in the same neighborhood. we're in the same universe talking about the companies impacted by a.i. this is a company that is already striking deals according to reports to the tune of $60 million a year for access to their users. i think that is a really important part of their business

to watch. if you look at what news businesses are looking at here means it is inevitable a.i. is coming for them. you have to work with them or develop them on your own. the risk there is you might be taking users away. who cares about that? advertisers care. the risk of canobolising. why would anybody come back to reddit? why would anybody who is paying for reddit access continue to do that? i think that's the challenge going forward. we haven't talked about the regulatory questions that are already coming into play with the other big players i mentioned with the ftc and if the deals will have to change in the future.

>> wow. 34. we'll watch it. astera went up 25%. it will be fun to watch today, hope. hope, let's do a price is right. you can't go over. >> i'm not playing that game. i'll play the tide game. i was on the floor when uber went public. we were waiting until way past lunchtime for that stock. a similar structure where are drivers got directed share program. >> all right. all right. you will not do it. >> eat breakfast. >> thanks, hope. programming note, steve huffman will be on "squawk on the street" at 9:00 a.m. when come back, the fed charting the course for rate cuts. that goes along with the analogy of a shift. three on the table for the year

or keeping three on the table although there were more doubters if you looked at the dots. former fed vice chairman roger ferguson will join us to talk about it. and from our drinking water to the power grid, is the government doing enough to protect the country from an attack? we'll get into that and more in the next half hour. right now, as we head to break, let's look at yesterday's s&p's winners and losers. >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. ry from rylee's rea! hi! this listing sounds incredible. let's check it out. says here it gets plenty of light. and this must be the ocean view? of aruba? huh. this listing is misleading. well, when at&t says we give businesses get our best deal,

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the fed holding rates steady and projecting three rate cuts still to come this year. joining us with more is former vice chairman roger ferguson. roger, when you and i spoke yesterday, you were thinking they were more likely to move to the dot plots to signal two cuts for the year. were you surprised that this maybe seemed more dovish and people had been anticipating? >> i was surprised, but i

recognized that several did move in that direction. so i think this was a close call. the market is getting excited about something that is real on the margin. that's what i looked at yesterday. i will say there's a little bit of jay powell's or chairman powell's press conference with the january and february numbers and he could have shown a bit more concern. that may have been playing into the market as well because many folks have been focused on those relatively hot numbers. he put it in the context of a bumpy ride and we'll look through it. i think there was a little bit of dovishness that may have been unintended. >> the only thing -- i agree with you. that was my take on it, too. he tried hard not to say much of anything. i thought through the press conference because every reporter was trying to get him on something and read the tea leaves and see when the rates would start based on his

statements. he doesn't want to sound like he is flip flopping from what he said two weeks ago to the senate where he said cuts will come sooner rather than later. he did sound the alarm that we are watching inflation closely. >> i think he certainly did. the other thing is the statement itself when it came to the question of needing to be convinced was the original language. the committee needs to be walked back this is nearer to what chairman powell said during the senate. on balance, they tried to stay close to the pre-existing line. i think the only place where i would have imagined they could have proved things forward a little bit is showing a touch more concern on inflation. the other thing i found interesting is they marked up slightly across the board where

they think finflation is going o be this year. they marked up slightly, but noticeably growth expectation. the overall message is the economy is a little stronger and inflation may end up higher this year. they didn't do what i thought which was be clear they are ready to move to two and not three. >> roger, in your view, does the recession risk suddenly carry more weight with them for some reason than the inflation risk? why are you thinking about cutting at all if you are not seeing some cracks somewhere? do they know something we don't know about the risk to the economy? it seems like that took a front seat and inflation took a backseat all of a sudden. i don't know why. >> i think the reason that appears to be the case is inflation is coming down closer and closer to their target.

i think they are right to say when that is the case, the dual mandate comes into play. having said that, i don't think they are seeing a recession. i don't think the staff was forecasting one the way they were a year or so ago. the reason they are talking about cutting, joe, obviously, rates are in restrictive territory. we don't know how much pre-descrip restriction there is. if inflation comes down, it is appropriate for it to come down, then there is no reason to maintain an overly restrictive stance. data dependent. i would say the question of two versus three is not resolved yet. it depends on the data. >> the message i want people to hear, roger, because you understand these things and you understand how chairman powell things and the fed works as a former vice chairman. your thought is the market may be getting carried away and

hearing things you don't hear. >> i think the market is hearing what it wants to hear. yes, i think they are getting a bit ahead of where the fed is and the question of two versus three is a really close call. had one or two moves slightly we would have been talk about how they moved from two to three. it is right on the margin. that is the market getting a little ahead of where the fed is and hearing what it wants to hear and disregarding the left. >> roger, thank you, as always. >> my pleasure. coming up, apple's ceo tim cook is in china to sellcelebra the new store in shanghai, but back home, the doj is getting ready to hit the company with anti-trust lawsuit. how should investors react? we'll get into that and more next on "squawk box."

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the justice department reportedly getting ready to go after apple for violating anti-trust laws. meanwhile, tim cook, ceo, is in shanghai for a new store opening. joining us now is daniel flax. dan, i can imagine just knowing you that you think apple is big enough and strong enough and successful enough to manage its way through this, but no one likes to take on city hall. it is a distraction. they have other issues they would rather focus on.

stocks are already down. is it going down more or is it at a point where you think people out to be nibbling? >> good morning, joe. good to see you. the stock is attractive here if one has a 12-to-24 month horizon. in the near term, the doj investigation with tougher s smartphone sales in china is a factor. if you step back the story from the regulatory standpoint, this is one where apple has to demonstrate they are being trans transparent and empowering others to build on the platform and make adjustments when necessary. the payout of $320 billion to developers since 2008 demonstrates they are creating value. apple and other platforms need to do more to demonstrate transparency and competitiveness of the platforms. we continue to like the stock here. >> these things take a while. i don't know what you think of

the election. would it be better or worse for apple in terms of the anti-trust action if former president trump were to regain the white house? >> i think what will matter most is whether they can execute on the product cycles whether it is biden or trump in the white house next year. what we have seen even in the difficult period is that the iphone install base continues to grow. we have also seen more and more customers mix up to the pro and pro max. if apple is able to execute on the product cycles and delight customers with stropng growth i services, i think whoever is in office in 2025 is not important. i think both parties will remain sta stance to china app.

apple has been able to navigate effectively between the two countries. apple and the supplies and the ecosystem employs several million people. it remains to be important on both sides. >> tim cook has anti-trust issues here and anti-trust issues in europe. he has product cycle issues and he has to deal with china. that's among other things he is dealing with. that is unbelievable. he better be good. he is good. >> joe, he and the management team have shown over the last several years through many economic cycles and the pandemic that they hecan innovate and execute. if we look back at the broadening of the growth drivers which has been what mattered in the generation of $100 billion of free cash. we like it with the challenges. >> at least they are not trying

to make self driving electric flying vehicle. that would add to the problems. dan, might be a big winner. dan, thank you. see you later. >> thank you. when we come back, a warning of potential cyber attacks on the nation's water systems. we will talk to a cybersecurity expert about whether the government is doing enough to protect the infrastructure and at mwhore could be done. "squawk box" will be right back. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

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all right. welcome back, everybody. the biden administration is warning states to be vigilant against cyber attacks targeting the country's water systems citing ongoing threats from the hackers associated with iran and children. the head of cyber security

practice at the chertoff group. adam, when i read about this warning coming from the biden administration, my first thought was, what? why don't we know more about this? what, as consumers, do we need to worry about? how would we know if there's an attack coming? does it mean you need to worry about your tap water? >> let's talk about why we care about this. water is the most life line of life line critical infrastructure. we think about this for three reasons pch we worry about an interruption in availability. that can happen in natural disasters, et cetera. we're worried about precisely timed attack that would interrupt the availability of it in the context of some conflict. there's a psychological impact that you really led with where some of these attacks could occur to ferment fear and uncertainty in communities.

>> yeah. i mean, i think a lot of people have seen "leave the world behind," the julia roberts film on netflix that lays out concerns if a lot of these systems were attacked, they're critical infrastructure systems, and we lost that and communication type of things. how big of a risk is this? how likely of a risk is this? and what are the government and companies doing to make sure this is not something that is carried out? >> well, we've been worried about attempts certainly in other parts of the world to compromise water infrastructure for some period of time. we've seen, going back over a decade actually, iran focused on water systems not just in israel but probing of dam infrastructure in the united states. more recently we've seen in israel attacks on water infrastructure. we've seen in ukraine there's reporting that says that the water infrastructure is the

fourth most sector attacked by russia in ukraine ahead of the state and border service. we've seen, to your point, recent reporting around strategic access, if you will, into water systems in the united states. >> adam, i guess my point is, how vulnerable are these systems? are we doing enough to protect ourselves? >> we need to do more. i mean, they're widely dispersed. we have 50,000 water systems in the united states, and they tend to be amongst the least mature of critical sectors. the energy sector, financial services sector has had either regulation or self-regulation in place and funding to go along with it. and i think we need clear measures. we need more funding, and more funding is coming, to enable the water sector to defend itself. >> the idea of an attack would be, what, the water would be shut off, or when you mention

potential attacks on dams, the water would be turned on in a big way? >> there are a couple of scenarios. these water systems depend on pumps, and pumps move the water. they also deploy disinfectant in the water to keep it clean, remove waste water. we're worried about pumps being turned off and worried about pumps being turned on either to move more water than should be moved or to deploy more chemicals that should be deployed. we also worry about the management console that controls all this stuff. even if the pumps aren't impacted, if the engineer workstations, the human machine interfaces are turned into bricks, essentially, then you have a loss of control as well. >> adam, thank you for joining us to talk about some of these issues. i get the feeling it's not the last time we'll hear from you. thank you. >> thank you. coming up, the fed putting three rate cuts in play for this year. mohamed el-erian with his

breakdown of chairman powell's possible strategy. then later a special interview with house speaker mike johnson. quk x"omg ghba.k 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!

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are you... your electric future. customized. the fully-electric audi q4 e-tron. ♪ ♪ markets looking to push deeper into record territory after jay powell and the fed maintain their commitment to three rate cuts. futures are higher ahead of the opening bell, even after the gains we saw yesterday on this. the justice department expected to sue apple for anti-trust violations. that announcement could come later this morning. we've got the details and the market reaction straight ahead. plus, reddit is ready to make its public debut. will the front page of the internet give the market for tech listings a much-nemuch-nee boost? the second hour of "squawk box" begins right now.

good morning and welcome back to "squawk box" here on cnbc, live from the nasdaq market site in times square. i'm joe kernen along with becky quick. andrew is off today. the futures, somehow, are continuing to trade. you can see up about 76 points now on the dow. 400 points yesterday. so just add it all on. nasdaq up, definitely seeing some excitement or animal spirits given what jay powell said yesterday. i think you'd have to call it probably on the dovish side for what people were expecting. treasuries are about 430 as recently as yesterday on the 10 year, now 4.23. and bitcoin, as you might not be shocked after the somewhat dovish 2:00 p.m. news that we saw yesterday, bitcoin took off.

it's down in the low 60s, now 67,000. mohamed, there's still a lot of people just in defensemen. i don't know when they finally -- but that was about, what, two years ago? >> no, before that as well. >> you did? all right. well, i had an intro for you, and i hate to waste an intro that they put in the teleprompter. but mohamed el-erian is here, chief economic adviser to allianz, president of queens college, cambridge. are you a whisperer? what are you. >> observer. >> a fed observer. did you think it was dovish, more dovish than you were expecting yesterday? >> oh, absolutely. in two ways. one is a signal that they're willing to tolerate higher inflation for longer, and, second, something that is flying below the radar screen is what

chair powell said about qt, said about the balance sheet, saying that he's willing to slow down the journey to a lower balance sheet. i think that means we may well look back on this week as the week in which central banks stepped away from a very strict inflation target to a much broader concept. >> and this has, in your view, nothing to do with the election? >> so i would like to believe the fed in saying it is apolitical. >> you would like to believe? do you believe? >> i have no other reason to believe otherwise. >> well, it was weirdly dovish, and i keep bringing up that suddenly it seems like the asim metric risk is now in a recession after we've had two really hot inflation numbers. >> i was with you when you asked me, what does the outlook like like? i said 15% soft landing, 50%

something better than that and i think that they realized two things. i think they realized the economy is weakening, but they've also realized or hope they're going to realize that we're living in a world in which the supply side is the problem and we need to tolerate slightly higher inflation if we don't want to sacrifice the economy. i think that's the right thing. >> because governments are still spending so much? the united states government is spending so much money? it's weird to have fiscal doing one thing, monetary doing the other thing. >> correct. and we should be doing more to enhance supply side. it is the problem because of geo politics. we are redesigning supply chains. second, companies are emphasizing resilience as much as efficiency and are embarking on a more costly supply chain. third, the labor market is not as flexible as we would like it to be. and we're lookingality an

uncertain energy position. supply will not be flexible enough and the fed will have a choice, accepts slightly higher inflation, or it unnecessarily tips the economy into recession. >> what's to say the inflation remains slightly higher and doesn't get out of control? >> that's the bet. that's the risk. there's been no evidence so far of the anchoring inflation expectations. and markets are behaving in this way. on the inflation side, look at gold, look at equities, but then look at treasuries, and you get no indication of expectations. >> like a cross current. we said that. there's a lot of animal spirits for the fed to be worrying about a recession, and you said the economy is weakening. well, i've seen two hot inflation numbers two straight months. i've seen that. >> three. >> three straight. but now they're saying it's transitory again. i haven't seen -- where is the weakn ness you're talking about?

>> in manufacturing. >> and there's a lag and it's going to continue to slow? >> it will continue to slow, and they're trying to make that slowing as orderly as possible. it is fascinating to me that when chair powell was asked about financial conditions -- everybody that looks at broader financial conditions says, gosh, they are so loose -- he dismissed that completely. he's looking at a very, very narrow and, in fact, roger ferguson repeated it today when he said we are in restrictive territory, because they're looking just at the policy rate relative to other indicators not at the holistic financial conditions. >> roger said that but then he said, oh, people can argue about how restrictive, which makes me think that's a judgment call. are you sure we're in restrictive territory right now given the economic background? >> we are more likely to be in restrictive than not restrictive. look elsewhere as well. the bank of japan surprised on the dovish side. the swiss surprised on the dovish side. europe starting to get a signal

from central banks that i believe we're going to look back at this moment -- >> do they all have elections coming up? let me ask you -- did you see what we're spending next year? >> a lot of money. >> 7 trillion. obama, for the first time ever, we went over 4 trillion. then covid, the pandemic, we need extra money. it got us to 6.9 trillion or whatever. covid is gone, basically. why are people still wearing masks? maybe they have a reason. why are we at 7 trillion? why? >> whether it's the u.s. or elsewhere, we ratchet -- >> you never go back from the crisis levels? >> we don't. >> that's a bad -- >> the fed's balance sheet. >> the uk is the same thing. it is sad and at some point we will pay for this. we will pay for this. >> we have been saying this for so long we're going to pay for this. we will talk with maya mcginnis,

too. we've been saying this for so long, decades and decades. >> remember the concept of the cleaner's dirty shirt. we live in a relative world, so if we misbehave and others misbehave more, we don't get punished because we have the reserve currency and are the place where people outsource savings to. as long as we remain the cleaner's dirty shirt, we will not be punished. if others start being cleaner than us, then this will change. but right now we are the cleaner's dirty shirt. >> a much better expression i can't use. >> oh, man. >> no, you don't. i learned my lesson. i'm not getting canceled. because everybody -- everybody -- has a support group for terrible people like me. what is it dirty -- >> the cleaner's dirty shirt. >> you use different ones and it's an inanimate shirt, it's

dirty. >> i've been using it for a long time. >> don't trash bad neighborhood. you can't use dead cat bounced. >> don't try to turn this around on me. >> gas light. mine is really not bad. i don't think the disease i'm thinking of is around anymore. >> oh, no. >> you know what i mean. i still am not going to -- it's very rare at this point. >> i know exactly -- >> is that a bad expression? >> probably. i think your first instinct was the right one. >> somebody said in my ear, yes. can i use that? would you use that? >> i have no idea what you're talking about. >> mohamed, thank you. i'll tell you when we go to break. all right, coming up, the department of justice expected to announce that it is suing apple. we have more on that story right after this break. and later, house speaker mike johnson will be our special

guest. we'll get into everything from averting a shutdown to the president's budget. "squawk box" will be right back.

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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. shares of apple are under pressure this morning. bloomberg reporting the department of justice could soon sue the tech giant, maybe today, as soon as today, for allegedly violating antitrust laws, which are -- are they not in the eye of the holder more than ever these days? >> with this doj, yes. >> steve kovach joins us now with more. >> i think what we should be looking for, if the lawsuit does, in fact, happen, there's this idea that this epic games lawsuit that worked its way through the courts, whether or not that kind of will resolve the issue about the app store dominance, that whole thing, the payments that they collect from the developers and so forth. so to what degree does the doj go after the huge, lucrative

business. beyond that, there are sub categories they'll go after, too, payments like we talked about last hour, and the air tags, the little -- >> i have a few of them. i don't know what to do with them. >> tile makes a competing product. companies like that, they are upset because they don't get necessarily full access to ios and a products like air tags. >> can my dog swallow it? >> people put them on their dogs, but, yeah. you're not supposed to do that. >> why? >> that's what they say. you're notsupposed to track your pets or people. they don't want to be responsible -- >> they put them on their kids' backpacks. >> that's a good idea. >> there's a headline from npr, september of last year, united states takes on google in biggest tech monopoly trial of the 21st century. does this top that? >> i feel like it does. first of all, apple is a bigger company. it's a more beloved brand and

you have the full force of the department of justice coming after our own company, and it's happening at an interesting time, the cusp of this revolution, that apple is behind on a.i., don't have a coherent story or good consumer facing product. let's rewind back to when microsoft was going through this at the cusp of the mobile revolution and people were saying, oh, they missed out on this because the government went after microsoft and, therefore, they missed the mobile revolution. >> bill gates has said that. he had his eye off the ball, focused much or on washington. >> then you have to wonder, does this become a distraction for apple? >> in the middle of the a.i. revolution, where it seems apple is a little behind. >> and that's going to be a big theme i'm going to be following the next couple years as this plays out in the court. they can't execute whatever a.i. vision they have. >> is that an argument for a settlement, for apple to say, okay, we'll do what we've already done with the eu anyway? >> it depend on what the lawsuit

says. again, if it goes after the app store in a significant way, the way the eu has done it, they're probably not going to want to settle, will fight it tooth and nail. if it's more minorceded like di payment processors or so smart watches can connect better to the iphone, non-apple watches, and things like that, maybe they can see that and can move forward with what they want to do. we've seen them fight everything. >> it is really weird, though. you pointed out this is such a beloved company for consumers to see antitrust go after a company where it doesn't look like there are complaints. >> they're the angry ones, the developers. >> the department of justice. >> the department of justice, exactly, they have to make this case there's consumer harm and so forth. beloved company, it's not just here in the united states, tim cook is in shanghai opening up their second biggest store they

ever did next to the one on fifth avenue. 1,000 people showed up. this is a beloved company that is having a stressful time and are taking pr blunders with these moves and fighting it. in the eu they have dirt on their face with the way they've been handling some of the regulations. lessons learned over there they're going to have to apply once this lawsuit drops. this is a big deal. you're thinking of other inappropriate jokes, i can tell. >> nope, not inappropriate jokes. a great song called "sunday morning." i woke up one sunday morning, no way to hold my head that didn't hurt. the beer i had for breakfast wasn't bad so i had another one for dessert. i fumbled through my closet and found my cleanest dirty shirt. mohamed's cleanest dirty shirt

is worth using. kris kristofferson, too, and johnny cash. no, i was listening. i was listening. that's where cleanest dirpt est shirt. songwriter kris kristofferson. were you born? >> i wasn't. >> don't answer. you were not. >> i'm '85. i was born in '85. >> you were born at night but it wasn't last night. >> exactly. reddit pricing its ipo at $34 a share. the first social media offering since 2019. we'll break down what investors should watch when the stock starts trading. the futures right now are again up. we should be dovish. i don't know. "squawk box" will be right back.

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and now the answer to today's aflac trivia question. the congressional budget office sounding the alarm, it is projecting the u.s. debt will climb to 166% of the u.s. gdp by 2054, up from 97% in 2023. it's also predicting the social security pension fund will be depleted by the year 2033. joining us right now to break down the highlights of that report -- >> low lights -- >> or low lights -- is maya mcginnis, committee for responsible federal budgets, president. maya, these are pretty staggering numbers. do you want to lay it out in more good detail? >> we know that the debt is on a

steady march upward relative to the economy. the biggest drivers continue to be the aging of the population, health care, but i think most worrisome is interest on the debt is really driving the growth and the only way to control if we make the necessary changes of raising revenue and cutting spending. last year we did have one good step with the fiscal responsibility act, but it's not something you see congress willing to tackle in any meaningful way. we will have spending growing over the 30 years that the cbo looks at it in this document to record levels. 27% of gdp, higher than it's been in the past, and our deficits and debt are all going to be reaching records. this slows economic growth, this weakens us from a foreign policy stand. it is not good for the health of the country, and it's the result of two political parties that are so busy boeating each other up they can't compromise and do

the things we should be working on. >> we had a conversation with mohamed el-erian talking about some of these issues and the warnings out there for decades that somehow haven't caught us to us yet. i think that is what has made it easy for the two political parties say, not our problem at the moment. what everyone is warning is -- i think they're painting you as a cassandra for saying, okay, we don't need to listen to this just yet. >> absolutely. it's very easy to dismiss this as both political parties do. voters aren't really concerned about the issue because it's very difficult to see how it connects to anybody's daily life. here is what happened. we've had huge interventions from central banks. much more global flows and changing and demographics that affected the economy that kept rates lower than people would have expected. the result of that, though, people actually encouraged the government to borrow more, and

borrow they did. as we saw the past couple years when inflation hit, which it still does as a result of many things, but part was fiscal stimulus, interest rates have to go up, which they do, you suddenly have a very huge effect on your interest payments because the larger the debt is, the more accepsensitive to grow interest rates, it will show the vulnerabilities that are even worse because we waited so long to fix the problems. the other issue you mentioned but social security and medicare both have trust funds that are going insolvent in about a decade. by waiting and doing nothing to fix those, we left the people who depend on those programs incredibly vulnerable, and changes will be much more difficult than if we'd gotten out ahead of this. the political class is eager to find excuses not to do anything hard but it doesn't mean it's good for the country. any other changes we have to make will be much more difficult. probably the high levels of debt already are slowing the economic growth, which is really such an important factor looking forward particularly as we have

demographic headwind making that more challenging. >> maya, the revenue side is really difficult to try to deal with. you don't know what helps, when you try to raise revenue. that's a problem. one thing that we probably could address more realistic is spending. but, then again, we really can't. and i know you saw 2025, the spending -- for the pandemic we got up over $6 trillion. we're still doing $7 trillion for 2025 and spending. if you don't pay for it, that adds on to the overall debt, which just is, once again, your interest expenses, adds on to what your interest expense is. it's this vicious cycle. where could we cut? where could we cut spending in your view? do we cut defense in this dangerous world? do we cut -- are the things -- now every time i hear the biden administration talk about spending, they say they're

investing. i don't want them investing for me. i'll invest -- let the private sector -- stop investing for me. >> yeah, you're absolutely right. spending is growing on a trajectory much faster than grg growth, much faster than revenues. it would have spending undergo a huge boost from very high levels. the answer to your question, we have to look to cut spending almost everywhere. the biggest parts of our budget are health care and retirement programs. we have to look at those programs. i know everybody running for president promises not to touch social security. we have to fix the program. there will be across the board cuts. i would look at growing -- raising the retirement age for younger workers. lots of things we can do on health care cost that is would slow the growth there looking how the medicare payments program is structured. you do have to do domestic discretionary cuts like in the

fiscal responsibility act, and those are going to have to hold. we've seen how hard it was to stick with them for one year. we're going to have to prolong those over time. i used to think there was a lot of savings in defense. i still think there's a lot of savings in defense, how we do procurement and other things. as you say, that's probably going to have to go back into other areas of defense. i leave that to the experts, but it's a riskier world, which is actually a reminder of why it was so dangerous to borrow for things we didn't need to borrow for so that now when there's real pressures and real things to think about -- cyber security, a.i., all of these issues -- it's harder to find the room? the budget to have a budget that's nimble and responsive to the current environment. and, by the way, we have a social contract that is ensuring for the risks of last century instead of what workers face today. that's outdated. not making any changes there. one other point, we talk about revenues. all these long-term scary budget numbers assume the tax cuts will

expire, and that's not going to happen. we know there's going to be some amount of taxes that are extended. both parties want that. that will make the numbers even larger. >> maya, thank you, i think. gives us a lot to think about -- >> the highlights. >> we appreciate your time laying it out. >> thank you. coming up, a breakdown. what are you going to do? what investors are wchg atinon reddit. house speaker mike johnson will join us later in the show. we have near-term funding problems. amelia, unlock the door. i'm afraid i can't do that, jen. why not? did you forget something? my protein shake. the future isn't scary, not investing in it is. you're so dramatic amelia. bye jen. 100 innovative companies, one etf. before investing, carefully read and consider fund investment objectives, risks, charges expenses

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reddit is pricing its ipo at the top of the range giving it a valuation of just over $6 billion. julia boorstin joins us right now, and there had been rumors it was going to be oversubscribed, there was going to be pricing that came out at the high end. i guess we'll see what happens today when trading begins. >> it did price at the high end of 34.

we had 34 was at the top end. the question, really, were they going to raise the pricing above that? i think it will be really interesting to see what happens when it starts trading today among redditers. i will be opening up the wall street bets reddit community to see what people are saying because it did invite moderators and active users to purchase up to 8% of its stock. we don't have the total numbers of how much of what was purchased by redditers, but that does drive volatility because they were able to buy in without any lock-up period. >> they can use all their profits from gamestop and amc. how much can they get with that? >> this is the question here. reddit describes this relationship with its wall street bets community and other communities on the platform to talk about stocks and said this could be a huge advantage. there's a lot of awareness of our product as a relatively small company, but a lot of awareness of our stock, this could be a risk pointing to the

wall street bets community. a lot of people were on wall street bets saying they didn't believe in the stock. they weren't going to buy in. they were worried going public might damage the quality of the platform and felt like this is a company that's 19 years old, has yet to turn a profit. a lot of people were saying they didn't think it was a good investment. >> joe was pointing out earlier there's been a lot of excitement at the idea of an ipo taking place that focuses on social media. there's absolute liquidity in the marketplace. you look at bitcoin or gold prices or copper prices or stock markets. it's going to be pretty interesting to watch this play out. >> this is a different kind of ipo than what we saw yesterday with the stock shooting up. this is an ipo like pinterest. i think there's interest here in trying to figure out whether the ipo market is really reopening. we have some stats about how much the ipo market has really

closed the last couple of months. we saw a peak in 2021. so far this year there have not been many ipos but hopes that between estera labs and reddit things will open up again. this is not truly an a.i. company. they're deploying a.i., looking to license their data for google to train its a.i. engines. that's being looked at by the ftc. a lot of questions here and questions how much they can really grow and how quickly they'll become profitable. >> adjacent. >> a.i. adjacent. >> that's what i said. is that next door? what if it's catty-corner? same street? >> i would say adjacent. >> same town? >> it's not core a.i., so they are not using a.i. -- they're not creating a.i. chips. they're deploying a.i. to make their ads better, to make sure they're targetingand selling

ads more efficiently, and the real question is, will they be able to sell their data to trade a.i. engines, and that's what the question is with the ftc. if they can, that could bea huge business down the line. >> the redditers themselves, the moderators who work for free, volunteer their time to make the platform what it is. they are listed as both a pro and a con. if you're looking at the potential issues, risks that could be associated with this. they are the reason that reddit has so many loyal followers. and yet you can't control them like a workforce. they're going to do what they want to do and have chased out the former cfo. >> they're not paid and occasionally protest, and there have been protests in the past when they weren't happy about changes in terms and service and the like. so i'm waiting for the data to find out how many of them bought into shares. they could buy up to 1,000 shares, the active ones. also, do they sell today? do they sell once it starts trading, or do they hold because

they believe in the company? >> the other issue is the nokia lawsuit claiming patent infringement. >> what reddit has said about this is they believe the more high profile they become, the more they're going to be facing these kinds of inquiries and patent inquiries, and they say this is really -- they don't think there's anything to it, and they think over the long term it will be fine, but they did warn that as they go public they'll see more of these issues. >> julia, thank you very much. we know you'll be watching as things open. >> i'll be down there at the new york stock exchange. >> don't miss julia's interview with steve huffman at 9:00 a.m. eastern time at "squawk on the street." coming up, senate finance committee chair ron wyden and a entrepreneur businessman. congress is moving on tiktok is

now considering a public hearing. we'll speak to the tech investor about the future of the platform and much me ensqwkorwh "ua box" comes right back. 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.

shares of paramount global surging yesterday. private equity firm apollo has launched an $11 billion bid for the company's film and tv studio business. this latest offer comes as the company weighs a bid to merge entirely with sky dance media. paramount's controlling shareholder sherry red stone -- an entire sale of the company but there are some serious questions about whether she would spin off just the paramount studios part of that itself. >> all the stocks look the same, media stocks. i don't really understand. >> viewers, customers are wanting to see things differently. >> content is more valuable than ever. >> which would make you raise

the question whether you would split off content and sell that aspect of the paramount. >> i don't know what the future looks like. there will be like three companies, two companies. i'm still waiting for the sports thing. i guess they're going full bore on that, too. coming up, bedrock founder jeff lewis talks a.i. and the future of tiktok. the next hour house speaker mike johnson will join us. being a change maker reflects our sense of urgency as we set about to improve the lives of cancer patients and their families. this year in the united states there will be more than 2 million people who hear for the first time they have a cancer diagnosis, and more than 600,000 individuals who will lose their life from cancer. i'm so interested in not just medicine but also the business of medicine and how we can accelerate progress by adopting

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new information coming to light this morning about a swiss bank and an under the radar american billionaire who invented a very famous product. eamon javers is here with the latest edition of "the javers files." eamon? good morning, becky. cnbc has learned billionaire five-hour energy entrepreneur allegedly maintained undeclared bank accounts worth hundreds of millions of dollars at the swiss bank according to documents cited by senate finance committee chairman ron wyden in a letter sent to the bank's managing partner in geneva. the letter does not name him, instead referring to him as person one. but a source familiar with the investigation and documents

reviewed by cnbc confirm bhargava is at issue here. he has received documents from a whistle-blower not identified in the letter who has information about bhargava's alleged scheme to avoid u.s. taxes on his fortune largely built on the sale of the tiny bottles of highly caffeinated liquid. bhargava's company 5-hour liquid is based in michigan. wyden writes he received a deposit of $255 million in 2013, but the account was zeroed out at the end of that year. wyden's letter alleges bhargava transferred it to person two in the letter but the funds were under bhargava's control. an attorney said he had no comment on the letter. a spokesperson for pictet referred cnbc to a statement it made back in december when the swiss bank came to a resolution

with the u.s. department of justice over its american clients. that statement said in part, this resolution follows pictet's extensive cooperation with u.s. authorities, in full compliance with u.s. law. the doj recognizes this substantial assistance in the resolution agreement. the bank said it turned over to the department of justice information on 1,109 accounts and 1,236 names with aggregated assets of almost $9 billion. wyden says foreign bank account reporting filings to the u.s. did not accurately reflect his control over the swiss accounts. under u.s. law, remember, americans are allowed to have foreign bank accounts, but they must filed f-bar forms with the irs, disclosing the assets, and they must pay appropriate related taxes. bhargava conducts business in the suburbs of detroit. the allegations against him and

person two, if true, could involve potentially the largest individual f-bar penalty in u.s. history. he said the highest penalty ever paid to the irs to date is $100 million. back over to you guys. >> the idea this happened in 2013, i'm trying to think back when swiss bank laws kind of cracked down a little bit. was that surrounding that time? >> yeah, that was as early as 2008. >> okay. >> and this bank, pictet, did not setting with the doj until december of 2023, so very recently. they were one of the latest ones to come in from the cold, so to speak. one of the big questions here is whether his name was among those names that was turned over to the department of justice as part of that settlement. that's something we don't know. we don't know whether there's an ongoing investigation. wyden's letter suggests there was a criminal investigation into the matter by the department of justice and the

irs. but we don't know the status of that right now, becky. >> eamon, thank you. joining us now to talk about tiktok, possible tiktok ban, let's bring in geoff lewis, bedrock capital founder, managing partner. open a.i. has been in the bedrockbedrock portfolio since 2021. talk tiktok. you call this a ban, i think, not a divestment. would that really work? would that solve the problem? >> look, love to be a tiktok ban. think back august 2022 president trump executive order to ban tiktok and i think an opportunity to divest and a plan for that, benefit back then. i support a tiktok ban or divestment. i think we have a very significant somewhat narrow issue based on a foreign government controlling one of the most powerful algorithms

influencing the u.s. here. i worry the practicalities of the six-month period of this proposed bill offers up, there's a possibility the design might be designed to fail. if it fails its chief objective i worry about the knock-on effects for freedom of speech, a society here. banning tiktok, yes, obviously. anyone who's not in favor of tiktok might themselves be a foreign adversary or a foreign agent for fear of getting rid of that but i worry how broad things expand if things don't work out as the bill plans. >> if someone said, geoff, is it a national security risk? you can't imagine that that question's even still being asked? you're that sure. >> yes. >> from what you just said. by definition it's the ccp, it's a very powerful algorithm and they control it. >> i don't know how much time

you're spending around young kids, joe. do you have grandkids? do you see how much time they spend on tiktok these days? insane. spending so much time on tiktok. >> my grandkid have kids, and then -- a couple of them are pregnant, actually. unbelievable and they're in their 30s. no, i don't have grandkids. my son is 22. my job -- i was a late bloomer. >> back up, geoff. you're saying basically anybody who doesn't think this needs to be the divested, our souls, is potentially a foreign actor? president trump changed his opinion. nothing leaves room -- >> changed it back, sort of changed it back. i haven't spoke ton him directly. as of yesterday, we need to do something about it. >> that could be steven mnuchin talking to him about it too.

the former treasury secretary says he would put together a group to buy it. >> fair enough. look, i think bottom line is, it's clear that chinese social control, ccp control, social media company, having this much influence, this much access to the data, on, like, 150 plus americans is dangerous. talking about doing something about this for years. should have done four years ago, and i just think the contours of this bill, definition of foreign adversaries power to the president to approve or not the sale, i worry might this bill be designed to fail a trojan horse for more regulation of more social media companies that are controlled by china. i think we have here a narrow issue with tiktok and the ccp. offering a trojan horse for government to control all

algorithms. that's the doomsday narrative. china controlling this algorithm, have to be an idiot think that's not clearly bad and not doing something about that, but then the u.s. government broadly having control over all algorithms becomes dangerous and like becoming a china overtime. i'm not a lawmaker, a legislature, i'm not a politician. i don't know how to exactly draw the lines but this is a very nuanced issue. >> i can draw lines as a politician. young people vote. you can see it. and they vote democratic. why do you think schumer's not moving? why do you think schumer thinks he had control what kind of government israel has? >> all about votes. >> don't you think, geoff? a cynical viewpoint but i worry nothing's going to happen. like you say. nothing happens on tiktok because young people vote and -- people on tiktok have started

threatening senators. i saw a -- it was a recorded message to someone's phone. last night. i forget which senator, says i'm going to kill you and cut you up into little pieces because this is the only way i know how to make a living is on tiktok. >> a really sort of very sad comment where things are eight societally here and we've had this, had this issue with social media. just getting worse and worse every year. i do think tiktok is in a league of its own how addictive the algorithm is, a.i. powers built in. obvious fact that any chinese company has a de facto section of the cc. reality of voting is very scary, but i do think we're -- i think if tiktok determines how people vote, we're all doomed, joe, basically. if people vote just because they want tiktok, the way it is today. then future's going to look very

bleak. >> so many things -- we're moving fast, geoff, technology, a.i., everything, and we don't know any of the ground rules. already see, you know, some of the effects of this, and it's not great for society. geoff, in spite of that, i think, i don't think you were trying to be unkind. do you think, becky? i could -- i could have grandchildren, but i don't. i could, but -- i don't. i started late. i started late, but it was worth the wait. geoff, thank you. see you later. see you later. >> my grandmother was 46 when i was born. >> your grandmother. >> yeah. it's very possible. we could all be -- >> yeah. i'm over 46. are you wondering? asking if i'm over 46. >> just saying very young to be a grandmother. >> i'm over 46. still to come this morning reaction to yesterday's spend

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. good morning. futures pointing to gains

following yesterday's fed-induced rally, fed-spurred rally. major averages off record closing. reddit set to make its trading debut today after an ipo valued the company close to $6.5 billion. and lawmakers releasing details of a more than $1 trillion government funding package. but can they still head off that shutdown tomorrow night? house speaker mike johnson will be our special guest as final hour of "squawk box" begins right now. ing good morning, everybody. welcome back to "squawk box" right here on cnbc. we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen --

>> a spry joe kernen. spry -- >> andrew is off today. aww -- >> you know what geritol is spelled backwards, don't you? >> no. i don't. >> remember, remember any of these? >> i remember -- >> geritol is for geezers and i don't take it. all right. >> okay! let's take a look at the u.s. equity futures this hour. seeing things off to the races once again even after yesterday's major gains. dow futures up by triple digits. 107 now. s&p futures um by 22. nasdaq indicated up by almost 165. of course, all three major averages saw record closes yesterday after the fed signaled it plans to cut interest rates three times this year. treasury yields reflecting some of that dovishness as well. looking now you see ten year back to 422. two year at 456. joining us right now to talk more about the fed and the markets we want to get trright

our first guest, peter orszag, former director of management and budget under president obama. peter, jump right into it. what we heard from the fed yesterday. it seems to be signaling game-on to the markets? >> yeah. absolutely. look, i think what's happened both this year and last year is that people get a little confused by what is very likely to be seasonal factors in january and february. so about a year ago robin brooks now at brookings and i predicted that inflation would come down significantly during the year, despite the fact remember about this time last year similar concerns about, are we going sideways? has the progress stopped. it wasn't correct then. i don't think it's correct now either and i expect inflation will continue to show a downward trajectory. i think the fed is correct and this is what you basically heard from chair powell yesterday to kind of look through the january and february numbers to the

glide path and's ongoing declines in inflation. the other thing that's happened, though -- >> go ahead. >> i'm sorry, go ahead. >> go ahead, the other thing that happened is, if you remember when i was on with you from davos at the time there was all of this expectation there would be six rate cuts, multiple rate cuts. what's happened in the meanwhile is the market has caught up to where the fed always was going to be, which was not starting until, at earliest this summer. i think the gap between the market and fed reality has narrowed substantially. which is a good thing. >> let's just say, though, that you've got another hot read in march. would that push the fed off from saying, okay, we can't do it in june. maybe not july. maybe august or september? that would be, i don't know if there's a meeting in august, but september maybe a more play-out? >> look, central expectation in line with the market at this point for the rate cuts to begin this summer, but i say there's a

higher probability that the odds are higher that it will be pushed off and might be one or two cuts, not three. >> so what we're seeing -- >> exactly the reason you h hypot hypothesize. >> we're seeing in the market, partially to do with the fed, partially other things, if the fed doesn't get to three, does that impact the market? what's driving this? how much is a.i.? how much is people thinking, okay. there's going to be a soft landing? >> well, the timing of yesterday clearly ly was linked to the fe. what's happened, i think, fed, read between the lines, read through, the fed did i what i think it should have done. to say, don't worry too much about the last two inflation reads. it looks to us like these were disproportionately affected by seasonal factors. chair powell was careful to say you don't want to interpret data

in the way you find most favorable. nonetheless, listen to the tone of what he was saying and even the words of what he was saying, that's the takeaway. whichis, their view is that this is most, or most likely a blip. i agree with that. >> the ipo market seems to be heating up. we've got reddit today, high end. a big ipo yesterday. what about the m & a market? that's one that you know really, really well. >> i think the m & a, i'll are careful, we're in our blackout period. m & a turned back half of last year, because many of the headwinds most pressing on the market started to fade. so financing markets started to open up. you can actually view the ipo market reopening as the next stage of first there were financing markets reopened, which was happening, know, over the past several quarters. now ipo market.

that one headwind out of the way. another significant one is the way boards and c suites look at antitrust. had a big, bad movement. there had been a series of court losses by the government, and there are more companies that are willing to kind of take their chances and roll the dice in court. so that's also been, you know, a slight alleviation on a headwind. yes, the m & a market has been picking up since last year. >> how much of the willingness to take things on from the c suite is the idea that there could be a new administration coming in? do you think a new administration would make it easier for m & a, or problems with m & a when donald trump was president last time around, too. >> yeah. look, what i would say is, traditionally, look back over history, when you move from a democrat to republican administration or vice versa there's a change in antitrust

policy. more pronounced at federal justice, not a surprise given bipartisan nature at the commission. you expect based on historical patterns moving from one party to the other does have some effect on antitrust. i would say is, regardless whether there is a shift or not, the courts are the ones that are going to be interpreting the law. none of the laws here have changed. so all that's changed is the way that the antitrust authorities are interpreting the law. and we have a series of court cases even this year that are also going to be quite important in demonstrating one way or another how the court's interpret those laws, peter orszag, ceo of lazard. great to see you. thank you for your time today, peter. >> in the private sector. it's, like, night and day watching. thank god. i mean, think -- looking back, don't you wish you'd been in the private sector before you did that other job, peter, now that you know all this? think of what you know now. >> come from public and private

circles. >> what you know now and would have known then. only known it then, our deficit would be in half, probably. >> i think it's going to serve in both sectors. thanks, joe. >> okay. thanks for coming on. coming up, house speaker mike johnson will join us to talk about the race to fund the government. fight over the southern border ayd much more. st tuned you're watching "squawk box" on cnbc. helps investors meet their goals. pgim investments. shaping tomorrow today.

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earlier this morning lawmakers releasing detailing of a 1.2 trillion dollar package to fund the government through end of fiscal year but still a chance for a shutdown end of the day tomorrow. joining us now house speaker -- house speaker. speaker of the house mike johnson. very good to have you on this morning, mr. speaker. >> hi, joe. great to be kwith you. thank you. >> many kwquestions swirling around. whether you rule the 72.

trying to read body language in between the lines. i would say that is imminent and you have to do it that way go to two-thirds and get democratic help but that shows you can govern. >> it does. we are in a moment of divided government, and in fact historically divided. everybody knows now we have famously the smallest majority in u.s. history. i had a two-vote majority today. by next week back down to one. but we have to keep moving. we've got to keep the government funded. we have to keep operating, keep the train on the tracks, and you're seeing that happen here. because of divided government it's not a perfect piece of legislation not the one we would draft and pass if the republicans had control of the senate, house and white house, and i think you'll see that next year. i think we'll avoid a long shutdown for the government. >> certain members of your caucus wouldn't grant you anything in here, any wins. there are things in here. and things that former speaker

mccarthy accomplished that i don't think he got credit for. he was going to keep the government open do what he thought was right no matter what. we know what happened to him, but i don't think that the -- the will's not there to do that again. and i think you can do what you think is right, and, you know, that's what -- just like he had to do it, something you have to do. you it tell me, though. i'm not putting words in your mouth. >> look, i say it all the time. democracy is messy. particularly messy right now in a moment like this but we have to get the job done. there are substantial wins in here. several packages is defense spendin spending. we know what a critical category that is. hot wars around the globe and our military, troops, out serving valiantly and deserve to be paid for it. highest pay raise in almost 40 years in this bill.

cut unnecessary and i think ridiculous spending. dei practice, for example. taking $50 million haircut here. we can take care of our priorities and do the right thing. another big piece of this is border security. republicans on our side we want enforcement of the law. what the administration is not doing. in this package we're able to increase enforcement capability. increasing number of detention bids for i.c.e. to hold those who come in illegally and providing more border patrol agents. 22,000 in our package, h.r. 2. our border security measures. some met, some done. same time in this package cutting resinresending, $20 bil expansion and expansion other unnecessary depolitlittive sten

and next year majority in the house and senate. >> and weigh percentages? go that route? why i'm asking. what i'm hearing. if you did give a delay, didn't do it, and let, you know, negotiations go on, i think what? 43 of your talk is members, a letter they want this, they want that. this is horrible. you're not getting anything. that's not why we were sent here. out of you that 43 i think 1 of them has voted ever "yes" on any bh budget whatsoever. give them the weekend, close the government. help republicans snatch defeat from the jaws of victory one more time, when the big election comes up what do you get for it? will you do the 72-hour waiver? can you announce that now, mr. speaker? >> look, we have to get the job done. the 72-hour time period is something, it's a principle we all defend. i always have. we want members to be able to understand legislation, have time to review it before they

vote on it. a concept. everybody's reading this quickly. doing that, and we'll see. i'm going to talk to colleagues this morning. i think we need it done by the weekend because the stakes are too high. >> that means get to two-thirds, a lot of democrats and willing to do that. >> it's what we have to do in divided government. can't get a rule done from our own party. can't have a fair majority. remember, a two-vote margin. have to get two-thirds. by necessity you need both parties to agree and that's what will happen. >> demise of -- heard that many times. in your view, senator i don't think there's a will to go the same route as they did with former speaker mccarthy. if you do it, you don't expect the same outcome, do you? >> i don't. look, everybody understand this is difficult right now. they all pat me on the back saying they have a lot of sympathy. hardest job in the world, all that. that's fine. i'm very sober-minded we have to get the job done. >> i get that, too.

we, we had maya macguineas on earlier talking about the long-term issues that we have in terms of spending and revenue and everything else. she said, i don't have one positive thing to tell you about this report. we called it the highlights, but they were really the lowlights and do you haven in answer for what we need to do? your candidate, former president trump, won't touch social security or medicare. even when he didn't even say that, but when, someone implied it, biden immediately came out with an ad that said, i'm grog to protect -- neither candidate has, is going to touch that third rail. should we? >> no, we shouldn't. here's the way that we'll do it. two completely different world views on this. the biden budget came out. it would make the largest tax increases in u.s. history.

about 4.9 trillion dollars in tax increases. raise the debt to about $52 trillion over the next ten years. can't go down that road. we're going to crash the u.s. economy. we recognize that. we present alternative views of our house budget committee that their resolution in the last couple weeks that would balance the federal budget in ten years and cut $15 trillion in spending while not affecting social security or medicare. this is possible 20to do but toh blig big choices. lipt skies and scope of the government. there is a path to do it. talking about it a long time. it takes political courage and you'll see that. i believe stakes are too high and we have to save the economy. we can, it has to be the right policy choices. >> there have been calls, bipartisan calls, actually, to bring together another commission to address this.

something like one with teeth required to follow recommendations of that committee. would you support that, mr. speaker? >> i have been supportive of that. talking about it. a bipartisan bicameral position. the catch don't go in with the idea raising taxes. i think raises taxes is problematic in a situation like this. i believe, limited government fiscal conservative believe in the principle reducing taxes on job creators and innovators and ricktakers and hard-working families, and reducing regulation to unleash the economy. not a theory -- >> mr. speaker, i mean, if you were going into that saying i support a committee but one that only sees things my way and is willing to cut expenses but not do anything else, you're going to lose the bipartisan part of that. simpson-bowles was based on the idea to raise taxes in someone arenas and cut revenue. how it was bipartisan how you would be able to get along with it. could you see something like

simpson-bowles but that again also had teeth and would be required to follow the recommendations of that panel? >> i think there's a thoughtful discussion that needs to be had here in everything reviewed, but end of the day i believe our principles are theones that need presented. what we did in the trump administration is exactly that. first two years, by end of, before covid, right? beginning of 2020 greatest economy in history of the world. not just the u.s. reason we implemented policies tax cuts jobs act regulatory reforms were transformative for the economy. we were onshoring manufacturing here. people were out growing businesses. adding jobs. you had an increase in every demographic in the country. all boats rising same time and then president biden comes in reflexively post-covid does exactly the opposite and why we're in the situation we are now. these are policy choices that put us here and thus policy choices that can turn us back. i look forward to that. i don't think november can get here soon enough.

we start the next congress in january and i think you'll have unified government with people in the white house, senate and house who believe in these principles. advance those we can turn the economy around, i think that, i really, really do. >> mr. speaker where are you on aid for ukraine, aid for israel? i know you considered inviting prime minister netanyahu to address congress. i mean, staggering comments -- i guess it's, one man's opinion, staggering comments from majority leader schumer about the prime minister. you were considering it. you spoke with, the prime minister as recently as yesterday morning. are you going to invite him? >> i would love to have him come and address the joint session of congress. we'll certainly extend that invitation. he invited me and i've been invited to speak at the knesset. i think third u.s. speaker in history to do that. a great honor of mine. trying to work out schedules.

what chuck schumer did was almost staggering to unbelievable to suggest to a, our strongest ally in the middle east the only stable democracy he knows better how to run their democracy is patently absurd. match's if i came on your show and israel is facing right now leader of the senate to say such a thing was outrageous. i think it was received that way in israel. i don't think they appreciate that very much and send a terrible signal to our allies and enemies around the world. i wish schumer would keep his comments to himself on that. we have to present -- >> sorry to interrupt you, mr. speaker. wouldn't he have to -- to buy in on the prime minister speaking to congress? do you know whether that -- he wouldn't say, "no." would he? >> i guess we'll find out. i mean, look, i'm the one that extends the invitations to speak in the house. if we just have the house that's fine, too.

i think a big majority of that senate would want to come and stand in support of netanyahu and israel. it's a really, reall time for that nation fighting for their very existence we need to stand strong with them and passed resolutions to do so. i've attempted twice to get the peace done. turn to the supplemental and all of those issues immediately upon appropriations being done and as we discuss today and over the weekend. we'll address that. lots ofthoughtful conversations on different routes to handle that. i won't show all the card this morning. there idea, thoughtful ideas how do it and we'll get the job done and project strength. we maintain peace through strength. that's an old reagan admonition and when we still believe in. >> you saw president biden's state of the union and his view, and this impression where we are in time right now as a nation, and then, you know, there are,

views probably that are diametrically opposed to a lot of the stuff the president said. at the state of the union. if we were, if president biden were to win re-election what does that look like for the relationship between your party, the gop, and for the next four years? it just paints a pretty bleak picture on where we would be. does it not? >> i think -- it does. i think four more years of biden-harris policies would be disastrous for america. >> anything done -- your own party is tough enough. i can't even imagine what we would accomplish with all of these, these very, very serious and weighty issues we have in foreign and domestic policy. >> yeah. i don't think you're overstating that, joe. it's a serious problem. i don't think america wants to go down that road. president biden has a 36% approval rating lowest of anyone

ever running for re-election. i don't think he will be re-elected. people are feeling the pain. the border, prices climbing through the roof because of lack of leadership. i've been in over 20 states now over the last several weeks campaigning with our challengers in these races we're going to flip to the house with incumbents. an energy in the base not fully registers on polls. people are anxious, they are deeply concerned and ready to vote for change. i think they're going to give us leverage of power and i genuinely believe we can fix this. i think america's best days are ahead of us. i really do. we need a difference in the direction and i think this election will provide that opportunity. >> talking about the ev, latest gas stuff. got one yet, mr. speaker? you've been driving around in a tesla or -- >> as we say in north louisiana,

that dog don't hunt. we don't do that. we drive pick-up trucks and will keep doing it no matter what aoc and biden says. >> been a while since we've seen you and hope to see you again soon. thanks for your time. >> thank you, my friend. good to see you. >> see ya. still to come this morning the department of justice reportedly set to sue apple for alleged antitrust vileations. we will speak with a man known as the architect of the biden administration policies. tim wu. stay tuned. u'ating "squawk box" and this is cnbc.

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rob lynch. papa john's executive takes over in may. lynche served at ceo of papa john's and randy garuni remains advisor rest of the year. both stocks moving lower on the news. shake shack shares down. papa john's shares off by 1.5%. all right. we are just seconds away from initial jobless claims also philly fed manufacturing data and much more. obviously after what the fed said yesterday, every piece of data matters. we'll see what happens getting closer to that. futures so far have been sharply higher this morning. even after all three of the

major averages closed higher yesterday after dovish comments coming from the fed chairman, jay powell. dow futures indicated up by 125 points. s&p futures up by another 25 points. nasdaq right now looking up by 185. treasury market has shown lighter yields. looks like 4.2% for the ten year. rick santelli is standing by at in chicago. rick? >> yes. we're looking for initial jobless claims the week of march 16th. expected to be 213,000. a bit less, 210,000 in initial claims. rearview mirror, 209,000. you can see how that stacks up. 209,000 was the smallest number since second week in feb when it was 200,000. continuing claims, 1 million 807,000. a bit less than expected. rearview mirror, 1 million 1

108,000. huge revisions on numbers to the point you almost gasp. give you an example. go to the second week in february, it was originally released at 1 million 898,000. then all of a sudden 111,000 of that disappeared turning into 1 million 787,000. now, i understand revisions, but, man. some of these are really large, just like we get every first friday of the month. large revision there's as well. now, let's look at the current compound for the fourth quarter expected to be 209 billion with a minus sign. comes in a bit wider, always good. minus 194.8 billion. 194.8 billion. that would be the smallest going all the way back, this is pretty good, to the last week, the last week in march of '21. so we really, really make progress there. philly fed minus 2.5 expected.

a big reversal there. up 3.2. up 3.2 is, well, stacks up to our last, 5.2. 5.2 best since august of last year when it was up 7.0. so how did these numbers move the market? well, prior we at 4.22%. as becky pointed out. now 4.23. two year hovering right around 457. now hover still around 457. more context there, if you recall, we had ppi last thursday. that's the last time ten year yields were trading here on an train day basis and if you look at the two year, at its current level, last time it was here was on the 12th of march, which was cpi tuesday. so both maturities, 2s and 10s comping to previous higher than expected inflation data, as yields do start obviously to

come down post yesterday's fed meeting statement and q&a. becky, back to you. >> all right, rick, stay with us. more to dig into this new data. to talk about the economy after yesterday's fed decision. for that, wendy elgds kberg with brookings institution. economics senior fellow. douglas eagan, america's foreign action president and our very own steve liesman. steve, you first. >> talking in the 6:00 a.m. hour about things to worry about and are we missing signs about things to worry about. well, the jobless claims does not look like one of those things to worry about. we've been in this really steady range here. 20 200, 210. rick is right about revisions but bottom line brought them down to 1.8 million level and assured unemployment total not out of whack. appears as if the job market is

strong. one of the things the fed flagged yesterday. the only one-line change in the statement, instead of saying job market moderated said it remained strong. ticking that off. i like the philly fed. interested to see if something coming out of the trough on manufacturing, at least in the data we've seen. some of the watching. unexpected surprise. we'll take it. >> let's get over to wendy. these are good numbers, as both rick and steve laid out on this. these are good numbers for the economy. i don't know if it's good numbers to think a fed rate cut is coming any time super soon, though? >> challenge looking at claims data it's only useful as a proxy what's going on in the overall labor market. the problem is the overall labor market has fundamentally changed. if you have been paying attention to the aging of the labor force, ageing of the population, you might have thought the break-even pace of employment, the monthly pace of employment gains that didn't put

upward pressure on inflation, you might have thought that was, like, just shy of 100,000. the thing is, given the pace of immigration, that pace right now is more like 200,000. so immigration is the key to understanding the labor market, and to understanding its relationship to inflation. >> what do you think, doug? >> well, i think wend hey a good point. there are a couple surprises in 2023 that really helped on the inflation front. for the top line, moderation in energy prices is a big part of the story. in the pce, still down 5% year over year. the second big surprise is the immigration. about 3.3 million immigrants well above what anyone expected, and the third big surprise is productivity boom. we saw the biggest reversal productivity growth from negative to positive seen in a decade. put all of those beneficial

supply stocks together you get easy disinflation. exactly what we saw. the question, will it continue? it is worth noting that the one place we've had sticky inflation is shelter, and if you get 3 million people coming into the country they have to live somewhere. demand impacts first and later labor supply. >> that gets you to where? put that, doug, in context what we heard from fed chairman powell yesterday. >> i would say that, you know, they had the tone about right. i don't think we learned an enormous amount in the past two months. moderation in inflation is what it is and they have no reason to change at this point. everything we're seeing in the economy keeps coming in stronger than expected. i think the three, you know, rate cuts people talk about is the upper bound, frankly. likely to come in lower than that. when we see it end of the day. >> steve? >> yeah. i'm interested, doug.

it sounds like the fed can affect a lot of things in the economy, but because of the dynamics that you and wendy talked about, fed is not going to have much effect on housing and can't really bring that essential part of the index down. so what's interesting to me is, what do they do? do they give up on that last bit of inflation there and just kind of abide it? part of my question yesterday to powell was, am i seeing that because you're going higher on growth and not changing your outlook for three cuts that you're willing to abide or at least ignore time bringing inflation down? what's your take on that? >> first of all you're right. fed controls components of demand. can't do anything on the supply factors. the supply factors were the story last year. fed benefitted from that. go the other way, not benefit from it this year. we'll see. now, you know, are they going to stop short of 29% target? i would have said no way past

couple years. back to the stance powell took august '22 at jackson hole. prepared to do too much as opposed to too little. only mistakevolker made prosper prematurely all dictating get to 2% even if it imposed fairly substantial costs. nor dovish lately and maybe they feel they can restore credibility even if they don't get back to 2. i wouldn't bet against that over the past couple years. felt they had to get back to 2 to re-establish their authority over monetary policy and to re-establish their credibility. a huge mistake in '21 and acknowledged that and have to get back to a point where people trust them. >> wendy, mohamed el-erian said something similar this morning. the idea he thinks fed is relaxing its stance on 2%, too. do you think that's the case? >> i am very confident that they will get to 2. the question is, how long it will take.

what i heard powell say yesterday is that they're willing for it to take a little longer than i heard them say in the previous go-round. >> take a little longer allowing rate cuts while pate waitwaitin that? >> that's right. i heard him say -- >> yokay, go on a leap of faith but cut rates anyway? >> i heard in the previous meeting they weren't going to cut until based on a renormalization of all of the different components of inflation. i thought that was a very high bar to cut. made me think we were many months off from a cut. what i heard in the past go-round, in his conversations yesterday with reporters was, they're willing to be more patient, and if they see weakening in the labor market, for example, without a slowdown in inflation, it sounded to me like they would be willing to cut, knowing that that would

mean a slower path down to 2, but i'm very confident that they'll get to 2. >> wendy and doug, thank you very much. rick and steve, see you later in the morning. coming up, former white house antitrust advisor tim wu joins us, and another reminder. reddit expected to start trading on the new york stock exchange today. more than expect it. it's going to happen. barring something really unforeseen. shares priced $34 each. don't miss also next hour an interview with reddit ceo steve huffman. ay tuned. you're watching "squawk box" on cnbc.

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when we come back we'll sdpeek with columbia law school professor and former white house advisor tim wu about the biden administration many expected antitrust suit against apple. just a reminder for you, folks, heading to a break. catch an all-new cnbc's leaders tonight at 8:00 p.m. eastern time. jim cramer sits down innvidia's ceo jensen huang. stay tuned. "squawk box" will be right back. while an earnings tool helps you plan your trades and stay on top of the market. e*trade from morgan stanley. they're waiting for you. hey, do you have a second? they're all expecting more. more efficiency. more benefits.

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case against a tech giant. bloomberg reporting the justice department is getting ready to sue apple for alledgedly preventing rivals from fully accessing the iphone's features. apple declined to comment when contacted by cnbc.

joining us is a law professor tim wu who served as advisor to president biden on technology and competition policy and known as the architect of the biden administration's antitrust policies. tim, thanks for being here. >> pleasure. >> is this playing out the way you envisioned it? >> i think it is. rumors going around for a long timing. a big hit monopolization case against apple on the smartphone. looks like it's coming. >> i guess we've been kind of digging through this for months and months at this point, but even this morning talking through, why go after a company that is so beloved by consumers and that is basically a star, the crown jewel of american innovation? this google, amazon, everybody that you guys are going after. i say "you guys" because you did architect some of this, did orchestrate some of this. why go after american's standout

american companies and agree with what europeans are saying in a way that could change the way we innovate and lead? >> the idea is to hold america's best company the feet to the fire. if they're forced to compete they'd be better. that dominant companies become stagnant. it's an american tradition. we did it with ibm, microsoft. talking tech leaders. sues microsoft ended up being best thing for the tech industry. theory, no one disputes apple is a great company but the law's not a popularity contest. the idea is that they are, got where they are, now build the moat from preventing any from getting in there are, switching applications. >> explain how you think going after microsoft was the best thing that could have happened for the tech industry? because bill gates says it's the reason they fell behind and why

the company lost out in having its own phone? >> europe and japan, other countries lead their monopolists there and after a while a vibrant competitive company becomes stagnant, less interested in innovation. back in the '90s microsoft had basically sewed up the market and trying to control the internet and probably prevented rise of companies like google, apple, amazon. they have their own search engine. >> i would push back on that front and say is, america is a much more competitive environment than some of these other countries, and in a maybe the reason those other countries go stagnant, leaders go stagnant, they have no one else pushing. look at apple say they are behind in the a.i. race and they have a lot of catching up to do. that's because they haven't been able to shut down competition. >> i think even inside this country we have former tech

industries that get very stagnant. take aerospace. allowed airline industry to merge boeing competing with airbus. how's that going? think about the car industry. we've said, okay. big three can have it. done a lot better when we force -- >> the big three have been completely disrupted by tesla. >> and by imports. no, i hear that. what i'm saying is if we had taken antitrust action in the '60s, we would have had a more competitive car industry. i think there's a cycle. i think companies get uncompetitive. they try to build up moats to defend themselves, it makes sense, they want to make a profit. but going after apple, it keeps them competitive, keeps them, in a way, insecure and forces them to innovate. >> when you describe it like that, it makes me think there is not much that apple can do to settle, to make these claims go away. they've agreed and made some concessions to the european union. would it be as easy as saying, okay, we'll make those changes

here too, or is the entire goal of the department of justice to bring them to their knees and not allow them to be a strong competitor in their own right? >> no, the goal of the department of justice is to protect competition, and their theory is that apple has monopolized this market and has prevented companies from challenging apple -- >> describe what it would actually take. are you talking about saying to the app store is no longer going to be protected via its own ecosphere? are you saying they can't do -- they have to let anyone who wants payments? apple in the past has said part of the reason they don't allow more of this stuff is because they want to make sure their consumers are protected from privacy concerns, any hacking that might take place. are they not allowed to do that at all? >> i think the justice department's going to want to know the difference between what is actually privacy protection and what is something they say that can protect their monopoly. look, this justice department is

not into easy settlements, so they can't wave a magic wand and say -- they want to understand that they need to be -- you know, thatblocking competition legally won't be tolerated anymore. >> i think that's the key in what you're saying. this justice department doesn't want to settle easily. there is much bigger -- there are much bigger issues. for apple, it's not going to be able to settle and go away unless it hands over the keys to the kingdom. >> jonathan kanter was saying, the biggest difference between us and the old days is we dent settle for five cents on the dollar and call it a victory. >> this investigation was begun under the trump administration, but i think what's happening under kanter is probably far more aggressive. if there is a change in administration, how do you anticipate that could potentially impact the dealings between apple and the department of justice? >> i mean, i think this movement has caught fire. i think a lot of americans want fundamental change to the economy. and they cheer on their government when they take on the

biggest companies. i mean, it only makes the companies better in the long run, and it only makes the american economy more productive, so i think this has become very popular, and i wouldn't be surprised if it survived. of course, i think president biden's going to win, but even if there was a different administration -- >> you're kidding. oh, what? knock me down with a feather. >> well, that's not what you said when speaker johnson said he thought that trump was going to win. >> i know, but speaker johnson's a republican leader of the house. this guy's someone who's talking about antitrust issues. >> but he's also somebody who works in the biden administration. i get it too. when you come from that, when you're in that party, you think that's going to happen. >> we expect the speaker of the house to be blatantly partisan, but not an anchor like me. >> tim, thank you for coming in. we're going to watch this really closely. thank you for the crib notes. >> we're going to talk markets and get you ready for the trading day ahead. the futures right now are indicated up again, 122. 174 on the nasdaq. reminder, as we head to break,

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hour now to the opening bell on wall street. joining us now on the markets, chief u.s. market strategist at morningstar. you get more bullish yesterday or starting to worry now that maybe we're getting a little bit too frothy? >> well, the market, according to our fair value, is trading a couple percent above that fair value, so again, not necessarily getting into overvalue territory, but it's definitely starting to feel a little stretched here in the short-term. when i thinkabout the market dynamics, i think the market's been a little spoiled over the past couple months. when i think about the dynamics, very strong growth in the third quarter last year followed by over 3% growth in the fourth quarter. but looking forward, we are expecting that the rate of growth is going to slow. we're only looking for 1.5% gdp here in the first quarter slowing, even in the second quarter, and for 2024, gdp of only 2% overall. so, i do think the market is getting stretched here, and i think investors really need to think about going forward, you

know, what's worked for the past year and a half probably isn't going to be what's going to work for the next part of the year. >> so, you see a leadership change to what? >> we do. and at this point, when i look at, you know, what's really been driving the market, and i think about the magnificent seven stocks, beginning of last year, six of those seven were all undervalued coming into 2023. they were rated either four or five stars in our view. at this point, they're mostly played out. five of those stocks are now rated three stars. meta has gone too far in our view. that's a two-star-rated stock. only alphabet is still undervalued at four stars. i think investors need to look for those areas of the market, start really looking into more contrarian types of plays. i think what you need to look for, specifically, are those areas that have underperformed, are unloved, where there's a lot of negative market sentiment, and of course, most importantly, still undervalued. >> you think -- we're seeing some of this positive action

now, dave. is it more about earningsbeing better than expected or continuing to come in strong, or is it that we may, you know, be back at the partying again, partying like it's 1999 again when we get three rate cuts? >> i can't imagine how many people have asked me, is this 1997 or 1999? and when i look at the of course artificial intelligence plays, at this point, the nvidias of the world, they're trading at fully valued or even getting to be overvalued, according to our estimates at this point in time. so, i really think you need to look at those areas like value stocks, the value category still trades at a 7% discount to our fair value, and i think you need to look at small cap stocks. small cap stocks have definitely been left behind. lot of opportunities there. we see the small cap space trading at a 20% discount to fair value, and of course, historically, when the fed does start to cut, that's usually a good indication for both the value and the small cap categories. >> all right. so, we should see some better

breadth, maybe, and it has been getting better, the leadership is not quite as narrow. dave, thank you. morningstar. final check now on the markets. another solid session setting up after, really, some outsize gains yesterday to new highs. another 175 on the nasdaq. make sure you join us tomorrow. "squawk on the street" is next. i think the reddit guy is coming up. ♪ good thursday morning, welcome to "squawk on the street," i'm david faber, live from post nine at the new york stock exchange. jim cramer is at our office at one market in san francisco. and carl has the morning off. let's give you a look at futures as we get ready to begin trading one half hour from now. looks like we may get a can'tca continuation of yesterday's rally, and that is where our road map begins this morning. the s&p topped 5,200 after the fed said three rate cuts still likely this year, and th