>> good morning, everyone and welcome to "squawk box" right here on cnbc we're live from the nasdaq market site notice times square. i'm becky quick. he's andrew ross sorkin. joe is out today we're here, and we're watching what's happening if you want to take a look at what's been happening with the markets right now, you'll see that this is the same pattern, andrew, just about every morning. >> yeah. >> where you have the dow indicated off this morning by about 126 points s&p 500 and the nasdaq both closing at record levels in fact, the s&p 500 closing above 5400 for the first time ever this morning the s&p is indicated up slightly, by about a point and a half the nasdaq is getting powered along with tech stocks really getting boosted by broadcom. we'll talk a little bit more about that in a moment and the nasdaq indicated up triple digits, a gain of 125. treasury yields, yeah, back down yesterday after first of all getting a cpi number that was softer than anticipated and then

hearing from the federal reserve. the ten-year right now back to 4.3% the two-year is at 4.75. the federal reserve did keep interest rates steady yesterday and signaled that just one cut is expected before the end of this year. here's fed chair jay powell on uncertainty around inflation >> the economic outlook is uncertain, however, and we remain highly attentive to inflation risks. we've state that had we do not expect it will be appropriate to reduce the target range for the federal funds rate until we've gained greater confidence that inflation is moving sustainably towards 2%. >> so we did get the cpi number that was softer than it had been potentially thought. >> right. >> and that comes after a similar story for the month of april, so maybe two months in a row that we've seen some better numbers but they do need to see much more. much more about the fed and the market response with the wharton school's jeremy segal. that's coming later this hour. >> i was going to say roger ferguson has been right again.

>> roger ferguson with us again. >> just been right again. meantime, a story we've been covering now for am months, it is all coming to an end, and in this case it appears to be a victory for elon musk. elon musk claiming victory in two share herald votes last night in a post on x he says both the shareholder resolution on his compensation and on moving the company's legal home to texas from delaware are currently passing by wide margins. he included images of two charts, one showing votes in favor of elon compensation with the line passing through a line labeled guaranteed win and a similar chart showing texas four guaranteed win it did not disclose the specifics of the vote count. in the next hour we'll talk to a longtime share holder who supported the pay package. we should note votes are still oh can you effectively go to theent polls and recast your vote my understanding from sources that smoke to last night looking just at where the numbers are was that on the retail front it

was by a wide margin and always by a wide margin at the same time it looks like some of the big institutions, black rock, vanguard and the like have now cut towards elon musk and that was only learned late last night. of course, all of this could change later that i had. i don't want to tell that you everything is locked in, but it appears that some of the big institutions that were waiting to vote and had not voted now appear to either have voted this way or signalling that they are voting this way, and that's where this tweet came from. >> that was a big question. >> the other piece of this though is if that's the case, how marginalized effectively the iss and glass lewis folks. >> and castors and calpers. >> following mortgage business of iss and glass lewis is an advisory business. >> mm-hmm. >> funds which effectively

subscribe to your service take your advice no longer take your advice, what does that mean? lots of questions will come out of this one. we will not know the final results, my understanding is, probably until late -- maybe not even late tonight but maybe by 5:00, 530, 6:30 p.m. this evening we should have a more definitive view of all of this. >> that's an excellent point wye ss and glass lewis. >> it's now happened a bunch of times. happened a bunch of times, and i wonder what that means to their business it may very well be if you understand the economics of their business, it's such that you subscribe to their service, maybe you just want to hear their view lots of people like to hear lots of views and then they like to make up their own minds and maybe that's just fine, too. >> why do have you to subscribe to their service for i know what their opinions are and i don't subscribe. >> there's two pieces to that. one you is may actually want to communicate with them. there's other services that they actually provide where they can actually advise on lots of -- i

mean, what's happening in truth is they are making -- they are creating advice for lots of companies. you know it for this, but they are doing it for hundreds of companies on every vote everywhere. >> on the small ones. >> the ones that don't make the headlines so you might want to know those things, too elon musk and spacex are being sued by former employees for alleged sexual harassment in the workplace. eight former employees said musk ordered their firing in 2022 after they are circumstancelated an open letter within the rocket k.according to a copy of the lawsuit that alleges musk's workplace decorum was a source of detraction and treated the female employees as sexual objects. the suit was filed in los angeles which seeks to hold musk personally liable for spacex operations and the chief operating officer has

investigated the charges saying it investigates all complaints and takes appropriate action one of the big questions, of course, what is with a happen if he won what would happen if he lost the stock up on that news and i'm sure we'll talk to cathie woods about that vote in just a little bit i know she's got views about the valuation of tesla we'll talk about spacex and some of these stories as well. meantime, former president trump is meeting with executives in washington at a roundtable. among those expected to attend is jamie dimon and citi group's jamie fraser jeff science will also speak to the ceos taking biden's place because he's in italy right now at the g7 meeting. we'll be getting a live report from washington later this hour about the relationship between the ceos and presidents biden and trump. meantime, in italy, president biden meeting with ukraine's

president zelenskyy today. they are expected to sign a new security agreement pledging as. meantime, shares of broadcom higher this morning, sharply so, earnings and revenues beating estimates, the company raising its full-year forecast citing a boost from the enterprise company vm-warer and they say customers have been ramping up spending and there's a ten for one stock split set to take place on july 15th. we've got a lot more coming up on "squawk box" this morning. reaction to fed chair powell's news conference from the current fed chair and former treasury secretary janet yellen who will be joining us for an earnings conclusive interview at 7:30 right here on "squawk box. she's in new york, and "squawk box" is returning right after

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welcome back to "squawk box. boeing telling the u.s. justice department it disagrees with the government finding that it failed to live up to a compliance agreement reached after the two deadly 737 max crashes in 2018 and 2019 the government had accused boeing of reaching that agreement by failing to improve transparency with regulators boeing declined to comment on other details of its communication with the justice department officials, but they said they would continue to work with them. the doj now has until july 7 to determine what, if any, punishment boeing should be facing i guess they are going to say they didn't violate it. >> what else are they supposed to say >> yeah. >> i mean, we'll see. >> reuters is reporting that the white house will nominate cftc christianer christy goldsmith romero to replace the chairman martin gruenberg

she is the front-runner. the white house is targeting july 8 for the confirmation hearing. show's served as commissioner since 2022 and was the director for the t.a.r.p. program back during the financial crisis. merrick garland is being held in contempt of congress garland has defied republican demands to turn over audio recordings with the special counsel about the handling of classified documents republicans want the recordings to prove that biden could come across to a jury as an elderly man with a poor memory the white house has exerted executive privilege over that audio. the vote is unlikely to result in prosecution of the attorney general, but i would say this is political. >> yeah. it happened, too, when -- in the

trump white house. both bill barr and wilbur ross were brought up the same way in a partisan vote on that front so we expect these things in washington when we come back, elon musk claiming victory in the tesla vote over his pay package. we'll dig into that story after the break.

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bob kelly. artisan rivals owns a stake in southwest making it the tenth largest shareholder of record. in a public record artisan says it has privately conveyed many of the same points as elliott to the chair in recent months that's a little awkward conveying to kelly that we think you should go, too art can is urging the board in their words to reconstitute itself and reconstitute the leadership in a statement southwest welcomed feedback from all shareholders and said that the board is confident in the ability of its show and leadership team. you can see there shares of southwest 2850 ceo bob jordan has no plans to resign. overnight elon musk claimed victory in the vote to ought right his pay. he presented this chart of

guaranteed win good morning there's lots of pieces to pick apart. the vote is not over folks can change their vote throughout the day so we'll be watching this until the end. day. in terms of your big takeaway, if in fact this is the conclusion, the end of the soap opera, what do you think, and also where do you think the soap opera goes because we all know that this is still going to go to court no matter what. >> yeah. look, on the one hand this is a strange time to be rewarding elon musk. tesla has been one of the worst performing stocks in the s&p this year. there's been headlines about his behavior at space x and culture and prioritizing the flow of chips. he's in some vague ways held these boards hostage promising to pick up his toys and move to another one of the companies that he runs if they don't give him what he wants so it's a little bit of kind of feeding

the hand that bites you, but, look elon musk has in a strange really singular way been an incredibly good steward of these companies over long periods of time and with the large exception of twitter, x. proximity to him has been good for shareholders i would say there's a very good argument to say pay him whatever he wants to keep him around. >> are you surprised that it has cut this way, and what are you anticipating in terms of the legal challenges that will be brought over this vote all over again, and so how much of this does this solve the situation? is it still possible that a judge in delaware could look at this vote. obviously they are doing this to try to persuade the judge otherwise, but what do you think of that legal possibility? >> remember, the judges aren't in the business of saying you're paying your ceo too much money they care about process, and the ruling here was there wasn't enough evidence that the board, which you could argue how

independent it is, the big question around elon is does he control these companies or not sort of -- certainly not by stock but sort of sheer force of personality. i think the process was probably made some changes here and shareholders, if he's right so far have said, again, yeah, we're sure we want to do this and they are big boys and girls. i mean, you know, california pension, norway had sort of come out and said they are not going to vote in favor i tend to think we've seen this actually a couple of times where, you know, those kinds of shareholders make a lot of noise, but actually they have less influence than you think. there's a similar situation at exxon a couple weeks ago and they made a lot of noise and it didn't really make a difference. i think if you don't want to be in the elon musk business, you really shouldn't own tesla stock, and i know it's in the index and people will have to make some choices, but it's a little bit of a self-selecting universe, and a lot of whom have made a ton of money by riding

alongside elon and i get it. >> let's pivot though because the other thing that's emerged during this, some of which has emerged during this period and some which may be tied to try to even influence votes, has been a number of reports now, including the big bombshell yesterday that landed on the front page of "the wall street journal" about his relationship with women at space x. what do you think of that? what did you think of that story? what do you think of the governance around space x and potentially tesla and others >> look, i hate the idea that there's a double standard, but elon musk has done any number of things over many years at many of his companies that would have gotten any other ceo fired do i think it will matter? no did we know that elon musk is weird, is a weird boss and inappropriate in lots of ways? okay you know, the one that is actually sort of an easier case to make if you're trying to think about this legally is the headline from i think a week or two ago that he had basically

leaned on nvidia i think to have spacex jump the line in front of tesla and remember, like, what started out as a lot of distinct companies doing brain implants and electric cars and space travel have all kind of converged around a.i. really, and lots of places he could kind of do any one of the many ideas that springs into his head, and actually i think that's sort of been more problematic governance not to ntantangle that web of companies. by the way there's a vote that also appears to be picking up tesla and reincorporate that in texas. unclear what that would do to any legal challenges but certainly came out of the same delaware ruling. >> finally, becky and i were talking about it arlier, this iss/glass lewis. these are the advisory firms which are paid a lot of money by at love of the investors to give them advice on what to do, and it appears that folks happen to pay for the advice and not take it what does that mean to their

buses and the credibility and influence that these firms have? >> you know, the proxy advisers have been kind of a corporate boogieman for a long time. you know, congress has tried, the s.e.c. has tried various times to rein them in. actually a house judiciary report this week that suggests that the republicans in congress are about to dial in there look, at really high important meetings, people will do their own work for the most part the reason proxy advisers exist, they came out of the department of labor in the '80s which gave 401(k) and pension plans which didn't have the time and attention to vote on every single thing in every company they owned said if you outsource to kind of an accredited third apartment, we won't give you a hard time about it, so it's really meant for the super long tail of these things, and i think we've seen their influence wane. >> it's a cyo thing, and looking

at it from the point of view of the republicans is very interesting. are they suggesting this is more of kind of telling people what to vote but put are their political spin on it like we've seen other places? >> the report out of congress is sort of this vast left week conspiracy involving climate non-profits and proxy advisers and asset managers, and i think actually what's happening with the proxy investors is they are shifting you're starting to see some of this at the big index managers saying we tonight want to be in this business. you can see almost like their own political parties and saying here are my values i care about the economy, esg and they will create a voting profile and i think they have gotten ahead of some of this criticism and said you take it basically at the end of the day.

>> liz hoffman, she writes a great newsletter. >> she does. go check it out. nice to see you. >> thanks, guys. >> we should mention don't miss this because it's coming up first right here on cnbc in just a little bit cathie wood will be joining us in the 7:00 hour to talk about the big tesla vote her compensation from the musk compensation package and so much more. when we come back, former president trump is set to meet with executives today as the business roundtable in washington up next, we'll talk about what's at stake between trump and the ceos of big public companies who up until now had been wary of him. right now though as we take a break, let's take a look at yesterday's s&p 500 winners and losers okay, team!

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. good morning welcome back to "squawk box" on

cnbc live from the times square market site. dow down 139 points, nasdaq up 18 points and the s&p 500 powering higher as well, just about three points we'll talk about what's going on with chair jay powell in just a minute and what may be moving the markets around today eight protesters, we want to tell you about, were arrested at the congressional baseball game in washington, d.c. yesterday. they ran on to the field at nationals park during the annual charity game that features republicans and democrats from the u.s. house and senate. activist group climate defiance claiming responsibility. they have disrupted multiple political events in the campaign against the use of fossil fuel capitol police were expecting this and in the ball game the democrats beat the democrats 31-11. former president trump is meeting with executives from major public companies in washington today at the quarterly meeting of the business roundtable. amon javers joins us live from

washington with that this is the first time he's been back to washington in quite a while and this is first time that many of the ceos are meeting with him at least publicly what can we expect in terms of par tis paite pace, in terms of the messaging? >> well, the first thing you can expect, beck, is none of this will be on camera. it will be behind the scenes at the business roundtable. they are not letting us into the meeting watch that jeffrey zients will be making his own presentation invited for joe biden who is at the g7 in italy so he won't be there in terms of trump though, this is an enormous opportunity for the former p.a lot of ceos, big publicly trade companies walked away from this president back in 2017 after the comments about the racist protests at charlottesville. they resigned from his ceo councils and stepped back from supporting him publicly, and that really hasn't returned.

you've seen some business executives step in and support trump this summer, but the business executives who have done that have largely been ceos who own their own companies, ceos of private companies, ceos who don't have a large constituency in terms of public shareholders or employees and customer bases in terms of a consumer-facing business this is trump's opportunity now to try to appeal to some of those executives so if he can peel them off it will be a big win if he can walk out with public endorsements later today or at least positive comments on camera don't know if he can get there that's the hope in the trump camp. >> the brt is always off the record so it's not unusual to not to allow cameras to come in. we've seen acknowledgement from jamie dimon, jamie fraser, tom

moynihan, probably not a surprise, they are going to be looking at a situation where donald trump is leading in the polls. they may not want to come out and speak very publicly because they don't want to alienate half of their customer base, but they also don't want to be on the wrong side if donald trump is the president again. >> yeah, absolutely. look, donald trump was a president in his first term and if he gets a second term you can expect this to continue who was not at all shy of calling out video ceos and saying you're doing the wrong thing. this is terrible i want you to fix this, fix that, you know, criticism of individual companies by name is not something that executives were used to, particularly from republican executive officers, and now you're looking at a situation where you could be facing that again. so if you're a ceo going to this meeting, you're going to have to want to show donald trump that, a, you can show up, b, you can be respectful and, c, can you have a conversation. the question for the ceos is there anything that they can get out of a trump administration

that they actually want? i mean, clearly ceos want a lower corporate tax rate they want less regulation, but they are also going to worry about things like mass deportations of immigrants into the united states. you know, if you're rounding up millions of people who are workers somewhere in the economy, that's going to have an impact on the economy. trump's 10% across the board tariffs will have an impact probably on all of these companies so there's a real mixed bag here in terms of policy outcomes for a lot of these ceos when they look at a potential second trump administration. >> from what i've heard, there's going to be about 100 ceos there of the 200 members is that kind of standard in terms of how many would be expected to show up, or is this less or more >> that seems about right. you know, with a group like this you're never going to get everybody because of all of the schedules and the vast, you know, scheduling apparatus that each of these ceos has, and some folks i've talked to this week says my boss is planning to be out of town. can't make it, overseas, so

that's not necessarily surprising a mixed bag of who is showing up in terms of people who have been previous supporters or past supporters, but i think what you immediate to look for here is the opportunity for trump to start to peel away some of these public ceos, public company ceos who have not supported him in the past to get positive or at least neutral statements out of them that would give you a sense that the business community is coming back to trump. that's something that i think trump very much wants to do here you know, the challenge is that a lot of those policies are policies that some of these ceos don't like, and then, of course, the public rhetoric around trump is just so intense that a lot of the publicly traded ceos just don't want to be associated with it, and one other thing to think about here in terms of how weird this is today. you know, donald trump with now a felony conviction, all of these ceos have compliance departments that would -- that would evaluate any kind of meeting or business opportunity

that they had and a felony conviction would be a red flag in terms of doing business with somebody for any of these ceos now they will have to do sort of political business with donald trump, you know, really whether they like it or not, and despite all of that, right, so this is a situation where they are dealing with somebody that they are not necessarily naturally comfortable with, but because of what we're seeing in the polls, they may have to get comfortable with it and very quickly. >> eamon, thank you. that's an excellent setup, and we'll see what happens later today. eamon javers. >> we'll see. the figure signaling one rate cut steve liesman has the big takeaways from chair powell's news conference. later, we'll talk to former fed chair roger ferguson who has been right pretty much all along. we're coming right back with that. plus, earyectatrsu srery janet yellen in the next hour.

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welcome back to "squawk box. the fed whittling its expected cuts down to one this year and sounding more hawkish than the markets seemed to expect senior economics reporter steve liesman joins us now with more, and the big takeaway, sir? >> andrew, thanks. more hawkish than expected the yesterday rallies were sparked by the good inflation data we had here on "squawk" 598:30 markets are wondering if the fed is looking at the same data as they were. here are the highlights from the statement. the fed reduced the forecast cuts this year from three down to just one. it the raises the neutral rates suggesting they don't think they were as restrictive on policy as previously thought they see higher inflation this

year than the prior forecasts, and they did give a modest nod to the latest inflation progress it plunged as much as 15 basis points thinking in part the fed would see this as dovish and then bonds sold off after the statement and the projections and the press conference, still ending up eight basis point lower on the day fed chair mowl was maybe a bit more dovish than the statement in the projections saying one or two cuts were still possible it could begin in september and that he welcomed the inflation report and suggested fed officials remain cautious because of the spike in inflation earlier this year. >> what we've been getting is good progress on inflation with growth at a good level and with a strong labor market. now, ultimately we think rates will have to come down to continue to support that, but so far they haven't had to, and, you know, that's why we're watching so carefully for signs of weakness. >> here are the probabilities of how we started the morning

8% just for july, september 61 so higher than a flip of the coin it was yesterday before cpi. november 75% and december much more confidence. at least there will be one cut this year. the fed is now seeing renewed progress on inflation, but it's not thereto yet and with significantly more for the fomc to become sufficiently confident to cut despite the market's high probabilities of a september cut, it's not clear. i'm not even sure if the fed has a bias to cut anymore. it looks like they saw their shadow in march, guys, and declared six more months of inflation here don't miss pal maria exclusive interview with the cleveland fed president loretta mester we get the pi today and that gets plugged in with the cpi to give us the index at end of the month that we're really looking

for. >> you want to help us out with our job. we have janet yellen a little bit later. as a former fed head she doesn't like to comment on the fed itself, as you know. >> i don't know if i would ask her about the fed. it would be interesting to see if she talks about it but fed treasury secretaries don't usually talk about it. i was interested in what she was saying how sustainable the deficit was over a period of time and i'm sure you are thinking and as treasury secretary she's sat there and presided over a pretty meterik rise over deficit. >> a fair and good question. steve, thank you talk to you in just a little bit. >> sure. when we come back, don't miss our exclusive interview with thereby secretary janet yellen come up at 7:30 eastern time "squawk box" returns after this. consider ders even more ways to sharpen their skills with tailored education. get an expanding library filled with new online videos, webcasts, articles, courses, and more -

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all right. welcome back, everybody. it's that time of year again since 2007, cnbc has been ranking all 50 states for competitiveness. our 2024 america's top states for business report is just one month away, believe it or not, and there are some important changes this year in how we tally these things scott cone put this preview with us and every year you mix things up a little bit. >> well, the world mixes things up a little bit, and there are some kind of clues, subtle clues within the changes here, so i know that you would like to try and guess so listen to all of this carefully first, a reminder of what hasn't changed. in the 17 years since we started this, we rate the states on dozens of metrics, 128 metrics this year in ten categories of competitiveness. those categories are pretty much the same from year to year, but the weight that they carry,

change is based on how important they are in the site selection process. what the states are pitching when they court companies. for a long time it was all about the cost of doing business like taxes and innocent i evers more recently it was which state has the best workforce in 2024 for the first time ever there is a different category on top. take a look. ♪ >> okay. here we go >> with federal money flooding the states and the very nature of work in flux, it stands to reason that infrastructure is front and center in this year's top state study. >> we need to make sure that the condition of our infrastructure is not a limiting factor on growth. >> we look at which states are offering shovel ready sites for development, where's the most reliable power grid and the least risk from climate disasters?

where can you find the best access to your customers, connecting both virtually and for real this year infrastructure is worth 17% of a state score followed by workforce. which states are meeting the needs for skilled employees? which states have the best economy? where's the top quality of life? we look at the cost of doing business, technology and innovation, including which states are leading the way in artificial intelligence. >> the state that's actually investing and allowing for people to go into industry or into government to help make a difference is the state that i think will succeed. >> we measure business friendliness we grade education, access to capital, and the cost of living. >> yeah, with prices still stubbornly high, we're taking a deep dive into cost of living this year, including housing affordability and the cost of insurance which is skyrocketing in some states more than others. also this year foreign direct investment states are talking about that in

a way i haven't seen before. we'll take a look at which states the world is betting on in that aspect as always, read about our study and reporting at topstates@cnbc.com and we'll reveal the top state for business right here on xbox right here wait, i'm not here that day. i'll guess ahead of time i love the guesswork on this, let's start this now before we do, one question, just about access to energy, that seems to me something that is a much bigger deal we have been talking about it with a.i.,this idea you're going to need more energy than we thought we were a few years from now and there are questions about whether the electricity grid can keep up with any of those things we have been talking about permitting and regulations and how you get access to that, because in order to have the companies that will come and build things like the data centers that suck up so much of that energy, you're also going to need to see how that takes away energy that would have been

for consumers and how it raises prices if you don't get more things built quickly. >> you're right. you're right it is a big deal we look at that really closely in that infrastructure category. also in business friendliness, the permitting business, we have some new data on that this year. but what we're hearing from site selectors is that companies want shovel ready sites and that includes a good reliable power grid and renewables, and all those things are things we're looking at this year there is a group called the site selectors guild, the trade group, a whole cottage industry around this and they're supplying some of the datafor us this year about what different states are doing and this varies a lot among the states in terms of site readiness, where are the shovel-ready sites some states have programs where they'll help you cut through the red tape in terms of permitting and companies really want that because it is -- now it is brick and mortar we want to build plants, we want to get the government money,

whether it is the chips act, inflation reduction act or whatever, and so it is really different this year. we have been talking for so many years about workforce, which is still important. but things really, when we started to star ed to look at what the states are talking about, we started this process in february, it is really, really changed in a way i haven't seen in a while. >> we had a guest in the last week, i can't remember, it was earlier this week or late last week who was from a power company out west, who had spent 18 years trying to get permitting done to build transmission lines from renewable energy sources to bring more electricity in. and they just got shut down again by the federal government. 18 years and running >> that's insane and it is just not flying anymore. everything is moving so fast that that's a big deal we have always done business friendliness as a category it is up in importance this year and now we're able to look at, you know, how what does it take to get a permit, how do the land

use regulations work in a way that is friendly to business, but also -- >> i'm going to be playing along from afar, even though i'm not here on july 11th, i'll be tweeting in my guesses. >> i always enjoy your guests. >> okay. thank you. we'll see you again later. >> you got it. when we come back, jeremy siegel weighs in on the fed decision and comments from fed chair jay powell that's next. and elon musk declaring victory on the tesla shareholder vote on his pay package. we will talk to k vearinst cathie wood. that's straight ahead. "squawk box" will be right back. with its customizable options chain, easy-to-use tools, and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. e*trade from morgan stanley

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closing at record highs after the fed left interest rates unchanged. but the central bank dialed back its forecast to just one rate cut this year. let's bring in jeremy siegel, professor emeritus of finance at university of pennsylvania's wharton school of business and the chief economist at wisdom tree jeremy, the smoke signals here, we got a better than anticipated cpi number showing inflation was not quite as hot and yet the fed sounded more hawkish was that dialled in before we got the cpi number or how should we be looking at the totality of information we learned yesterday? >> yeah, becky, i think you got it right they were given the opportunity to change as chairman powell said, you know, most of them didn't change their prediction my feeling is we get -- if we get one more the next cpi as a good one, you're going to have almost everyone in the two cut camp and by the way, i think the prospects are looking good for

the june cpi gasoline for instance was down april to may 2%. energy was a big reason why we had a low number from may to june gasoline is down 4% twice that amount. there is either factors, of course, but one has to realize, they really don't know what the future is. if you take a historical look at how good they have been at predicting what the rate is going to be, it is not good. they are 100% data dependent it just depends on how that inflation data and the real economic data comes in >> even if we get one more month of good numbers, it is probably going to be september before you see a rate cut because the june numbers wouldn't come in in time before the july meeting, you got august off, that's going to be when we could potentially hear from powell out at jackson hole. maybe setting things up.

so, i think probably the earliest case scenario would be september. you agree? >> i agree i think you'll tee it up another good report, you'll tee it up at the july 31st meeting, reinforce that at jackson hole, and then go for it at the september meeting and then depending if the data keeps on going good, we might have it again in the next meeting and the december meeting i'm not saying even three is very possible. my reading is that cpi is going to come in well. he hinted on that, you know, the rental rates are still high, you know, plus .4%, even though as powell said the real data is still coming in much better than that comes in second half of the year you're going to have good data there. >> what could get in the way what could change the outlook? i mean, energy prices have

cooperated you got oil below $80. if that were to change, would that take all bets off the table? >> all that could -- commodity is going back up it looks like a lot of the commodities, copper, tin, oil have peaked, gone down there is a lot of volatility up out there and if they start going up, and we don't see any softening whatsoever in the labor market, then they would remain firm. i don't think that's my medium case, but certainly it is in the range of possibility i actually think that if you take a vote, even right now, as i said, most of them didn't change their vote because they had put their vote in, i think you get more people on two changes than one change and all we need is, you know, one more good report and i think we'll have it. i think the danger is if the real economy slips, now i know we got good payroll, household

wasn't as good, unemployment up to 4%, is powell ready to go fast enough or is he going to go -- tee it up, 25 basis points, 25 basis points. don't forget, we did inflation going up on 75, you know he has to be reactive. he can't be setting up things all the time sometimes he might have to surprise the market if things do soften. >> we have seen the nasdaq hitting a new high every day the s&p hitting a new high every day. i was going to say, this is really a goldilocks scenario the economy is not collapsing. and you've got the fed where it looks like there is a situation where they could cut rates the market gets everything it wants unless the point you just brought up, something happens with the economy what do you do with the markets right now? where do you think they're headed >> i think that momentum trade on the tech and the a.i.-related is still there that has been so powerful, it

takes a lot of bad news to break a momentum trade and we just haven't gotten it. let's face it, those stocks have delivered the bacon as they say and as long as they do, you know, those momentum traders are going to crowd in those stocks so i don't see that ending anytime soon of course, oftentimes it gets over done at the end, but the end is often further into the future than many people believe. >> professor siegel, thank you you've been talking about this for a long time and i have a feeling we will have you back as the situation adjusts. thank you. >> i hope so thank you, becky >> it is just after 7:00 a.m. on the east coast you're watching "squawk box" on cnbc i'm andrew ross sorkin with becky quick. joe is off today we got a bunch of big stories to tell you about this morning. former president trump meeting with executives from major public companies in washington today at the quarterly meeting of the business roundtable president biden's chief of staff

jeff zients will also speak to the ceos, taking the president's place, because he's in italy right now at g-7 meeting sony pictured achoired alamo draft house, the first time a studio purchased a theater chain since the doj's antitrust division terminated a decrease in 2020 that prohibited certain film distributors from owning exhibition companies the cinemas will continue to operate under the alamo draft house name. and she shein is hiking pri. reuters reporting that the average price hikes topping those rivals h&m and zara in the u.s. the company raised the average price for women's dresses by nearly 30% in the past year. biggest increases in footwear. with an average pair of shoes selling for about $41. let's look at the boards this morning still the same story with the cow dow futures off by 130 points.

the s&p 500 picking up by more, over 5 points and the nasdaq futures continuing to climb as well, up by 127. it is the same divergence we see every morning with dow futures under pressure and the s&p yesterday closing about 5400 for first time ever. nasdaq also at a new record. want to get over to frank holland with a look at this morning's premarket movers hey, frank >> good morning, becky we start off with tesla, shares up 6.5% ahead of a shareholder vote on the massive pay package today on x musk posted that he expects shareholders to approve it by a wide margin. you had notable investors like baron and altimeter capital saying they're approve the pay package. he remains a fan of musk and the company. he says it is a matter of corporate governance you had the tesla board share on "squawk box. she says -- she suggested that musk could leave tesla if it is not approved

shares up 6.25% ahead of the vote broadcom shares up 13.5% off of what it was earlier today, but big jump after earnings. a lot of announcements from broadcom first, beats on the top and bottom line, a 10 for 1 stock split and a little color in there, they said the company saw 3 billion in revenue tied to artificial intelligence and revenue from bm ware, a company that they acquired late last year, was a big contributor. that stock split takes effect on july sa15th we have goldman this morning, making big calls on fast casual and quick service restaurants. analysts say they focused on brands with concepts that drive traffic and those that made digital investments. take a look. the top picks are your top three. sweet green, starbucks, up half a percent. shake shack up over half a percent. out of favor, we have jack-in-the-box and wendy's. jack in the box, shares down more than 5% back over to you.

>> thank you we'll see you in a little bit. coming up in a moment, ark invest ceo cathie wood joins us ahead of tesla's shareholder meeting. she says the tesla stock could reach $2600 a share by 2029. and then later, treasury secretary janet yellen will join us for an exclusive interview ahead of a speech she'll be giving at the new york economic club and a big new op-ed in the new york times this morning on using russia's assets to support ukraine. we're going to ask her about all of it in just a bit. "squawk box" coming right back sure, i'm a paid actor, and this is not a real company, but there is no way

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welcome back to "squawk box. elon musk claiming victory on x saying that shareholders have voted by a wide margin to pass

two resolutions. at stake is the pay package and moving tesla's legal home from delaware to texas. voting is still open, we should mention, final tally expected later today. meanwhile, tesla's cathie wood raising her price target on the company. the projection is now $2,600 per share. joining us at the table is kathy w wood, ceo and cio of ark invest. i want to talk about this price target and this vote for a moment i know you support it, his compensation package did you expect and, look, things can still change, it seems like some of the biggest institutional shareholders broke for muck lask late last night were you expecting that and what do you think, if in fact this is the verdict, if you will, or the

vote, what do you expect is going to happen next because it doesn't seem like the game will be totally over, because this is, of course, probably going to go back to court. >> first of all, you broke the news about the institutions and i was surprised actually and pleased. but i do think what has happened here, really started with esg and all of the drama around that and it got these large index players to say, wait a minute, should we be voting all of these shares we should be taking into account some of our clients' preferences. and so i think it has opened the topic up it is healthy, very healthy. so, but nonetheless i was surprised. >> do you anticipate that this becomes another years long drama, given this will go to court? do you imagine the judge is going to look at this, this vote, say that the process was fair part of this whole situation, as

she said, the original process was unfair, we had some lawyers come on our air and say even if they vote -- even if shareholders vote in favor of this, a judge could still strike it down. >> you know, i am not a lawyer but i learned what was at stake, the lack of transparency about relationships with the board all of that has been completely exposed and here we're having a vote and i think it is more overwhelming than i would have expected. >> so $2600 a share. >> yes. >> help us do the math how do you get there what has to happen >> this is a five-year price target as all of ours are, and what has to happen is an autonomous taxi platform, tesla's autonomous taxi platform so, robo taxis, which is a sass-like model. instead of selling a car and maybe the software package, and that's it, this becomes a

recurring revenue model. a slice of every mile driven on that autonomous taxi network very high margins. right now, auto gross margins are around 16% gross margins in the sass world are more like 80%. >> how big a market does that have to become for tesla to get to the $2600 price the reason i ask is there is some cities that may allow this to take place, there may be geofenced areas where people are going to do this and there is also a larger view that one day these cars will be able to do everything by themselves everywhere in the country. >> yes well, this is the largest a.i. project on earth autonomous mobility broadly. and i think it is going to catch on as quickly as that. now, of course, what we have had during the last ten years is a movement toward fsd and now we're seeing safety statistics i remember -- >> all self-driving for those --

>> full self-driving you look at the number of miles between accidents for the average car in the united states, it is about 200,000 miles. you look at a tesla without fsd, full self-driving, just auto pilot, it is more like 600,000 miles. with full self-driving and an older version, not even the latest, six to nine months ago, 3.2 million miles. tasha keeny has done this work volvo built a brand on safety. and i think tesla is going to -- >> we're in the middle of 2024, you're saying we get to 2029 and that's where that price is i think what i'm asking is for your base -- for this to work, and by the way, we should that elon musk tweeted out extremely challenging, but achievable on top of your tweet. >> yes >> when does this all have to really go into effect?

>> yes, we believe that they're setting up for robo taxis within i would say a year and a half, two years. elon would say maybe we'll start -- >> that requires regulators to sign off on all of this. >> yes, regulators have an issue and that is the auto accident rate has gone after decades of going down with auto safety measures -- 40% to 50% texting is a big part of it. disproportionately young people. so, deaths in the u.s. have gone from the low 30s, i think they got into above 40,000. so i think the -- if regulators understand and they do that 85% of all traffic accidents are caused by human error, if you take the human out, you're going to make the roads -- >> we asked people to judge the

department -- the secretary -- the treasury of transportation, the secretary of transportation yesterday pete buttigieg about this and he did sound like he was open to the idea as a result and that's first time i've really heard a public official who has kind of embraced it instead of saying, wait, we don't like the rise of the machine. >> absolutely. he is telegraphing that the roads ultimately are going to be much safer if you take the human being out of the equation. much safer >> a couple other pieces of elon news or elon-connected news i'm curious about. one was elon musk said earlier this week he was frustrated with apple because apple is integrating openai you have a stake in openai. >> right >> so there is some interesting -- you like elon on one side, you also happen to like openai. >> we are in such early days i saw what elon said

and i think he might have misinterpreted i think what apple wants to be is a platform for foundation models openai, anthropic, we have anthropic in our venture fund as well so, you know, we're in such early days and the other question we are asking ourselves is, wait a minute, what is the operating system we're talking about is it apple? is it ios? or are these foundation models going to become the new operating system again, we are in -- if you think about the internet, we are in the early '90s when it comes to a.i. we have barely begun >> and what is your sense about that apple stock popped on the back of that news because i think there is a sense of both an upgrade cycle coming that was one of the reasons. but there was also a very interesting sort of back and forth we talked about at the table in terms of the economics of what this openai deal looks like and what the deal with google or others may look like

as well. which is that apple is not paying openai. >> they're just distributing >> they're just going to distribute it. it is possible that they will take a piece of revenue, i'm told, if, in fact, openai is able to effectively upgrade you to a paid version of the product, so you could think of it as a lead gen product having said that, for every query that openai is going to get is going to cost them money because they're going to have to pay for the process and power of that by the way, they have to therefore pay microsoft to some degree, you understand that relationship. >> yeah. >> so it could work out in many ways. >> many ways >> from a branding perspective for openai, but i was going to say economically it is unclear actually whether this is going to be a massive win for them. >> the deal that apple cut. >> i'm sorry. >> it looks like the google search deal that apple cut. >> and apple paid -- >> the google -- google pays them in this case, apple -- in this

case openai is not paying them. >> it is a lead generation situation, the same time of issue. if that's what it is, a lead generation -- >> yes. >> a lead generation for a consumer pay i look at it as a totally different business and the question is if consumers are going to upgrade to chatgpt and if they don't -- >> i agree with that the consumer -- the consumer doesn't want to spend money on this and if it is true that apple wants to be a platform for a foundation model, you know, this is not exclusive right? so it is going to be very confusing, yes and the question is, very interesting, sarah fryer joining openai, she's had a lot of experience and will make sure that economics are front and center in terms of every deal, so, i think it is too early to say what is going on we're still trying to say, okay, which operating system is going to, you know, have -- are we still in a walled garden world

or is this going to just open everything up? and we do have another operating -- so our chief futurist, to give you a sense, believes that will happen. and nick ruse, an associate portfolio manager and very focused on consumer internet thinks apple might have an edge here i am listening to the debate and just like i'm listening to you and saying, wow, we're so early. >> they're doing the same thing that so many other people are, but making a lot of bets, not walling themselves off with one or another are you an investor in xai >> yes >> the pay package, i understand the pay package for elon for work already accomplished. it seemed crazy to me that get taken away after the fact. what i don't understand is how you keep him incentivized as a tesla shareholder to make sure that a.i. and all of thinks other great ideas go through tesla. because you're going to benefit either way if it goes through xai or somewhere else.

will a retail il tesla investor have the same benefit? >> this comes down to the kind of ceo that we think elon is he understands the world -- the technologies are converging. one with the other artificial intelligence is the biggest catalyst out there to all kinds of disruptive innovation and data, proprietary data is key in terms of competitive advantage. tesla has incredible proprietary data, right? i think that will help feed xai and xai will come up with its own versions of proprietary data so, i think what we're seeing here, many people say, oh, how can he do all of this at once? i think and i've set up ark around this idea that technologies are converging. >> i'm not even questioning whether you can do it. i'm questioning whether tesla

retail investor is going to get full benefit of the tesla great proprietary information used by xai. how do you make sure it is a fair exchange throughout every one of those >> deagain, we're back to the convergence idea they can help each other i don't think it is a win-lose situation. >> you don't worry about the conflict let me ask you about a final issue which may very well be considered a conflict of sorts, which is what do you think of all these "wall street journal" reports that have come out, specifically the one yesterday about his involvement with different women at the company, the allegations effectively that he's had these inappropriate relationships? >> well -- >> this is at spacex, specifically. >> right well, we read the article and, of course, governance is very important. gwyneth at spacex i think is probably very sensitized to this issue and i'm sure there are evaluations and investigations and so forth but as i understand it, from

that article, really we're talking about stories that are from eight years and longer ago. and really nothing since and this is, you know, rinse and repeat stories around the time of the vote just coincidentally. i'm just saying. >> you don't think they're that coincidental we made that point earlier cathie, thank you for joining us today. great to see you appreciate it. thank you. up next, we're going to talk crude prices and other commodities with jeff currie of carlisle and then janet yellen will be our special guest. "squawk box" will be right back. >> announcer: time now for today's aflac trivia question. in 1996, brian kovalchuk, the cfo of the fashion company benetton, joined what beer company as its ceo the answer when "squk x" rern tus.aoh, charades! - okay! - love it! umm... first word. - tonsillitis! - nostril!

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of fashion company benetton joined what beer company as its ceo? the answer, pabts blue ribbon. wti below $78 a barrel, $77.96 the international energy agency warning that a u.s.-led surge in global oil production will outpace demand by the end of the dec decade joining us right now is jeff curry, carlisle chief strategy officer of energy pathways and, jeff, does that sound accurate to you, the idea that we're going to have too much oil, we're going to be rolling in it by the end of the decade >> yeah, all we know is oil demand just keeps surprising to the upside, to everyone's expectations by the way, what i find ironic about this, which we'll talk about in a few minutes is copper is worried about not enough ev demand and the iaea is worried about too much ev demand

i think it underscores one thing we know for sure, the pathway on this transition is completely uncertain at this point in time. >> yeah. it was weird to see them actually suggest that energy companies adapt and maybe look for new strategies because we're thinking, okay, we got a whole lot of oil that is rolling around, but if oil prices were to spike by 10 bucks, everybody, all bets would be off the table and every government around would be urging them to pump as much as possible >> yeah. absolutely and i think it captures a bigger point that is driving the market today is sentiment is swinging from data point to data point. we take oil, a huge impact on positioning. we just dropped 500 million barrels of positioning that is absolutely enormous and record levels. that costs a $15 a barrel drop in prices. we bounced off the bottom, about

100 million back in, but i think it illustrates a point that the sentiment swing, copper, oil or gold, are enormous in these markets right now. i think that the bigger question to ask here, why are the sentiment swings so big? i think a lot of it has to do, we saw it yesterday, the market doesn't know how to handicap the macro backdrop is it one rate cut is it zero rate cuts is it two rate cuts? and yesterday a balance between two and one. i think the key point here is when the market is fearful of inflation, it buys real assets when the market is comfortable it is going to be low inflation, it finds financial assets like the nasdaq last time i was on the show, commodities were up by 15% year to date. while the nasdaq was up around 8. those two have reversed in the current environment. >> those are two different things, though if the technology stocks take

off every time inflation is low, it is not that inflation is low, it is that people are anticipating the fed will cut rates and that will mean a lot more free money. things can bid those things up once again when it comes to commodities, inflation readings, i think commodities may be less connected to the fed, more connected to inflation because if you see inflation that is there, you're going to see a crimp on demand. and i think it is more of that supply and demand that really takes place in precedence for commodities. do you agree >> yeah. it is another way to say it is commodities are spot assets driven by today's supply and demand financial markets are anticipatory assets driven about the expectation for the future so, our view is that commodities, where we are in the business cycle, this is when you likely see commodities outperform the other asset classes. and when we look at the fundamental picture going into 3q, oil, copper or gold, looks

very solid driven by seasonal increases in demand, we're seeing in copper green chutes of inventory declining in china, the supply situation given the recent opec meeting, a tighter 3q and even in copper, the production just hit an 18-month low. we should see solid third quarter draws across the commodity complex leading to higher commodity prices and i tend to think that next time we're on the show it will be a flip-flop where commodities are back up 15% and the nasdaq is up 8%. >> okay. we will mark that down and check it next time you're with us, jeff great talking to you >> thanks for having me. >> thank you okay, coming up, an exclusive interview with treasury secretary janet yellen ahead of her speech at the new york economic club happening today. and then late, major corporate leaders of the business round table meeting with former president donald trump as he tries to craft alliances with businesses former brt board member mark

weinberger will join us in a little bit "squawk x"etnsitalof after this.l

coming up, treasury secretary janet yellen's message to ceos. an exclusive interview with her is next. take a look at the futures right now. you'll see that dow futures are still down by about 120 points nasdaq futures up by the same amount quk p 5 the s&p uby "sawbox" will be right back. (vo) what does it mean to be rich? maybe rich is less about reaching a magic number... and more about discovering magic. rich is being able to keep your loved ones close. and also send them away. rich is living life your way. and having someone who can help you get there.

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welcome back to "squawk box. presidenting in italy for the g-7 where they will discuss the russia-ukraine war. joining me right now with an exclusive interview this morning with treasury secretary janet yellen who has a big op-ed in "the new york times" about this very issue we'll go there first and then there is 100 other questions i want to talk about, economy and where we really are. great to see you. >> thank you >> explain your plan and in terms of what it means economically to try to support ukraine. >> well, i think ukraine needs to know that the allies are committed and able to support

ukraine for the long term. russia looks like they're trying to wait us out, hope that we'll lose our resolve, and we want to take a step that will provide significant funding for ukraine and show that we have the capacity over the long term. >> the idea is to take the frozen assets and earnings that come after the frozen assets and effectively create a loan against the earnings that come off the frozen assets without providing the frozen assets themselves to ukraine. >> that's right. almost $200 billion is impounded, frozen in belgium at europe where all and all we think there are there $280 billion but the biggest chunk is that they're clear and those assets are generating a return that does not belong to russia the assets have been are just in

cash is but euro clear can own interest on these funds and already the european union has taken this step of agreeing to take that flow as they call it, windfall, profits and turn it over to ukraine. and that could be somewhere in the $3 billion to $5 billion a year range but ukraine's needs are bigger than that. and given that the leaders have committed these assets will remain frozen until russia has ceased their aggression and paid for the damage they have caused to ukraine we're going to make a loan >> right but why not just take the frozen assets themselves? you think legally you can't? >> our view is it legal, moral and economically reasonable to seize the assets but what we're looking for is

keep the assets together, to find a way to do something jointly in a way that is agreeable to all of the partners who have been supporting ukraine, the g-7, to europe, to other countries that are part of our coalition. and this takes the economic value in those assets and gives it to ukraine in meaningful amount, the numbers being discussed are something like 50 billion and this could be r repeated. >> let's move the conversation back to the u.s. for a moment. i'm curious what you think is happening on the ground in terms of our economy, particularly inflation. i'm not going to ask you to comment on jay powell, i know you don't like to do that. >> i won't do that. >> we heard his perspective yesterday and that there might be one interest rate cut on the table, maybe there is a larger question about where we really are in the journey on taking inflation

down there were some good signs, but there are still parts of the economy that still are hot >> well, you know, we're creating jobs at a very rapid pace but at the same time the unemployment rate has drifted up a little bit it is still extremely low in historic terms more or less the lowest in 50 years. but the labor market has become a little less hot, a little bit more normal. the number of job openings has declined some. we had a burst in labor force participation. and so the labor market now is resembling what it looked like prepandemic, wages are increasing, but at a slower rate and so that doesn't really look like it is a threat to inflation. a substantial part of the inflation we still have -- inflation has come down

dramatically but a substantial part has to do with the housing market. and really reflects the fact that it takes time when market rates go up for people who have rental contracts to overtime their rents go up too. that takes a while so a significant share of the remaining inflation represents the slow return of housing costs. >> on the housing front, though, how concerned are you that it is harder for young people to get into a home. >> that's a real issue. >> but there is an issue that may be here for a long time, the people who own a home are trapped in a home because they can't sell the home because of mortgage rates and as a result, what that does both to physical mobility, but also to economic mobility in the country. >> well, i agree with that and because interest rates were so low, many people don't want

to sell their homes or move because they're faced with taking out -- >> as somebody who is thinking about running our economy, your role -- >> president biden made a proposal in his most recent budget that he would give $10,000 both to first time home buyers, looking for moderate-priced homes, but also to people who, as you described, are locked in their homes and needed incentive to sell them. there is a substantial lock there. >> another question about inflation, which is the administration and the president himself has talked a lot about what he sees as corporate greed, that the price of things has gone up almost artificially and the companies are taking advantage of customers i asked you this question about two years ago, and at the time you said, no, no, i think it is more about supply and demand that's leading to this do you have a change in

perspective? >> i'm going to say exactly the same thing i think inflation is about supply and demand. and clearly a significant part of the inflation we had the burst after the pandemic during the pandemic, reflected supply const constraints and stresses on supply chains and also russia's invasion of ukraine led to a leap in energy prices and impacted food prices globally. that said, there are many sectors of the economy where competition is limited and price cost margins are high. and it is -- you could call that corporate greed. there are high markups, the level of markups is high. >> your boss calls it corporate greed. you don't. >> well, you know, there is a lack of competition that enables

firms to have healthy markups in profits and our antitrust policy, which has been very active during this administration, is designed to make sure that we have effective competition in markets to hold down prices and offset that. >> when you see polls by americans who say that we are either in a recession today or that the economy is terrible or bad, what do you think about that >> well, i also notice that when they're asked about their own personal situation, overwhelmingly people say they're fine when asked about the local economy, they also say that that's fine. but when they're asked about the national economy, they think things are not good. and that's -- that really is something i don't think we have ever seen in the united states before we also see record levels of new

business formation, which is something you would not see unless people felt confident about the economy. >> is that misinformation? some of the polls suggest, you've seen polls that the public believes that the former president, former president trump, was better for the economy than the current president. >> well, you know, i think president biden understands that people are feeling pain. and when they say this, they are concerned. i think they have seen the level of prices rise quite a lot i mean, over 20% over the last three years or so. they can remember when the price of a gallon of milk or a loaf of bread was 30% lower than it is now. and low income families have seen some of the highest increase in costs. that said, wages have also gone

up and the calculations, the congressional budget office has done show that all americans, both those who are well off, and those who are near at the bottom of the income distribution, are better off now that wages have risen more than prices but i think people are influenced by that, and then if you go back, really over the last decade, you see things that are critically important to americans, the cost of education, the cost of housing, and many big cities, and the cost of child care have gone up a lot. and life seems unaffordable, so i think high costs have been a problem, critical things that are necessities have been a problem for people healthcare costs so, it is the president's top priority

even if the rate of inflation has come down, i believe it has and will continue to, to address the high cost of living, whether it is in allowing medicare to negotiate drug prices, capping the cost of insulin co-pays, doing what he can to bring down the cost of living >> talking about bringing down the cost of certain things, when you were running the fed, you talked about debt and deficits all the time and you encouraged congress to try to bring those things down we are now at a u.s. budget deficit reached $1.2 trillion. it has not come down it actually has only gone un what are you doing >> it has come down since the beam. >> since the pandemic, yes on a total number, we're in a -- we had a real challenge. is there a plan to bring the -- bring this number down materially and i'm talking about

the total debt load that you see the president pursuing >> well, i think that if the debt is stabilized relative to the size of the economy, that we're in a reasonable place. the way i at it is that we should be looking at the real interest cost of the debt that's really what the burden is, and in the budget the president presented for this coming fiscal year, he proposes $3 trillion of deficit reduction over the next decade, and that's sufficient to basically keep the debt to income ratio stable, and this interest burden would be stabilized at -- back to a normal level. >> how much is that versus cutting costs? >> well, it's difficult to cut costs. discretionary spending which is what's governed by

appropriations, it has fallen relative to this size of gdp, and if -- once you involve looking what's in there, more than half of it is defense it's really not possible to get cuts there, and a growing source of expenditure is for retirement programs, social security and medicare and, you know, i think it's right. especially if the job cuts and tax act, provisions of which will expire the end of next year really resulted in a substantial loss in revenue, and so undoing some of that and asking the wealthiest and highest income americans to pay their fair share, and, you know, raising corporate taxes somewhat not back to previous levels, is

part of a, what i think is a reasonable plan. >> finally, you've come out and said you are against a global wealth tax i was interviewing president macron he said that's a pity are you in favor of wealth tax in the u.s.? >> it's not a wealth tax and do agree with the basic concept that billionaires should be paying more taxes than they are. >> unrealized income >> yes, because these unrealized capital gains are an enormous source of income for people and often they escape taxation completely even at death due to step-up of basis so, yes. i believe that is a source of income. >> if you could fix the basis issue and other issues around these things, would you be an advocate of -- mechanics and practicality of doing it. >> there is that issue

we have a concrete proposal put forward that would apply to individuals with wealth over $100 million, and if people had their wealth in a liquid form so they wouldn't be required to sell those assets, they could wait until, to death or until later on when the assets are sold so there are practical issues, but i think they can be addressed, and we try to do it so we are definitely in favor of higher taxes on billionaires, and we have a proposal so i just don't think we need a whole global negotiation to accomplish this, but i think it's the right thing to do. >> a longer conversation, hope we get to have it. thank you for joining us this morning. >> my pleasure. >> thank you again. >> thanks, andrew. >> becky when we come back, talking markets and reaction to janet yellen's comments from steven

eisman check out futures. ahead of that ppi data coming out at 8:30 a.m. eastern time producer prices this morning after cpi yesterday. right now dow futures off 135 points s&p futures up by five nasdaq up by 120 "squawk box" will be right back.

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meg's moving company uses t-mobile. so she scaled down her fleet to save money. and don's paying so much for at&t, he's been waiting to update his equipment! there's a smarter way to save. comcast business mobile. you could save up to 70% on your wireless bill. so you don't have to compromise. powering smarter savings. powering possibilities. it could be end of an era with the news this week that hot dog-eating champion joey chestnut won't compete in this year's july 4th contest because of a conflict with his sponsor raising the question between this and college sports. has our sponsor ecology gone too far? jon fortt. >> definitely. putting themselves at risk joey chestnut is the latest example. the man is michael jordble of

competitive eating and now out of his year's july 4th contest on coney island because it's backed by nathan's hot dogs and chestnut picked up a sponsorship from the plant-based impossible brand. chestnut turned down a $300,000 for hnnathan's yes, on a hot dog contest. welcome to 2024. this is america. bad enough a signature event on the nation's birthday is competitive gluttony, eating tubing 6 proprocessed meat now derailed by an olympics spat michael jordan covered redoc logo on dream team uniform but after representing his country took down bud light, 2024 our hot dogs quick, somebody check on the nation's potato chips. pretty soon nothing left to

overeat. becky? >> some argue today's sponsorship deals and social media opened up opportunities for talent people who wouldn't have been making this before you get the eye bballs and mone, what's wrongly that? >> becky, "on the other hand," making things more fair. college used to feed a whole industry and get next to nothing. name, image and likeness deals bringing millions to young talent take the university of colorado quarterback estimated to make more than $4 million a year brands from google, and me mercedes and caitlin clark, made millions before going pro bringing money and attention to that level. look at gymnastics estimated $3.6 million this year, made more endorsement money than caitlin clark more fair, right i said directly to talent rather than to leagues.

broadcast networks nothing wrong with giving money to broadcast networks. this sponsorship economy, messy at times, messy because it's bringing this to those who deserve it fastest eaters, and the people society finds most attractive. >> hard to argue with that i am glad to see college athletes getting this. i will say the process is messy, and it's not fair within the ranks of the college athletes who all are putting in a lot of time then pick as few favorites and doesn't take -- into account the team around them that builds them up too. i think it brings inequality down to lower and lower levels. >> true. something's wrong with joey chestnut that he isn't eating hot dogs. >> watching how he actually trains in advance. anybody who's not a long-time watcher of this. he actually trains in advance. esophagus by guzzling tons and tons of water trying to do all

kinds of crazy reflux things i don't think it's healthy yom think it's good for you, but he does train, in air quotes. >> those who are religious we have to answer on judgment day as a society, too. well, before that,nd "on the or hand" newsletter there's the qr code you can share. it is 8:00 a.m. on the east coast. you're watching "squawk box" right here on cnbc i'm becky quick along with andrew ross sorkin joe is off today among the top stories this morning, sony pictures acquired alamo draft house. seventh largest theater chain in north america. first time purchased a theater chain since the department of justices antitrust terminated an agreement prohibiting certain film distributor from earning exhibition companies. broadcom shares higher earnings andrevenue beating

expectations and the company raising its full year forecast citing in part a boost from acquisition of enterprise software vmware and ramping up spending stock up 14% helping the nasdaq composite also, gamestop shares looking to bounce back after the sell-off in stock intensified late yesterday the action coming same time a spike in trading options in call options supposedly owned by keith gill otherwise known at roaring kitty. it's unclear if it really was gill behind the large volumes but options traders say he could be involved. stock up by 3.5% right now in the pre-market for the week down by 43%. meantime, tesla shareholders voting on elon musk, his pay package. joining us with more this morning. >> good morning. andrew, the question whether or not we get results before the

annual meeting or will it happen this afternoon during or shortly after the annual meetmeeting usually during announcing shareholders votes for or against what is proposed a little different a number of institutional shareholders already said emphatically they're voting shares for elon musk to get his $56 billion pay package, which, by the way is $45 billion now with options the value now. or they are against. calpers good example said, as did iss you know what? we are against this pay package being approved then we got this overnight from elon musk. it was posted on x, he says, hard to read, both shareholder resolutions compensation as well as the reincorporation in dallas or in texas, i should say, are being approved by shareholders, and we don't show you the chart.

there was a chart post on x which showed a big spike in "yes" votes for compensation as well as the reincorporation. one reason why -- for the retail investors which is where we think a lot of these votes may have been coming from, or likely are coming from, if you had put $10,000 in 2018 when the pay package was approved it's now worth more than $80,000. while there are some people as you look at shares of tesla who will say, yeah i think the judge was right. he doesn't deserve $$56 billio. nobody deserves that you can't tell me investors back in 2018 wouldn't say, yeah, give me $80,000 i'll take that return. about a 625% return. look at shares of tesla versus s&p 500. keep in mind while the stock has not done as much in the last year or year-to-date, there's no

comparison between whether or not you put $10,000 in tesla back in 2018 or the s&p 500. so, guys, waiting to see what the results are and, again, elon musk's post on x makes it clear they believe they do have the votes for both of these measures to pass. >> phil lebeau thank you, sir we will see, and following this throughout the day. when we come back, steven eisman joins us next to talk markets, election and which stock he thinks will be the biggest beneficiary of the a.i. play. plus, expecting latest read on jobless claims and ppi in less than half an hour futures ahead of that data dow off about 115 points nasdaq towering higher 116 points higher. s&p 500 up and 5.5 points. you're watching "squawk box" and this is cnbc.

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our next guest says that he is still bullish on the infrastructure trade and thinks there's one big hidden a.i. play joining us is steve eisman, senior portfolio manager at neuberger berman's what do you see that you love or i guess it's the absence of anything you don't love? >> i would say in bad times people focus on credit quality and balance sheet, and good times they focus on stories. and we're in story time. there are two extremely dominant stories in the markets today that's a.i. and infrastructure and that's what's driving the economy, and you know, all economists say fed raised rates

will cause recession has been wrong. we're powering through the only conclusion you reach is that the u.s. economy is more dynamic than ever in its history. so what's not to be lucky or happy about? >> explains momentum setting new records they day, seems like. >> right yes. i mean, what i would say -- i had a theory a few months ago the hidden a.i. play was apple and that seems to be, consensus like in the last week. >> yeah. how did you know that before so many questions about apple what it was doing. suddenly it's become clearer, they're going -- >> i'm not tech genius i only know if a.i. will broaden out beyond just the cloud, people are going to use it on their phone. and so that means apple, and it means that my phone that i bought a year ago is probably not going to be adequate. >> obsolete. >> it's going to be obsolete the biggest refresh.

look, the next stage in the whole tech story people will buy new phones, new laptops and that's going to have a tremendous trickle down. >> and so right now i have the 15 pro 15 pro. >> right. >> you're good to go my friend pup actually don't need to upgrade the phone. phones prior to this phone you have to upgrade. >> yes. >> the question is what kind of upgrades do you think we're really on? a multiyear upgrade cycle? a finite one, two, three years >> i have no idea. >> at this point the economicless come as a result of the upgrade cycle. it is less clear they're come necessarily from service revenue. >> look, say whatever you want at this point because it's impossible to know i think both i think people will upgrade. i still get a new ipad my is low. a new laptop last time i bought one four years ago. maybe keep my phone.

maybe i won't. then all the services. it's impossible to say at this point what service is going to do because there aren't any apps yet to pay for the services when it's all pie in the sky at this point. >> do you think apple is the secret play, but you think it's -- >> not so secret anymore. >> not so secret looking downstream >> starting to do research downstream about everybody else that's going to benefit, and, hey, i'm not going to tell what you companies those are because i haven't bought them yet, but that's what we're working on right now. >> do you hold on to your apple position >> definitely hold on to apple position it's too central a figure in the whole story. >> how do you think about a microsoft? >> for years same story. >> same story? >> central figure but -- microsoft is not going to be -- i mean, like apple in terms you have to figure out who else will benefit from all the stuff microsoft is doing but has to be a core holding.

>> what about google >> same. >> same. >> two groups. they're the groups -- there's microsoft,oracle, google, meta that had tremendous databases that are going to be used, and then there's going to be all the companies that will benefit from the broadening out. the big question that i have, and i don't know the answer to this, is -- there's a thesis out there i find interesting i don't know if i completely agree with it yet that for years software outperformed hardware and i think there's an argument to be made that if a.i. is as successful as people think it's going to be, the cost of creating software is going to implode. >> right. >> so that would imply that the moats that some of these software companies have, not all, but some, have around their

businesses won't be quite as high you can make an argument that the revaluation of hardware is going to continue, and that some parts of software will derate. i think it's an interesting thesis if it's true, it's a very long-term thesis so there's plenty of time to figure it out, but one of the more interesting things i've heard in a long time. >> steve, we have president trump, former president trump, meeting with the business roundtable in washington, d.c. today. you have come up with this idea that his re-election is -- inev inevitable. >> a certainty. >> why is that and what does that mean? >> my these sis that -- thesis is protesters on college campuses are rapidly unfortunately becoming the face of the democratic party. although that's not 100% true yet, but that's what's going to happen in august at the democratic convention which ask in chicago ironically, given what happened in '68. >> '68, right. >> they will convene there and

won't be able to help themselves and burn israeli flags burn american flags and shout things like, "death to israel" and "death to america" or some variation of that and the whole country's going to watch and the whole country's going to be appalled at that point the election will be over. won't matter about what anybody else says. it will be done. >> what does that, in turn, mean for the markets if that's your thesis >> i don't think it mean as thing. i actually don't really think it matters that much for the overall mark who's president it will matter for certain subsectors probably some old energy stockless do better. they'll be other things that might do better, but the overall economy i don't think it matters much as all. >> love to have you back for the other story that you say it out there you don't believe in of the three stories, a.i., infrastructure, crypto you're not a believer in crypto, but we'll leave that as a tease are for the next time you're here. >> okay. >> thank you, steve.

>> thank you. when we come back, former president trump will be meeting with those business round table leaders later today. we'll talk to a former board member and former ceo mark weinberger about what to expect next. plus, breaking economic data numbers and insta reaction as the ppi numbers cross. stay tuned "squawbo wl rhtack x"ilbeig bk. offers investors leverage to both gold and copper at its project, and mining friendly wyoming. u.s. gold corp has a reserve of almost 1.5 million ounces of gold equivalents. permits to mine zero debt with only 10.73 million shares outstanding and a portfolio of world class american strategic metals assets. u.s. gold corp, while i am a paid actor,

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welcome back to "squawk box. reporting the white house nominate cftc commissioner to head the fdic. talking about this a long time replacing long-time chairman martin bloomberg christy goldsmith romero served as a commissioner since 2022 and was a special inspector general

for the treasury department's program during the financial crisis meantime, president trump set to make his case, top ceos in washington, why he thinks he'd be the better president for business joining us now former ey ceo mark weinberger who attended several of these meeting with presidential candidates. good morning to you. curious how you think the winds have blown inside the world of business today, mark, and how they're thinking about former president trump today and the possibility that he may be president tomorrow >> well, andrew, it's great to see you again. it's been a while. i see you. you don't get to see me as much. yeah it's interesting how much news this has gotten to me. this is obviously you know a standard meeting where both candidates are invited to come in and talk to businesses as a whole. not an opportunity for individual you companies to lo lobby.

there won't be anybody end of the day choosing a candidate it begins the dialogue and input into the platforms that the campaigns will have, which will be the blueprint for how they run, and the first 100 days of the next administration, and what policies they will have it's the great dialogue, jeff seitz there, of course, in addition to trump and, you know, he's a well-respected business guy who's going to have to answer a lot of questions as well what i found, one of the few things i miss about still not being a ceo. having this opportunity really to have input, but let them ask us questions and really getting the discussion going about the economy. regulation competitive nature of what's going on you know, the affect the policiless have on the business and/or clients and employees in that room. >> so, mark, you were on some of the committees, advisory committees, that worked with the former president trump, when he was the president

and many of those ceos walked away from being part of those advisory committees frustrated with things he said around charlottesville and other things is the view of those who sort of walked away changed today, do you think? >> no. i mean, when they walked away, andrew, i think we were pretty clear. it became very politically difficult, and it was almost like the ceo, us ceo who were a part of that group were attributed to agreeing to everything the president put forward. you know my belief having worked for the last four presidents in some capacity. some politically confused, i believe business should be in the room trying to make a difference instead of outside complaining. i don't think that's changed and why these forums are so important. the rule of law is incredibly important to 9 buthe business community, the economic

environment and "quality that causes social unrest are things businesses care deeply about and it will remain that way. president biden has been very clear. he ran before, numbers very low. it's a relative decision about me versus the other candidate. and i think what's going to happen, andrew, is what the members will do is ask the president what are your policies going on on tax reform, on regulation on trade, on a.i. and a whole bunch of other issues and compare that to what jeff seitz says and have a better-informed decision, and that will determine where policies will be that the brt will support. not the candidates they will not choose a candidate full stop. that's not what they're supposed to do. >> who do you think businesses are supporting >> i know lots of people in business talk to colleagues there, no answer to that just like no one answer to who journalists support or no answer

to who the middle americans support or look at minority groups it's all overt place a role as ceo and issues you care about as your business. that's what this meeting is about. you also are a u.s. citizen. also live in a community you have lots of social issues and values all of those play into different issues what i think you'll see is less public statements by companies try to weigh in on every issue and get involved in legislation. you saw that backfire. >> and i think you'll appreciate this question. you and i talked about this many, many years ago, i think. there was a period of time where it was very popular for companies to weigh in on issues, and ceos said they needed to weigh in on issues they were purpose-driven mission-driven companies their employees expected them to weigh in on issues we heard that they believed that their customers expected them to weigh in on these issues

and it was only when i would argue to you that a number of red states typically started to push back on that by threatening the companies and their businesses, the actual economics of their businesses. not the customers threatening their businesses directly necessarily, though i thinkweise case a real shift when it became clear certain pension funds in certain states, certain states where corporations do business with the state in some way or another were going to push back in a different way so i'm very curious what you think of that effect and if you believe the way i've framed it is right >> well, i think that you're right. that there's less interest and desire, because of the immediate social media and 24-hour news cycle and frankly the echo chambers and the way any ceo's comments can be interpreted in

100 different ways overnight and then the defensive that ceos are generally less reticent to not speak on these issues frankly, ceos should always talk about what's important to their values and their employees and should talk to the employees and do the right thing what i think happened, andrew, is we got into a marketing contest about who could be more esg? who can go more good and say they're doing more things and thoen then realized there's a plus and minus. america, every company is split down the middle in terms what their employees believe. listen to the very, very loud voices sometimes and not majority of people who want us to focus on issues that affect you as a company i think sometimes business lost that focus i think the whole -- approach, though, brt came up with, back when i was there and worked with jamie dimon, the chairman, and josh and mary barra and others, that's still very, very real

they may not talk about it publicly as much absolutely. >> mark, need to apologize because we have data crossing the wire in a moment got to jump. great to see you and we appreciate it and look forward to talking to you again soon. coming right back thwi those numbers. the. ay ppi in a moment. and i've been taking it quite a while myself and i know it works. and i love it when the customers come back in and tell me, "david, that really works so good for me." makes my day. prevagen. at stores everywhere without a prescription. at morgan stanley,

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we're back, welcome back, and rick santelli is with us with the numbers >> yes initial jobless claims for the week of june 8th 242,000. that's a big pop 242,000. we expected 225,000. last, a the look was 229,000, although still may get revised 242,000. that is the highest level. i have to go on way back machine here highest level since august of '23. since the second week of august of '23 we popped above 1.8 million on continuing claims.

1 million 820,000. 1 million 820,000. that's the heaviest level and i have to go back a long ways on this one 1 million 820,000 takes us all the way to -- november of '21. because we've had so many benchmark revisions that is really a big jump. now, let's look at the ppi data. wholesale, inflation for may, expected on headline to be up 0.1 is down 0.2, but not time to celebrate yet. down 0.1 in march. down 0.3 in october of last year to put some context there, but it is definitely in the right direction if you're looking for less inflation if we look at x food and energy, unchanged. much lower than expectations and in the rearview mirror half of 1% zero lightest. again, minus 0.1 in march of

this year. so a big improvement based on expectations opinion to some extent, been there, done that. x, food energy and trade, well, unchanged as well. in the review mirror 0.4 becomes 0.5. unchanged comps too. minus 0.1 in november of last year look at the year over year numbers. shall we i think sometimes these are the most important 2.2% year over year headline we expected the number at 2.5% but this does match the rearview mirror, which was 2.2, and 2.2 back-to-back, now 2.2 last no. just revised up 2.3. so we have 2.3 last month. 2.2 this month 2.7 was march of last year, for context. energy, take those out, 2.3%

year over year basis 2.4 last month so 2.3 that drop is nice we're at 2.1 in march of this year and finally, ex, food energy and trade, this one went up. 3.2. last look was 3.1. now revised to 3.2 so back-to-back 3.2s those are thehighest levels since 3.4 in april of '23. almost a year, a little over a year, excuse me. the net change of this shouldn't be shocking. seems as though investors always gravitate to some of the better news of inflation. interest rates moved down a bit on that. at 4.25. 4.29 prior at 4.27 yesterday before the fed's statement was read if you look at two-year notes, moved from 473 down to 464 a nice move. at 468 pre-fed to put a face on it so whether it is the notion of

higher continuing claims, higher initial claims, meaning the labor market's giving a bit, maybe that's more where the kit came from in terms of the pre-opening equities, which have improved back to you. >> okay. rick, thank you. thank you very much. check in with steve liesman. he's got more on this right now. a lot to get through, but, steve, add it all together what we heard yesterday on cpi, definitely shows an improving picture on the inflation front >> yeah. this is going to flatten, i believe, the cpe cpi yesterday, below expectations this number, ppi, put the two together that gives them the fed's deferred inflation indicator they do a good job my guess looking at goldman said 0.16 yesterday i think may be lower than that we'll wait until they run their models intraday. interesting abouts they and what will help i believe the pce,

services, the deuce egg. a big part of it looking for trade part didn't see it in there in any event service number was zero and, yeah here it is a lot of negatives on trade numbers. final demand for goods was minus 0.8 on prices there. really flattered by energy, too. you get big drop 7.1% drop in gasoline. minus 4.8% on energy overall then this jobless claims number. watching it creep up unemployment creeps up wonder was it a head fake and look at unemployment rate in the household survey and say maybe we have weakening here on the jobs front raising the question, is the fed sort of guaranteeing itself to be behind the curve on this? a question i have, you know, maybe roger's going to talk about this in a little bit, but

it's a good question if we see this weakening and the fed needs more and more data to be convinced to cut rates, maybe behind the curve. >> just in terms of what the fed futures say, see any change based on that this morning >> i'm looking at it yeah a little pop towards september. a big pop towards september, actually 7 per1% up ten points. yeah becky, down a couple ticks went straight down look, i don't know how much difference there is between the market and the fed i think they were on two cuts. out in the fed maybe towards one. a not a big difference, but a big difference thohow they're looking at the data. the market gets a little more excited than the fed about this stuff. market seems to say, time to be cutting, and you have scope to do that. the fed is being much more

reluctant. like i said, i think they kind of woke up in march and looked at their shadow, decided there were going to be six more months of inflation to me, the debate that's out there, that april and may numbers on inflation are showing that the begin of the year was not the start of a new inflation cycle, but perhaps more of that residual seasonality, or in english, the beginning of the year price hikes not accounted for by the -- >> between you and rick, rick saying, we don't know if we believe it, seen lower inflation numbers before you're saying, okay. maybe aanomaly we saw before that's where the debate comes down on all this three-hour chart for the new year one-week chart shows undoing where yields rose, because the jobs number was a little stronger than expected and maybe these continuing claims takes wind out of the sails of that

jobs report too. up and down and right back to where we started, almost. >> an awful lot of volatility in there. i think the fed's job is to step away from that and take a broader look at it its forecast has to be right here the economy holds up jobs hold up i've showed you that chart i don't know if it's available unemployment up 3.4, 3.5 inflation rate coming down fed will be at what was its inflation forecast for the full year it does have a basis effect problem for some of the low numbers dropping out and has to do even lower numbers to keep up with that to hit its target, but, you know, i've said this before, becky. sure would be a lot easier for everybody involved if the fed was trying to hit a target between, say, 175 and 225, and it was thinking about reducing rates, if inflation came within a range of 2.5 to 3%

we're trying to do here -- the -- so ludicrous about this, trying to figure out the price change on a $22 trillion economy and reacting to a 10th or 100th of a point here. i don't think it serves anybody else to be trying to go for that precision or the policy can be done with that kind of precision. >> okay. steve, thank you for your perspective on all this. rick, stick around we're going to continue this conversation bring in kay richards former treasury official and senior fellow at groundwork traditional and another fellow your reaction to the number and where you think we stand, and maybe what jay powell will do about it what do you think? >> i couldn't agree more with steve. i think there's a really big risk here that the fed is behind the curve. folk whose thought they were too slow to move on inflation should

be concerned they're being too slow to move on disinflation used to talk about long and variable lags, policy, a blunt instrument, and now in a position the fed continues to hold rates at very restrictive levels despite rapid disinflation, and i'm really concerned about the knock-on effects, not only to the labor market but actually to people's pocketbooks right? it is now much more expensive to buy a home to purchase a car, because of the cost of borrowing, and those effects of the fed's interest rates policy i think are now swamping any effects on prices in those really key areas. especially in shelter where people's mortgage rates are up you know it's a real problem. >> joel? >> well, i think i want to commend the fed for actually not having lowered rates just yet and the numbers today should not

be forcing them into drawing conclusions otherwise. even with this small downward tick on the core prices, got to look at what's it's been like over this past year. we are still trending around 3.3% on that headline number, even with today's 2%, negative 0.2% clip. look, a big part of that is because oil prices dropped nearly 20% in the past month on concerns over a weakening economy. now is not the time for the fed to be lowering rates if anything, rates need to go higher if we truly want to get overall inflation back to that so-called 2% target. >> kitty what would you be doing at this point? i get the housing part of it other factors you have to balance them all >> yeah. i mean, i think this is one of those places where you have to kind of dig deep into the data right? if you just look at cpi or even core cpi, you can make claims

about how interest rate policy needs to change in order to damp down prices with this very basicebasi ed mod -- model. yesterday's cpi, huge in shelter's we know a couple of things about shelter one that actually our measure of shelter costs, not very good so spot rent prices have actually normalized to -- they're too high but still normal pre-pandemic inflation level. but we're still seeing shelter in cpi grow. that's because of this 12-month lag in the way we collect that data so first we're not working with the best data there, but then the second piece is the fed's policies have really direct impact on shelter imposition not just in terms of borrowing

trying to buy new homes but in constructing new home. we have a huge supply problem longstanding in the housing market and the fed is actually reducing housing starts. redicing our ability to build. again, i know that it's tempting to just look at the top-line numbers or to say, yeah. we have this housing problem, but that's really separate but the more things that you sort of take out of the basket, the more you're really just targeting a very small number of consumer goods, and kind of indirectly just targeting wage growth what we want to see is wages going up, and prices moderating, and prices that people actually pay, and the big, one of the biggest ones is housing. >> right rick, want to jump in here >> absolutely. listen, initial continuing claims most likely why yields moved lower. they really especially continuing claims are starting to reflect the reality we see in other areas like jolts

inflation data make is a rorshach if you want shouldn't be look at any month over month data points within the last six months or sooner, much steeper drops. look at the year over year data, it's all rather high in every revision in the rearview mirror was moved higher if you look at final demand year over year, first two months lower than current 213 ex food and energy, 2.3. first three months dramatically lower the final number year over year ex 100 and trade i pointed out, can't stress it enough 3.2. that's a high number we started off the year at 2.7 so, you know, we could rorshach this no doubt in my mind investors are more concerned in many ways about the potential for a.i. and things like your hand-held and how that's dramatically going to

change or infrastructure spending which is really driving a good chunk of the economy, which is funded on huge borrowing issues by the federal government you can focus on the economy, or you can focus on the fed focus on the fed, interesting. huge amounts of control. managed markets for decades. in the end, pay attention to the economy. don't take your eye off the real ball because the fed ultimately is going to do what the economy dictates and all of you viewers right now see the same datathe fed does only difference, asymmetric interpretation. >> kitty, joel and steve, thank you. appreciate it. when we come back, former fed vice chair roger ferguson will share his reaction to yesterday's rate decision and chair jay powell's remarks also spots on what this latest aye ppi and cpi tell us out abthe inflation outlook. we'll be right back.by these

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. joining us to react to this week's data and the federal reserve's rate decision we bring in former fed vice chairman roger ferguson formerpresident and ceo of tia and a cnbc contributor roger, you have been right for a very long time in terms of guiding us, what the fed would actually do. people have gotten carried away. thought they were going to cut rates sooner, thought they were going to do things beyond this, but we did just get a series of data points that suggest inflation is a little weaker and so is the jobs market than we expected a week ago. does this change the trajectory at all in terms of when you see the next rate cut coming or the first rate cut, i should say. >> not really. so first, let's listen to what the fed itself had to say. remember, they had the cpi

number yesterday, and still didn't change their forecast for, you know, perhaps one cut this year. secondly, i think they're still clearly stating that they need to see more data in the same direction before getting comfortable. so you know, if there's a cut this year, i think september se chance for them to feel sufficiently comfortable this incoming data, i think, sort of is another building block in the direction of getting comfort. but recognize back at the end of last year, i think people were very comfortable and suddenly we had the first three months of this year. so, i think to be cautious this data does not swing the pendulum dramatically it moves them in a direction in which they want to go. but they're not there yet. >> we were talking to steve liesman about it, and as those ppi numbers were hitting, we did see the fed futures for the month of september jump to 71% the odds of seeing a rate cut in september increase pretty

dramatically does that match your estimation of what the odds are of a rate cut then >> i would say the odd have gone up, but i wouldn't say 71% i think as always the market has glommed on to a piece of information from one data source and i think projecting that forward, you know, far too optimistically from their standpoint we have seen this happen man times, expectations are five or six rate cuts, away to one or two. and so i think the odds of a september cut have gone up somewhat, but nowhere near 75% i think that's getting way ahead of where the fed is right now. >> roger, you still see a lot of data you talk to a lot of people through the business council and beyond i wonder what your sense of the overall economy is right now. >> i think the overall economy is actually pretty strong. so, you know, the economy performed reasonably well against this so-called restrictive fed policy some of it has to do with what

we call the wealth effect. ie equity markets have been very good some of it has to do with many businesses getting greater certainty about supply chains, et cetera. i'm also seeing some of my conversations expectations of continuing to increase wages at around 3%. so, it feels to me while there is some pockets of weakness, overall, you know, pretty good and calls into question exactly how restrictive monetary policy might be >> ian shepherdson was with us yesterday and made good points about how there are some real pain points in the economy he mentioned small business in particular, and the idea that, you know, they have to pay 9% for loans at this point. that being really something that can clamp down on job growth because small businesses, which are a huge engine of hiring in this country, can't afford to expand when those are their costs. is it fair to say that there is a hugedifference between bigge companies that we talk to most of the time, between what main

street is facing, main street businesses, and is that cause for concern or cause for the concern -- cause for the fed to potentially ease sooner? >> well, look, part of the challenge is there are sectors that are much more interested. so, housing has always been talked about as one of those certainly small enterprises as well can be. so, it is a source of some concern, but this is a very large economy. and so the fed has to figure out how to think about all of the factors that are driving this. so, a source of concern, certainly source to be taken in consideration, but i don't think it is going to be definitive because there are always sectors that are doing, you know, worse and some that are doing better when the fed is either in a tightening mode or an easing mode or just standing still. and so i think one takes into consideration what you shouldn't sort of overweight a particular sector because this is a very large complicated economy as you well know. >> as a former vice chairman, you know pretty well what takes

place in the room. how big of a concern would moving too soon be, just the idea of doing something and then having to undo it later? risking credibility? >> i think it is a bit of a concern, frankly first, they have -- they know their forecast is not as accurate as they would like. inflation dynamics have probably changed. i think they're worried about credibility. i think there is a risk if they cut early and markets take off, so to speak, they will be in a position where they're having to cut -- having to raise rates not because of the underlying economy, but because of, you know, equity markets going forward. and obviously, you know, the history of stop/start in the veh volcker and in the burns and early volcker years. i think that is actually part of the story here they want to be convinced. and they have been very clear that, you know, one month worth of data, maybe even two months worth of data is not sufficient to drive conviction. >> roger, thank you, for guiding

us as always >> thank you >> coming up, when we return, we're going to get you up to speed on this moinrng's biggest stock movers you're watching "squawk box" and this is cnbc (♪♪) what took you so long? i'm sorry, there was a long line at the thai place. you get the sauce i like? of course! you're the man! i wish. the future isn't scary. not investing in it is. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com

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the labor market has become a little less hot, a little bit more normal. the number of job openings has declined some. we have had a burst in labor force participation. and so the labor market now is resembling what it looked like prepandemic, wages are increasing, but at a slower rate and so that doesn't really look like it is a threat to inflation. >> that was treasury secretary janet yellen speaking us to exclusively in the last hour watch more of that interview right now on cnbc.com. let's get over to frank holland with a look at some of the morning's premarket movers what are you seeing? >> we're still watching broadcom, shares surging on earnings, beating on top and bottom line, ten for one stock split and adding some color on their a.i. business and the company saw about $3 billion in revenue tied directly to artificial intelligence. revenue from vm ware the company acquired late last

year a big contributor the stock split takes effect on july 15th. we're seeing nvidia up over 2.5% marvel and qualcomm rising in the premarket. we have another southwest investor showing support for elliott management's activist campaign at the airline. artisan partners holds under 2% of love stock and sent a letter calling for a leadership change and board shake-up including the chair. this comes after elliott announced a stake in southwest and pushed for a lot of the same changes. southwest ceo bob jordan said yesterday the company's open to listening to ideas, but he has no plans to resign taking a look at shares of southwest up about a third of a percent. big spike after elliott announced their activist campaign earlier this week also, goldman making big calls on fast casual and quick service restaurants. analysts say they're focused on brands with concepts that drive concept and those that made digital investments. the top picks on the top of the screen, sweetgreen, starbucks and shake shack. you can see all those shares are moving higher. out of favor, jack-in-the-box,

and wendy's. jack-in-the-box off the lows of earlier this morning, it was down 5%. back to you. >> thanks, frank down by 1.7% now we'll see you later. quick final check on the markets before handing over to our friends on "squawk on the street." the dow would open down 66 points nasdaq up 137. make sure you join us tomorrow "squawk on the street" begins right now. good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchanges. futures are mixed, off the early lows as we got the surprise drop in producer prices down .2%, and jobless claims spiked at the highest level since august ten year drops to 4.25 our road map begins with fed expectations holding rates steady now the surprise o