confidence in the ceo. and former ceo speaking on the company's fall from grace. thursday, june 16, 2016 and "squawk box" begins right now. ♪ good morning everybody welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. and over night the bank of japan keeping rates steady. bank of japan governor kuroda commenting, saying they will examine risks and will not hesitate to take additional measures to try and reach their 2% inflation rate. that announcement sent the yen sharply higher, which in turn sparked speculation on whether policy makers would try to intervene to halt the currency's rise. it's been on a tear this week. the nikkei fell sharply on the

news. it was down 3%. and remember this follows 3.5% earlier in the week. the shanghai was down half a percent. >> we had a boj viewing party last night. you didn't make it. >> you look tired. >> we ordered sushi and got some red bull. just to, you know, full effect. >> you are trending on -- start saying sushi and stuff like that. i don't want to get too stereotypical here. >> well, you know. >> it is a safe zone. >> since when? >> i'm with becky. since when. let's look at the futures, they are indicated lower follows the first five day losing streak since february. >> when did you come one that though?

that borders on a shtick for you this morning. >> a stick? >> you told me i wasn't allowed to use yiddish. so the mid western version of stick. >> i was up -- we had a viewing party. >> -- lie. >> coming one things now. try -- >> -- good. >> you're doing a stick. because you -- i don't -- you really didn't stay up. >> no -- >> see, you aric making that up and you are going for a laugh. i've learned a lot. because i was going to pull away. >> -- you could get me. u.s. stocks gave up gains after the federal reserve held rates unchanged but signalled a slower pace of interest rate hikes. >> really? slower? >> shocking. slower. >> how do you get slower? >> is this a stick? >> yes. and i told wilfred and sara

this. do you remember new math? there is a point. in geometry. there is a point in geometry. two points, you connect them it. makes a line. >> i know the answer and you know the answer to that too. >> the dots were meaningless. they weren't real. only one point in time we have no -- >> -- gonna be at 0.5% still. >> what is the pace of rate increases so far when you have got one rate increase in nine years, what is the pace of that, other than glacial, other than not believing anything they say or not having any credibility whatsoever at. >> steve leisman threw in the towel yesterday. >> -- >> i read that too. the fed kpacht icapitulating. >> it's over at one? at a quarter point the rate hike cycle is over. this is all very strange.

i don't want to call it the new normal. i want to call it the rinehart rogoff idea is wrong. and now self inflicted. >> this actually -- >> -- eight years later. >> -- long leverage. >> no it's overregulation. not doing the things necessary to get economies moving anymore. it is turning into -- >> also us being hampered by global growth. >> we could lead global growth. >> we are. >> right we're leading it under 2%. and they did this weird thing where they lowered their forecast so it averages out to 2% so they can still say hey we're doing 2%. i mean, if you were cynical and we have richard fisher and he's not known to always be a poly anna. i think we'll get him to just say. >> they could have said or done a lot of things yesterday that made the lack of a rate hike yesterday feel like it wasn't the end of the end. >> -- we won't be japan because

we know how do these things. our bank clears things up quicker. despite their best efforts this is what it looks like to me. this looks like we're going to be here forever. we're never going to have negative rates here? >> i wouldn't bet on that, would you? >> i wouldn't bet on never. >> it is a better version of japan. elevated version of japan. let's tell you what is going on with the yield. it did tick back below 1.6% following the fed's announcement. go out and get yourself a mortgage or refie today. in the meantime in the early european trading we've got -- >> why would they go up? how can it possibly go up now? equity markets. the only thing going to go up now is gold. >> and you missed your opportunity. >> i missed my opportunity. >> here we have ed arrows across the board. >> five straight days.

>> the fed is part of the problem. definitely not part of the solution at this point. >> okay. we'll debate that -- >> but i'm also, i feel hampered because i can't use this. stick. and other times searching and realize i can't use it. >> and you had an issue yesterday with wilfred yesterday trying to use -- i don't want to say the word because it is supposedly an epithet in another land. >> he used an epithet himself. so kind of cleared the way. >> does it count if you -- vega is far or somethint or somethin. >> the air around the world. take a look at crude moving lower there. following government report that said u.s. inventories fell last week. less than half of the barrels

expected. and quick as joe mentioned, he wished he had bought that -- well. >> via com? >> -- wished to buy gold. we were going to -- sumner still thinks that via com is gold. >> there's gold. the dip is where you tried to buy but didn't get your act together in time. >> you need a special account to buy that. so mad at that. right there too. there is a full slate of economic data on the day's agenda. weekly jobless claims. may consumer prices both out at 8:30 a.m. eastern. headline cpi is forecast to rise on higher gas prices. we'll see whether the cpi is also hotter than a time square rolex at like yesterday.

>> and dirtier than a mouth of a pos some. >> -- you needed more texas. we had dan rather on yesterday. we had fun. and he had fun. also look for current account figures for the first quarter. and 10:00 a.m. a national association of home builders month survey. earnings front, kroger and rite aid are going to report. earnings somebody has been over a month. stragglers. and oracle and smith and wesson after the close. and in political news, speaking of -- wopder if they did on this purpose?nder if the did on this purpose? just did smith and wesson earnings.

and yesterday democrats had a 17 hour fill bust they are finally ended early this morning after republican party leaders reportedly agreed to allow votes on two proposed gun control measures and in his statement senator cris murphy that a deal -- who whether the --. and whether to expand background checks to gun shows and internet sales. >> ask yourself. what can you do to make sure that orlando or sandy hook never, ever happens again. with deep gratitude to all of those who have endured this very very late night, i yield the floor. >> over the course of a 14 hour and 50 minute filibuster murphy was joined by other senators,

including blumenthal and booker. and i guess the other part of this story is that donald trump has at least shown a glimmer of -- and this is -- i. >> i'm very curious where you are on this. >> well i would have thought other liberals would have said wow this guy might be pragmatic. maybe this guy will do things -- right? i thought that -- i actually was very -- >> you can imagine how the nra after endorsing him how mad they are now. but the "daily news" deciding that trump's plan is actually groveling. >> -- come up with some ideas that he would like to go along with some of these restrictions. >> that is what i mean. and that is a pretty purist sort of ideological -- i understand where it comes from because

everybody deserves due process. you can't just take rights away. but i also understand if the guy can't fly and if he's on a terrorist watch list -- >> and just to put a fine point, what trump has suggested thus far is he would be prepared to make sure people on the terrorist watch list can't buy guns. >> -- come prepared to understand what i'm talking about. don't need to surmise. >> and the other component is he was not prepared, unlike bill o'reilly. in terms of the assault weapons and the size of the magazine. he's not inclined to support -- >> who knows? >> at least thus far. >> because there are purists and then there are people that at least would listen. and also he said there are some indications that there are other parts of the gop. not maybe the guys in the most -- >> there are two bills we should say also. we showed that one. but there is the other one as

well. i just, you know. it is anything now. i don't want the left -- >> i think you should focus on that paper and the hufgten pofi post. >> great op ed about donald trump as a businessman. >> -- we'll just try to explain the phenomenon in how author today set 16-0 in terms of vanquishing pretty good candidates. >> nonetheless a man who thus far can't be vanquished. sumner redstone continuing in that battle. sumner receipt stone saying he

no longer trusts the board or ceo philippe. he made the comments. redstone wrote i no longer trust philippe or those support him. the board are ignoring his wishes and he doesn't think they are acting in the best interest of shareholders. citing the decision to sale stake in paramount pictures and via com shares are down 36% the past year. former ceo tom preston also had harsh words for management in an interview on cnbc's fast money last night. >> the whole soap opera versus the redstone and the women and the lawsuit i think has been a side show compared to the real story which is the fall of via com from grace over the years that have been really one of the leading television networking

companies in the business and now it's fallen to a level below really any of his its peers on almost any metric plagued by all times trieps of problems. >> redstone is never one to want to sell anything. while known has floated the idea he couldn't take the ceo job if asked. in the meantime let's get back to this mornings's market moves. dependingen what you think happened yesterday and what may -- brexit joining right now is. you heard the argument from joseph. there is no line or dots. there is only one dot. >> we want to slow down the pace. >> -- if the line of equities now as a result is functionally going to continue going this way. >> to me the uncertainty and in fact the fed feels very

uncertain. >> situation where they said things are lousy here not going raise rates and the equity market has said this is spectacular. >> lost control though. >> right. is this a moment of the loss of control? >> we've been in the correction camp for a while. and i think what the fed did yesterday was a relative ily easy decision that just reflected the reality of what's going on in the marketplace. the dual mandate, the labor market has been noticeably slower. the metrics have ticked down. first quarter economic growth and corporate earnings were terrible. the brexit vote in eight days, which right now is probably no better, no worse than a coin flip. given all of that uncertainty what else could the fed have done. >> -- is it possible they come back in july? >> if the data supports that?

>> overly pessimistic about the data currently. >> we feel really good about december. but july or september is going to be a tougher call. the data has to support that and right now that is a crap shoot. >> is larry right? are we the new japan? is that what's going on here? >> well joe making the point in the first segment we're relying way too much on the fed to solve our problems and the fed can't solve the problems. we need better government action. when things are tough we need a government to comes together and sets good policy and we haven't had that. >> are we the ones leading the world into the slow growth? or are we following? >> i think we're doing it together? >> i agree with allison. fiscal policy matters here. we're at 1.7% full year gdp. the fed was at 2.5 working down

to 2. i suspect they are going to be sub2 for the second quarter. we don't think we're going to get anywhere near the bounce that a lot of folks. >> one side of the dots but not the other. >> because they missed two years ago. and you can fault the fed at a lot of points along the way. but at the very minimum when they should have a couple of years ago, it is not just that they are, you know, suddenly unable to do any good. it is they own part of this. and when you say well the fed did the right thing yesterday given the economic backdrop. well that is a given. and the economic backdrop is part of. it is not just that they are not part of the solution. >> they are part of it. but not the whole solution. >> no. and you're not following me. they are part of the problem. it is not that they can't do anything. it is that they are part and parcel of the issue that wore facing in the first place. they own -- central bankers own this malaise.

and now because they didn't do it two years ago we're totally painted into the corner. >> in terms of the corner there is a projects, not a high one but a probability that we could be looking at the recession in the next year or two. the fed would like to reset to a hundred basis points. to be able to do something they are at a quarter point right now. they have to force in a couple of hikes to reload. >> make it practical here. if i missed the gold trade what do i co- >> i don't think you missed the gold trade. we've been playing defense all year. we continue to play defense. the allocation in equities in stock bond right now is two ticks below neutral. we haven't been this low since the great recession. we've got more cash. more bonds. we like gold. stock market is going lower. you have got to play defense here. >> i think the second half of the year is going to look a bit better. all of the head wind we had last

year should be working against us and we're just seeing moderate growth but there is too much unserntd near term. >> and that is what makes a market. >> all habituated to believe that now and that it's not self inflicted. half more than a decade of planning the shanghai disney resort opening today with a price tag of $5.5 billion. and eunice, i've been watching some your tweets this morning about the average line to get in, about two hours long. >> just to give you a sense of the crowds. the average wait outside of the gate to get into the park was two hours today. tens of thousands of people braved the rains to get into the park. and so on a day which is very important for disney. earlier today the ceo bob iger

was presiding over a dedication ceremony for the grand opening. several high level government officials took part including the vice premiere. and the ceo stressed the importance between disney and the chinese government. >> today is a celebration of creativity and collaboration, commitment and patience. a triumph of imagination and innovation. and a testament to the strong partnership between disney and china. >> disney said that they had congratulatory messages, both from president obama, as well as president xi jinping. now, this part has been long in the making. five years of construction. $5.5 billion. and it is all to as iger told me, to create a booster rocket

for the business here and the expansion in china. this is a brand building exercise in many ways because the park could have more people come here. people get more familiar with the brands and characters and might want to go out and watch more disney films and buy more disney products. and there is some reason to believe that there could be a big payoff. and because by disney's own estimates, 330 million people live within a three hour radius and can travel there in that time either by train or by car. and are what they call income qualified. and that means they are able to afford a vacation here. so already if you believe as many economists do that the chinese economy is advancing in the long-term and that people are seeing their incomes rising and that household spending is playing a larger role in the economy, disney is well poised. and already from what analysts are told us, they have some

pretty optimistic estimates about how many visitors they expect in the first year. the range is from 10 million all the way up to 15 million. visitors in the first year alone and that already if it does come true is going to really launch this park to some of the top numbers in terms of the most visited parks by disney. the company has also been tailering this park to the chinese. 80% of the tractions here are unique to china. and one thing they are not doing and not allowing is the selfie stick. this beloved by chinese people and many people in asia but unfortunately it is not allowed here for safety reasons. >> thank you eunice. a great story. and a great day to celebrate what is going on over there. i did want to ask given that it's been in the news here in the united states and whether it became a conversation at all over there given the disney

executives, this terrible incident down in florida with this toddler and an alligator. you saw a statement from bob iger later in the day offering his condolences to the family. is that a conversation happening over there? or not really? >> it is not really a conversation happening amongst the public. certainly as you said iger issued a statement sending his condolences to the family. but from a public level of course people are heard are of the story and are horrified by it. but in terms of their enjoyment and their fascination with disney and this park it really hasn't resonated very much. >> okay. eunice yoon how to much. the country in crisis. one opposition leader has a plan to turn it all around. that interview is next.

i was reading how they are attacking trucks on the way into the ports, that they can't even make it into the cities now because the road to get there. >> really are free when you have socialism. amazing. >> clearly this is a country on the brink. believe it or not the parliament is controlled by the opposition

but the -- to what people believe are senior anti-democratic measures. there's been a movement for a recall referendum of the president. -- have been trying to push a vote a national referendum immaterial's been thwarted. this comes as john kerry just yesterday says he also backs this referendum and the dialogue with venezuela. i said to mr. vek owe, listen, from o outside what we see on the ground t only thing we think might happen there is military kups. is that possible? >> military coupe could be a disaster in venezuela. we don't want to get to that point. and that is why we are pushing

so fast. >> do you worry a possibility? >> yes. we are in a totally collapsed country right now. it is not working. >> so we'll see if there is enough pressure from other leaders to get maduro to actually allow this recall reverend skpm to have a constitutional process -- >> what -- >> so the process would be they allow that renchds referendum to occur. if it occurs next year and people vote yes he should leave office then the vice president can take over and be in charge until 2019. >> dragging his feet. >> absolutely -- >> i don't know how you keep control when you see scenes like this and when people are starving. >> which raises the fears of the military cue. the military is deeply

entrenched. very much a lawless militaristic state is the way it's been described. and don't forget there's been a lot of cuban influence as well. because they still supply oil on a daily basis to the cuban government. >> how long has this president been control? >> 2013. and you have had socialism there since 2002. hugo chavez presided over much higher oil prices. >> -- thought he was nnt power until 2002. >> there was a couple of iterations. >> i'm look at the piece here written just last year. at that time it was latin america's most fluent country. >> it's producing two million barrels a day. it should be doing just fine. >> with that form of socialism.

we hear bernie sanders form and say no this is democratic socialism. was that democratic socialism. >> so i think the first election was democratic socialism. it was democratic. and after a while they would do all kinds of things to really disrupt the democratic process. in other words giving people the right to vote -- >> this is not a bad experiment in terms of -- >> okay. so -- >> do you think he's looking down or probably up at what's happening in venezuela right now? >> i brought up this question to carlos and this is what he had to say about our election here. >> something is happening in the u.s. political system but on one side you have the trump and on the other side you have this bernie sanders. so they are -- something is happening with the u.s. system. the problem is not trump. the problem is not bernie. the problem is that the people is voting for those ideas.

>> we have to take a hard core examination of what was happening here to explain why. and he said there was a deep parallel to what he saw in venezuela before the rise of chavez. when hugo chavez came to power you know what he said, he said i am not the cause, i am the consequence. >> i'm not sure that is true. they could have been a totally different -- venezuela could be a different country right now if they hadn't tried that. >> yes. absolutely but venezuela always had a big problem in latin america. very rich and very poor and corruption and no middle class. >> and corruption. >> i see few parallels. but in general, few parallels when venezuela and the united states. >> i know. >> and hosting a conference on diversity and leadership today. carla harris will join us next. as we head to break look at

yesterday's s&p winners and losers ♪ ♪ don't you know that you are a shooting star ♪ ♪ and all the world will love you just as long ♪ ♪ ♪

welcome back to "squawk box" everyone. as morgue stanley prepares to.

>> carla harris. is going to be moderating the panel on diversity at today's event. harris also serves as chair of the national women's business council and thanks for being here. we hear from from time to time and talk about the idea of diversity in the board and in management helping but how do you bring the point home? >> one of the impetus for this conference is last year executive leadership council released a paper on what is global leadership. and one of the core competencies was around multi culturalism and as a firm this is something we are very committed to. so we thought why not convene a conference which currently does not exist in the market at all of the most senior leaders of

color and corporate and civic america to talk about business topics, cyber terrorism, business security. capitalal markets interpretive and have the attendees be the leaders again who are multi cultural. and by definition because of who's speaking you are going to have a slightly different conversation than in any leadership conference. >> how is the conversation different? what different opinions might you hear. >> well all of us are the function of who we are and where we came from. despite the education and expertise you have you naturally bring your personal perspective to the conversation. and i think again because you are going to have the most senior african americans and most senior hispanic americans and asian americans in this room coming from all different perspectives you will have a different conversation around disruptive innovation and big

data and perspective on the global markets and perspective on the civil rights agenda and i'm really excited about the conversation we're going to have the today. >> how duke corporate america is doing noefrl terms of promoting -- >> i think we're starting to get it. you can't debate the changing demographic and the shift in consumers in this country and obviously what's happening with the millennials. so in order to compete going forward you are going to have to embrace multi culturalism and have a competency around it. in my thesis, the business thesis is if you are competing around innovation you need a lot of different ideas in the room because it takes a lot of different ideas to get to that one idea that will allow you to lead. and if you need a lot of different ideas in the room you need a lot of different perspectives and experiences. and you have to start with a lot of different people in the room to get to that one innovative

idea. >> if you are a ceo watching right now who is thinking how woe do hiring at whatever company. how do you do it? how do crow actually think about it? do you think quotas maybe -- how do you make it work? >> there are three things if you really want to make it work with respect to diversifying your leadership and pipeline. intentionality. you that have to be intentional about making sure you have people there. with respect to women and people of color f they see someone in positions of leadership they are naturally drawn to that company. so you have to be intentional about it. you have to be accountable because not only does it need to happen at the senior levels but throughout the organization. you need to say andrew, middle level manager. what are you doing with respect to your pipeline and how you developing your people and how do your pipeline look? and then you have to be consistent. it can't be a bull market phenomenon. when things are great and bull

market then other not so much. >> and warren buffett has been explicit when it comes to the board, for example, that diversity is not something that he -- not that he doesn't put a priority on it. but that is not the goal line for him. it is just about surrounding himself with great trusted people who he thinks are really brilliant and everything else is secondary. >> i got to tell you though he's intentional about it. i had the privilege of seeing him at the united state of women in washington a couple of days ago and he was very articulate and focused and intentional around how he has added women to his board. sure they have all the characteristics that you mentioned but he was very intentional about making sure that he had some diversity on his board and he's got some great women on his board. and he messaged that he intends to do more. >> carla thank you very much for being with us today. and again this is the first one of these conferences. maybe you can come back later and tell us a little bit --

>> i look forward to it. >> thank you. cnbc will be covering today's conference and james gorman will be on the "closing bell" at 4:00 p.m. eastern time. >> when we come back, ab inside look at donald trump's stunning primary win that few people saw coming this time last year. nobody thought it would happen. a former investment banker who literally wrote the book on donald trump's playbook. a check on european markets right now. things are in the red and looks like we'll be keying off that as well in the united states. can the call just came in. she's about to arrive. and with her, a flood of potential patients. a deluge of digital records. x-rays, mris. all on account...of penelope. but with the help of at&t, and a network that scales up and down

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welcome back. time for squawk planner. a full slate of economic data. among the highlights we get weekly jobless claims and the may consumer price index at 8:30. and then on the earnings front we get kroger and rite aid reporting before the opening bell. and then from oracle and smith and wesson after the close. donald trump -- i don't know about this intro.

says here he's all about winning. he's proven it so far by beating a dozen other candidates to get the gop nomination. let's look at a secret to the success if we can. joining us is author jeff --. jeff is also an advisor. and former investment bank apparent goldman sachs. the way i would have introed. i would have said it is almost not just trump but it almost was a perfect storm. and i'm trying to think of the last 10, 15 years to try and explain the trump phenomenon. perfect storm is used by everyone now. from that book. >> -- >> the fonz where he actually -- >> he said it was a crappy episode but it has become a real -- >> -- [inaudible]. >> so perfect storm.

democrats you had w. and everybody hated w. and for republicans you had 8 years of obama where colleagues went down because of a -- the senate t house of representatives they all sort of were sacrificed. so both parties had i would say a reason for their core to be d disillusioned and then enters trump. but that wasn't enough. he had something that appealed to this environment. and what was it? >> right. where i start is this is a game of game a skill. this is a game of skill. which is your ability to tap into how people are feeling and then move them towards where you want to move them to. look at all the candidates many of them were campaigning against the establishment, against a new

approach to the washington. ben carson, ted cruz, carly was an outsider as well. >> so what did he do different is this. >> really two things. which is the idea that i start from is that he is a master. winner and a masterful winner is hard to beat at any game. >> what does that mean? >> if you look at warren buffett. why does he win is this because experts at winning are able to develop strategy, masterful strategy and skills. >> instinct too? >> it is instinct, absolutely. and one of the reasons trump is so hard to beat at this is because he spent 40 to 50 years mastering these skills. >> and i'm not trying to be critical of trump in this instance. >> the whole premise here andrew is he says he's not focused on his controversial comments. he's just focused on the 16 jeb bushs and scott walker so that is a fact that's happened. once it happened let's try and figure how it happened. >> i understand that but the

question i'm about to ask is about this idea of winning. and this is an op ed in the financial times by mike moretz from --. one of the great venture capitalist whose makes an argument that donald trump as the businessman has not been a winner. in truth his performance has not been successful in compares on the warren buffett. so a, who's right? and if mike moretz is right how trump has otherwise convinced people that he is winner if he really isn't. >> well i mean, what is your definition of winning? >> exactly. >> a world defining brand -- >> honestly you can't figure that out. >> i can. >> that is a totally specious piece. >> the -- he went 16-0. if a football team went 16-0. nobody would be standing around and asking he's the crowd

favorite. they would be asking what has he done? what was his winning strategy? what were the skills they needed to crush the rest of the field and that is really my focus. >> some people would think 20 million is a successful person. and then get toperson. 200, 300, 400. it's not 10 billion. there are ten trump golf courses, "the apprentice," ten years of one of the highest rated shows. there is the brand. you are talking about semantics. >> if you go 12 months ago -- look at the polls today. 12 months ago nobody gave him any chance of winning. as soon as he stood up on the debate stage he absolutely did things that nobody could predict. >> he flies by the seat of his pants. yesterday -- he gets the nraest endorsement. everything is great. the nra loves him. he is finally trying to court

conservatives. then he says, you know what, maybe we shouldn't sell guns to -- the nra is like, what? this is totally by the seat of his pants. sometimes it looks like such a blunder. is there a method to that? you're sure there is a method to the madness? >> i have modeled it. in this book i literally put a structure around what he's done. i call it the trump two-step. the trump two-step is how does he drive an enormous amount of attention -- he has earned himself $2 billion in free media, but most importantly, joe, how does he take that attention and move it towards his messaging. and this is really the core of influence. there is a very big difference between -- everyone knows he has the best messaging. what he also has is the best skills of influence. >> is it replicable? meaning, is it specific and idiosyncratic to this particular individual or can other people -- >> barack obama did it in 2008. what did he do? he stood up with a message of hope, change, yes, we can.

bernie sanders did it. it's a skill set and it's ability to tap into how people feel. that's the two-step. but there is something else trump does, what i call the trump four-step. the four-step is how do you move people from problems to solutions. every expert on selling, every expert on influence knows that you have to start with a problem. and that's why you've got all this controversy. you have to really embed the problem and then move people to a solution. bernie did the same. barack obama did the same. it's a set of skills. >> geoff, thank you. >> thank you. when we come back the brexit vote just a week away. we have an updated betting line. we'll give you that next. stick around. ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪

♪jake reese, "day to feel alive"♪ mr. president we're on mars. switch to a video call... sure, we can do that. congrat... picture from mars looks great. it's about time business communications caught up. go from an audio call to a video conference with the push of a button. vonage. business grade. people friendly.

time for your daily brexit update. the latest betting line shows a 65% probability that the british vote will be to stay in the european union. that probability rising from 62% yesterday. so we'll see if the betting line stays and whether they're right. coming up, the federal reserve signalling a slower pace for the rate hikes over the next couple of years. we'll a talk to former dallas fed president richard fisher who never holds back. back in a moment. ♪ ♪ ♪ for decades,

investors have used a 60/40 stock and bond model, with little in alternatives. yet alternatives can tap opportunities that traditional assets can't. and even though they're called alternatives, they're actually designed to help meet very traditional goals. that's why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. translation? goodbye 60/40, hello 50/30/20.

the fed dialing back its rate hike forecast. markets now turn their focus to a possible brexit. a closer look at what central bankers are thinking with former dallas fed president richard fisher. that's straight ahead. >> is trump on a collision path with gop leaders. will bernie sanders step aside for hillary clinton. former white house chief of staff is here to talk about the race for the white house and more. plus, is content still king? executive producer of "lost" and editor in chief of wire join us live from the wired business conference. the second hour of "squawk box" begins right now. live from the beating heart of business, new york city, this is "squawk box." welcome back to "squawk box," here on cnbc, first in

business worldwide. i'm rebecca quick along with joe kernen and andrew ross sorkin. we have been watching the futures. after the markets closed down again yesterday, fifth session in a row, and that's the longest losing streak we have seen in a while for all the major averages. red arrows once again. dow down 38 points below fair value. s&p off by 6 and nasdaq down by 13. take a look at oil prices, which also not coincidentally have slid for the last five days as well. we're below $48 a barrel for wti. down another 65 cents this morning to $47.36. brent down at $48.33. >> let's tell you about some of the stories that we're watching this morning. the federal reserve kept interest rates unchanged and signalled it still plans to raise rates twice in 2016. janet yellen acknowledging that the may jobs report had fueled doubts about the strength of the labor market. the number came in at just 38,000, well below expectations. we'll have a lot more on the fed decision in just a minute.

the other big story of the morning, the bank of japan deciding to hold rates steady. policy steady despite sluggish global growth and inflation. the yen as a result of that spiking. what are you nodding about? >> i am just thinking -- >> how i'm going to intro richard. >> japanese stocks as a result of this plunging in a news conference bank of japan governor commenting on further easing saying they'll examine risks but will not hesitate to take additional measures to reach their 2% inflation target. jabil circuit is cutting his full-year outlook again citing a weakness in its mobility business that overshadowed third quarter results. >> i thought it was a cool name. ja-beel. it's a guy named jay and bill. jay and bill. they know a lot about like connecting stuff. you know. circuits! apple accounts for a quarter of their total revenue.

so check out jabil. >> jay and bill. switching gears for a minute back to general news. today president obama and vice president biden travel to orlando to stand in solidarity with the community after this weekend's shooting at pulse nightcl nightclub. law enforcements officials are learning more about the shooter. investigators say they've received volumes of tips that they're now following up on. they say they're methodically recreating the crime scene and reaching out to anyone who knew the gunman. while the president and vice president are there they'll spend times with victims of families of victims. senate ended a 15-hour filibuster this morning after republican party leaders reportedly agreed to allow votes on two pro posed gun measures. senator chris murphy said a compromise had been reached. votes would be held on whether to ban people on the terrorist watch list from obtaining gun

licenses and whether to expand background checks to gun shows and internet sales. the non-stop series of speeches stretched 14 hours and 50 minutes. just crossing the wires, bank of england leaving its key interest rate unchanged. central bank commenting on the possible effects of a brexit saying a vote to leave the eu could trigger a sharp fall in sterling, a rise to unemployment and an adverse spillover into the global economy. the fed leaving rates unchanged. janet yellen says that staying cautious is the right move. >> recent economic indicators have been mixed, suggesting that our cautious approach to adjusting monetary policy remains appropriate. as always, our policy is not on a preset course, and if the economic outlook shifts, the appropriate path of policy will shift correspondingly. >> steve liesman is here. he joins us with more.

steve, you kind of threw down the gauntlet yesterday and say the that all bets are off. >> well, you know, i -- just to recap. yesterday morning i was here telling you to expect changes in the outlook for what the fed thinks of interest rates. it was more than i expected. and the reason is because they think that some of the things depressing the data right now are going to remain and become more permanent. it is a turn to pessimism is the key. here is the key to the meeting. yesterday they lowered the outlook for the funds rate but didn't change their growth forecast. so what does that mean technically? it means the fed now thinks it will take a lower funds rate to get the same inflation and the same lack luster 2% growth. that is the neutral rate is lower. practically what does it mean? yellen references it as the new normal. they believe the stuff depressing growth will stick around longer and be permanent. >> how long is the term? >> exactly. the fed's rate forecast. the chart we showed you yesterday updated for today. it keeps coming down.

they were much more optimistic that they could have a higher rate, that the neutral rate was higher. 2018, come down from 3.5 to 2.4. you see 2017. didn't change for '16. still .9. six members now think there will be one rate hike. one says there is no hubris, only humility. the fed is now finally trying to run policy with a bias to keeping away from the zero bound. that is, do not raise so much that you have to go back to zero. peter book var says we have a committee walking blind in the forest and on a path to nowhere. real quickly, i want to show you what's happened to the rates. this is where they were before relative to the cnbc fed survey, aka the market. and right now. you see it's much, much closer to where the market's view of rates is. maybe that's positive. a representative from isi said a fed embracing the right neutral

rate as opposed to one that's too high is better than the other way around. he thinks the change will be good for risk assets. let's say the fed was believing in a higher neutral rate and thought that the economy could stand that. that's -- that's -- >> they were wrong. >> if they were wrong. he says going back to reality is a better way to run the railroad. >> are we artificially inflating them because we're holding market forces -- >> not good. five straight down days. >> there is a guy on the set with strong feelings about that, so i'll let it go right now. i don't know where the market would set these rates if the fed were not doing what it's doing. they may even be lower. >> let's talk to richard. i'm glad someone made up the expression chicken and egg. as long as we think that the economy is a kickchicken and thd is the egg, it's one thing. i think the fed is part and parcel to the whole mess we're in right now. for them to say, yeah, we're just looking at what's happening and we'll stay at zero.

what if you are causing everything to stay below 2%. one other thing i'll say. one rate increase, is it in nine years or ten years? nine or ten years? how do you slow down that pace? that does that mean? one quarter point increase every 20 years, 30 years, 40 years? how do you slow from one in ten years? >> let's get back to the chicken and egg thing. >> all right. so they're just responding to what's happening. not their fault. >> let's be fair to the fed. it's the only agency that acts. fiscal policy makers do nothing. we're going through the ritual that steve and i go through after every meeting. nobody else takes any action in washington. the burden is on the fed's back. i want to come back to another thing you said. there is a consequence to what they're doing. we're speaking in macroeconomic terms. how do you goose the economy enough to keep it going and provide the fuel and the psychological boost? but there is a price being paid. and this is killing the

insurance industry. it is killing the commercial banking industry, particularly local banks, regional banks. those that lend to the middle income groups and what you would call the middle class if you believe in the class theory, which i don't. so there is a byproduct here which is, i think, retarding growth, which is the point you are getting to. because there is very little incentive, together with the pincer movement of regulatory excess, for people to go out and lend and to job-creating enterprises. this is what we need to do a better job of. if i were back at the fomc, insisting during discussions -- we don't just talk about the theoretical neutral rate,e. but talk about it combined with the regulatory policy since we have feckless fiscal authorities. it's a joint strangle on what moves our economy forward. if you are in the second or

third income quartile, what's your form of savings to protect yourself? insurance. >> if you're a pension manager, a public pensions. the ripple effects of what you just described. goes all the way through. >> we're undermining the returns that basically protect the future of people's savings. if you do that, joe, one last thing. if you do that, you end up personally having to harbor more at home and you spend less. you are not getting as much return on investment. you are getting nothing. so now, as to the decision yesterday, there are some counter indicators here. unemployment claims are at a significant low. we are seeing mismatches on skills and so on. i can understand how they had a very difficult decision yesterday. i am not -- as i've said yesterday, the music of wagner is not as bad as it sounds the way things came out. i'm very worried longer term that this could be undermining the ability of the basic financial fabric of our country

to do what it's supposed to do, which is to finance economic growth. >> no one is talking about what they should have done yesterday. the actions that they may have taken -- or didn't take a year or two ago that may have been the chicken that put the egg where it is right now. i have known you for a while -- >> you knew what i was advocating a year or two ago. >> i knew what you said three years ago. that is, we primed the pump. now it's up for everyone else to take the prime that the fed has given the economy and to run with it. that never happened. three years ago you said it was basically not -- not having an effect anymore. >> what is the impact now? we have a presidential election which is mean-spirited and angry. why? because both republicans and democrats didn't do a damn thing. >> yeah. >> fiscal policy. >> i want to -- >> we were supposed to be at 4.7% and everything is flush. we ought to be at 70% headed the right direction, not the wrong. >> it's taking a lot longer because of fiscal fecklessness.

>> they reported the lowest unemployment numbers in a long time. >> you threw in the towel as well. >> i am not defending the fed. i want to understand something. how do you go to an executive and say, higher interest rates make that project you were going to do more attractive rather than less attractive? >> first of all, you go -- >> you move to lower their return. >> you are going to an executive, if you are a banker, saying it's now attractive for me to lend to you, mr. dry cleaner or -- >> their cost of funds is still below what they can lend at. >> the yield curve has flattened, steve. >> it's more severe but it's still a profitable venture for them to lend and they haven't been doing a whole lot of that. on the regulatory side, i am not sure higher rates leads to better economic growth. >> i think we need to better integrate monetary policy with the regulatory side. i never sat on a single meeting in ten years at the fomc where

the two were joined. >> draghi is tougher on the regulatory and fiscal side than yellen. i think carney is tougher. >> who is outperforming? the united states. >> in my question yesterday there was an opening for her to go to the fiscal side. she chose not to. >> when do they tweak the balance sheet? >> the last survey said sometime in 2018. >> i thought they pushed it back. >> it's later. >> the rollovers are very important. this is something people are missing. forget about quarter point increases or cuts if we have to make one cut. the question to me is how they invest s.o.m.a. system open market account portfolio. how far out they go. she hinted at that in the economic speech in new york. she referred to it again yesterday. that's the way to stay accommodative. the fact is, you can continue to suppress the yield curve, and that keeps accommodation going by how far out they move when they roll over their portfolio.

referred to it twice now. i think that's become the principle tool -- >> explain that one more time. >> they have a large portfolio of securities. between now and 2019 it's $1.1 trillion maturing. >> let it roll? >> you can invest is short or invest in longer treasuries. she has twice referred now, her economic speech in new york and yesterday during the press conference, we can use the reinvestment of that portfolio. we're going continue to do so and push it out longer. >> bernanke said the way we reduce the balance sheet is to let it roll off and not reinvest it. >> of course. but this is a new circumstance. we're later on in the economic cycle. >> what do you think about that? i can imagine about bernanke might say. what do you think. >> i can't imagine what he would say these days. he's also seen the progression of time. when i am visiting with the people i speak to, i am reminding them that that is as

powerful a tool as whether they move a quarter point or not. >> as powerful a distortion also. >> 20% of treasury, federal debt, is held by federal reserve. >> we have to go. you're one of the -- you're a texas democrat, so i am not really sure what that is. it's hard to leave that totally behind. you have made great progress in the years. and you were a texas democrat, but you still come back. >> lloyd benson type. >> you still come back to the feckless congress is the problem. and that's why you can't leave those old habits behind. >> right. >> why wouldn't -- without congress doing anything, why wouldn't a normal private sector unfettered by executive actions and regulations and obamacare, why wouldn't that have been sufficient to do much better and so the fed wouldn't be -- you always go back to, oh, congress isn't doing anything. do you want a $20 million stimulus? >> i want more unfettering to use your word. >> that's not from congress. it's from the executive branch. >> that's not true.

who put dodd-frank together? the congress of the united states. >> you want to repeal dodd-frank? >> i would like to change the way it's structured. look at the federal register. all the regulations don't come unilaterally. the congress supports them. >> i have left the lights on for you to come home completely. but you still -- old habits die hard for you. even though a texas democrat is not -- >> wonderful man this guy is. love this! >> i'm in bad trouble now. >> thank you, comrade. >> what are you pointing at me for? >> just saying, it's great to see you. >> i went to report on the transition of russia from communism to capitalism. >> you tried to -- >> no, no! i was the lead reporter, joe, of the greatest capitalist transition of all time. >> let's think this trhrough. >> i'm going to keep saying it until you get it. >> in texas we get things done right. when we come back, time to

power up the portfolios. utility sector has been electric up 20% over the past year. find out if the sector is still a buy after the break. later, former white house chief of staff bill daley joins us to talk about the race for the white house. back in a minute.

in our what's working segment, so we're not going to talk about the fed here.

obviously. the utility sector is surging up more than 15% this year. con edison hitting all-time highs. duke trading at its highest level since february of last year. joining us with how to play utilities and what is working now, david burks, senior vice president at hilliald lionlions. i thought we were in a tightening cycle and utilities were not a place to be. the demise of that sector was greatly exaggerated. >> that's right. this has been an ideal environment for the utilities. sustained low interest rates, modest economic growth and a relatively flat stock market. that type of environment utilities tend to outperform on an absolute and relative basis. >> still, and it's been that way for a while. so given what happened yesterday, i figure that just buys more time for yield type stocks. >> that's right, joe. one thing i would point out,

though, that just yesterday the dow jones utility average hit an all-time high. in fact, over the past five years that average has risen over 60%. so these really are the good old days for utility investors. the average electric trading around 18 times estimated 2016 earnings. by comparison historically they'd traded around 14.5 times earnings. that represents a 25% premium. we believe the group looks more overvalued than undervalued at this point given the gains we've already seen. >> unbelievable chart. if i want to get in, what's your favorites in that group? >> yes. we still have a buy on ppl corporation, american electric power, and a long-term buy on nextera energy. all these stocks are relatively near our price targets. as you alluded to moments ago, nearly every name in the group is here a 52-week high. we are a bit cautious in terms of committing new funds to the

group right now, but the reasons for owning them longer term are still intact. they still offer attractive dividend yields and consistent earnings and dividend growth. >> anywhere between 3.5% and 4% as far as yields even with the stocks at all-time highs, right? >> yes, sir. the average yield is around 3.6% right now. most utilities are growing earnings 3% to 5% annually and raising dividends 3 to 4% per year. >> i thought there was a move to part growth, part dividend. in the past, florida power and others -- now, rich yields. that's with the stock already having moved up. it looks pretty good. david, we appreciate -- appreciate your time. down in louisville. did you go to -- see any of the muhammad ali -- >> yes, sir. we saw the procession and attended the memorial service. he was a great champion, but

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welcome back to "squawk box." nearly a decade after being ousted as ceo of viacom. tom freston has harsh words for the company's current management. in an interview yesterday on cnbc "fast money," freston came down pretty hard on ceo philippe dauman. >> is he the right guy for the job right now? >> i would say no. >> some described him as an arrogant elitist. would you agree with those words? >> totally. >> totally. >> yes. and, you know, i -- has a reputation of not being a great listener. >> they're currently embroiled in a high-stakes legal battle over control of the media company. you can see more of the

interview on cnbc.com. when we come back, former white house chief of staff bill daley joins us. this is right after the break. stick around. "squawk box" will be right back.

i wa welcome back to squawk. among the stories front and center at this hour. full slate of economic data. jobless claims and may consumer price index. cpi forecast to rise 2% on higher gas prices. look for current account figures for the first quarter. at 10:00 a.m., the national association of home buildings monthly survey. despite sluggish global growth and inflation. governor kuroda saying they'll not hesitate to take addition the measures to reach the 2% inflation target, similar to ours. people think we're turning into

japan. the announcement sent the yen moving sharply higher and sparked speculation on whether the policy makers would intervene. golf's second major of the year, u.s. open, getting under way in just a few short hours. the tournament is being held at the oakmont country club near pittsburgh. have you played there, joseph? >> i have not. i know someone who loves it there. never been to that one. >> some of the world's best players. rory will be there. calling the toughest course they've ever played. >> i'm sure they've narrowed the fairways and grown the rough. >> that's how they do it. >> the rough gets so bad, if you do find your ball, it's -- see, those guys it's half a stroke penalty because they chip it out. put it on the green and sink the putt. to anybody else it's a two-stroke penalty. i hit it out. then i miss the green and i get it out again and then i three-putt and i get an 8. >> spoken with experience as a man who has played on are you

ever roughs. >> that's what i said yesterday. you know what you can do? if you grow the rough beforehand, then you can cut it down to what you want for the tournament. if it's too short when the tournament comes, you can't go out there and pray for -- so, you know, now they're just -- it's out of control. >> got to bring a weed whacker. >> right. >> golf club. >> that's what i call my sand wedge. >> pick it up and toss it out. >> that will work. >> take a couple of strokes. >> or get a caddie to do. end of the line for bernie sanders. or is it? after hillary clinton's final victory heading into the convention, senator sanders still refusing to endorse his rival. joining us to talk about the road to the white house and more is bill daly, former white house chief of staff to president obama and former commerce secretary as well. bill, great to see you this morning. >> thanks very much, becky. >> it was a little surprising. you started hearing some things from bernie sanders last week when he was at the white house with the president that sounded as if he might be more open to

endorsing hillary. >> right. >> after the final primary. that's come and gone. we still haven't heard an endorsement. >> i think the circumstances of the last week, ten days has changed the dynamic. i think the president coming out right away, elizabeth warren, has made, even though it's obvious senator sanders is going to endorse hillary, the fact is, the country has kind of moved on and obviously the tragedy over the weekend in orlando has changed the whole discussion. and donald trump continues to make news, totally outside of what happened in the primary. so i think the fact that the primaries are over, you have the two nominees, it's less -- it's important, obviously, that senator sanders be there to help hillary in the general election, but that whole discussion of last week seems to be old. what's going to happen at the convention and blah, blah. >> most people are thinking of this as a two-person race, donald trump and hillary clinton at this point. >> right. >> dnc still won't say she is

the official nominee. the bigger question becomes what happens at the convention just in terms of what concessions can bernie sanders ask for? >> he has started to lay out some things around superdelegates. but the fact of the matter is that's inside baseball. most people will not worry about that. you're on to the discussions whether it's national security, gun control, terrorism, foreign policy. we have moved rather quickly to that. so a discussion around what's going to happen on the platform, which -- i don't know if anybody ever reads. >> i think you're looking at an election for there are a lot of people in the middle of the road who haven't decided to they're going to vote for. depending which direction hillary clinton goes. to this point she has said my views are my own and i'm not going to be pulled by that. but sanders had a lot of support and democratic votes. if she tacks to the left to make sure she keeps the base, it does one thing. if she stays where she is or moves more towards the center, it does something else in terms of the broader election. >> i think you saw her take some

steps in the primaries to address some of that. the support and enthusiasm for senator sanders moved her maybe a little more to the left of center than -- >> i would say definitely more than i would have expected. >> i don't think there is a lot more room to run if you're looking at a general election. >> if elizabeth warren is your vice presidential ticket -- >> well, that's a possibility. >> if you think that's a possibility -- >> in my opinion not a probability. >> don't bury the lead. >> not a probability. >> don't bury the lead. >> you're saying this guy. >> who is it going to be? >> al franken. >> that's what i said here a couple months ago. wait, joe, before you react as you normally do, first of all -- >> this isn't even my normal reaction. >> talk to your republican friends. al franken has been a serious senator for eight years. got reelected with a very -- >> did you know that? >> yes. in recent years he's no longer the comedian people think he is. >> right. depends on your perspective. >> i think the stuff he stands for and says now is much funnier than anything he ever said on --

on -- i am not kidding. >> he is a progressive guy. he is not a center guy. not a center guy. >> that's what i am talking about. >> he's from minnesota. so, you know. >> but that's the issue. the issue is that right now the country thinks that hillary is generally in the center, right? >> right. >> there are concern republicans, i think, that may decide that they don't like trump, they don't really like hillary but -- but if she picks elizabeth warren -- if she picks al franken and moves that direction, all of a sudden it becomes a much more challenging -- it's not that they'll vote for donald trump necessarily but certain people won't come out to vote. >> there is a possibility a lot of people won't vote, period. with all due respect to vice presidents they mean nothing in the end on election day. >> in this case -- >> but for people, when they walk in, will vote for the presidential nominee, end of

discussion. i don't care who they have for vice president. it will tweak it a little but there is very little historical evidence, except going back to a johnson-kennedy year -- >> these candidates seem so polarizing to begin with. am i wrong? >> they're reflective of the country in my opinion. >> you don't think whoever is the vice presidential candidate for either side is going to move the needle? >> not so much so that it will change the dynamic that the presidential nominees are causing in the election. >> certainly these people -- >> it will have an effect. >> it will change the way people think about how either progressive they're going to be or how conservative they'll be? >> i would not -- you put lae elizabeth warren in that pot. i wouldn't put al franken in that big of a message that this thing has moved and hillary clinton has gone way left. >> he is so crafty. i told you, he is so crafty.

he says you would look forward to franken's wit and ability to drive trump crazy. that's another one of the benefits of -- >> he would appeal to a lot of the sanders voters, obviously, young people, motivating them in any election is difficult to do, to get them out. i think al franken would be part of that. i believe there are other candidates. tim kaine is a solid. former governor from a swing state. important state, virginia. >> is the senate problem really going to be taken into account, do you think? >> with a guy like sherwood brown, a guy who is a republican, could appoint a republican. if i was running in a presidential election i would say, in the end winning the presidency and maybe having a difficult time with one more senator -- and unless you have 60, i don't know if it matters, to be frank because they don't do anything anyways. >> not having congress, senate and the house, didn't stop

president obama from asserting his will on which way the country was headed. >> many of the things he did with executive orders could be reversed if a republican wins. that's your hope. >> let me change the topic. >> the royal your. in general, the republican party's. that's what you're talking about. >> yeah. not you. >> if they appoint me. >> in your role as former commerce secretary and in your role today, what do you think of the fed's decision yesterday to hold on rates. by a lot of parsing what they were talking about, by their knew economic forecast. people think we're not going to get a rate hike in july, september. it could be off the table for a very long time to come? what does that mean? >> i think there is no doubt, in my opinion, that it's off the table for a while. not to say that the fed responds to politics because they don't and they're not political, blah, blah, blah. you're now into a very dicey period where, you know, and former fed chairmans have been

criticized one way or the other for raising rates or not raising rates around presidential elections. so the impact of a rate increase between now and november would be a -- forget the economics of it -- politically could be very important and damaging to the fed. so my sense is she did telegraph. and again, i don't believe the fed is responding to the politics, but they don't live in a bubble. my sense is that's one more factor to make it more difficult for them to take a step for a rate increase. >> is that the right move? we've been at basically zero interest rates. >> i don't believe it is but that's my personal opinion. listening to the statement yesterday, it's obvious that seems to be the message. >> it's off the table. >> again, i think they don't live in a bubble. they don't respond to the politics, but that's another factor. a rate increase at this time would be -- would be thrown into the middle of a very difficult presidential election, difficult for the nation as far as the emotion of it all, and that

would just be another factor that -- i think the fed would be a little leery. if i was giving them advice. >> looking at it from the other side, probably half the country thinks, look, you are being political by not raising rates. >> i agree. greenspan had this problem in 2000. >> senior george bush blames him for the reason -- >> right. there are those who believe he should have started the rate cut, waited until after the election and raised 11 times between -- not the election. after the recount was over. which brings back great memories and 9/11. there were 11 rate cuts in that period. >> secretary daley. great to see you. >> tightening cycle. slow it down. one quarter-point increase in 11 years. so we're going to -- it will be one every 33 years. or 22. i don't know i'm not sure what the new -- the dots mean a lot.

>> when you look as young as we look now -- >> we may not see another -- i hope we do. that might be something to strive for, that we're around for the next rate increase. >> your previous guest, richard fisher would be a great secretary-treasurer. >> he is a texas democrat. so far from a chicago democrat. don't even act like you're allies. >> not really. >> eye of the beholder. he has come a long way from coming on this show. thank you. coming up, betting on content. the executive producer of the hit shows such as lost and the strain. joins us to talk about the future of media. check out the futures right now. five straight days down. indicated down another 62 on the dow today. "squawk box" will be right back.

welcome back to "squawk box." today wired hosts its annual business conference. bringing together business leaders to discuss the forces reshaping modern business. here to preview a bit of the conversation happening later today is scott dadich, the wired editor in chief and carlton hues. executive producer of tv series

"lost," "colony" and the strain. one of the things i imagine you'll talk about later today is the future of media and the future of sort of story-telling writ large in both the tv medium and also digitally in terms of news and magazines and how this all goes. i am curious, when you think about tv now, the binge viewing, how do you think it's changed story-telling itself in terms of how you even go about it? >> it's changed it a lot. for instance, when i started doing "lost," the network business had almost no serialized story-telling. there was no mechanism for people to get caught up. they were afraid the audience would be lost. now we have all the technology in the world to allow people to get caught up. serialized story-telling is more immersive and engaging. the engagement is the key buzz word these days. >> what do you think of the

phenomenon of people say, if you can get through the first two or three episodes -- sort of like a book. the first 50 pages are slow, but if you can get to the next part. where is a great procedural or closed end show that can be watched at any time. which way are we moving long term? >> i think a bifurcated system where certain networks like cbs will continue to make closed-ended shows and have great success with them and we're going to increasingly see more and more serialized shows and complete story-telling taking place on places like netflix and amazon. >> why can't you do serialized shows on network? why is it so much harder? >> it's just the shows are really valuable. cbs can take a show like "csi" or "ncis" and sell it all over the world because you can put it in any time slot, any channel. you can watch it as a one-off.

those are valuable commodities for companies. >> it works as one self-contained episode. >> you do 12 on cable, right? you need a major star to sign on for. what, 22 or 24? it's harder to talk people into. you can't curse. you can't show s & m. >> the biggest -- >> [ laughter ] >> that's right. i was casting a network pilot at the same time i was casting a cable show i make for fx. there was a group of actors who were unavailable to come in for the network pilot who didn't want to commit to ten and a half months in new mexico versus five months of a cable show. most actors are open to that. almost no one is off the table in cable. it's a combination of basically not having to commit your entire life away, plus there is interesting story opportunities. >> just from the story-telling, though, what do you prefer? the actual -- >> i mean, being able to tell a serialized story with a beginning, middle and an end is far better. as a writer, what you wanted to do is take your audience from a

to z. that's why "breaking bad" was so engaging at the end. people wanted to see the end of the story. that's why "fargo" and "true detective" are to engaging. in eight hours is takes you beginning to end. >> unreal. >> do you think we're moving to even shorter. you talked about a ten-episode show. what was the show we were just watching? "the fall." >> i stopped watching it. u.k. model was doing six and five episodes and then they're not coming out for a year or two. >> it comes down to the economics. it's pretty tough to make that few episodes and be successful. but i think the eight to ten model is really the sweet zone in terms of high-quality drama. >> we weren't really watching it together, though i'm open to that. we were both watching -- >> simultaneously. >> you just never asked me. but -- i mean you -- do you have microwave popcorn? fake butter? >> real butter. >> real butter. >> really? i have to get into the city. that's not -- >> in the city. question about digital story

telling. do you think your story-telling has changed? >> absolutely. >> not how it's delivered but the actual thought process around telling the story. >> absolutely. the availability of the platforms and, again, the way that we deliver the story has changed so dramatically. the bar -- the barrier to entry into getting into actual reporting is much lower. we can report in public in a way that we didn't used to do with a magazine. in the old days you would go off, report a story for three or six months, then you'd work with an editor and he'd build it into something that might go on the cover. we can actually continue the reporting in the open and actually write out the story in realtime. you may see six or seven dispatches against a particular subject, as we did with the cover story this month, before we actually get to the cover story. cover story is a different thing entirely and it's treated as a different process, but you see the story elements in the reporting end up -- >> that's hard to give up as a reporter. >> absolutely snu don't want to give up your chocolate chips. >> we find we're building

audience along the way. we those people ready and waiting for the cover story at the time it's ready to release. >> you guys at wired have always been on the edge of the edge. are you of the view that there will be a print magazine in five years? >> absolutely. >> i use "texture." it's a netflix of magazines. that's pretty much how i am reading magazines, on an ipad. >> the engagement numbers on prints are still off the charts. people who love print really love print. fewer of them take it, but we're making more stories. and so the best stories are actually getting into the print magazine. and we're seeing that bear out in the numbers. those same stories that end up in print are the highest engagement on the website. so even this year, year to date, the top four stories on wired.com were all print stories. >> back to tv for a sec. on the creator side. curious about the economics of it all. when you think about network tv, that was always where the money was and the opportunity for

syndication. when you think five years into the future where every network is going to have their own app, effectively, and possibly a closed-wall garden, do you see the economics being the same, or are they changed? >> my friends and i like to joke that we work twice as hard now for half the money. you don't have the big pot of gold at the end of the rainbow that used to exist in television. the days when carsy warner would sell "the cosby show" or roseanne into syndication and make hundreds of millions of dollars are gone for show creators. what's emerged in its place is much wider story-telling opportunities and the ability to really do things that you couldn't do. the old network days it was all about getting the biggest under a yeaudience into the show. now it's about being a favorite show. >> i love how much you put into training people who are under

you and how proud you are when those people go on to be show runners themselves. what inspires that? >> thank you very much. you know, i think it's like almost everything. you kind of do what you love. i love the teaching aspect of the job. and i'm really proud that i have a bunch of writers who started out and are now running their own shows. i love that part of the process. i also love to work in collaboration. i function best as a story-teller when i can sit with someone and bounce ideas. to do that with young, fresh, talented writers just excites me. it's fun. >> it's great. >> cool. thank you guys. carlton and scott, thank you. good luck with the conference. >> i'm afraid you might ask me to netflix and chill at your house. not that there's anything wrong with that. >> you are invited over anytime, you know that. >> popcorn, alcohol. >> becky is invited too.

>> gm ceo mary barra is among those speaking today and becky is sitting down with her. we'll bring you that conversation tomorrow on "squawk box." when we come back this morning, a check on the markets. at the top of the hour we welcome our guest host, alliance chief economic advisor and get his reaction to the fed and more. here is a hint for you. the markets are seeing red once again. "squawk box" will be back after a quick break.

when we return this morning, mohamed el erian will join us to talk global markets and central bank moves. stick around. "squawk box" will be right back. i asked my dentist if an electric toothbrush was

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it's all about the pace. the fed reining in the rate hike paths. hillary clinton taking aim at carried interest. the democratic nominee sounds off on what she would do to close the tax loophole. that story straight ahead. all that plus what the [ bleep ]. cnbc has learned which phrases get flagged. we'll bring you that report as the final hour of "squawk box" begins right now. ♪ because you know i'm all about

that bass ♪ no treble >> live from the most powerful city in the world, new york, this is "squawk box." ♪ welcome back to "squawk box," here on cnbc, first in business worldwide. i'm joe kernen along with rebecca quick and andrew ross sorkin. we're less than 90 minutes away from the opening bell on wall street, the futures weak again down 56 points. five straight days down. thanks, janet. checking the markets in europe at this hour. why would they be up? no reason. because they're not. they're down anywhere from, in italy. big selloff in italy. down a percent or so in germany, france. and the ftse. in asia, nikkei closing lower after the bank of japan kept rates unchanged despite a sluggish global growth and inflation. how come they don't get more

negative? just -- correct me if i'm wrong, but isn't -- can't you go like down 10%? >> didn't work last time. >> can't you go down 20? >> there is no limit. if you don't think zero is a lower limit, you can go as low as you want, can't you? >> i suppose you can. if it's not effective, what's the point? >> because if you think it's effective at all, if you take the assumption that it is effective, then keep doing it until it gets -- if it doesn't work -- >> the last move they made had the complete counter -- >> that's what i mean. it doesn't work. you would think there would be no limit to how negative you could go. if you really think it is effective. if you realize it's not effective. don't even try. >> stop and get out. >> exactly. >> look. they think it's not effective to do it -- >> if inflation is minus ten, you're ready to go minus nine? >> i am not and i'm on the record against negative interest rates. remember, the bank of japan had

a choice. ill h either it will be ineffective or counter productive. it decided to be ineffective. >> as opposed to our fed? >> but it's important. if you go more negative you become more counter productive. >> it's alice in wonderland. we'll need a second sequel. it's the last thing johnny depp needed was for that movie to bomb. if we do a sequel, it will be on the central bank in the -- in the -- what is it? 2010s? what do we call it? >> the teens? maybe. i don't know. among top stories this morning, the federal reserve, as we have been talking about, kept interest rates unchanged and also signalled that it still plans to raise rates twice this year. but when is anybody's guess. former dallas fed president richard fisher weighing in on the fed's impact on global markets. >> i am very worried longer term that this could be undermining the ability of the basic financial fabric of our country to do what it's supposed to do,

which is to finance economic growth. >> and in other central bank news, bank of england leaving its key interest rate unchanged and commenting on the possible effects of a brexit saying a vote to leave the eu could trigger a sharp fall in sterling, a rise in unemployment and an adverse spillover into the global economy. not helpful. the pound is under additional pressure today. dollar up against it. trading 14135. yen at 104.42. new data on jobs and inflation due at 8:30 eastern time today. we'll get the may consumer price index and the closely watched weekly jobless claims. this coming up in 25 minutes' time. political news this morning. senate democrats ended a nearly 15-hour filibuster early this morning after republican leaders reportedly agreed to allow votes on two proposed gun control measures. in his closing statement senator chris murphy said that a deal had been reached to hold votes on whether to ban people on the

government's terrorist watch list from obtaining gun licenses and whether to expand background checks to gun shows and internet sales. in other political news, hillary clinton says she would use an executive action to end a tax loophole for wealthy americans if elected. in an interview with usa today, hillary clinton says if congress doesn't act she would ask the treasury department to end the carried interest loophole. this will ask hedge fund managers to pay a lower rate by counting income as investment income. we always say hedge fund, but it's typically actually private equity. you have to hold for at least over a year. >> she has also agreed to give back all the speech money she's made from giving speeches to private equity firms in the past that accrued from the carried interest -- >> she is willing to bite the hand that feeds her. >> so unlike the clintons. >> our guest host for the next

hour, here to weigh in on the fed decision, the upcoming brexit vote and more is mohamed el erian. he is the former ceo of pimco and allianz's chief economic advisor. we have seen a variety of investors who have thrown in the towel and said the fed is calling the shots from here on out. do you agree? >> i agree that the fed doesn't have a clear vision of where the economy is going and, therefore, it's overly data dependent. and because of that it sends conflicting signals over time, and the market ininterprets that as either the fed being totally inconsistent or the fed being a slave of the markets. i don't think they have a vision of where the economy is going. >> they do keep moving the goal posts. >> because they haven't taken a view yet. they're getting there. yesterday chair yellen started to talk more structural than before. she said short-term issues will be in play for much longer.

but it's taken them a long time to realize that there are structural issues in play in the economy. >> do you think she is right in playing it cautious at this point and not raising rates? >> look, i would have raised rates before. as chairman bernanke reminded us in august 2010, when you go unconventional there is costs and risks and sometimes they become too large. the consequences of this prolonged experiment with very low interest rates, very big balance sheets, are starting to have a meaningful effect on the economy. >> mohamed, it's amazing that, as far as forecasts for the last eight years, the fed has been as wrong as likes worst economists. way too optimistic every single year. yet -- you would think -- they're always able to explain how it happens in hindsight, which is just weird that they could never take into account the same factors that they cite for the slowness in -- when it's in the rearview mirror. they were never able to

anticipate that it was going to be that way looking ahead every single year. they're wrong every single time. >> behavioral science tells you, when you have grown up in a cyclical world where things go up and down you think cyclicly. when you face structural issues, you don't see them. >> she said new normal. >> she did. we first said new normal in 2009. >> that's the problem! these are the people supposedly looking ahead. seven years later they finally -- they use your term. >> look, it's very hard for advance country people to think -- >> don't give them excuses. if you could figure it out. maybe they could have figured it out five years after you. seven years after you. >> they were hoping for the handoff from what they do -- >> i would be embarrassed to say it yesterday. i would come up with a new name. >> you have the new moediocre. secular stagnation. >> i have a new name for this, janet. the new normal.

what did you say? 2009? >> january, 2009. >> mohamed, richard fisher said something that really concerned me earlier. i hadn't thought much about it. he says yellen has now twice said that they're going to take the balance sheet and, as some of these treasuries roll over, reinvest them. their decision is whether that goes into short-term investment or long-term investment. every financial guru i talked to a few years ago about the size of the balance sheet and should we be concerned said, don't worry, they can let it roll off. if they don't let it roll off and continue to invest another $1.1 trillion comes due. if they continue to reinvest that we're prolonging this for an incredibly potentially extended period of time. it's not just the low interest rates. it's, as you mentioned, these massive balance sheets too. >> the main collateral damage of unventi

unconventional policies is what you do to the financial system. there are two effects. one is, by having so many securities on your own balance sheet, you change the liquidity, you change the price determination. >> and you tamp down the market and artificially move it and motivate it. >> correct. people start spending much more time trying to guess what you're going to do as opposed to fundamentals. that's the first element. the second is that you undermine anybody providing financial services, and especially long-term financial services. all of us pool and get that because someone is willing to provide us that. you'll find fewer and fewer providers of those services. >> life insurance, catastrophic -- >> life insurance, pension. anything that's a long-term promise becomes very hard to deliver in this environment. so the financial system slowly starts eroding its role in the economy. that has implications. that's what people are starting to realize. to be fair to the fed -- joe will not like that -- they have assumed from day one that they wouldn't be in this business

long term. now they've found themselves in it long term. why? because they haven't been able to hand off to other policy-making entities who have much better tools. >> that's like the addict blaming the people who are -- at some point you have to stop enabling. >> you stop enabling, but it's not easy to do. i told you last time i was here, think of the central banks as doctors. doctors don't walk away from their patients even if they don't have the right medication. >> eventually tough love has to step in. >> tough love as a parent is hard to impose. as a doctor it's even harder. >> after years and years. >> we still argue about whether doctors should prescribe heroin to addicts. some make the case they should. i think it's better to get off it. >> we would help the cause. the cause being a better economy. markets supported by fundamentals. we would help the cause more by focusing on the other policy tools that are not being used. that's what we -- we obsess with central banks, right? >> it would be good if you knew

the fed wasn't dr. kevorkian. >> you're in good form this morning. >> thank you. >> must be another loss by the cincinnati reds keeping you going. >> then i would be in a bad move every day. they did lose. >> they did lose. they're only 15 games behind, i think. maybe 19. >> they beat atlanta a couple times. that's not so great this year. i thought there was one other thing. the other thing we don't talk about anymore is we don't talk about the deficit. oh, yeah. no big deal. it's coming down. medicare, social security. wait until rates go up. >> that's what i'm saying. >> we've all been in -- yeah. we've all been -- oh, yeah, not a problem. what if they went to 5%? we can't even pay that, can we? >> that's not going to happen until -- >> i know until never happen. it's better that it never happens and we never go above 2%. >> that's a concern we've raised again and again. >> remember when we used to say japan can't happen here? >> that's what i said earlier. >> japan is slowly happening.

keep an eye on the bank of japan. certainly this week was the most important meeting for them because it tells you how far a central bank can go to a place where they're not used to being, which is ineffective and potentially counter productive. keep an eye on that. that's the most important central bank meeting. >> we're right there. we're here. it's here! they lost control. it's ineffective and counter productive. we're here! it's the new normal. >> there you go. mohamed is going to be with us throughout the rest of the program. we have a lot more to talk about with him. >> me? okay. coming up, a fairy tale in china. shanghai disney officially open to the public today. a look inside the park next. heading to break, a check on u.s. equity futures? improved at all? don't bet on it. ♪ how's the new project going?

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welcome back to "squawk box" this morning. if you work at goldman sachs, you have to listen up. cnbc obtained a document detailing more than 180 phrases flagged by goldman sachs's email monitoring system. eamon javers joins us with a list of words that employees may want to avoid.

>> reporter: welcome to a slice of life inside a regulated industry. goldman sachs, like many banks, uses automated software to monitor employees' internal and external emails. to do that they've compiled a list of words that they flag as potentially concerning, the software flags the words and they're later reviewed inside the compliance department to see if it's an indication of potential trouble. here are some of the phrases they are looking for according to the list we obtained. one is simply "i have been trying to reach you." "stock will fly" that seems to be a concern that they catch people overpromising on stocks. also "call the sec" is a phrase they're looking for. a couple other ones. "paying through the those." "ass or butt" in terms of fees. "clowns managing or running the fund" and "way too effing much." there are 13 phrases on the list that contain the f-bomb. and they use it in every kind of

imaginative way you can think of. the list is from 2008, but we're told that goldman sachs still does this monitoring. the full list is up on cnbc.com right now if you want to check it all out and see what your emails might get flagged if you send them over to goldman sachs, guys. >> so is -- are muppets on the list? >> i searched. >> it's not there. vampire squid is not there. all the ones you might expect. the list is from 2008. they've updated -- >> there was the guy who came out from goldman and talked about the muppets. >> muppets might be on there now. we have to ask them. if you look at this list, you know, it is from 2008, and they've changed their policies since then. now, if you try to send an email with an obscenity in it inside goldman sachs, you get a dialogue box that pops up on your screen and asks if you're

sure you want to send it. >> what did "ldl"? let's discuss live. >> right. i didn't see that one. right. for internal use only and a bunch of phrases around "keep this inhouse" for internal. that's a term that gets flagged as well. >> call me. >> can you check bollock. >> bollocks. >> bollocks? >> i think that's a british phrase. >> we're broadcasting -- >> they're bleeping it out. >> you can use it on -- goldman sachs, you can say bollocks as much as you want. >> i would say never mind the bollocks and make a shout out to my clash fans around the world. >> sorkin is still afraid to say bollocks. >> i am sitting in washington, d.c., it's not a curse word here in washington, d.c. >> thank you, eamon. don't be afraid. >> try to be sensitive. >> i can think of a number other british phrases we can say gleefully that you can't say in

london. it's a bloody shame. >> thank you. excellent! it's pertinent. because who knows what the -- with brexit. right? all right. bollocks! it's a big day for disney. the company officially opening the doors to the shanghai resort after more than a decade of planning. if you've ever been to disney, i can't believe you -- it seems like it would take ten years to put that together, you know. so amazing. price tag, $5.5 billion. eunice joins us live inside the park with more. we should have gotten you on tape saying "i'm going to disneyland." it's a big thing over here when anyone wins the super bowl or anything, eunice. because you are and you did. >> reporter: that is true. right after i finish all my work i'm going to say, hey, i'm going to go to disneyland. that's a phrase that a lot of people have been saying. tens of thousands of people are at shanghai disneyland today. to give you a sense of the

crowd, the average wait time outside of the park just to get in was two hours. this is a big day for disney. the ceo, bob iger, told me last week that he was opening that this park will become a booster rocket for the company to be able to expand its business in china. the hope is that once people come here they'll go home and want to buy more tickets for disney movies or more products at disney stores. there is reason to believe that this big bet is going to pay off. by disney's own estimates, 330 million people who live within a three-hour radius traveling here either by car or by train are what they call income ready, or in other words -- in other words, they can actually come and afford to travel here on vacation. and if you believe the whole story, which many economists do, that over the long term china's economy is going to improve, incomes will rise, consumers will take a bigger part of the

economy, then disney is well poised. guys. >> incredible. yeah. what a -- what a life that -- i mean, you just think about one guy, eunice. it's unbelievable the impact one man can have on the entire globe. anyway, have fun. it is -- it's great. it's fun. >> you already road tron. >> reporter: i have gone on tron. i have been on pirates of the caribbean. both of these have been souped up with a lot of new technology, visual technology, virtual reality technology. and also i took a spin on the new seven dwarves ride as well. i think after this i'll go on the carousel to go on something that's more classic. >> just seeing the castle in the distance is always -- when i saw it just now, you get that same feeling that -- from when you were younger. and they build -- >> reporter: over here a lot of people are having a bigger

reaction because this is the biggest disney castle anywhere in the world. >> oh. >> reporter: when you say you're getti getting shivers in your spine looking at it. in china it's that much more amplified. >> i wasn't quite a chris matthews leg thing but it was darn close. it was darn close! >> you're such a weirdo. >> you said it. or she said it. >> can i ask -- what are the entrance tickets? >> i would rather get it looking at a castle than a presidential candidate when i'm supposed to be objective. >> how much does it cost to come in for an average person? >> i think we lost eunice. >> she said yesterday. >> she is on her way. >> 80 bucks. >> i think it is $80. which is more than other parks in the area but less than you pay here. when we come back, there are some new developments in the battle for sumner red stone's. former viacom ceo sounding off on the drama.

we'll tell you what he said next.

calling all nappers. a new study says that split sleeping might actually be better for your health. that is according to the university of south australia. it says sleeping for a continuous eight hours is a modern invention and argues napping periodically could increase alertness during the day. didn't know and i've been healthy for years apparently. when we come back, breaking economic news.

we're a few minutes away from may cpi and weekly jobless claims. stick around. "squawk box" will be right back. 2% back at grocery stores and now at wholesale clubs. and 3% back on gas. kenny used his bankamericard cash rewards credit card to join the wednesday night league. because he loves to play hoops. not jump through them. that's the excitement of rewarding connections. apply online or at a bank of america near you. thank you. ordering chinese food is a very predictable experience. i order b14. i get b14. no surprises. buying business internet, on the other hand, can be a roller coaster white knuckle thrill ride. you're promised one speed. but do you consistently get it? you do with comcast business. it's reliable. just like kung pao fish. thank you, ping. reliably fast internet starts at $59.95 a month.

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we are just seconds away from may cpi and jobless claims.

futures indicated down -- you can see, down 70. rick santelli standing by at the cme in chicago. rick, the markets are not doing well. we need the fed to cut rates or something. i don't know. we need some help. anyway, the numbers, please. >> i think we need an algorithm for the fed. rules based. account balance moved more positive. 124 billion. we were expecting more like 125. one initial jobless claims report last week, they were 264. they stick at 264. for this week, add 13,000 to bring you up to 277. continuing claims, they actually moved up a bit from 2.112 million to 2.157. cpi up .2. ex food and energy up .2.

year over year, this is the one many will be looking at. the year over year ex food and energy up 2.2. why is this important? the 2.2 number, what was usurped in february to 2.3, we haven't had a number higher than 2.3 since the fall of '08. we actually have another number i want to read, and that's philly fed. this is a june number. more realtime. we're expecting one. this is definitely better than expected. hip, hip! 4.7. the best read since the last positive number, which happened to have been in march, 12.4. every other indicator in this series, january, february, april, may, are all negative. so of course, that march number and this number comping to it are positive numbers. that indeed is a good thing. if i look at the landscape around us, we are still, you know, in the high 150s for a ten. high 60s for a two-year.

of course. when we look at boon yields. they did go a bit more negative. every central bank seems to have dipped their toe in a little muddy water these days. with regard to, you know, independent, not biased, maybe leading by the nose has grown to be habitual for some of these cbs. carney seems to have a bit of a rat's nest regarding brexit. i tell you what. next week at this time markets and investors and myself included are going to be awfully interested to see how this all turns out. not so much for the u.k. but for the rest of europe. joe and the gang, back to you! >> rick, remember, you know that tightening cycle? we're going to slow it down. slow it down. we got one rate increase in 11 years. we're going to -- that's too fast! we got a quarter point. we're going to take our foot off the tightening gas. ramp it down a little bit. slow it up a little.

>> 71 vega on a hill out of gas. i got you. >> for more on data and defense of the fed to steve liesman. >> let me start by defending the show, joe. it's 8:30. time for a new joke. you started at 6:00 a.m. with the joke about the one dot. >> you didn't do that one. >> you left the one dot out. >> you want to do it? >> you can't look at the slope of a line with only one dot. it takes two dots to make a line. we don't know what the pace was. >> i won't say it's really a change in the forecast, which is two dots. we won't do that. looking at inflation. you have a lot of 04s and 03s. rent to primary residence. you have a surge in rent that's going on. better wages out there. deficit perhaps of places for people to rent. apparel surprisingly up 08. two months of declines. new car costs keep coming down. 04. gasoline surging 2.3. that's a big part of it.

the 2.2% year over year on the core rate is something the fed will have to watch. but i think what we're talking about from this press conference yesterday is the fed may be more willing to tolerate higher inflation. >> that gets us back to your question that you asked this time and last time both about, look, all these goal posts, all the points you had set, you are not paying attention to now. even when the data hits that. >> i am very interested, becky, in whether there is a better way to run this railroad. you look at the variability and volatility around whether the fed will hike. talking to mohamed back-stage. 33% for june. evaporated to nothing all in the space of a single number. you think there would be more behind it. >> was the fed wrong saying they were data dependent in leading us down this path or were they wrong in not following the data and hiking when they say it. >> all those things are true.

there is not a solid framework upon which to base policy. >> what if it's better -- >> it goes back again. >> when you think about monetary policy theory, the idea is you use the market and market expectations, you bring them forward, you set them backward. but the idea of jerking the market around, i don't think there is an appendix to the montanatory policy playbook saying that helps. >> we were having the enabler say, i don't see a big difference between june and july. it doesn't matter. they won't do it in june. but what's one -- and we said, what does one month mean? one month. when things can happen on a daily basis. and something did happen that day. >> i asked that question last year. >> now july is off. june and july are both off. >> september is the new thing. september is the new june. >> they're not going to do anything in september ahead of the election. >> i have a bunch of guys --

i'll call it up, who is saying steven stanley said -- saying september. a lot of guys who were saying two are now saying one. that's the new -- the new talk on the street right now. >> let's bring in drew maddis, deputy chief u.s. economist at ubs. still with us, our guest host, mohamed el erian. so drew, you have been patiently waiting. can you -- you must have some -- some opinions about this. is there a reason for cynicism or frustration? >> if my own view, as you know, higher rates would stimulate activity. let's assume janet yellen doesn't believe that, because i think that's a fair assumption. the biggest concern i have are the massive shifts in the fed's thought process that seem to occur based on single data points. it's worrisome to me that the fed is data point dependent instead of data dependent. in that you can get a massive swing on a theoretical construct of something like the real

neutral fed funds rate over a six-week period. which strikes me as kind of -- the reason you have the theoretical construct is you don't have massive swings like that. >> did it surprise you, the drop in 2018 that they took 60 basis points off the expectation. that's in three months? what happened. >> it's four weeks from when they were saying you should be thinking about june or july. so i mean, the problem i have is just that the reactions that are occurring based on small data changes are extraordinarily large for a fed that's supposed to have this broad idea of how the world works. they seem to abandon that whenever they feel like it and then return to it. for janet yellen then to say, oh, july is on the table -- i mean, no one in their right mind thinks july is on the table, and she can't possibly believe that. so don't tell me it. >> the headline of your piece yesterday was "take the summer off, we are." >> right. >> it's not possible. when do you think the fed might hike? >> we think september. there is a fed meeting between

the september meeting and the election, so it doesn't mean -- it means they're going but not going directly in front of the election from their own calendar. we think they follow up in december. our view is inflation is gradually gathering steam, the unemployment rate dropping is a sign slack is evaporatinevapora >> you're saying it from an economic perspective. >> i am saying the fed is taking the summer off. >> even if july turns out to be a strong jobs report, and it turns out that the aberration -- >> they're on vacation. >> if you have one weak number and one strong number, you don't know what the trend is. >> mohamed, is that a serious question? this fed? >> remember, there are three ways of interpreting the last employment numbers. one, it's weak demand. that's what the market embraced. two is we don't know and it goes counter to other things.

so let's wait. the third is, you know what, we're getting closer for employment and the participation rate is not picking up. maybe the problem is not the demand side. maybe it's the supply side. >> give me a reality check here. are we making too much of this? we are after all talking about a quarter point. i am happy to take more of the summer off if i could. if the idea is that we're too focused on this federal reserve, i'm happy to entertain that idea. >> we are too focused on the federal reserve. we should be looking at other elements of policies, because we're just going to focus on the federal reserve and it will become less effective -- >> but it's the only game in town. >> it is the only game in town. >> you want a federal government out there spending tens of billions of -- >> serious structural reform starting with corporate tax reform and infrastructure spending. deal with debt overhangs in the economy and get better global

policy coordination. that's what you need. if you get a couple of these things, there is so much cash on the sideline that the private sector -- >> do you concur that those are things that are more important than whatever the fed does? >> i think it would certainly be helpful. in terms of global policy coordination, i think it's hard to be coordinated when there is one bank that has an extraordinarily low unemployment rate, low inflation levels as we saw this morning and is sitting at 25 basis points claiming that's normal. we're pushing everyone into on offsides position. >> we've been -- >> i think it's the other way around, drew. >> -- that we can't raise rates when everybody else is going negative. >> people always say, well, rates cannot go up because there is all this money waiting to flow in. for years the biggest buyer of u.s. debt was japan. they had extraordinarily low interest rates. somehow u.s. interest rates managed to move on their own based on domestic issues. so i am not a big believer that the rest of the world holds back our yields. i am not saying it doesn't have an effect.

i am just saying i don't think it's the primary driver relative to growth and inflation. >> speak to the flattening of the curve. what's caused the massive flattening of the curve if not the pressure that's come from europe? >> i think you have a few things. but the one that stands to mind is just that people are continually being reinforced in the idea that u.s. growth is weak, that there is not a sustained data set over time that encourages people to believe that we are through the looking glass in terms of risks of u.s. growth. >> drew, thank you for coming in. mohamed will stay with us. steve, i know how you can settle this whole thing. book a bunch of vacation this summer. >> then they'll raise rates. >> and you have to cancel your vacation. >> thanks. so the fed not only coddles every trader here that might be on the wrong side. we'll let you know. they coddle -- no, they coddle every other central bank. got to make sure we don't do anything to hurt any of them. every other currency. even cyprus is not too small to

worry about. >> no. >> the music is playing, joe. >> is yellen going to jackson hole? >> yes. when we return, celebrities unfiltered. a new platform changing the way influencers get social. the ceo of who say joins us with supermodel cocoa rocca. huh? detecting threats faster, responding faster, recovering faster. when your security's built in not just bolted on, and you protect the data and not just the perimeter, you get faster. wow, speed kills. systems open to all, but closed to intruders. trusted by 8 of 10 of the world's largest banks.

welcome back to "squawk box." whosay is a consent marketing company for a-listers.

celebs use the company's invitation only platform to manage relationships with fans across all sorts of social and mainstream media. whosay backers include amazon, comcast. joining us is the co-founder and ceo. and also coco rocha is here. supermodel and founder of the new ath-leisure -- that's the phrase these days. of co and co. explain what this is all about. >> we really are at the moment a fast-growing market content company. that means we make better ads for the world we're really living in that matters which is this. nothing really matters now in my humble opinion except for this. >> and television. >> and the ads on this. i consider them to some degree the same thing as we'll probably talk about. to make better ads on a mobile device is tricky.

we make great creative ideas but we work with great professional people in the world of fashion and entertainment and sports and make sure the ads are distributed effectively to all the right places. >> you're connecting with celebrities and other people to effectively endorse products? or to use it to then send out over -- over their -- >> it's a bit of both. if you think about it, it's a form of endorsement. that market, of course, is a very large one in television. and television, of course, and the conversion with television and digital it happening faster than ever as everyone knows. what you need to do to make it work is you need to make a better ad. one way to do it is to work with creative professionals from the entire spectrum of celebrities. there is nuns ainfluence and im that you can have because you own to some degree your own audience. coco owns to a degree her own audience which she can use in multiple ways. >> how did you guys hook up?

>> i feel like early on in whosay -- my relationship with them was early on. i loved many things they did. the celebrity, as you could call me -- that they give me opportunities to do. if it's posting something on my social media. i have 13 platforms of social media. i handle them. me and my husband. it's a lot of work. >> how much time do you spend in a given day -- >> every day, all the time. >> an hour or two? ten minutes here and there? >> my husband can work on it pretty much every hour as long as we have something to post. not only posting, checking what people respond to. we want to make sure that whatever i am saying or doing, they don't feel i'm overselling. >> it sounds exhausting. >> it is exhausting. do i check social media for fun anymore? probably not. >> social media is a business now. >> i think it is to most brands, new brands. i am a brand. my modeling career is a brand in itself. so yes, i think if you're smart

and savvy and want to grow your business you'll use social media the right way. >> you go to her with ideas? >> there are three aspects to what we do. a technology aspect. we built a platform to help our clients manage, as coco pointed out, what's now multiple distribution options that take a lot of work. that's a simple invite only. >> you have a tailor a message differently for the different platforms. >> over the years transformat n transformations have occurred. but snapchat might be the big exception because that's a different experience. the second part is we basically bring opportunities that are brand-oriented to our clients and then help them manage the data associated with that. we have collected a lot of emails for our clients. things you can't do if your professional life involves doing your actual job. we've made it easier to do all of that. >> of the social platforms out there these days, do you feel like one is hotter than the

other? are you a snapchat person? >> i am. one ever the reasons snapchat i think is working these days is because people know it is you. in the end it has to be you. for a while people loved doing social media on their own and then were sold for the fact that they should have a pr company doing it on their behalf. a lot of celebrities. and then the fans and followers notice, this isn't you anymore. it doesn't sound like you anymore. you're selling me something that i just don't believe in. snapchat changed that again in that it has to be me. it is me. and it's raw. that's the other thing about when i work with whosay. when something comes to me and they say, hey, this brand, so forth, is looking for a celebrity or so, it -- i have to make sure that i believe in that. and that, i think, is again, everyone realizes that they can't just randomly be like, yeah, i'm going to sell that coffee. i don't drink coffee. i am a tea person. it makes sense. >> i have to ask a money question on both ends. how much money can you make justinjust

on the social media side? not selling your ath-leisure-wear but from stuff he comes to you with? >> my modeling gig bein, presoc media, that's what i media, i would model products for a paycheck. this is a new way to do the same sort of thing but now i get to own my content and say what i will do specifically. but it is always different. everything is different. >> i think the big part of this business is there's a huge amount of money spent on marketing. the ads are currently not very effective. the pop-ups, you don't have to be 20 to make sure they're terrible ads. >> are you profitable right now? >> yes. >> do you become independent or -- >> i'm trying to craft a path to global domination. that's what we're following. >> we will watch as the empire grows. >> when we return, jim cramer is going to be joining us from the

new york stock exchange. we'll get his take on today's big movers. stick around. "squawk box" will be right back. ♪ i could get used to this. now you can. when you lease the 2016 es 350 for $329 a month for 36 months.

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let's get down to the new york stock exchange. jim cramer joins us right now. jim, we've been talking about

the fed all morning long, what this means, whether they're out of the game of rate headachikes. >> i think it's a green light to buy high yielding stocks but we're still hostage to oil, becky. honestly, when i saw oil down again, i said we're going to take our cue from europe, which is bad because the brexit. you have the fed saying the economy is not that strong. you say, all right, let it come in and i'll buy general mills when it's right, i'll go in and buy some kelloggs. it's difficult to buy anything that needs earnings momentum. kroger is up on a not so great number. that's a domestic company, don't have to worry about brexit. you still got to go to the supermarket. it's a suboptimal situation without as many stocks doing as good as we would have if the economy were better and oil

going back to 50, which it's not going. >> oil prices, by the way, down for five sessions in a row, just like stocks have been down five sessions in a row, which will be six if we continue the way we're going this morning. i've seen larger-than-expected supply numbers coming in but then you have the weak dollar. where's the chicken and egg thing here? >> they bought the drilling rights from deffen and they're going to add to the rig count. unless venezuela drops off the face of the earth, the united states started pumping again at 50. $50 will be a ceiling. oil can get down to 45 and bounce and when it gets to 45 and bounce, the stock market will go up again. >> the reverse linkage up six straight days.

up $25 today. i don't think it's brexit or chaos or anything. i think it's all fed, right? yeah, that's all fed. it's an asset worldwide that people want. i'm in favor of going there. i think gold is good. and i think rand gold is an amazing gold company. you see that stock go through 100. there were six downgrades where people didn't think gold could rally. doesn't matter. it's a premiere gold company in the world. stock is on fire. >> we'll see you in less than four minutes. >> when we come back, we'll have parting shots from our guest host today. and weep hear from general motors ceo mary barra tomorrow, starting at 6 a.m. eastern time. shipped from here, on this plane flown by this pilot, who owns stock in this company, that builds big things and provides benefits

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will we get back ever above 5% in our lifetime on fed funds do you think? >> not in my lifetime. >> and you're young. >> not in my lifetime. >> seriously? >> yeah. i think we are at around 2.5 to 3% in terms of the neutral right right now. getting to 5% would require some

enormous shock, positive shock productivity-wise which i don't see. >> wow. >> we haven't talked about the effect segment. that has a way of transmitting volatility elsewhere. don't forget what's happening on the effect side. we learned that before and we're going to learn it again. >> homemamohamed, thank you. >> that does it for now. see you tomorrow. right now it's time for "squawk on the street." >> good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer. stocks are off for a sixth day down. central banks are the story all around the word, the fed, the boe all stand pat. we begin with central