a stunner in alabama, doug jones, the apparent winner in a senate race against republican challenger roy moore focus on the fed stocks sitting at record highs as policymakers get ready to make their final policy decision of the year. and finals ncials on fire we'll get an analyst's take. it's wednesday, december 13, 2017, "worldwide exchange" begins now

♪ a warm welcome to "worldwide exchange" on cnbc. i'm wilfred frost. >> i'm contessa brewer in for sara eisen this morning. >> great to have you with us we begin with breaking news out of alabama nbc new projects doug jones the apparent winner that state's senate race. jones defeating roy moore. it's the first time in more than two decades that a democrat flipped a alabama seat moore has refused to concede saying it's not over president trump who endorsed roy moore seems to think it's a done deal the president tweeting congratulations to doug jones on a hard-fought victory. the write-in votes played a big factor but a win is a win. the people of alabama are great and the republicans will have another spot at this seat in a very short period of time. it never ends. so quite conciliatory from him,

maybe thinking he needs to work with jones in the future and knowing another election is going to come. >> and we know the president likes winners. >> but he doesn't like losing himself. the crucial thing in the short-term, does this affect the tax bill i think it increases chances of the president signing whatever comes across his desk in the next week, whether it's 20%, 21% corporate tax rate they'll want to get that done before this change from 52 republican seats to 51 republican seats takes effect. >> sources are telling nbc news that -- and ylan mui that the current republican plan will include a 21% corporate tax rate and bump the top individual rate to 37% and the mortgage interest deduction will cover loans up to $750,000 the current plan lores the pass-through deduction to 20%.

members of the house and conference committee will head to the white house this afternoon. they're trying to negotiate a path forward about these two separate chambers. >> it sounds like we're close to an agreement between the two separate chambers. the question is will the president accept this? i think it's increasingly likely that he will even though that red line of 20% seems to be broken he'll go the 21% and claim that very legitimately as a victory let's see what it means for the markets. futures are pointing higher to the tune of around 32 points for the dow. s&p up 1.7 yesterday we had the dow leading things higher, it was up a half percent. the s&p was fractionally higher. the nasdaq lower telecos soared higher, also nice gains for banks. utilities were the worst performing sectors if we look at the ten-year, we did cross 2.4% yesterday

we went back up and back below by the end of the close, but above it this morning. >> stanley druckenmiller sat down with kelly evans yesterday. here's his take on tax reform, the markets and the economy. >> on the economy, it should have stimulative effect in '18 and some years after that. ironically, the expenses is going to be more powerful than it appears i the tax cut is delayed a year because if you're a corporation you have a bigger expensin under the higher rate in '18 than '19 so i think it super charges capital spending and investment. >> but druckenmiller is furious about one part of the tax plan >> i'm so offended by the

carried interest provision >> the fact they're keeping it in place so people who -- >> well, it's outrageous we have doctors and lawyers in blue states, tax rates going up dramatically, professionals. and you have these multi, multi-billionaires with carve outs let's be clear carried interest, you're making money on somebody else's capital. it's not on your own if that's not income, i don't know what is i want to repeat that. you're doing it on other people's capital >> we'll talk much more about taxes coming up later in the show >> great wide ranging interview that kelly did well worth looking at online to the global markets, asian equities having predominantly good session hong kong up 1.5%. japan is lower european trade, which was pretty strong yesterday, is mostly lower today, but not significantly lower.

0.2% of declines for germany and slight gains for the ftse 100. italy off 0.4% the date for the election all but set in stone the president, a ceremonial president, saying all parties are agreeing on march 4th. that will be an election to watch. oil prices fell 1.5% yesterday up about a percent yesterday, rebounding or 0.8% gold prices down 0.4%, up about 0.2% just less than that now, 1243. dollar board for you, which was up yesterday, up 0.2%. seeing a bit of softness today nothing too significant. about 0.10% against the euro and yen. the pound is up 0.2 against the dollar bitcoin futures this morning are just slightly down, 1,850.

some interesting comments coming your way from the australian governor on bitcoin. he was less than enthusiastic about bitcoin itself, but positive about cryptocurrencies in the future for central banks. more on that coming up >> the fed will be front and center on investors minds today. there's one piece of economic data out before the fed decision the november consumer price index will be released at 8:30 eastern. the fed statement is due at 2:00 along with the latest economic projections. janet yellen will hold a news conference at 2:30 you can catch complete coverage on cnbc. bank stocks have been on fire the financial sector hitting the highest level in more than a decade let's bring in girard cassidy from rbc capital markets thank you very much for joining us >> you're welcome. >> it was a strong week last week for the banks pulled back monday strong day again yesterday

to what expent is thtent is thax reform hopes and to what expetet is that for tax reform >> tax reform is a huge factor of why bank stocks have done so well i would also point out regulatory reform is another important factor of why bank stocks have done better. as you said, the interest rates. today the federal reserve is likely to raise rates once again and this should help banks and their profitability. >> there's been fear about the flattening yield curve even though we're getting rising short end rates, people fear if we're getting warning signs from the economy. in the short-term for profitability, as long as the fed fund rate is going up, that's encouraging for banks isn't that right >> i think you're absolutely right. certainly a flatter yield curve

makes it less profitable for the banks. the ten-year government bond yield has broken through 2.4%. as they unwind the fed balance sheet in 2018, we anticipate there being upward pressure on the ten-year government bond yield. as a result, the yield curve may not flatten as much as people think. you're right a flatter yield curve does dampen the profitability of the banks. >> in terms of that regulatory formula that you mentioned, what are you looking at does it favor certain sized banks over others? >> i think what we're seeing is that the regulators are taking a completely different approach in this administration versus the prior administration people are a policy. the individuals appointed to these different roles, the vice chair, the controller of the currency, even the new fed chairman coming in, jay powell, all of these individuals have

taken the approach that less regulation is better for the banks. they believe what's happened under the dodd-frank rules is slowing down the economy as we all know, the economy has expanded, but it hasn't been very strong relative to where we have been in previous recoveries so i expect the regulators to be more conciliatory towards the banks rather than confrontational. >> in terms of your pop tick t what's your preference >> we would steer investors to bank of america. the bank will benefit from a stronger u.s. economy. and we have higher dividends coming and more buybacks we would also for a regional bank look at pnc financial, one of the best managed regional banks in the united states it's growing nicely in new markets in the southeast as well as the southwest >> thank you very much for joining us gerard cassidy of rbc. toshiba and western digital

resolved their dispute that was holding up the sale of toshiba's memory xhip bchip business. the companies will jointly invest in a chip fabrication plant in japan. verifone swinging to a profit beating forecasts they reported record services revenue, but the goins for fuid 2018 falls short. airbus ceo tom earneds are not xhechcommenting on a report he will step down. an airbus spokesman said the decision about enders role is not decided by the french press or government but by the board shares of amgen are trading higher the biotech firm is raising its quarterly dividend to $1.32 a

share. inditex reported profit surged in the first nine months of the year the owner of the zara fast fashion brand says sales rose 10% as it dit benefited from continued and online expansion shares of mongodb are lower, despite the company reporting better than expected third quarter results. the softwaremaker posted ed ed a narrower loss and issued fourth quarter guidance above analyst estimates. shares are off 5.25. more on the stunning upset in alabama nbc news projecting doug jones as the winner in the senate race. the countdown is on. a little more than eight hours before we get the final fed decision of the year we'll te yllou what to expect when "worldwide exchange" returns.

welcome back to "worldwide exchange." the dow up 35 points the nasdaq up 8.6. s&p up 2 yesterday the dow was the leader telcos, financials led the charge yesterday let's check in on bitcoin futures prices which have been pretty stable, all positive since the futures market on the

cboe launched. 17,880 the price this morning. we have some breaking news out of alabama nbc news is projecting doug jones the apparent winner that state's senate race. jones defeating republican rival roy moore. moore has not conceded the election let's get to cnbc's john harwood live in birmingham the real story this morning was turnout surprisingly high. >> it was, contessa, especially among african-americans who provided a huge key for doug jones. you also had strong support for the democrat among young people and also among college educated suburbanites, extraordinarily high for a democrat. this is the first time in 25 years that a democrat won a united states senate seat in the state of alabama roy moore, as you mentioned, kale out and told his disappointed crowd last night that he wasn't prepared to

concede, that god is in control. there's still some write-in ballots yet to be counted. but the margin exceeds the level for an automatic recount under alabama law. doug jones, the democratic candidate said -- this is a man who prosecuted klansman for bombing of the 16th street baptist church, he said this was a victory for justice. >> tonight is a night for rejoicing. because as dr. king said, as dr. king liked to quote, the moral arc of the universe is long but it bends towards justice tonight -- tonight, ladies and gentlemen, tonight in this time, in this place, you helped bend that moral arc a little closer to that justice.

>> now, this was a very large victory for the democrats, and a very large defeat for president trump who not only backed roy moore, despite the allegations of child molestation against him that he had molested a-year-old when he was in his 30s, he also pulled his party back into the race after the party stayed away president trump put out a tweet immediately after the election praising doug jones for having run a successful campaign. said a win is a win. we will see how he reacts this morning when he gets the full force of this defeat for his party. it's not likely that this is going to slow down tax reform. republicans are trying to push that ahead before the new senator takes office it's unpredictable how senators react to shock and political concern of this kind this is a bad sign for republicans going into 2018. we know now that in 2018 that

senate margin for pushing the president's agenda going forward will have shrunken from 52 seats to 51 seats. very little for mitch mcconnell to play with there >> as you said, unlikely to affect tax reform. clearly framing this as 2018 is harder now for the republicans to get things done is it possible to envision a situation where because they lost an extra seat, they think we really need to come together next year to make sure we pass more laws or else the 2018 election race will be a struggle >> it's possible that system of that mentality affects their thinking that's part of the fuel for the tax debate after the defeat on obamacare. i'm not sure it will be that easy 2018 will be difficult in any case if you're a republican running

for office, it's going to be every person for himself or herself. this is a difficult election environment. you're seeing an energized democratic party, a republican party driving away more affluent, suburban voters. it's difficult in that circumstance to hold people together >> john, you never hear them described as passionate centrists. the truth of the matter is the two polarizing sides have always been passionate, always motivated to turn out and vote what you're seeing in this alabama vote is the moderates being really motivated to get out there, to turn out the vote and make their choices heard that's going to be a deciding factor in 2018 >> that's right. when you operate in a state as conservative as alabama, the only way for a democrat to win is to get moderate voters,

voters who may look conservative in other parts of the country. donald trump beat hillary clinton almost 2-1 in the state of alabama so the fact a democrat was able to win, as i mentioned, first time since 1992 that a democrat had won a united states senate seat is simply an indication of how the wind is at the back of democrats. this comes on the heels of the substantial victory in the state of virginia, not only for governor but in nearly taking back the house of delegates, which they were in a big deficit before this is a positive sign that the trump era is, for the midterm elections, is going to be in some ways a mirror image of 2010, the midterms under president obama, when he came in, it was very difficult time economically now the economy is in much better shape, but you are having a backlash against the party in power. >> john, thanks.

still ahead, the red carpet gets the royal treatment as "star wars" makes its london premiere night the top trending stories are ahead. as we head to break, here's today's national weather forecast from bill karins. >> good wednesday morning. the cold, frigidaire has arrived. we're already preparing for our next snow event. winter weather advisories from areas of fargo to the heart of wisconsin. winter storm warnings, grand rapids to detroit, and dealing with leftover storms in northern new england. here comes that next little snow over duluth now. this will dive quickly today through wisconsin and into michigan temperatures are plenty cold it's a flauffy snow. this pink color is 4 inches. 4 to 6 inches in this area less amounts in pennsylvania tomorrow as the storm weakens.

dry across the rest of the nation and very cold in the northeast. more "worldwide exchange" when we come back another day at the office. why do you put up with it? believe it or not you actually like what you do. even love it. and today, you can do things you never could before. you're working in millions of places at once with iot sensors. analyzing social data on the cloud to create new designs. and using blockchain to help prevent fraud. so get back to it and do the best work of your life.

right in the heart of the was in his financial crisis, and using blockchain to help prevent fraud. and saw his portfolio drop by double digits. it really scared him out of the markets. his advisor ran the numbers and showed that he wouldn't be able to retire until he was 68. the client realized, "i need to get back into the markets- i need to get back on track with my plan." the financial advisor was able to work with this client. he's now on track to retire when he's 65. having someone coach you through it is really the value of a financial advisor. welcome back to "worldwide exchange." time for our top trending stories. we have a big win for jeff bezos. blue origin successfully launching and landing the new shepherd taurus space rocket it's the first big test flight in more than a year.

they hope the rocket one day can carry six tourists into space and keep going i love this battle i hope they all do well. >> launching and landing successfully is a good first step george and amal clooney might have made a lot of friends on a flight. reports say when the clooneys were traveling to the uk with their young twins, they handed out noise canceling headphones to everyone in first class of course the headphones had the logo of george clooney's tequila brand and came with a note saying apologize ahead of time if the twins cry this raises questions for me as the mother of twins, and i did fly with them alone when they were babies, i read all the information i could about making friends with the people next to you on a plane one, i would never fly in first class with them.

"a," why waste the money on the babies, "b," is it worth -- >> i think it's pathetic, stop trying to buy friends in first class. >> i dressed them matching so they looked cute >> i'm sure they looked cute and people would have been content babies are babies. it is what it is if you go in first class, the rest of the people have to deal with it. >> you never had those judgmental looks from people marching on board with babies. >> no but buying gifts is absurd >> i want to fly next to you with my children >> we all had those flights where we board and go, oh, my gosh, those screaming things i wouldn't expect the mother to hand me a gift you just deal with it. >> i will quote you the next flight >> i know this will come back to haunt me please give me a gift. the new "star wars" movie

had the premiere in london last night. two high-level celebrities were walking the red carpet prince william and prince harry inspected a line of storm troopers before going in to see the film the royals made a cameo in the last jedi disguised as storm troopers they were spotted on the set last april i did not realize it was a thing that they have celebrities like people like them hidden. >> they're not very hidden because storm troopers are 5/11, the princes are above six feet tall the tallest storm troopers, you know who they are. >> there we go opens late tonight >> exciting. >> tomorrow night. >> opens thursday. >> we're all confused. "worldwide exchange" coming up late breaking headlines from capitol hill on tax reform details when we come back.

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a stunner in alabama nbc projects democrat doug jones the apparent winner that state's senate race. taking shape new details emerging on that massive republican tax plan. and it's all about the fed today as policymakers hold their final meeting of the year. it's wednesday, december 13, 2017 you're watching "worldwide exchange" on cnbc. ♪ good morning a warm welcome to "worldwide exchange" on cnbc.

i'm wilfred frost. >> i'm contest is a brsa brewer. >> great to have you with us markets about 34 points higher on the dow nasdaq up about 2. nasdaq up 8. breaking news out of alabama nbc news is projecting doug jones the apparent winner that state's senate race. it's the first time in more than two decades a democrat flipped an alabama senate seat moore has refused to concede the election telling supporters it's not over president trump seems to think it's a done deal he tweeted congratulations to doug jones on a hard fought victory. the write-in votes played a big factor but a win is a win. the people of alabama are great and republicans will have another shot at the seat in a very support period of time. it never ends. more conciliatory than expected

given that he made a clear backing of roy moore >> roy moore at last check was not conceding the race we'll have to see if he has new comments about that. new details emerging on the republican tax plan. ylan mui is live in washington with the details is there any chance now that the democrats try to stall the reconciliation because of this election in alabama? >> it looks like doug jones would not actually be certified as the winner in that election until late december, republicans want to get this done before that they're hoping to get this done as soon as next week the final plan is taking shape here's what we have been able to confirm. two sources tell me the corporate rate will be 21%, though there's still debate whether that would take effect right away or in 2019.

the top individual rate would be 37%. the deduction for mortgage interest would apply to loans up to $750,000. this would only apply to new loans, so existing mortgages would be grandfathered in. the deduction for pass-through businesses would be 20%. not quite as generous as republicans had originally hoped for. a white house official confirmed these details as well to eamon javers last night and said they represent the current state of play the lawmakers who are negotiating the bill will have lunch with president trump before holding a public meeting today. president trump will deliver what he's calling his closing argument for tax reform this afternoon. he'll focus on the particular impact on families we are not expecting him to get into the weeds of tax policy the white house does appear to be on board with the parameters of the final bill taking shape here >> i guess that's the key question not as generous on certain

measures as some had hoped, particularly that red line being crossed from 20% corporate tax rated to 21% we don't expected that to derail what the president will do in terms of signing this or not >> it was the president himself who gave lawmakers a bit more wiggle wroom suggeroom suggesti could be okay with something up to 22% lawmakers seem like they're take that breathing room and space if the president is willing to give it all signs so far is that the white house was okay with that change >> thank you very much let's bring in ron insana. great to see you when you talk about those kinds of details, 20% corporate tax rate versus 21%, does that make a huge impact on the companies of this nation >> i don't think so. that's the marginal rate and the effective rate will still be lower than 21% the average american corporation pays between 18.5% and 22.5% tax

rate so 21% is good for companies that have a marginal value at 35%. >> does the slim margin for republicans have an impact on the tax debate >> they are supposed to finish this thing and have this on the president's desk before christmas, before they go on rece recess that would be before doug jones is sworn in as a senator >> chuck schumer was asked about it, whether they would try to stall the budget reconciliation. he said let's see. >> it's hard since it is going through the budget reconciliation process, which just requires the republicans to pass it. it's doubtful that they'll be

able to stall that much. >> switching to the fed. everyone is expecting a 25 basis point hike if we didn't get that, what would be the reaction >> the stock market would rip to the upside given yesterday's wholesale inflation data, it's a virtual lock the fed has indicated it's intending to aim rateds in december it would be a surprise if it didn't we'll have to see what they say about the pace of rolloff for treasuries and mortgages they own and the outlook for 2018 most are betting on three hikes next year. we'll see if they deviate from that >> janet yellen when she talks, she will likely be asked about the effect of the tax plan on the nation's economy she challenged this premise that a lower corporate tax rate will lift wages and affect the economy in an overall positive

way. >> i think this might be a contractionary tax cuts. very few people are getting tax cuts, some people will pay more or lose subsidies for insurance, if the individual mandate for affordable tax is -- >> but only at the high end of the consumer below $200,000 gross at the high end you might squeak through if you have a pass-through entity. you might see a rush of llc owners to convert to c corps >> 200,000, it's still a significant wage >> gross gross. not net. >> that depends on where you live if you live in new york city, l.a., boston, chicago, that's a middle class wage. >> absolutely. if you're losing those deductions, you could see a net increase in taxes.

>> i'm not sure what she will say about this it's stimulative for capital spending for a year. you get the immediate expensing of purchasing new capital, but at the end of the day, this is unlike other periods where taxes were lower, government spending was going up, if you have the fed monetary policy fighting fiscal policy all next year, the fed will increase the pace of interest rates >> do you think there will be an impact on the tax plan and politics will we see an impact in 2018? >> the economy is in pretty good shape if there is a benefit f corporations start spending more money and hiring more people, the question is will they hire more people or invest in labor saving devices, that's an open question the stock market may continue to go up if there's a big benefit to companies that have a much lower tax rate apple may benefit by $47 billio does that go into stock buyback

and dividend increases we don't know right now. >> will she comment on bitcoin >> she might when ben bernanke was asked if he thought gold was money, he said no. right now the irs and the united states ruled that bitcoin is property, not currency bitcoin does not have all the characteristics of money it might be an interesting intellectual exercise they have. i'm sure she'll be asked about it she may say it's in a bubble she may say bubbles are impossible to recognize as they are inflating. we will see. she could cause a pullback if she's negative on it >> ron, thank you very much. turning overseas, the republican tax plan is causing concern in china eunice yoon is live in beijing for us with the details.

>> china is watching trump's tax plan with some trepidation, that's because ultimately it could threaten china's competitiveness. china is not any longer the paradise for factories a lot of companies have been complaining about the high costs for labor and the tax burden so people have been focusing on the loweringing of the corporate taxes, from 35% potentially to 21%. here in china. the corporate tax is 25% plus companies pay a 17% v.a.t., and even though chinese companies don't have to pay a state tax, they have to pay high payroll taxes. welfare and social insurance, that could run them between 40% to 100%. that is one big focus here officials are also fix ate efixn any moves which could mean companies are repatriating profits back home.

the tax cut on repatriating tax deferred profits held overseas and dividends received from companies overseas that are tax exempt it is feared that will put more pressure on the renminbi b already we heard from the chinese vice finance minister who said china needs to take pro active measures to safeguard itself against this plan we don't know what those measures are in the state press today, there was a lot of reports about how china needed to blunt the u.s. tax cuts through stricter capital controls as well as a long-term vision to try to change its own tax regime. >> thank you very much for that. the shanghai market closing up 0.7% coming up, why the white house should be worried about

doug jones victory in alabama last night and as we head out, a check on futures, pointing higher. 35 points on the dow which led the market yesterdayp ua half percent. back in a couple minutes the moment a fish is pulled out from the water, it's a race against time. and keeping it in the right conditions is the best way to get that fish to your plate safely. bacteria can multiply to high enough levels that even cooking it will not destroy all of them. it's definitely the most important thing in my business. how fresh is the fish? where it comes from? how it gets here. the more i know, the better. sometimes the product arrives and the cold chain has been interrupted, and we need to be able to identify where in the cold chain that occurred.

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victory should make trump nervous. congressional leaders should feel nervous after reporting and responding with appropriate disgust to the first reports of moore's mall walking, they waffled and quailed in the face of trump's supreme amorality. they have been placating the right wing so these people who you would never describe as political watchers to turn out the vote, that's one thing republicans have to weigh in the balance, how much they skew to this harder right wing line and alienating moderates who may turn out the vote against those people >> it will be interesting to see if it plays out next year. roy moore not representative of all the republican senators

standing mine is bitcoin and cash cast a shadow over banks one thing is clear, banks face growing rivalry from a shadow payment system that ranges from cryptocurrencies to electronic platforms. i was drawn to it because i thought the title was too strong if you look at various innovations in payments, whether it's square or anything else t has not hurt banks if you think of technological disruption, banks remain the forces they were traditionally cryptocurrencies could be the tinge that changes that, but so far banks have kept their market share in this able of technological disruption you had some payment disruption, but nothing broad yet. >> when atms came on board, people were saying that's the end of the cashiers. in fact there's more people employed at banks now than before atms. >> speaking of bitcoin, stanley

druckenmiller weighing in on the bitcoin craze. here's what he said yesterday to kelly evans. >> bitcoin is like anything else, it's worth what people are willing to pay for it. right now people are willing to pay -- i haven't looked in the last five minutes, they are willing to pay 17,000. at some point, figure out when this is going to end, either get out or go short. by the way, when this ends, an it will, i'm talking about this monetary radicalism period we're in, bitcoin will probably go down with the rest of the stuff. >> bitcoin futures today, 17,800 just slipping 1% small move, 1% for bitcoin approaching the top of the hour. the team is getting ready for "squawk box. joe has a look at what's coming up >> hello, wilf do you know -- you're in the company of greatness do you know who that is sitting

next to you? >> i do indeed >> so you're familiar with her career and her -- it's almost iconic you know that? >> i'm not old enough to be iconic >> is she wearing shoes today or is it a barefoot contessa? >> shoes, very smart pair of shoes. >> how are you doing >> hi, joe >> he's a tall man have you noticed that? >> well, i'm used to tall men. >> you are >> doesn't impress me much >> doesn't impress you >> other things about him. >> well, his intellect for one >> unlike you having a a complex when it's kelly evans and i next to you >> it is a complex not quite the complex that bill gi griffith has so we have larry bossidy on. he has some predictions for 2018 very, very disturbing. very dire to anyone that cares about things the yankees winning it all

he has that. winning the world series next year he has some stuff about the markets, too i saw that, i was nauseous, sick to my stomach. we will talk to larry for two hours. >> i wonder if he can be as impressive as chamath palihapitiya yesterday that was awesome stuff >> there is a guy who made me think. his kids, don't know if you saw that part, where he was talking about it, no screens zero screen time during the day. >> that was my life growing up my dad did not allow tv in the house at all look what happened i work in tv. >> >> my dad had to allow tvs in the household. >> you know, concontessa, i did have tv but three channels it was black and white and you had to move the rabbit ears. >> and you had to get up out of the chair to change the channel. >> you do to change it from

goemer pgoem goemer pyle to the munsters. he started talking about you get a dopamine fix from the screens. >> it's as addictive as heroin on developing brains, they're trying to figure out why but when you are wearing young children, you have to think, we don't know what the long-term impact is. also, on the other hand, if we're going the way of computers, if singularity is our future, then maybe we do need to indoctrinate them. >> that dope ma meamine hit, wee talking about facebook for 7-year-olds to 13-year-olds, horrible >> we go, one last thing, 2:42 today on the ten-year. rick santelli yesterday was talking about 2.44, we have not seen that in a long time i'm not sure what you attribute it to.

we have the new tax stuff. a couple of changes. not huge, but interesting changes. that's it. >> nice one. joe, we'll see squawk squawk coming up in eight minutes time. we're back in a couple minutes ♪ ♪

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eight hours to go until the fed makes its final decision of the year joining us is michelle girard from natwest markets good morning >> good morning. >> the markets are confident of this 25 basis point rate hike. so what do we expect for next year do we get a move of the market closer to the fed or the fed closer to the market >> it's interesting that 15 -- 2015 and 2016, of course it was the fed moving to the markets. 2017 was the first year that the fed actually delivered on what they told you they were going to do if you think about the fact they

changed their balance sheet policy, nobody expecteded that coming into 2017 so i think 18 will be more like 2017 they're guiding that they think three rate hikes will be appropriate in 2018. that's the same signal that they send today i actually think the fed will hike four times this year. they'll stay with this once a quarter pace what do you think their outlook is likely to be for inflation for 2018 >> they'll stick with this certainly they continue to say that over the medium term inflation will get back up to the 2% target. the year over year numbers will continue to be held down by those low readings we saw last mar much so that statistically holds things down until the middle of next year. inflation is rising, but rising slowly even this morning we have the consumer price index out

we had a firm reading reported last month for october i think today we'll see another relatively firm reading for november ppi was firm there is evidence that the fed is not wrong to be sticking with their forecast >> quickly on tax reform if some factors are less generous than they were going up to 21% corporate tax rate, is that a disappointment to the market or is that confirmation of the hope that people have been trying to see >> i think the day it passes, i think people will be still happy it's passed -- or the markets will take that in. there's still some skepticism about what the deal is i think in the end people will be thinking about raising economic forecasts, even if some details are maybe somewhat less, appear to be somewhat less positive the bottom line is getting passage, getting a cut in the corporate tax rate, the markets will view that as good for growth in 2018 >> michelle, thank you very much for joining us >> thank you >> michelle girard of natwest

markets. contessa, thanks for joining me. >> great to be here. >> that's it for"worldwide exchange." all eyes on the fed.

good morning breaking news. no more craziness. that was my headline they didn't use that democrat doug jones claimed the contested senate seat in alabama over republican roy moore. and it's decision day for the fed. stocks sitting at record highs as policymakers get ready to make their final rate decision of the year. and the clooney family, you say the clooney family to me, i think rosemary and nick. they have found a solution to a long-running "squawk box" debate should babies be allowed to fly

first class? it's wednesday, december 13, lucky 13, 2017, "squawk box" begins right now ♪ live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. let's look at the u.s. equity futures. both the s&p 500 and dow closed at record levels once again yesterday. look at this you can see green arrows across the board this morning dow futures indicated up by 45 points sop up