it is 5:00 a.m. on cnbc. here is your top five at 5:00. hurricane michael now ballooning in size overnight. it is now a category 4 hurricane. oil prices are moving as it takes aim at the florida gulf coast. president trump slamming the federal reserve yet again. we'll tell you what he's saying about jerome powell and company. and steve mnuchin out with a warning for china and their currency sears reportedly moving one step closer to filing for bankruptcy and we've got an activist triple play to talk about. why starbucks, campbell's soup and ppg need to be on your radar

today. it's wednesday, october 10th "worldwide exchange" begins right now. good morning welcome from wherever in the world you may be watching. it is an extremely busy day. there's a lot going on in money, a lot going on in business, a lot going on with the weather. here is your morning setup futures slightly lower we're seeing dow futures down two. nasdaq and s&p are off just a bit. very, very fractionally. the ten-year note, the story of the markets, that's backing up a bit. it's up, but the reality is we're at 3.22 because it backed up overnight that 3.25, 3.5 level, those are the key psychological areas for many people out there in the market those are the numbers we're watching the higher rate story is one that's hit every sector of the economy. right now we're keeping a close eye on something else.

that is oil prices hurricane michael gathering strength in the gulf coast the storm is now a very dangerous category 4 hurricane and it's expected to make landfall later today courtney reagan is standing by in panama city, florida. john kilduff will dig in on oil, first we get more on hurricane michael's path >> this storm has intensified into a strong category 44 storm. if you look to my far right, you can see the different categories and the list it's 140 -mile-per-hour currenty at this point. this storm will continue to barrel its way towards the florida panhandle. this could be the strongest storm that the florida panhandle has ever seen. i'm not saying that to scare you. i'm saying that because that's the reality. here is the track.

don't pay attention to exactly where it makes landfall, but along the florida panhandle later this afternoon i want to show you the radar it's extremely impressive. look at the eye. look at how well defined that eye is you can see all the reds and orange along the right corner of the eye. that is thunderstorms just really developing along that right quadrant that will be the strongest portion. you can see the lightning. it is still intensifying we'll continue to track this for you throughout the morning >> thank you very much for that. we'll see you in a bit businesses along florida's gulf coast are boarding up as the storm takes aim. let's get to courtney reagan live in panama city beach, florida. courtney >> good morning, brian so governor rick scott declarin a state of emergency for 35 florida counties, 1.8 million people are in the cross hairs

and in this hurricane warning. 24 hours ago is when the mandatory evacuation order went into effect for this area. some people heeded the warning others did not many of those that didn't we saw in line at lowe's and home depot and walmart yesterday. lows and walmart actually shut stores yesterday afternoon, about 24 hours before the storm is expected to hit home depot stayed open a bit later and folks were in there buying lots of plywood thinking they should board up their homes. duke energy is expecting that 100,000 to 200,000 people could lose power for several days up to a week. 17,000 power restoration personnel are on stand by to go ahead and get the power back up and running. that will only happen when it's safe the airports are closed across the region

the ports are also closed including pensacola and panama gas stations closed yesterday afternoon. did not see a lot of gas lines, but the stations themselves roped themselves off and the employees went home to get safe. lastly we want to talk about the lodging. about 150 airbnb members have opened up their home frees for evacuees and first responders. many hotels were turning folks away because it's not safe >> you may have heard before that this is the biggest storm to hit the panhandle this has intensified over the last 24, 36 hours. are you getting a sense just being on the ground there that people are taking the warnings seriously? >> yeah, i am. i think you bring up a great point. the tropical storm didn't form truly until sunday

it wasn't until monday at 11:00 a.m. that it officially became a hurricane. a lot of people we talked to, both the folks that were working in the retailers as well as residents that live in the area said we weren't ready for this we have not decided yesterd ed e going to evacuate or not but we're making preparations now. i do think a lot of folks were caught off guard by the strength and the quickness of this storm. people do seem to be taking it seriously. not a lot of folks left around here >> courtney reagan, you'll be there all day. be very, very careful. >> we will hurricane michael could have a manl every jor impact on oil s oil platforms have been evacuated as michael is taking aim. that is taking 40% of offshore oil production offline joining us is john kilduff

so 15% to 18% of oil production is offshore. 40% of that will be shut in for a couple of days what do you think the impact ultimately will be >> it should rock one of the upcoming weekly inventory reports. you could see a large crude oil draw down, not only are we losing this production but also a good amount of imports >> the louisiana offshore oil platform, an offshore loading and unloading point. that's closed now. so it's not just the rigs we need to focus on, you're saying watch the ports as well. >> the ports as well to courtney's point about how this storm blew up to a cat 4, that's what we were always watching in the energy space >> so fast >> whenever these storms stumble into the gulf, even as baby hurricanes or tropical storms, the energy they draw from the warm gulf waters is what causes this this always produces a spike in

oil prices because the rigs get evacuated out of an abundance of caution, even if it's a tropical storm because of what happened in the past, rita, dennis, storms that came along and caught the industry offguard >> we will be in midland, texas tonight. i'll be on an oil rig in the gulf next week twlats we' that's what we're planning to do we forget how big the offshore industry is we're talking 15%, 20% of total u.s. production it's big investments is big and the production is big. >> the shale gets all the glory and attention. most of the gains from production was from offshore projects long in the planning stages that come on and stay on no matter where the price goes that's when you talk about high prices curing high prices, that's where that comes from because you have the money to invest in the deep water

projects that bedevils opec and saudi arabia about high prices i will say this, there should ab pri be a price break here. we couldn't be lucky ner term is of pipelines, everything is to the left of this storm as you look at the map and where this storm is going >> it is an unusual crahual tra storm. it will be difficult to predict, but from an oil perspective this is a best case >> not even the mississippi refineries look to be in harms way in terms of flooding or power outages which is another issue for the industry >> storm willing, we will be on a billion dollar oil platform next tuesday in the gulf of mexico to show how big the industry still is. >> tonight forget to hit the kitchen. great food on those platforms.

>> will be ap interestin intere st. joe company is a stock to watch today it's one of if not the single biggest land owner in florida but they also own ten master plan housing communities in northwestern florida and hotels, beach clubs and golf courses, all of them are in the florida panhandle. watch joe. now to your broader markets, perhaps because the storm, perhaps because of everything else going on, we are seeing not a lot of action in futures and in the bond market futures are basically flat treasuries are flat as well. that doesn't mean there's not news president trump addressing interest rates and launched a fresh attack on the federal reserve last night at the white house. here's what the president had to say. >> well, i like to see low interest rates the fed is doing what they think isnecessary, i don't like what they're doing because we have

inflation really checked we have a lot of good things happening. i will say this, we're normalizing money, that's good but i think we don't have to go as fast. >> let's bring in tim seymour, a cnbc contributor, "fast money" host >> good morning, brian >> there's a lot going on. i want to run through a bunch of different topics with you and get your "fast money" take >> let's go this >> starting with your take on the president's comments criticizing the fed. >> same president that didn't like lower interest rates on the campaign trail a couple years ago. i think we'll continue to hear this i have a lot of confidence in the fed remaining independent. the irony is if anything over the last two weeks i think jerome powell sounded more hawkish. a number of fed governors last week spoke, and the sense is that december is in the cards.

i actuallybelieve the fed who is data dependent may start to see some impact of trade which has not frankly shown up in u.s. numbers. president trump will continue to do what he does. he will lean on those folks that he believes are acting in interests not with his policy now. a weaker dollar is something that i don't think this administration really should be talking about, but it's what they do. >> which goes to number two, steven mnuchin making some comments in the financial times warning china about devaluing its currency do you think this trade fight, this trade war will turn into a currency war >> i don't if you look at the key exchange rate levels on the yuan around 7, this is something the markets should be watching this is a long-term kind of level that's not gotten up and above. i think the chinese spent time trying to show the rest of the world that they're building capital markets that the world can depend on that are reliable. whether you believe that or not,

i don't know the bottom line is they're going to be careful about using currency here. they want to remain in the world view of having this market base. so, you know, some movement in the yuan is totally justified relative to where the dollar has gone they rate that basket against currencies as they see it. that's something we don't like, but it's something they do >> that chart is inverted. as it goes up, that's the currency going weaker. if is goes to 7/1, watch people get freaked out. macro markets. last night jim cramer getting nervous on the market. this is what he had to say last night. >> call me a little cautious i think we can go higher but the stocks taking us higher are the wrong stocks if you believe the economy is in good shape they're the right stocks if you believe i'm right and we could have a fed mandated slowdown i sure hope i'm wrong, but on a

day like this where we get dire news from ppg, i'm feeling right as rain. >> you know what's amazing jim nailed it. ppg is a paint company, their talk about input costs, inflation, they're a commoditized company across a lot of sectors, that's spooking a lot of people. >> if you think about the input costs, inflation costs that you would be seeing across the manufacturing chain, you can make the argument we have not begun to see this. their comments are more a foretell into earnings season. if you think about what we've heard for the last six months since the trade war went from concept to enactment you have a dynamic where regional fed surveys tell you not only do we have labor shortages, and a lack of trained skilled labor but uncertainty on the trade side is affecting how companies are placing their orders >> are you more cautious with regards to u.s. equities >> i think if you look at

evaluations, first of all, people say the s&p now it's down a couple turn since the start of the year obviously that's a function of where earnings are we are in an environment where the fed will continue to lean on things rate compression is something that is supposed to be happening here expectations for the corporate profit cycle continue to be extremely high yeah i think it pays to be cautious here >> bill ackman revealing a new stake in starbucks nelson peltz with a stake in ppg. dan loeb upping his stake in campbell's soup. any of these names seem attractive >> i'm long starbucks, that name is attractive to me. it's a china story i like it on valuation and i think they continue to have that china growth story that will support. i think the u.s. comps number is important for them nelson peltz and ppg, he started building that position last

quarter. they had a great run during the quarter and a terrible couple of days looking at what's going on outside the inflation front, you have a robust global economy for the manufacturing side i think following activist investors is a dangerous game for a lot of investors who don't have the same insights and are not positioned the same way. i would not follow that move >> tim, we can't call it "fast money" -- >> this was pretty fast. >> we'll call it quick cash. >> quick cash. new show let's do it. >> have a great day. up next, the sears saga may finally be ready to make another sad turn why some are saying a bankruptcy filing may not be far off. and softbank's next big bet. the japanese company reportedly eyeing a major new investment. stick around

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bankruptcy filing this could come ahead of a debt filing due next week. m3 partners has been working on the filing, though sears is discussing other options once the world's largest retailer sears has been losing money for years. it closed 400 stores since last year a bankruptcy filing would end years of efforts by eddie lampert to keep the company afloat the "journal" says lampert wants to restructure sears debt without filing for chapter 11. a special committee is weighing an offer that lampert offered earlier this year to by the kenmore brand but sears warns it could go out of business as it awaits for approval of that deal sears market cap is well below 100 million standing at about 64 million. >> a sad story thank you very much. also in your

lines, softbank is talks to buy wework we broke the news about their $3 billion investment in wework last year. so much more to do on this busy wednesday interest rates and your money. more on how you can plan and prepare for higher borrowing costs and we're keeping an eye on hurricane michael, now a category 4 storm latest coming up

it is 5:23 here on a busy wednesday morning. in washington, d.c. the fallout continues following nikki haley's resignation. tracie potts has more on this story. >> first it came as a surprise, not only to foreign policy experts and lawmakers on capitol hill but even some white house insiders say they didn't see this coming. >> she's done an incredible job. >> reporter: president trump praising united nations ambassador nikki haley, now leaving at the end of the year her resignation letter dated last week. >> i think it's important for government officials to understand when it's time to step aside sometimes it's good to rotate in other people who can put that same energy and power into it. >> reporter: haley said she will support mr. trump in 2020 and

has no plans to run for office a u.s. spokesperson denies a watchdog group's request to investigate her use of private jets has anything to do with her departure. >> something doesn't smell right. something is weird >> she is ready to step down sometimes it's not a conspiracy and it's not more dramatic than just that. >> reporter: president trump heads to pennsylvania tonight continuing a week of rallies to stop democrats from winning in november >> you don't hand matches to an arsonist and you don't give power to ang a angry left-wing b >> the administration is now losing one of its most powerful female voices. president trump says he'll replace nikki haley, at least announce his choice for a replacement in two, three weeks. >> tracie potts in washington, d.c., thank you. now a check on the other top

headlines including the latest on the search for a missing saudi arabian journalist >> new developments for a saudi journalist who mysteriously vanished some believe he was assassinated on the orders of top saudi leadership they say he was killed and dismembered by a team of saudi agents the journalist and "washington post" columnist has been a vocal critic of mohammed bin salman. drug prices at the pharmacy are about to get more transparent. president trump is expected to sign two bills that will lift so-called gag orders on pharmacists. this would allow pharmacists to

tell consume fers if it would b cheaper to buy the drug at a cash price rather than use insurance. this peck chicture shows a truck which lost control and landed on top of another car miraculously, nobody was hurt. all three were wearing seat belts. as interest rates rise, some market players get more cautious, how you can protect the gains you've made. speaking of bracing, all of northwestern florida and lower alabama bracing for hurricane michael. it's now the biggest storm ever to hit that part of florida the latest on its track and timeline next get stronger... get closer. start listening today to the world's largest selection of audiobooks on audible. and now, get more.

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michael taking aim the category 4 hurricane, it's path, timeline and the impacts on oil ahead. donald trump and what he said about interest rates that is raising eyebrows. and the new numbers around just how much money your kids are spending on fortnite cnbc rolls on right now. welcome back in. it's 5:30 on the east coast.

thank you for being with us on cnbc i'm brian sullivan it's the largest storm to hit this part of florida hurricane michael gaining strength in the warm waters of the gulf of mexico, now a dangerous category 4 storm with high winds and a storm surge expected let's bring back in kayle kaylee dionne. >> this is moving at about 12 miles per hour, it will move fast we are expecting it to make landfall around midday today only a few hours left. the time to prepare is coming to an end >> with hurricane florence we rached e watched it for days, people had time to prepare. how fast-moving is this it appears from we're watching something develop to a major hurricane in nearly record time. >> it was learning to walk and then started to sprint

basically. it is moving into the gulf of mexico yesterday the gulf of mexico is basically a bathtub of fuel for these storms it's like a steroid shot it immediately intensified that's what happened so you see that happen with some of these storms that move into the gulf of mexico it went from category 2, qu category 3, now a category 4 and it is still intensifying what kind of storm surge are we expecting? >> storm surge could be from 9 to 13 feet that is awful. that is for a wide range along the florida panhandle from the alabama/florida border down to cedar key, that's the main part. rainfall totals from 8 to 12 inches talking about winds, sustained winds of 140 miles per hour. peak wind gusts will be more than that. that will stretch up to southern georgia and south carolina where

we can see power outages >> that is still dealing with the aftermath of florence. how bad will the storm be in georgia, south carolina? how much will it slow down once it hits land >> it will weaken but it will not slow down. it will get picked up by a trough and move. but we're talking about a place that has tons of trees and it's already saturated. you have this saturated soil, the trees and those winds. there's going to be several areas with trees down. >> big storm take heed everybody out there. thank you very much, appreciate it. there's not a lot going on in the markets maybe the markets are taking a breather given all we've seen over the last couple of days the s&p 500 right at its 50-day moving average people are watching that you heard jim cramer last night say he's getting a bit more cautious in the overall markets. it's because the bond story. bond yields have been rising as

you know, they're like a super tanker slow moving but big and they impact efrverything in their wa. president trump addressing interest rates last night. in fact, launching a bit of a fresh attack on the federal is he rev listen to what the president had to say >> i like to see low interest rates, the fed is doing what they think is necessary, but i don't like what they're doing. we have inflation really checked. we have a lot of good things happening. i will say this, we're normalizing money, that's good but i think we don't have to go as fast. >> it's not all bad news with the rate story we act like rising rates -- a lot of companies see this as good but you heard jim say he's more cautious from a macro

perspective, are you, david katz >> the last quarter was very good, we think things will slow down we would be a buyer, we would not chase rallies. the economy is very good we will withstand these higher rates, there's lots of good companies selling attractive valuations we wouldn't class the winners but lots of things lagged this market that will be doing better >> when you say slowdown what will slow down >> the market will take a bit of a breather, but we think it ends the year higher than today so we would be buying on weakness we would not get spooked out of this market. >> we talk about rising rates, they affect everything in their path if you're a bank like a bb & t, a super regional, higher rates are welcomed to you. >> absolutely. the financials have been one of the big laggards, but business is very good loan portfolios are good higher rates do help them.

we like a whole bassett of financials bb & t is a favorite we also like a jpmorgan and a wells fargo. >> is the interest rate story part of that or just the icing on top >> exactly it's the icing on the cake you have a better regulatory environment. good economy more lending, higher rates makes them more profitable >> we will be live in the permian basin tomorrow all day on cnbc. i'll be in midland tonight, somehow. schlumberger is a name you like. is this the worldwide growth of fracking >> this is the worldwide growth of drilling that has not been happening for the last few years. we think the market also be better oil prices have been rising. oil stocks generally have done better the biggest laggard has been schlumberger we think there's a lot of catch up there we think there's more drilling activity in the next one to two years especially if oil prices are up here. >> you'll want to hear rbi at the end of the show, drilling

rig activity you'll like that one ebay, they've been advertising aggressively it's clear ebay no longer wants to be you're selling me your old skis they want to take on amazon and punch them in the face you think they'll do okay? >> the valuation is great. they're a good, long-term business there's a growth area in the internet they're a survivor of that yesterday there was rumor that an activist was involved the stock sold back down but it's cheap there's potential for an activist either way we think the stock would be 30% higher. >> interest rates not all bad. david katz, thank you. >> thanks. let's find out what else you will be talking about today outside of the storm time for the top trending stories. frank holland recently moved from boston down to here >> not long ago. not from boston, from

philadelphia, but i like the sox. >> maybe you just hate the yankees. >> trending time, we will start off with nasa releasing new video of hurricane michael this is from the international space station. the video shows the massive storm spinning towards the gulf coast. an ominous sight for people down there. the american music awards were last night. it was all about taylor swift. she kicked off the show with a performance and went on to claim multiple awards. that included artist of the year she used her acceptance speech to urge fans to get out and vote in the midterm elections swift is the most awarded female artist in the ama's history. >> she got a huge number of people to register to vote she is making a rare dip into the political world. >> her move into the political sphere has gotten a lot of attention. gotten younger people out there.

already a lot of controversy going on in politics any way >> let's spark the rumors right now. swift for senate >> i think she has to go for congress first i know -- >> are you a fortnite guy? >> not a computer game guy at all but the fever for fortnite rolls on the current ois version of the game is raking in the dough. it's been making 2$2.5 million per day since season six was released late last month check this out before it was released on ios it was making 1.5 million a day. it wasn't struggling before. >> i'm not a fortnite player, if i'm wrong, correct me. you're just buying clothes and weapons, i think, right? that's where the money is going? do you know? i think that's what you spend money on skins. i want to buy that tank top or that has the i don't know does it help you in the game who knows. >> never played.

>> tonight stardon't start. people have put away the playstation, kids who were an "a" student now a "d" student. >> i play sports games, not computer games the yankees were facing elimination at the hands of the red sox of boston last night now they're out. it was drama down to the final out with two outs, the winning run on first red sox closer craig kim brel got torres to ground out to third base the out call was held after replay giving the sox the win. 4-3 boston wins. boston will face the astros in the alcs starting on saturday. still ahead, we are going global the imf and world bank annual meeting and kicking off in bali. a cnbc reporter got to go to bali we'll go to geoff cutmore. as we head to break, here's your

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another day, another dow jones component upgrade to tell you about. guggenheim out upgrading mcdonald's to a buy from a neutral. they expect same-store sales to grow and they put a $200 price

target on the stock. yesterday at this time we got a walmart upgrade. the imf and the world bank's annual fall meeting is under way, and for some reason it's held in bali and geoff cutmore and us got to go to bali where i assume there's not just coconuts but there's also news. >> absolutely, brian the way i heard it, they sent you the e-mail, you didn't get back fast enough so they had to send me instead. don't get too jealous because even though i've come to bali, they'll stick me in this conference center for the next four days as we listen to the imf and the world bank pouring out their story of woes on the global economy that's what surprised people is that we got the imf forecast on growth and they revised it down to 3.7% from 3.9% for this year. and they've also talked in their

report today around financial stability about rising risks in the near-term as a result of a trade war between the united states and china higher oil prices, and of course the pressure we've seen on emerging markets that means that many of those currencies have weakened it's sunny here in bali. the message from the imf and the world bank is overcast something else to add into the mix which relates to president trump. he may not be here, i'm not sure how big the u.s. delegation will be here, largely what's going on is a rearguard action against this trade dispute we have the director general of the ocb, the imf and they all met today and said we need to deescalate this trade story and we need to get back to a multilateral trading system approach that's the message from the imf world bank in bali back to you.

>> you are right they send us to these cool locations and we spend the entire time inside is the transpacific partnership, the tpp, something that is going to be discussed? the u.s. is out. i understand they are now courting the uk to come in the tpp is not dead. >> yeah. i think they're desperate to try to keep tpp running. there's a lot of big economies interested in this story japan, of course, australia. countries are vested and believe it can still work even if the united states is not a participant. so it will get some attention here on the fringes of this meeting. but as i said, brian, i think the key here is what they want to do is to try and isolate that message coming out of the united states that we need to see widespread renegotiation of trading relationships and we need to introduce penalties

where trade is not viewed as fair here they're trying to set up a position where at the moment it appears to me that it is the united states and the rest of the world as it is presented here at the imf. >> geoff cutmore, see you soon let's find out what's coming up on "squawk box. becky quick has a preview. the storm is literally and figuratively overshadowing everything the biggest storm ever to hit that part of the florida panhandle. >> they have never had a category 4 storm coming ashore in that area what is striking is just thinking about how short the notice was for evacuations versus what we saw with florence where you were looking at a week and people knew that it was coming just yesterday the governor in florida was making such strict warnings saying get out because it could be 110 miles per hour, now those winds could approach

150 miles per hour and you could be talking about storm surge of 9 to 13 feet that's frightening indeed. we'll watch this that storm expected to come ashore this afternoon. as you can see, not just the panhandle at risk, but washing across georgia, south carolina, areas that have already been hard hit this hurricane season we'll watch this closely to see what it means. there are already people trying to figure out from an economic impact down the road -- the very immediate concern is for the lives and the people who are in the threat of that storm, but it will be throwing lots of kinks into what we will see in terms of the economy down the road brian, that's something we'll be focusing on today. we've been watching so closely what's happening with interest rates as the fed continues to raise rates. jay powell sounds like he's talking a tough game about more rate hikes to come market adjusting to that with equities under pressure and what we're watching with the yields,

really picking up steam. today we will hear from the white house. we have kevin hassett who will be joining us to talk about where they think the economy is headed and what's happening. it's a tricky line the economy has been going gang busters. the unemployment rate is at the lowest level in almost 50 years. seeing massive gains across the board in all kinds of economic statistics wages have come up but at the same time you have the president once again saying yesterday that he is not happy with what the fed is doing with raising rates. kevin hassett has to walk that line, talking about a great economy and explaining the case for why the fed should not be raising rates in that environment. we will also talk to jeh johnson. we're a few weeks away from an election he will talk about how safe he thinks the election infrastructure is as we head into that. >> certainly a lot to do today thank you very much. see you in a couple of minutes.

still ahead, we'll weigh the risks. it's rising rates versus china what's the bigger risk to you and your money we'll discuss and debate it as "worldwide exchange" returns

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cascade platinum does the work for you, prewashing and removing stuck-on foods, the first time. wow, that's clean! cascade platinum. welcome back joining us is joe lavorgnia and steve frickman if you had to frame out from a macro perspective, china, trade, currency issues here, rooizing interest rates here, what is the biggest risk to the economy and to our viewers, listeners? >> i would put more weight on the china trade dispute. i see a broader attempt by the trump administration to

deglobalize supply chains. they are telling firms if you want to produce for u.s. markets, you should invest and do that production here. that means that process is unlikely to be smooth. >> joe, i know from your reading you would po literally disagree with that. you think rates are the bigger risks? >> we have a trade deal with south korea, one with europe, klein and the u.s. are battling this out if you look at business cycles, the fed always dictates liquidity and risk taking. they're still raising rates. i wrorry about the curve i would say the primary risk is the fed overdoing it we're not there yet, but we're moving in that direction >> joe, you do agree, i would imagine with steve, that trade is some kind of an issue

i know we have a trade deal with korea, but korea is miniscule. >> it is, but there's a pattern. the administration and properly so focused on bilateral relationships and not multilateral relationships, i'm not sure why the multilateral approach is the best approach. u.s. manufacturing has been strong the economy has been doing well. markets are forward looking. they looked past much of the trade rhetoric correctly sensed the u.s. outlook to be solid. we heard about how trade wars will lift inflation. when we look at break even inflation rates they have not moved. all the increase in yields has been due to real yields, a function of the market thinking that growth will accelerate. not to totally deminimize the china situation, my sense is it's not that big of a deal. >> i guess i would respond that we have not seen the impact yet of the most recent round of

tariffs especially on inflation. when it comes to the fed and rates, i would point out that everything that chairman powell is tolling itelling us is thatb cautious he wants the expansion to go for many more years. he will err on the side of letting inflation -- >> he sounded more hawkish, steven you disagree with that >> i would he made a comment last week that rates have a lot more to get to neutral. >> joe, you think powell hawk or dove >> hawk. the market has less tightening than what the fed is telling us. the fed thinks it's going slowly, i don't think it is. with respect to neutral rates, housing is rolling over. you have to be careful with what economists are telling you the fed knew where it was going, it wouldn't cause recessions >> joe and steve, a respectful

disagreement, at this time of day we needthat. >> thank you >> both sides of that story. time for the morning rbi today we're talking oil and the permian shale boom there's been a boom in drilling. baker hughes says there's 1,052 oil and gas rigs operation, up from last year how interesting is this? this boom is tiny compared to 1981 in december of 1981 there were 4,530 operating oil and gas rigs in the u.s dallas was the hit tv show and midland, texas had a rolls royce dealership why bring this up? it's random but interesting and all day tomorrow we're live in midland to talk about whether this permian boom hit its peak or if it's built to last and texas becomes bigger than most of opec. that's all day tomorrow on cnbc. have a great day

"squawk box," coverage on rates, markets and hurricane michael. that's next. i'll see you tomorrow from taxa tawh what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley

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good morning hurricane michael is now a category 4 hurricane with life threatening storm surge. p big moves by big activists we'll tell you about new plays by bill ackman, nelson peltz and dan loeb. and president trump doubling down on his criticism of the fed, at this point it may be tripling or quadrupling down it's wednesday, october 10, 2018 "squawk box" begins right now.

♪ live from new york where business never sleeps, this is "squawk box. ♪ good morning welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm melissa lee along with becky quick and a low wilfred frost. >> i came in this morning he was sitting like this. >> i was prepping. the screens are so low underneath the table i get for tv i have to go back up for the viewers, you made me stay like this >> there you go. >> i'm not going right to the top. >> the angel music >> i will go back down there we go. >> you are still too short >> yeah. >> you need a couple inches. ther