workweek tuesday, march 16th, 2021. "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc i'm becky quick along with andrew ross sorkin and joe kernen >> do you get anymore done on the four day is three different from four when it comes right down to it >> yes, yes, yes. >> what if we offered to work another hour a day do three days? >> yeah. probably not going to work >> the new york stock exchange will never. >> markets are open five days.

we need to be here in fact, we are going to start with the markets after the dow jumped 174 points to close at a record high. s&p closed at a new high the nasdaq out performed yesterday in terms of the percentage gains it was up by just over 1% versus up .6% for s&p and .5% for the dow. it closed at the highest level in two weeks in two weeks versus all-time highs for the dow and s&p 500. the dow up seven sessions in a row. the longest winning streak back to august. the futures is a mixed picture dow and s&p indicated down slightly dow futures down 50 points s&p futures off 1.5. the nasdaq indicated up by 50 points of course, there are the treasury yields. check it out we will see what is happening for the 10-year note

1.6% we are keeping a close eye on it 1.602% right now here is a look at the "squawk stack. any changes anybody would like to make? the dow and nasdaq and 10-year and bitcoin and gamestop not a lot of movement on any of them >> tesla for gamestop. just the rest of the world is waking up to that was an actual title change that went into an actual regulatory filing it is so bonkers >> weird >> we're not tdone talking about it >> no. emphasis on no >> take the company on pot day you know -- >> it worked for them. >> master of coin.

it is called bitcoin they decided to start buying the whole game -- >> did you see that the best tweeting back and forth about his nft he is selling and beeple saying he is happy to buy for $69 million. the best >> did you see his response? he said, elon musk's response. 420 doge coin. get it >> life is short >> 420 >> business is boring. what the hell? you might as well just do -- you can't really -- >> what shall we refer your title to be? >> i havhave to think about it married. i never got the big title. people mistake it for big

cajona that's okay. that's okay. >> you like to be called the big cajone >> if you think it is appropriate. i don't know it is -- i don't know. >> i love it when you call me that >> i want something more that illustrates my tech savvy a little bit more. something that delves into my space. >> joe, what do they call you on twitter? >> we can't use those -- remember what you told me yesterday? andrew was minding his own business you were minding your own business over the weekend and you look at the count and someone out of the blue said andrew, you're a turd. >> that's true

a wonderful place. it's a wonderful place >> you can look at this. >> twitter. >> let's see what people are saying about me today. you're a turd. thank you. all right. i told him i liked it. he got mad it was funny i shouldn't have retweeted it. >> maybe we should move on >> maybe we should >> we have a lot of market events this week the fed kicking off the two-day policy meeting today market participants are watching and listening closely for any clues from the fed's forecast of the economic recovery. low interest rate policies or not. we will see. the future of the asset purchase program. in the 8:00 hour, we will talk to judy shelton. h her nomination to the fed board was blocked in the trump administration she has a lot of views of what

the fed should be doing right now. joe, this drug news. new headlines every day. >> clots cause and effect unclear. i'm looking forward to judy shelton. she was, i guess, two anti-mmt for the new environment we seem to be in which is freewheeling gold standard. it should be interesting to talk to her she has strong views a lot of people that wanted her on the fed, but it wasn't meant to be. we are excited to finally talk to her about that situation and it is a good day we know what is going on with the two-day meeting. you mentioned astrazeneca and this vaccine reuters report says results of the company vaccine trial is reviewed by independent monitors and emergency authorization could come within a month. if the results are positive and it is deemed safe and effective,

the fda will review and issue the approval a lot of places today, a growing number of european countries, suspended it over concerns of blood clots. recently germany, france and italy and spain. astrazeneca said there have been 37 reports of blood clots out of more than 17 million people vaccinated in the eu and britain. no evidence that the vaccine carries an increased risk of clots. i mean, i'm trying to connect the dots of how you get there from the immune response you know, it is so -- we're not doctors. we'll talk to scott gottlieb of this to see the pathology of how the vaccine somehow leads to more of a chance for a blood clot.

is there some increase at all? even if you need a lot of decimal points to see the probability. it is troubling. you read some of the anecdotal reports about, you know, young people a young woman over in the european country after the second shot, i think, or it was, she died after four days people die you know, that's hard to understand whether there is any connection here we are talking about bringing it here i don't know >> look, it has been such a concerning story to watch. particularly because europe has been behind in the vaccination schedule and behind where other nations, including the united states has been, in terms of getting it rolled out. they have seen a spike in cases of covid as a result they have been fighting with

astrazeneca publicly about not allowing them to ship vaccines to australia and other places. just in terms of how quickly they were able to get their own supply it looks like a bad outturn. it is dissttressing to see they have fallen behind on the vaccines >> there is already anti-vaxxers sentiment. i have seen whacky stuff a thread with 54 comments on it. how did i get on this thing? it is all about conspiracies and drug company profits crazy stuff. >> and a rapid response from the regulators based on advice from doctors and not politicians getting involved i would like to hear what the doctors have to say and hear that quickly. >> detailed safety profiles on

these. it was fast. the fastest it has ever been to get these, but still big numbers of people that it was tested on. >> tested on thousands >> you would have thought it would be statistically demonstrable mississippi is the second state to open a covid vaccination to all adults. alaska last week michigan and connecticut will start next week. biden administration is offering vaccinations offered to all adults by may 1st. we have one of the members of the panel dr. ezekiel emanuel with us. and we will look at the opening and whether they have the premium already built in futures right now are in the red

except for the nasdaq which is weaker on a relative basis as we head to break, okay, check out the shares of gamestop higher right now trading was halted during yesterday's session. now that hey are lower it was halted for volatility we cannot write it in the teleprompter we need to leave it blank. i'll say it. closed up 16% yesterday. we're coming right back. >> announcer: this cnbc program is sponsored by truist securities

♪♪ in boxing or any other business, one day, you're gonna take a hit you didn't see coming. do you stay down? or do you get up? [announcer] and this fight is a long way from over, leonard is coming back. ♪♪ ♪♪ oh, that's wrong. what's wrong? your swing. that's terrible... you gotta put your knees into it, put your knees into it. that's too smooth. too smooth? watch this. ♪♪ you try it. ♪♪

better. ♪♪ oh, you gotta move your feet. charles. alright, alright, i'm going. i'm going. this is how you become the best! [music: “you're the best” by joe esposito] [music: “you're the best” by joe esposito] [triumphantly yells] [ding] don't get mad. get e*trade and take charge of your finances today.

as optimism continues to grow over the economy reopening, our next guest says the tension in the markets is about whether cyclical and reopening has room to run or are they getting expensive? we have chairman and ceo of rss asset management if wite are not staying in the stay at home stocks and the rich are already getting rich, what should we do >> the market overall, has pockets of expensive stocks. we have seen what happened with

p peloton and zoom and airbnb. you see those stocks started to fall they got ahead of itself now we had the reopening trade since september. airlines and hotels and casinos are going to have a big boom in business p compared to the covi year that doesn't mean the stocks continue to go up forever. you hear so many people talking about the enthusiasm for cyclical trade most of the markets are trading at 23 times forward earnings if you look at industrials, they are 24 times earnings. cat and deere are selling next

year's earnings. you know, you can have a bit of a pause in this cyclicals, which we, in fact, saw with technology the technology stocked peaked at the beginning of september and they went into the lull and they are still down the big names are down from where they were in the fourth quarter. they had a tough quarter in the fourth they had a very tough year so far up 2% cyclical stocks up anywhere from 8% to 20%. you look at a day yesterday for example where the airlines were the best performing group. many up 8% to 10%. the financials were down there is a lot of rotation as investors are seeking the level where it is all right to buy the stocks if we think they have gone up or perhaps they have come back in such as the big tech names we find many are attractive right now. it doesn't mean the whole market is expensive you have to be careful about

where you continue to put money and not just follow the crowd. >> all those multiples you mentioned in the past with multiples like that you feel like you are at the high end of the range. those aren't numbers like wow, this is great. with rates going up, whether slowly or over time, should that be something to keep in the back of your mind >> yes, definitely the market as a whole, if you look at 2022, i gave you the year that is current now for the next 12 months the numbers for gdp keep going up i suspect most ain nalysts are looking at 6% gdp growth this year it could be higher

that is relative to last year. if you look at history, we just looked at the last 50 years where gdp was over 4%. it was a post-recession year in those years, for all of them, except for one, which was 2000, the s&p was up now you can say look at what happened in 2000 is that happening today? we have extremely high price stocks that was the dot-com bubble bursting so many of the high priced stocks at the top of the capitalization table had no earnings at all. the big names at the top of the s&p are the big, you know, apple, amazon, google-type names. they have lots of earnings and cash flow. i understand the point you know, we have watched as the electric vehicle cars, for example, they have gone to 40

times sales. the percent of stocks selling for multiples of sales more than ten times is pretty high compared to periods in the past where you had, you know, $10 billion and $20 billion in market caps with no earnings and lots of excitement you have to be careful of those stocks joe, you know many have come down if you look at peloton, zoom, snowflake, crowd strike, doordash mongo db these names did not exist a year ago. they had parabolic moves the market has adjusted. you are right. 22 times forward earnings is not cheap. interest rates at this level are very low are they going up? they are going up. i think we will hear this week that the fed has no intention of moving them aggressively at all.

the market is trying to figure that out that is one of the big questions. that, taxes and inflation. we don't think rates are moving very far >> all right karen, i don't know if you saw who is on. the ceo of sotheby's on. do you want an offer on that piece behind you you want it appraised? >> sure. we're welcoming offers absolutely >> all right we got him on. >> thank you. >> we have him on. i like the color scheme and everything >> thank you >> yeah. all right. >> if it was an nft, it would be worth many millions of dollardo. >> i thought about that. that doesn't look computer generated. might be a place for what humans actually do. not with the computer. >> i agree

>> let's not throw those out just yet thanks, karen. i appreciate it. andrew, that day is not coming we still like it >> i'm taking screen shots of you, joe, and selling them by the dozen. i attached them with a non-fungible token to it >> my tie with her art work. that really looked good for today. >> we have the three-shot with becky. it is more valuable screen shot. >> we had that one >> i like your shirts, joe that is stepping out you usually wear a plain shirt i like the polka dots. >> i told you why. >> the other shirts were all di dirty? >> they are more tapered i was out last night i'm breaking through all resistance i don't want to hurt -- you see

the buttons go fling and like that that could happen. >> hold on are you wearing the lululemon pants? >> i am. >> they are so flexible. >> they are not as comfortable as they used to be no, they're fine they're good i'm going down there starting today. >> okay. big day. okay when we come back on the other side this, cannabis stocks surged after new york governor cuomo says the state was close to approving marijuana use in new york we'll take a closer look at the industry and particularly the new opportunities opening up for women as we head to the break. here is the biggest pre-market winners and losers in the nasdaq 100. ♪ ain't no mountain higher ♪ ♪ keep me from you ♪

mom and dad left costa rica, 1971. and in 1990, they opened irazu. when the pandemic hit, pickup and delivery was still viable. and that kept us afloat. keeping our diners informed on google was so important. the support from our customers, it honestly kept us going. i will always be grateful for that.

just over a year ago, i was drowning in credit card debt. sofi helped me pay off twenty-three thousand dollars of credit card debt. they helped me consolidate all of that into one low monthly payment. they make you feel like it's an honor for them to help you out. i went from sleepless nights to getting my money right. so thank you. ♪

so thank you. dana-farber cancer institute discovered the pd-l1 pathway. pd-l1. they changed how the world fights cancer. blocking the pd-l1 protein, lets the immune system attack, attack, attack cancer. pd-l1 transformed, revolutionized, immunotherapy. pd-l1 saved my life. saved my life. saved my life. what we do here at dana-faber, changes lives everywhere. everywhere. everywhere. everywhere. everywhere.

welcome back to "squawk. cannabis stocks out performing the industry and women are than jo enjoying the growth. frank holland has more >> the majority of jobs were for women. the percentage of women and cannabis increased from 30% to 42% last year over 2019. the report finds half of all cannabis workers have been in the industry a year or less. that dynamic increases the

chance of female advancement according to the founder of banks. >> to be able to come and join a company and work in the business for a couple of years and be considered someone with a lot of experience in cannabis is great and a great opportunity for women. >> women as cannabis customers is growing the service in california shows women have grown to half of the overall customers in 2020. we talked with that trend with the adult use dispensary owner in massachusetts >> there is an opportunity to define what it means to have retail cannabis stores and cultivation and consumption. it is being figured out. by all means, i think women in many ways, are the future of the industry >> with u.s. legal cannabis sales forecast to grow 40% in

2021, banks say there is a need for professionals for accountants and attorneys and women can transition into the industry that way. >> frank, if we are talking cannabis, i have to talk about the home state of new york do view of what's going on with governor cuomo >> a clearly exciting opportunity for tax revenue. so many states are trying to find revenue after the pandemic. one company that puts out jay-z's cannabis line. manhattan alone is a $1 billion market you can extrapolate what it means for the state and how big the market could be. new york is the biggest city in america. it has so much potential you look at a state like illinois where they cannot keep cannabis on the shelves. you imagine the potential of the tax revenue. >> one other new york question depending on the fate of the governor, does it matter

meaning if he ultimately is not in the seat, if you look at his lieutenant or the others, what happens in the state is there more support or less support for it if he is there or not? >> i don't think that is 100% clear, andrew. most lawmakers are concerned with the drama over governor cuomo lhimself. if you are in a neighboring state, people can cross the border and go get it when it comes to cannabis and other issues, if you have a neighboring state where people go back and forth often, keep it legal in your state, you are adding pressure to municipalities that make it level level. >> it forces the issue in new jersey and connecticut thank you, frank >> thank you becks. >> thank you, andrew when we come back, dr. zeke

emanuel will talk about the vaccine eligibility and the push to make it available for more americans. "squawk box" will be right back. >> announcer: executive edge is sponsored by at&t business our people and network will keep you connected. let's take care of business. okay, imagine this... your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, asap! so basically i can pick the right plan for each employee... yeah i should've just led with that... with at&t business... you can pick the best plan for each employee and only pay for the features they need.

some say this is my greatest challenge ever. but i've seen centuries of this. with a companion that powers a digital world, traded with a touch. the gold standard, so to speak ;) yes! hey ava, how's my bracket looking? this is gary, i invested in invesco qqq. a fund that invests in the innovations of the nasdaq-100. like this artificially intelligent home system. become an agent of innovation with invesco qqq. ♪

good morning welcome to ""squawk box" on cnb. the s&p 500 is looking to open up a point or two. we will found down to get to flat becks. thanks, andrew germany, france, italy and spain are the latest countries to halt the astrazeneca vaccine. they are concerns the shots may be linked to an increased risk of blood clots joining me now is dr. zeke emanuel. he served on president biden's coronavirus advisory board and as a white house health adviser in the obama administration. he is the author of the book "which country has the world's best health care."

doctor, the concerns, are they founded? >> they are founded in cases there are 37 cases that astrazeneca itself has out of 17 million people getting the vaccine. that is 2 people per 1 million these are the numbers you see on rare side effects from vaccines. i think there is a concern in countries. the data aren't overwhelming i think given the fact this blood clot number is about what you would see -- it is a little hard on the one hand regulators are saying no big worry. the data shows this is normal background numbers you have the halts i think regulators and governments need to be quite clear about it it may be that people are -- the governments are trying to respond to people's worries about the vaccine and not

necessarily the data because a lot of people do not -- our reactions do not necessary follow the data. they follow more emotional responses to the kind of things. >> it seems to me this is a situation that is pretty dire and we need to get additional information quickly to make the decisions based on the science particularly with the situation in europe just for covid they are behind us in terms of vaccinations as a result, they have seen a spike in cases going back up there. what's the dangerous position? >> you are absolutely right. they also have not done a great job in terms of ordering vaccine. relying heavily on the astrazeneca vaccine as opposed to other vaccines. it does put them in a bit of a quandary about needing to vaccinate a lot of people to control the variants that are spreading rapidly there.

countries like britain which had done a good job of vaccinating the population despite the variants and are seeing a drop in the number of coronavirus cases. that's very important for getting the handle on this it is a big worry that europe just doesn't have that many people vaccinated. we interviewed people from a lot of countries like the netherlands and norway it has just been a slow rollout there. one consequence is what you might call the third spike for them >> i guess the bigger concern for people not living in europe watching this, thif there are variants that are out of control, that could spread and spike up around the country and globe. >> it is a big worry this is another reason we have to be worried about the situation of covid in other countries. not just in the united states. obviously we have to get a handle on vaccinating people in

the u.s. we're at roughly 21% of the population at least having one shot we do need to be concerned about other countries. latin america, brazil had the p-1 variant. within our own country, we need to be concerned with the va variants that popped up in new york and california. we need to do genetic surveillance we have seen in places like israel and britain which immunized a big portion of the country with a big drop in the number of cases. that is reassuring and that should urge us on and spur us on to actually get the vaccine and as many people as possible as some point in the next few weeks,probably five to ten weeks, the demand and supply curve will cross where we will

have more supply than demand that is a good thing that the biden administration allocated the american rescue plan money to a major ad campaign to encourage people to get vaccinated >> back to the blood clotting issue. this is different than the anaphylactic reaction with other vaccines are other vaccines which have been known to have blood clots as a side effect and what is the -- how does it happen? is it just involving the immune system i'm wondering as a doctor if you can tell us the sequence of events that lead to that >> there seems to be at least two paths here norway just reported a case that they had a small country. 4.5 million people you wouldn't expect a lot of cases there.

where the number of platelets dropped tremendously you know, you seem to have a lot of clotting. the platelet number went down. the blood clotting associated with covid is a response not of the cellular immunity, but what is called complement that the immune system incin sciting complement and clotting. this is a pathway i studied in the early '80s at oxford as a master student that does seem -- we know it was possible with the virus. it may be possible with the vaccine. again, i think we need to put it in context 37 people out of 17 million. the risk of dying of covid is much higher than 2 in 1 million.

i think that needs to be put into context it is a terrible consequence to have a stroke or some other die of serious blood clot. covid is not nice either it does cause a lot of morbidity that we are just beginning to learn about. >> zeke, when you put something like that, it raises questions for somebody who is younger and healt healthier and less risk for covid. is this the only one >> it is the only one with the sizable number you know, you've got one of the consequences of giving the vaccine to a lot of people is you have to be sure what the control group is and the background situation is and if you are giving it to a lot of old people, there are a lot of

other health problems those groups of people have and sorting out the vaccine from what is the background condition is a challenge i think that's what you are hearing from astrazeneca and a lot of the european medicines regulators that this is background this is not an increase of the proportion of what we expect given the patient population getting the vaccine. getting to the bottom of that is the critical issue i know the fda is looking at it because astrazeneca has applied for the emergency use authorization in the united states we should remember that there's been some confusion and problems in running the astrazeneca trials that has slowed down approval in the united states. that began the trial with not full doses getting to the bottom and making sure we have the right data and how those data compare to the background, we expect in society

is really, really important. >> dr. emanuel, thank you for your time. >> thank you take care. coming up, listen up serial daters do you wish you could run a background check before a first date that is something to think about. you may soon be in luck. details are next. don't miss the interview with united airlines ceo scott kirby. coming up at 8:00. we'll be right back. ♪ i'll bless the day ♪ ♪ i discover ♪

think about this this is a step forward tinder another match group dating app will let users run background checks of possible dates they used a non-profit to allow people to run and background check using a person's full name the check reveals if the date had arrest record or history of violence it will focus on violence and it won't make drug possessions or traffic charges public it is not clear how much it costs the tinder users we have seen enough "datelines" to if the person knew or authorities knew

someone saw one recently of the college and the college is still trying to deal with the repercussions because they were warned again and again about this person which resulted in the death of the young woman the signs were clear that this person had a history of things and campus police warned and nothing happened initially i thought a background check on dating. that would be something that is as a parent i would appreciate >> you want to do it for anybody dating your daughter. >> yeah. yeah i want to know everything. i want to know. >> what is the price it will be like a credit score it can't be cheap. that's the thing i hope it's cheap. i'm worried it will cost more money. >> i want to know the credit score, too, of the person dating my daughter. i think all of that would be an issue. you have a few years, sorkin

the taime will come. >> we got to go. we have music playing us out when we come back, survey data on what office places could look like in new york after the pandemic the changes could be drastic we talk to sean donovan straight ahead.

welcome back to squawk as we all know the pandemic has shifted the way we work. in new york, it looks like it may be for good. roughly four out of five office workers will not be returning full time. i spoke to major companies and 66% said they would be splitting from hybrid models only 1 million employees are expected back in the office by september. joining us to talk about the reopening of the economy is new york city mayoral candidate

shaun donovan. however, you hear some of those numbers, it appears, i would imagine, daunting for the city of new york and ultimately the tax base of new york what do you do about it? >> andrew, it's great to be with you. and, look, we have to start with the fact that new york city has seen crises before and has recovered and nobody has been at the forefront of helping new york recover from those crises like me. remember, when i was working for mike bloomberg after 9/11 folks said offices wouldn't return to downtown we got flexible. we started looking at ways to bring more residential, bring more 24/7 neighborhood amenities to hour manhattan and so what we need is a mayor who knows how to lead through crisis as we can adapt to creating the jobs of the future and city of the future. >> tell us how you'll thread this needle because i think it's

a complicated one. we have social justice i shall us on one side and on the other side is a clamoring for more law and order. the question is can you do both at the same time >> well, andrew, we can do both at the same time i worked with the 21st century policing task force, mayors around the country for all eight years in president obama's cabinet and we were able to both create safety and respect at the same time but here's the thing, we have to remember, and i learned this from mayor bloomberg, i learned this from working with mayors around the country, in this modern economy, talent decides where to live and companies follow then quality of life is the single most important thing a mayor can do it means focusing on safe streets, ending homelessness and

it means we have to bring back arts and culture all of us have been on zoom for a year we're eager to get out and travel again new york city could see a boom from bringing new yorkers back and we have to make sure everyone knows where the safest city is. >> by the way, here on this network about some of the wealthiest in new york city jumping on a private plane and deciding to spend at least some of this pandemic down in florida and some say they're not coming back >> well, look, there may be new yorkers who choose not to return certainly i hear from a lot of my new york friends who have been away for a little while that they are eager to come back i think even more importantly, what we've seen is big companies, small companies making bets on new york, buying up office space so i think there is a chance with the right leadership, with a mayor who can focus on making us the

healthiest city in the world letting the world know we're the healthiest we have to build our infrastructure we have to make new york a digital future i have a plan to make sure we're the leading public health and biotech city. >> shaun, where are you getting the money from that's -- the taxes, as you know, in this city are high to begin with >> right and i've said over and over again, andrew. we can't tax our way to recovery what is unique about me in this mayoral race is nobody has worked side by side with vice president harris and president biden. i led the $4 trillion budget we reduced the budget deficit faster than anybody in world war ii and made big investments. we can do the same thing in new york city if we have someone who understands how to get our fiscal house in order in new york. >> let's talk governor cuomo do you think he should be out? >> look, i have said that we

need a real investigation but given the buildup of accusations, which frankly i believe, andrew, i think it is time for him to resign and allow the state to move forward. we have too many critical things solving this pandemic, getting people back to work. too many critical things ahead of us to have the distractions and the problems of a vacuum in leadership i think he does need to resign. >> what was the tipping point for you? i know you said there needs to be an investigation and i imagine something -- i don't know which of the news reports changed your mind about that >> frankly, it was last week when the accusations of actual physical abuse came out that really tipped it for me. you know, enough is enough and this state needs to move forward. women need to be heard and this investigation needs to move

forward, but at this moment we need leadership in albany that can move the state foofrd in one of the deepest moments of crisis this state has ever faced. >> we've got to run. to the extent supporters say let the investigation play out, don't let cancel culture, as they say, play out instead, don't you want to hear the facts, you say what? >> i say i don't call credible allegations from this many women cancel culture i call that believable and something we have to honor as new yorkers and we need to move forward with a leader who has credibility to be able to lead this state at a moment of crisis. >> shaun, it's good to see you we hope to see you again maybe we'll talk about pot in new york since that's the other big issue that governor cuomo is dealing with now. >> have a great morning.

>> you too becky? when we come back, the ceo of sotheby's will join us with a special announcement that's jt meusmonts away "squawk box" will be right back. doug? sorry about that. umm... what...its...um... you alright? [sigh] [ding] never settle with power e*trade. it has powerful, easy-to-use tools to help you find opportunities, 24/7 support when you need answers plus some of the lowest options and futures contract prices around. don't get mad. get e*trade and start trading today.

i had saved up some money and then found the home of my dreams. but my home of my dreams needed some work sofi was the first lender that even offered a personal loan. i didn't even know that was an option. the personal loan let us renovate our single family house into a multi-unit home. and i get to live in this beautiful house with this beautiful kitchen and it's all thanks to sofi. markets reach record highs a look at what's moving ahead at the open is straight up. and the digital art revolution could be here to stay we'll hear from the ceo of sotheby's on the latest auction action.

the fed's two-day policy meeting kicking off today. a preview of what investors can expect from former treasury secretary jack lu as the second hour of "squawk box" begins right now. good morning and welcome back to "squawk box" right here on cnbc. i'm andrew ross sorkin along with becky quick and joe kernen. we're 2 1/2 hours out from the open here's where things look like it will open. dow opening down 27 points the s&p 5005 which had been marginally in the red in the green. joe. here's some of the things making the headlines the faa has zero tolerance for unruly passengers. it centers around the mandatory

use of facemasks the policy will remain as long as the cdc's federal safe mandate is in place. china is pressuring allibab to sell the media assets canada's going to recommend use of astrazeneca's covid-19 vaccine for people age 65 and older according to a cdc report. that's positive news for the swiss drug maker which has seen germany, france, italy all suspend the use of the vaccine plus astrazeneca and the w.h.o. insist that the vaccine is safe. meantime the fed's two-day meeting getting underway today while no policy is expected, the

outlook for rate hikes is expected steve liesman has the latest >> reporter: good morning, andrew the cnbc fed survey shows the market has sped up the time line for fed tightening putting the fed and markets at odds over the policy outlook respondent's now see the fed hike rates for the first time since november 2022 and ending qear asset purchases in november of 2021. 63% say the $120 billion of monthly purchases not needed either for the economy or the markets. 83% say the 1.9 trillion biden relief package is too big. back in september respondents forecast the first hike february 2023 now it's november 2022 that's three or four months later. economic news and a huge amount of fiscal relief has been a chief factor robert brusca says the stimulus

package is too big and poorly allocated. joel naroff says 2.7 trillion, that's the last one in this year, in stimulus in one year should lead to a booming economy. even though inflation and interest rates may rise, we are only getting back to the normal levels faster than expected and that is good for the economy back in december the 10-year was forecast to rise modestly. this year to 1 1/4%. it's headed to 2% this year and 2.4% next year according to respondents. the 2.4% level is what it would take to bring the fed into the market little expectation at this point. the current yield the fed would rise to the rescue of bond markets. andrew >> whew. it's going to be fascinating to see what's going to happen

you know who we have in the next hour do you >> what have you got, jack lu coming up and judy shelton, is that who you're referring to >> that's what i'm referring to. i want to know what you want to know. >> well, i mean, i read miss shelton's last piece in the journal and i think she's very much against all of the things the fed has done and i think you could make an argument somewhere along the line what they're doing now was too much but was all of it too much i guess is the question? they're also interested in this idea, maybe jack would talk about this, other central banks have expressed their concern with higher bond yields but this federal reserve has not. i'm interested, does he think the fed needs to come in at some point. andrew, the question is this, the fed had a forecast and it

was perhaps not based on first of all the blue wave coming, then the extra 1.9 trillion in stimulus and why that does or doesn't change the fed's own policy outlook if you look at the forecast for the dodd block, they don't have rate hikes until 2023. market's moving that forward not that significant that the fed and the markets are out of whack but it would be interesting to see how they would realign it. >> steve liesman always fun good questions we will try to ask as many as we can. see you in a little bit. becks? >> thanks, andrew. when we come back, the ceo of sotheby's on nfts and the digital art revolution underway. before we head to break, let's take a look at a stock to watch. nikola filed raise more in a secondary stock offering and

they want to use the growth proceeds through a general stock quk x"ilbeig b "sawbo wl rhtack.

four, five, turn, kick. we got chased by these wild coyotes! they were following her because she had beef jerky in her pocket. (laughing) (trumpet playing) someone behind me, come on. pick that up, pick that up, right there, right there. as long as you keep making the internet

an amazing place to be, we'll keep bringing you a faster, more secure, and more amazing internet. xfinity. the future of awesome. nfts disrupting the art world. last week's auction setting records selling for $69 million. it may be just the beginning joining us to talk about the digital art revolution and share

some views of his own the ceo of sotheby's charles stewart. we just said the beginning in fact, charles, i guess you'd make the argument this is not completely new in the art world. for a while it's been transformed by digital innovation the art itself is now going digital. this is a few years. i guess now we're all getting up to speed on it but it's not completely new, it's just headlines now. >> that's exactly right. the nfts as an art form, digital art has been around for years and years, decades even. nfts themselves and some of the platforms that trade them have also been around for a few years. obviously they've come in a major way into our collective consciousness in the past few months that's linked to the rise of crypto values but i think it goes beyond that aswell. >> charles, you make the point that -- and there's a lot,

obviously, that's not totally generational but there are a lot of young people that aren't interested in physical ownership of something you call borderless ownership. i figured it out actually thinking about andrew's michael jordan baseball card do you need a card with frayed edges up in the attic sitting in a box or would it be better to have a digital ownership there's no reason why that card, if it's limited edition, needs to be sitting somewhere. so i guess once you get past that that it's not all about just holding something in your hand >> you know, to me that's one of the major things that's really come out of the last 12 to 18 months in everything digital it's an obvious statement. exactly as you say, in the art world there's been a pivot towards digital in almost everything except the art and now we're getting there in the art. on an unrelated note i'd like to

talk to you about that card of yours. >> andrew's. i saw an oscar robertson one that i would like to own where he was 8 feet off the ground, his legs, rebounding i would pay to own that nft. cincinnati amazing. you've got some interesting developments with a digital artist which -- who's anonymous, we're not even sure whether it's one person or not or it could be a group of digital engineers but what does that mean for sotheby's? can you go into the news >> absolutely. we're really excited we've been following the nft space for some time. we're excited this morning to be announcing an upcoming sale with an artist known as pac this is an artist who's been producing digital art for decades, actually, and we're very excited to bring their work to market.

the artist prefers to remain anonymous in part because the artist wants it to be about the art but it's one of the many new things about crypto art in particular that i think is different and potentially a bit disruptive, certainly when you compare it to the traditional art world. >> and tell us, is this the beginning of you doing this a lot? how many digital artists are you going to take into your stable >> you know, it's really -- it's still very early, needles to say, with crypto art in general and this is new for all of us, but there's a lot here that's really exciting and we think has staying power. so we wanted our first sale, you know, as a market leader to be with one of the most established artists which is why we've chosen to collaborate with pack here we're going to be selling one of one works of art but also open

editions in the nft world where many people can buy tokens for the same work. there will be other surprises along the way over the next few weeks that i won't go into detail on here but i do think this is the start of something you'll see more frequently one of the interesting things about nfts is beyond the fact that you've got a new audience and a new aesthetic, which is always a great thing in the art world, this really has the potential to by pass a lot of the traditional gate keepers and vetting processes of the physical art world that's something that's really exciting and as it develops we're very curious to see where that takes all of us. >> here's the thing i'm trying to figure out because there's this sort of artificial scarcity that's created with an nft, right? a photographer can number, you know, 1 through 100 and you think there's100 prints of thi

and they can go make posters of it separately but everybody thinks that's okay because those 100 are more valuable. do you think that you're going start seeing artists attach, you know, nfts effectively to the first 25 or -- first -- or just to 500, tell you it's 500 and then the question of course is what happens if they want to reissue the art or issue more of the art? how is that going to change the dynamic over time? i think these are the things that a lot of people are trying to grapple with in their head. >> you're exactly right, andrew. that whole scarcity versus abundance continuum is a debate that's existed in the physical art world, with photographs, editions of work in some sense it's not new here because the digital copies are literally indistinguishable and because it's controllable, that's something that artists will have to choose for

themselves which model they're going for. as i said, you'll see in our upcoming sale some one of one works which are not replicable or won't be replicable but open editions where many copies of the same thing will be sold. it will be interesting to see the difference in values and how collectors think about those things, but that topic of scarcity versus abundance is one that is routinely and widely discussed. over time if this market's going to develop, it's something that artists will have to get right in order to -- for values to increase and engage their audiences in the right way. >> charles, what's the last year been like? i can't imagine you need to be there physically at an auction and with the pandemic which, you know, has the fed on full bother, we're going to see jay powell today, that's usually pretty good for collectibles as money's sloshing around. has it been a great year

has it been a challenging year what have been the issues? >> no doubt it's been a challenging year our top line is down mid single digits, which actually is a pretty great outcome in financial terms, but what's been interesting is we've been able to reach and engage a much broader audience with all the digital first rules. we're seeing millions of people watch our auctions in the digital first format pre-pandemic we would have had a few hundred people at most in the auction room that's exciting to be able to engage different and larger audiences. we have seen a lot of engagement to your point on values, maybe it's not surprising given everything going on, whether it's art categories where we are routinely seeing records set for artists or in our luxury categories, you mentioned trading cards, watches, handbags, wine and spirits, you know, design furniture, these

categories have been absolutely ripping over the last 12 months and probably no surprise, you know, for us about 1/3 p of our global bidders come from asia and a larger group of those from greater china. that's been a noticeable trend that supports the global markets too. >> charles, we were going to get a big screen tv and one of the options from these smart guys at geek squad is you can have a resting tv that you can download art on to your resting tv and i was just -- we were showing some of the nfts behind you some of them were amazing. is that the future am i going to get motion sickness when i walk into someone's room that's showing three or four live art pieces that nfts moving around? do you foresee that some day >> well, my son told me physical

walls are so 2019 and i do think there's an element a lot of debate about nfts and digital ownership. there's no doubt people are comfortable owning things on screens. people's tvs already and in the future can reflect those images with lots of examples of collectors who do that that said, just to be clear, i don't think this is going to completely replace the physical art world. what's most exciting about nfts for me is it's a new aesthetic a very new and engaged audience but it doesn't have to necessarily somehow replace or -- this can exist alongside the physical art world in a really interesting way of course, there's people carrying digital images of their physical art and people will probably end up printing out physical images of the digital art, too a lot to come here

nfts, aside from the fact it's a new aesthetic and new audience, the message is the medium here there's so much power in this blockchain and co-creator, creator, co-economics and all kinds of things that have the power to disrupt the traditional art market which is exciting. >> great art any museum you can stare at a motionless piece for a half hour and see things totally differently. you know the millennials, it all has to be experiential, moving around, whoo, that's what we're seeing here. you can't go look at a beautiful monet, dhali, it's just not moving enough. not enough experience there for you. i'm kidding. i think it's cool. it's not -- the genie's not going back in the bottle no matter how much people say it's like the current pets.com

phenomenon it adds value. >> it's very early the values are going by for sure we think as it develops and matures there is real staying power. like you said, you don't see these things go backwards necessarily. what remains to be seen is the model that springs up around it, how big is the ecosystem is it something that's front and center for us in a few years or is it something that has developed but in its own capacity and alongside the physical art market. i know you know this, nfts have a lot of applicability outside of the art market. we're seeing this in the form of, you know, collectibles, arts, music, other categories. >> blockchain. you're right charles, thanks.

>> thank you >> it's sotheby's, is that a good pronouncement for you >> i wouldn't expect any different from you. >> sotheby's >> thank you. >> thanks. >> thank you very much bye. >> great ceo name for sotheby's, beck, you know what i mean >> he knows you well yes. when we come back, a special guest. far peak ceo tom farley will join us to talk markets, the spac boom and much more. right now though as we head to a break, let's take a look at the winners and losers in the s&p 500. pinduoduo up by 3%

these days, we want sophisticated but simple. cutting edge made user friendly. in other words, we want a hybrid. and so do retailers. which is why they're going hybrid, with ibm. a hybrid cloud approach with watson ai helps manage supply chains while predicting demands with ease. from retail to healthcare, businesses are going with a smarter hybrid cloud, using the tools, platform and expertise of ibm.

welcome back to "squawk box. its etoro going public with a fintech. still to come on the other side of this break, far peak chairman, tom farley going to join us. we'll talk spacs and everything else with him. former treasury secretary jack lew will be our special guest. march is women's history month here's luke capital markets president courtney gibson on getting more women in leadership roles. >> in the u.s. more than 50% of the college educated labor force is made up of women yet women still only hold 25% of leadership roles and less than 5% hold the title of ceo as leaders, we all need to demonstrate that this is a business pry or the by not only what we say by what we do, what we measure and how we lead

real outperformance happening in the last few months especially for the mid and small cap stocks keep an eye on that. also, watch what's happening with the nasdaq composite overall. we have seen a bit of a bounce you can see here, we did see some bigger draw downs over the course of the last couple of at least quarters here. this draw down was 12% nasdaq bouncing here 1% yesterday. the three stocks that maybe help

contribute the most have been these three. facebook up 3.5% tesla up almost 5% and nvidia up 7% facebook, tesla, nvidia all part of the nasdaq 100, the biggest nasdaq stocks out there. these stocks make up roughly 10 to 11% bigger bounces in facebook, tesla, nvidia, becky, the reason we have seen the bounce off the lows we'll see if that trend continues. back over to you, becky. >> dom, thanks very much we also have some news out of moderna this morning. the company announcing it has begun dosing patients in a mid to late-stage study and children aged as young as 6 months old. all of them less than 12 years old. moderna is looking to enroll 6,750 children in the united states and canada. the company says it's already testing the vaccine in a

separate study of adolescents between 12 and 18 years old. this is the big question when will we see kids younger than 16 get the vaccine. it's going to take a while because you have to change the dosing for these kids. i was going back and forth with stefan bancel and he says when it starts they will be doing kids 8 to 11 they'll probably be the first of the younger kids to get approved and then it will go down from there. they've tested other vaccines with 100% of the same technology in infants not new technology he points out they've had close to 18 million americans who have gotten covid vaccines according to the cdc websites.

moderna is one of the bigger movers and the last i looked it was number 3 out of the top movers in the s&p 500. it's up by 2 1/4%. joe? >> thanks, becky coming up, tom farley of far peak it's not fair peak, is it, tom is our special guest looking good for the remainder of the show. we're going to kick things off with a look at the markets and the record run for stocks. then former treasury secretary jack lew going to be our guest. just yesterday, the day before t li i said, maybe norungt out. we'll ask him. "squawk box" returns after a quick break.

will there be an ev for me? what about me? one for me? you mean us? what about me? and me? how about us? yeah, how about us? great question. wait, can i get one in green?

got one for me?! hey, what about me? what about us? is there an ev for me? ev for me? us? what about me? me? for me? ♪ ♪ (dog whimpers)

welcome back, everybody. a record close yesterday on the s&p. joining us right now to break down the moves is tom farley former president of the new york

stock exchange and current chair and ceo of far peak. >> and i'm chairman of global blue on the stock exchange the reason i mention that i contracted coronavirus or at least i became aware that i had it i got the report the same time andrew did the story of etoro going public by spac it's an interesting company where they have applied social media precepts to trading. i heard that it's going public for $10 billion. i quickly in the break logged on to my crm system what a great business this is. this could have a valuation of a

couple billion here we are a little over a year later it's going public for $10 billion, global blue is doing well if you had told me a year ago we'd be in the position we're in, i would have said you're crazy. many ways it's been a year of anticipating recovery, been the year of the spac, looking back it just shows how little we know and how little i know. >> tom, you aren't alone look at what happened with the selloff. things changed in the ways we didn't anticipate. could you imagine a year later we'd be talking about 25% of the american adult population having received their first vaccine for a disease that we had only heard about for the first time, only declared a pandemic, i think it was march 11th of 2020 we're talking just over a year out. the idea we could get to that

point. not to mention the trillions of dollars the united states is spending in stimulus, aid money, not to mention what the central banks are doing. these are unprecedented moves for an unprecedented pandemic. >> i thought you were going to say 25% of the adult population has a spac. >> that, too >> i couldn't have imagined that either but that's a separate topic for us to cover. yeah it's amazing i remember a year ago talking to masters of the universe, saying the shortest any vaccine has been developed is four years, this looks like it's more complicated. this is a modern miracle and a testament to education and all of the geniuses we have in this country and abroad i will say we're lucky here in the u.s. because the situation of vaccinating 1% of the adult population a day is a luxury it doesn't exist in rest of the

world even in parts of the developed world like europe. hopefully the story is the rest of the world getting their act together as well ultimately we need a global rebound. we need the consumer to come back part of that is the consumer crossing the borders, traveling, doing all of the things they were in 2019 we're still pretty far away from that but making strides in the right direction. >> part is the progress with the vaccine, part is the numbers coming down in the united states and a huge part is the liquidity out there. that explains a lot of the spac craze we've seen it explains what we've seen in the digital art world. when you look at all of that, tom, do you worrisome of that gets pulled out from under us? how do you weigh that? >> i'm very nervous.

i think it's the proverbial sediment in the punch bowl what are we going to do to rein in the federal debt. the strategy is spend, spend, spend. you look at republicans for a long time, we had a republican president, republican senate not doing anything to rein in government spending, rein in government entitlements. there were no voices the bastians of conservatism went silent on some of the important issues we now have a democratic group spending money they look a little bit hypocritical given the track record it's hard to see where it ends but ultimately we'll have to stop spending and raise rates. the party will have to slow down for a bit.

i suspect it will come sooner rather than later. >> yeah. what does that mean for spacs too? this is an area you know so well you saw spacs coming so early on what's the market for spacs? what's the buzz? everybody's got one. >> i hope it brings in spacs there are great people running spacs and there are some knuckle heads. this is an attractive proposition for investors. when the spac party ends, the nice thing is the people who get hurt are the sponsors who are by and large wealthy individuals who can afford to fund that up front investment in the spac so i suspect there will be a pull back right now there are 400 open spacs. there's no way there will be 400 really good deals for investors for those 400 spacs and i think

it will be a good kind of culling or good washing out. the thing i'm concerned about is investors getting hurt this is completely untethered from financial reality. >> you're talking about spacs post deal? >> yeah, where they're putting out five-year projections of a pre-revenue business the market is somehow valuing on 2024, 2025 revenue that may or may not materialize. my concern is people will buy into that enthusiasm and ultimately get hurt if the stocks come way off. that's my really only concern about spacs is that exact sort of situation really just selling a stock on hope and belief. i'd like to see sponsors be a little more tethered to those projections, hold on to their stock holdings for those projections. i tied up most of my sponsor shares on my first spac deal for three years very much invested in that deal that's really the only thing i'm

worried about. spac sponsors getting hurt, that's not something for any of us to worry about. >> hey, tom, on that point, and i've thought about this because i know gary gensler when he gets into the role to run the sec is going to look hard at the disclosures, but other types of forcing mechanisms you talked about a three-year hold 23 there was a three year, 36-month hold for all sponsors, for example, how do you think that would change the business >> andrew, good to see you i would like to see the market solving it as opposed to gary gensler. you saw how short sellers are moving into spacs. that's a very good thing investors are becoming slightly more discerning in the last couple of months with respect to

spac sponsors. sellers are being slightly discerning making the vehicle more efficient. that's the sort of fix i would like to see as opposed to a heavy handed kadule or hammer, but with respect to locking up sponsors for a longer period of time, at least on a majority of their shares, there's some meaningful stake of their shares, that just sflietrikes ms good business practice i like to know our partners are in it for the long haul. >> how would you feel about this you can only make projections far out enough that the sponsors are locked into those projections, meaning if you want to make a projection of what's going to happen three years from now, the sponsor is locked up for three years. if you want five years for now the sponsor is locked up for five if you only want to make projections for six months, great, go for it the sponsor can get out after six months it seems preposterous for me

that you can go out and sell a transaction based on earnings that are a decade from now, you know, path to never profitability, extend to pretend and the sponsor jumps out eight months after the transaction. >> you and i totally agree that's preposterous and that's the sort of situation i just don't like to see because i worry about people getting hurt. if you're the voice of the regulator and you're saying that, i lived through dodd-frank regulation i was managing exchanges those exchanges oversaw credit default swaps, traditional futures and energy futures the d.c. community will screw it up if on the other hand you were actually giving me the voice of the investor, then i absolutely agree with you that's where i think it should come from and i would like to see investors apply a lot more discipline where the sponsor walks in the door, this is a pre-revenue business you're expecting revenue to

start in 2023, 2026, are you going to hold your shares for that time period that is a conversation that needs to be going on. >> tom, thank you. >> good to be here with you. >> i'm glad you're here with the rest of the show we'll keep chatting about this and much more. thanks for coming in good to see you today. >> thank you. coming up on the other side of this break, former treasury secretary jack lew is going to join us after the break. his thoughts on stimulus, the nation's growing debt and taxes. here are the futures after this hour we're an hour and a half before the open nasdaq powering higher 72 points higher s&p 500 up a little over 4 points back with former treasury secretarafr isy teth we see homes staying cooler,

without the planet getting warmer. at emerson, we drive the adoption of more environmentally friendly refrigerants, for a greener, more sustainable impact on our future. emerson. consider it solved.

welcome back to "squawk box. the u.s. budget deficit widened to unprecedented levels. estimated 10.3% of gdp the deficit in 2021 would be the second largest since 1945 exceeded only by last year's nearly 50% short fall. deficits expected to decline post pandemic but will remain historically large jack lew served as the treasury secretary andchief of staff to president barack obama jack, good morning great to see you let's talk about some of these numbers because there are concerns about the deficit and the question is, you know, when you look at the economy today

and look at the economy two or three years out and potential tax policy on top of it, what you think that deficit looks like. >> good morning, andrew. obviously we're spending enormous amounts of money during the crisis, which i think is the right thing to do. two ways of evaluating the debt, one is the total amount of debt, the other is the debt service cost i think it's important to note that in a world of near zero interest rates, the debt service costs have actually not gone up. the question from the capacity to service the debt at the moment is not a serious challenge. as you look ahead, interest rates will creep up. whether they stabilize in the two to 3% range or whether we see a great deal of inflation is what the debate in the last few weeks has been about for my own part, i see a lot more risk coming out of this

cries sigs with an economy that is not as strong as it needs to be and then i see the risk of losing control over inflation. this is not the 1970s. we're not talking about funding a war, we're talking about getting through a crisis the question is what do we do to get through a crisis i've always believed when you get through a crisis, you do what you need to do to get through it and then you go through a balanced fiscal program. >> i think next up on deck is going to be an infrastructure plan that the administration will be proposing along with sometime this year tax increases. how do you think about that? >> so i look at the question as one of the most urgent priorities rebuilding our infrastructure. dealing with some human infrastructure, human capital challenges making sure that people can get into the work force. get the training and education they need with the tools like

technology and roads that's where the future economic potential of the economy can really be expanded how much of that can we afford will in part depend on our willingness to pay for it. when i look at the tax base it has shrunk because of tax policy and now because of economic conditions we can't sustain the program that we need for our country with revenues at the current percentage of gdp they are and where else should you go when you are looking for new revenues you need to look wherein come and wealth is the greatest that's not in any way punitive, it's simply where the revenue is it's where the income and the wealth are and i can go through a host of options that are on the table and frankly the appetite for investment will be balanced against the difficulty of raising revenue and it's important to be ambitious. >> what do you think of a potential transaction tax? here we are on cnbc.

i'm looking at bitcoin now at 55,000 you're seeing the markets near all-time highs, reaching new highs constantly what would you think of a transaction tax? >> i think a lot of good work has been done on how to design transaction taxes so that they could be effective and administratable without doing harm we've looked at them seven, eight, six years ago and the work was still pretty nascent. i don't know that it's the first place i would go, but i would think it should be on the list of things that you look at there's some pretty low hanging fruit. the top individual tax rate, we know the economy did just fine before it was reduced. the corporate tax rate there was no clamoring in the business community to go to 21%. the clamor was to go to 25% and i still think 28 is the right level. there's absolutely no excuse in a country where concern over

income and wealth inequality is so great to let assets go untaxed as they appreciate in value and pass from generation to generation. so there's a lot of options, not all of them will turn out to be capable of getting a majority support, but you can raise a lot of revenue if the goal is ambitious. >> okay. fphilosophical question what do you think is the top rate that you could ever imagine putting in place meaning what do you think is just fair? fair trade >> you know -- you mean on the corporate side or the individual side >> on an individual, meaning whether you make $100,000 or you make a billion or more, is there a number at which you say, you know what, i don't know, 60%, 70%, 80%, that's the high number or no? >> so, you know, andrew, it's

hard to answer the question with a simple number because the top rate doesn't tell you what the effective tax rate is. we still have a tax code that's so riddled with special provisions that give you the ability to shelter income. very few of the top most wealthy taxpayers are paying the top rate on much of their income and i think you have to look at effective tax rates. if we could accrue a combination of tax provisions and better enforcement, get the effective tax rate back into the range of 39, 40%, you know, that would raise a lot of revenue >> i think tom farley's got a very quick question for you. >> hi, mr. secretary everything about technology is enabling companies to grow in a more distributed way, to be able to start a company abroad, to be able to invest abroad. are you concerned that raising rates by 33% i think in the example you just gave from 21 to

28 will force businesses and/or investment abroad? >> look, i think it's very important to have not just the u.s. conversation but global conversation having a race to the bottom in both tax rates and tax savings is not a great thing for democracies anywhere in the world. and i think the u.s. needs to be a leader in that discussion. i'd be interested to see secretary yellen weigh in on that and i think that you have to work on two fronts, getting our house in order and then working as a leader in the global community to have it be done in other countries as well. obviously each country makes its own tax policy, but if the u.s. is a leader we'll see better outcomes. >> jack lew, always great to see you. thank you for joining us hope to get to see you soon. >> stay well. >> i look forward to it. >> thanks. becky? >> wish we had more time with him. we'll talk to him soon. united airlines ceo scott

kirby will join us right after this break. plus, retail sales data coming up at 8:30 a.m. eastern time at 8:40 judy shelton will be atr guest. th plus far peak chairman and ceo tom farley we'll be right back. in other words, we want a hybrid. and so do retailers. which is why they're going hybrid, with ibm. a hybrid cloud approach with watson ai helps manage supply chains while predicting demands with ease. from retail to healthcare, businesses are going with a smarter hybrid cloud, using the tools, platform and expertise of ibm.

this is how you become the best! [music: “you're the best” by joe esposito] [music: “you're the best” by joe esposito] [triumphantly yells] [ding] don't get mad. get e*trade and take charge of your finances today.

good morning markets muted today. we mention that to contrast it with exactly one year ago, march 16th, 2020 when the dow plunged 13% amid virus panic on wall street what a difference a year makes investors now rejoicing as the dow hits record highs after record high. in focus, the federal reserve kicking off a two-day meeting. judy shelton will join us to break down the state of the economy. and airline stocks surging as demand shows signs of a big bounce we have an exclusive interview with the ceo of united airlines that you can't miss. the final hour of "squawk box" begins right now

good morning welcome back to "squawk box" here on cnbc i'm joe kernen along with becky quick and andrew ross sorkin 80%? don't even put those thoughts into their heads, andrew what are you doing >> taxes. >> 80% what are you doing what are you thinking? >> i was trying to understand. >> don't suggest that! >> i was trying to understand how jack lew was thinking about this. >> don't say that! whoa, andrew said 80, i guess that -- anyway, i'm kidding. 60, 70, or 80. 60, 70, or 80? >> because by the way, in most places it already is 60. that was the point >> let's work through october for the government and then we can keep november and december treasury yields are indicated at about -- i think they're under 1.6% there's the futures up 10 or so. i'm surprised they're not plunging on the thought of 90%

10-year 1.599. let's show you the squawk stack which you have to say kind of care pli at times. we did put tesla in because the techno king has got that back above 700. maybe it's the master of coin has it back above 700. bitcoin at 55. below 1.6 now on the 10-year a week ago on monday it was 1.6. that's what we thought what if it stabilizes. here we are. around 1.6 beck, it didn't continue to move higher not at 1 3/4 back where we were about a week ago. see how it lasts tepper put it, he said, several months. >> several months. >> right nothing lasts forever. >> i think i would have moved bitcoin out today for the next story because it's interesting

>> maybe. >> one of the stories we've been talking about is moderna it's in the top five movers in the s&p this morning after the company says it's begun mid to late-stage studies testing its covid-19 vaccine in children between the ages of 6 months and 11 years that study will test the safety and effectiveness of a two-dose regimen with shots given four weeks apart. moderna is hoping to roll just under 7,000 kids for that study. by the way, if you're interested, if you'd like to look into it, they're trying to sign kids up at the website wwb.kidcovestudy.com the faster they sign up kids the more quickly this can get approved that stock is up by 2 3/4 percent. in other vaccine news, sweden and latvia are pausing injections of the astrazeneca vaccine. more than a dozen countries have halted vaccinations.

the european union's drug regulator is investigating this and france announced hope that it could be resolved on thursday the world health organization has recommended countries continue giving that shot. separately, in canada the cdc reports that the astrazeneca vaccine will be recommended for people aged 65 and older and the spac fin tech acquisition core will combine with trading platform etoro and take the robin hood rival public they will have an investment value of $10 billion fin tech, that spac up 11 1/2 percent. that's the one tom farley said he was looking at a year ago. >> andrew? >> thanks, becks. big news from the travel industry tsa screeners at u.s. air ports topping 1 million each day over the weekend. cnbc's phil lebeau joins us now with a very special guest. phil >> reporter: thank you, andrew

let's bring in scott kirby, ceo of united airlines from the united club at dfw down in dallas scott, we heard the reaction yesterday from not only you at the jpmorgan conference but some of your colleagues as well demand is clearly back paint a picture in terms of how crowded the airports and airplanes are right now and what we're likely to see let's say two months from now. >> yeah. phil, thanks for having me this morning. and it is nice that we've started to see an inflection in demand the airports are more crowded than they were though they're still a long ways to go. revenue is down 60% and demand is 50% lower than it was before but we're clearly on the up swing. as more and more people are getting vaccinated, particularly leisure demand is coming back. coming back at almost 100% international borders are still closed my guess is business demand is still six to nine months from

its inflection point but it really is encouraging to see and feel like we've turned the corner and are on the road to recovery >> scott, you said yesterday you may have positive cash generation this month. some competitors may be there this month or the next couple of months how competent are you that that is sustainable this is not just that surge in march but that you can build from here? >> well, look, we're excited to be first airline to return to our core cash burn getting back to positive territory in march we do think that's going to continue going forward and really, you know, this goes back a year, taking all the decisive action to deal with covid. allowing us to get back to core cash burn positive going forward it's nice we won't be talking i hope about cash burn, layoff, those kinds of nega negatives. it is dependent on a continued

thought or a known or unknown in the battle of covid, it's likely the continued cash burn will head up. as long as there's not a setback, i think we're on the road to recovery and we can put those days talking about cash burn, layoff, things like that largely in the rear-view mirror. >> scott, a lot of people seem to forget, because i get this question from people and they don't seem to remember that you became ceo basically when this pandemic started you have not been the ceo of an airline during what we would consider normal business times but you've taken this last year in order to make a number of changes, ordering larger single aisle airplanes. some of those changes will filter through quicker than others, but when do you expect those to start hitting the bottom line? >> well, look, i am really proud of what the team at united airlines has been able to accomplish getting through this.

and really for us to be the first airline to get back to our core cash burn being positive despite the fact we're the largest business airline in the u.s. the largest coastal gateways is a good indicator of where we are headed in the future we had two big initiatives working pre-pandemic focused on changing the customer experience and expanding the mid continent hubs those are working before and we're confident they're working forward. what's great is as we turn the corner on cash burn, we can set our sites on improving the customer experience and expanding the big continent. and we've said by 2023 we would be back to the same ebitda as 2019 and we expect to expand. >> scott, we know international travel is dead in the water not just for you but for the entire

industry when it comes back you said you think europe comes back before asia big part of asia is china. how worried you are you about asia and how long it takes to come back? >> that's a hard question to answer really because it depends on politics, science i do think europe will come back first. they're closer to the united states in terms of where they've been with covid, where they are with vaccinations. a lot of great work going on in israel in particular right now to do studies on -- for more evidence that once you've been vaccinated you can't get the disease asymptomatically which can be a transfer. so at some point i think we will start to open european borders probably with some kind of vaccine passport, if you've had a vaccine you're allowed in without a quarantine because the asian countries have not had the same level of cases, fatalities, et cetera that we've had in the united states and because as a result they're

further behind on vaccinations, my guess is they will be more cautious about opening and, you know, the good news is at united we've been able to get the core cash burn even with international shutdown across the globe. europe will be a huge tail wind for us assuming it opens first then it will be three, six, nine months later asian starts to broadly open. >> hey, scott, i'm curious with now 12 months of perspective how you look at the taxpayer funded bailouts and frankly whether they were ultimately needed and whether private market solution might have been available? i ask because clearly your stock is up 300% from the lows most of the airline stocks are up and people -- the market is obviously hot, hot, hot. people are buying things, frankly not intending to make profits for many, many years at this point and how do you think taxpayers

should think about all of this >> look, i think the three rescue packages that went through for the economy were critical for avoiding a depression huge kudos to congress and the administration for what they have done to get us through this while, look, the stock market is up now, i watch cnbc every morning, there's a lot of businesses going gangbusters if you're selling home repair goods, if you're selling online your business is through the roof, but there are a lot of us that are in worse than a depression anyone that is in travel, entertainment, leisure, local restaurants, those industries have needed support. they've needed not support for the long term, they've needed a bridge to get through the crisis and to set themselves up for the rec recovery an airline is a perfect example. we're a huge contributor to the

places that people go. orlando is an example. keeping that infrastructure in place and the people employed so they could bounce back was really what these three bills have been about. i'm a huge proponent of that i recognize theconcerns on the other side that we've increased the deficit, but i agree with secretary yellen, this was the time where it was the bias to go too big than not big enough because the risks were so large. we're set up as we get vaccinations across the country, all of us are primed to come back 100% and support more robust growth. >> hey, scott, the faa says that it's going to continue its policy of zero tolerance for unruly passengers. a lot of those cases of unruly passengers have been people who didn't want to wear masks on the airlines there have been 500 cases just

since december of passengers getting written up and taken off of planes because they're not wearing masks. are the incidents on the rise? are they tailing off what happens to the flight attendants on the front lines who have to act as bouncers. >> 99.99% of the customers do the right thing, appreciate the mask policies and are doing the right thing for their fellow customers, neighbors, and employees. i'm really proud of the employees of united airlines, gate agents and flight attendants are tip of the spear on this dealing with customers would very a whole de-escalation protocol that we go through at united to attempt to avoid making the situations complex. it ultimately results in handing a note, a card that's been prewritten to a customer that says essentially last warning and if you don't wear the mask you'll be banned from flying united until the mask policy is removed. we've had about i think 1,000

customers that we have ultimately temporarily banned from flying united in the past year given the number that we carry, that's a relatively small number our flight attendants have done an amazing job with dealing with what can be a tough situation at times and avoid escalating the problems i think it's getting less and less societal acceptance of mask and of doing the right thing is much higher, at least that's my anecdotal view so we have fewer incidents at a time on airplanes. not zero but far fewer. >> scott, one last question. a couple of months ago you guys invested in archer, which is an ebotol startup essentially looking at urban air mobility where people theoretically in the future can go from let's say burbank down l.a.x. and then transition to united flight. how far away are we from seeing

that become a reality? because it sounds great conceptually right now, but when you looked at making this investment and when you look at that business opportunity, how far before we might see that actually happen? >> well, look, we've been excited. once we got -- once we viewed the -- we could see the light at the end of the tunnel to get back to making investments in all kinds of new technology, ebotol is another one of those, we tried to pick who we thought was the best partner on the technology that they're developing the current plan is 2024 i'm not sure if it will be 2024 or 2025 but i do think the companies that are developing and we picked archer as our partner this technology are going to be the ones to change a big part of the infrastructure of around transportation, the kinds of examples. burbank to l.a they replace helicopter service,

better for the environment, quieter, higher safety i expect when it's all through. we were excited to be able to partner with archer in this. it really is about their technology development and going beyond what the near-term thing is burbank to l.a. and where can this technology take us even farther in the future. >> scott kirby, ceo of united airlines joining us from the united club at dfw in dallas scott, thank you very much joe, i'll send it back to you. you heard him mention the mid continent hub flight i know you're familiar with denver, joe. go through denver sometime i did a couple of weeks ago. wow, night and day compared to other airports around the country. it is crowded. >> you don't want putting 4, 500 people on the plane and then taking them off, phil. i think we've learned that the hub model is better. i think it is. you've got to do it that way,

don't you think? we learned that. it took a while. >> i think so. point to point still works there are plenty of airlines who have made it work and still make it work but clearly for united the mid continent hub is the strategy. >> thanks, phil. coming up, retail sales data for february wall street eagerly a wear thing this number and economist and former fed nominee judy shelton joins us on investor's anxiety about inflation and how banks have kind of transformed their business model away from private money. all they've got dtoo is hold treasuries you're watching "squawk box" on cnbc - in business, customer support is mission critical. with grammarly business, you can turn your frontline reps

into bottom line superheros. take carl, for example. carl's got a superpower, spot on customer support. grammarly business helped him set the right tone increasing our customer satisfaction by 17%. - [children] hurray! - which leads to happier customers, and stronger relationships. learn more at grammarly.com/business. and stronger relationships. if you're 55 and up, t-mobile has plans built just for you. get 2 unlimited lines for only $70. and now get netflix on us with your plan. and this rate is fixed, you'll pay exactly $70 total. this month and every month. plus, switch today and get a free smartphone for each line. the best value and award-winning customer service. only at t-mobile. don't like surprises? [ watch vibrates ] proactive notifications from fidelity keep you tuned in all day long. so when something happens that could affect your portfolio,

you can act quickly. that's decision tech, only from fidelity.

a lot of good work has been done on how to design transaction taxes so that they could be effective and administrable without doing harm we've looked at them back 10 years ago, 7, 8, 6 years ago the work was still pretty nascent. i don't know it's the first place i would go, but i think it should be on the list of things that people look at. >> that was former treasury secretary jack lew with us earlier. tom farley's been with us. the former president of the new york stock exchange. current ceo of far peak.

you asked the question about corporate taxes, about the rate. he said, look, the rate should maybe be he thought 28%. he said corporations he didn't think really wanted it to be lower than 25, weren't pushing for 21 if it goes to 28, what happens, tom? >> what was he talking about i felt like i was -- i couldn't believe i was talking to the former treasury secretary. i respect his service tremendously he said there's been good work done on the transaction tax? what is he referring to? implementation in sweden didn't work, italy didn't work, france no good. it's a regressive tax. that was when i kind of leaned in and said where is he going? then on corporate income taxes, he wants to take it from being competitive, not terrific, just competitive on par with oecd nations and jack it up 33% doesn't he realize, andrew, in these days and age capital is fungible people can set up the businesses

wherever they want >> here's the question, tom. you have made the point several times in the program today we have too much debt and you don't want to run as large a deficit so assuming you can't take the $1.9 trillion back at this point because i think you thought that was too much, what do you do then >> i'll give you great progressive ideas that aren't nearly as crazy as either one of those. means testing social security. start there. more efficient health care system in this country maybe we try that. i'm not even talking about individual income tax rates. maybe there's a little room there. i'm looking at this as an american if you raise my individual income tax by a bit, am i going to move out of the country no if you jack my corporate income tax rate up 1/3, am i going to invest the incremental dollar outside of this country? no question. >> you think if it went to 28% you would start to see corporate inversions all over again? >> yeah, you already did,

andrew people have a fiduciary responsibility to their shareholders the whole thing was very disappointing. if that's going to be the agenda under joe biden, i expect treasury lieu is a mouth piece, this is scary. transaction tax should be on the list andrew, you know better than that. >> we'll have more of a debate about that one, tom. it's a good one. stay with us, folks. we have retail sales data right after this quick break to a world that must keep turning. the world can't stop, so neither can we. because the things we make, help make the world go round. they make it cleaner, healthier, and more connected. it's what we build that keeps things moving forward. so with every turn, we'll keep building a world that works.

welcome back to "squawk box," everybody. new retail sales data just seconds away the estimate is for 0.4% to gain the futures have just turned positive if you've been watching the dow, up by 2.5 points make that 1.5 points nasdaq is up by 73 the dow and s&p set levels all of these are february reads. import prices expected up 1% is up 1.3%. so that's a bit hotter but do keep in mind in the rear-view mirror we have up 1.4. that's kind of the cycle high post covid let's see if that gets revised stake up petroleum, up half of 1% half of the .9 in the rear-view mirror if we go long, year over year, up 3%. that definitely is the hot number the year over year numbers are always going to be hotter as we

move forward because of the comps. if you look at export prices month over month, that's up 1.6% after an expectation of 1% if we look at year over year, it's up 5.2. we expect it up a little over 4. these are all big considered rear-view mirror it was 2.3 so more than double at 5.2 retail sales, this is for the month of february. of course we know that whether it was the 900 billion stimulus it will show a pop indeed, it did not minus 3% this is a shocking number. we were expecting down half of 1% the whisper numbers were much higher follows up 5.3 that may get revised. take out autos, still not good minus 2.7. if we consider exautos, minus 3.3. the control number minus 3.5

the control number, that is the weakest control number going all the way back to the first major covid effect which was minus 12.4, april of 20. that was the all-time low number for this series. so a real disappointment many were expecting the 2029 would show up. we've seen strong numbers in housing and all of this was supposed to have a larger impact we'll have to watch how the market digests this. consider we're at 159 oin a 10-year. the high closes at 162, 162.5. we're still hovering very close to our highest close in 13 months at a 10, 14 months at a 30 but the reality is we're not really done, we don't come down in yield or up in price very much and that stickiness is something that i think the federal reserve two-day meeting may address because investors are a bit nervous that all of

this gasoline is going to lead to issues the fed is going to have to deal with. becky, back to you. >> rick, thank you very much we're joined right now by cnbc senior economics reporter steve liesman, neela richardson. steve, we did see the dow tick back negative again on this. got to be some concern about the consumer what do you think? >> i don't think i'm concerned at all i heard what rick said about whisper numbers. they could have been much more negative those ones ended up being right. there's a bunch of offsetting factors. you had the storms that really hurt the economy in the early part of the month, prior month i'm talking about. you also had a huge jump in the prior month as a result of that first round of stimulus. i think it's going to be -- it's automatic that the next round that we're going to see the money had not yet arrived by the

time these numbers were collected. so i think you're going to get a big bump in consumer spending. i was not surprised at all to see the falloff in this month here maybe not as much as rick suggested as wall street had estimated. we also knew that the automobile manufacturers had reported lower sales here just looking at some of the data here you had some good numbers in electronics, good numbers -- i'm looking at two month totals. one-month totals you had a falloff in furniture, falloff in electronics, building materials. all a lot of negative numbers here i think it was to be expected. i don't think it was to be a problem with the consumer. >> neela, that may certainly be the case those checks are already hitting. i guess the question becomes how strong is the consumer when they're not being handed $1400 checks >> that is the question. we saw that that stimulus late last year really did boost

january sales. now agree with steve that the winter month of february was a mitigating factor in terms of the spending this month, but what we're looking for, becky, is not just spending in the top line number. we're looking for a rebalancing of the consumer budget away from all of these goods that we saw decline in february to services. in february we saw a burst of hiring from restaurants. is that being matched by a burst of sales and services especially when those $1400 checks hit, are we going to see them buy more stuff or have more experiences, travel more with a reopening of the economy? that's going to be key in terms of determining the pathway towards a complete recovery later this year. >> rick? >> yes i'll tell you what, late big and i'm talking big revisions. so this really changes the dynamic. when you think down % on headline following 5.3, that

becomes much less stingy when you realize it's now up 7.6. if you look at the minus 2.7 instead of 5.29 in the year on ex-autos, it's 8.3 8.5 from 6.1 and 8.7 on the control group from 6 so all of these negative numbers in the context of that extra horsepower last month will mitigate that to some extent and as the panel has pointed out, most likely whether it's the 900 billion or psychological effects of 1.9 trillion or the checks going out is a matter of time before the gasoline shows up in these numbers. >> hey, neela, quickly, when you say we are looking to find out if this lands in services or if this lands in goods, how will we see that what will be the first readers that show you that >> we're looking at those leisure and hospitality sectors. we're looking at trying to see

what we saw in january sustained. we're looking at service sector. we're looking to see if that growth rate goes positive. the most recent read on the ser vick sector was a decline from a year ago while the spending in the goods sector was a double digit increase will the numbers flip or start to equalize going forward? that's going to be key, becky. because the reality is the service sector is a much larger part of the economy. we want to see the spending hit where there's more bang for the buck and that's going to be in services. >> steve, we'll give you the last word on this. >> becky, you asked a great question before. what's the consumer going to look like without all of the stimulus the answer is we don't have to ask that question for a while. what we know is a good amount of the money that's given to people ends up in savings and you have this mountain of savings that's out there from the prior stimulus and there's going to be another mountain that will happen with this stimulus.

consumers will have this money to spend out over time i would think it's many months until we have to ask the question of whether the consumer is able to stand on his or her own and by then hopefully we brought a lot of those 10 million people back into the work force and they can replace the lost income from the stimulus that's how it should work. we'll see if it does >> yeah. i guess neela is right the question is where does that money go does it go to goods? does it go to services the market seems to be betting that it's going to all of those places we'll see. neela, rick, steve, thank you for joining us >> thank you >> pleasure. >> joe >> thanks, beck. coming up, joined by former federal reserve board nominee judy shelton her comments on the hard choices facing the fed the rise in the 10-year yield, inflation, much more next, jim cramer's first take on the trading day. that's straight ahead. stay tuned, you're watching "squawk box" on cnbc

we see access to fresh food being the global norm, not the exception. at emerson, our cold chain software and technology keep perishable food at proper temperatures, to assure its safety and quality. emerson. consider it solved. you can try to predict the future or you can create it. to assure its sawe're driving it. everywhere. we emit optimism, not exhaust. we plug in our vehicles as naturally as we charge our phones. we. we are generation e. we want smart. clean. and safe. to also be fun, easy and powerful! ultium! a battery that charges fast. runs long. it fits everyone. nobody will be left out. and that, changes everything. ♪ ♪ ♪

♪ ♪ ♪ ♪

want to get straight over to cnbc headquarters where jim cramer joins us. want to talk a little moderna. moderna this morning >> look, i think moderna is the most innovative of all of these companies. this is what people need we have to clear things up we have to make it so everybody feels that everybody is safe before we get to this point where some are not sure and

others are this is great. this company obviously has so much in the hopper and doing things everyone is concerned when you have kids that young taking it moderna's been right on the whole way, haven't they, andrew? really impressive. >> who is the bigger winner, moderna or pfizer? >> moderna i think has so much more look, they obviously are going to be the great vaccine company. i always believed of them as an amazon web services backer they put trillions of different combinations in and they come up with the right one i've been thinking is the one that they're working on a lot of forms of cancer. so pre-clinical that it's even wrong to mention so far but it's obviously happening. i like these guys. i recommend them again younger people with a stimulus check, go buy moderna. that could be the next pfizer. >> before i let you go, i saw you were watching the shaun donovan interview.

>> yes. >> mayoral candidate about new york coming back and i'm happy to see you're as excited as i am. >> oh, my god. you know what, andrew, i think it's going to be unbelievable. i think we're going to be shocked how good it is i'm working to get my restaurants open i was not going to open one. the heck with that, i think we're like the roaring '20s. people will be in line no vacant apartments people will say, what was i thinking it is going to be a remarkable time in new york, remarkable i think being mayor -- you're going to get the luckiest hand in the world. >> if you're right, what does jay powell do about all of this then >> well, jay's got to worry. jay's a very thought full guy and worried about the people who don't get caught up, but i think that the boom is going to extend listening to phil lebeau talk about airlines scott kirby. i'm thinking, holy cow, some of these people are going to travel how many weddings have been postponed? how many giant events have been postponed? look at this time.

you ought to -- you and i ought to take blocks of hotel room and put them on airbnb we should take out a lot of airbnbs, offer them again. it is that time. come on, you and i both know it. it's going to be an unbelievable time in new york city, unbelievable >> boy, do i hope you're right jim cramer, we'll see you in a couple of minutes. judy shelton is going to join us. an interview you don't want to sse in 'rgog to do it next. stay tuned, you're watching "squawk" right here on cnbc. best burger ever. intuit quickbooks helps small businesses be more successful with payments, payroll, banking and live bookkeeping. ♪ ♪ (upbeat music) ♪ ♪ ♪ ♪

♪ ♪ ♪ ♪ at t-mobile we believe you should get more. introducing magenta max. unlimited premium data that can't slow down based on how much smartphone data you use. plus netflix on us and taxes and fees included. only at t-mobile. the leader in 5g

the fomc beginning with meetings today rising inflation concerns, investors will be paying extra close attention to the language jay powell uses to describe the economy. joining us economist and federal reserve board no, ma'am any judy shelton. the author of "money meltdown. great to have you on we've been talking about it for a while. great to see you finally >> thank you for inviting me

>> these are deep thoughts a segment on snl i want to get to them because i think they're important. inflation is a concern now obviously with what we're seeing around the world obviously and with the fed and they're going to be talking about it today you make the point that full employment, phillip's curve mentality doesn't cause inflation because with productivity you can avoid that. i think you're concerned that we may not get this tit this time some of the fed's actions and staying low for too long. >> that's right. that's a good summation of my concerns the reason being fear inflation now is they very rationally see there's been a tremendous amount of liquidity injected into the system and we've all learned that too much money chasing too few goods can cause inflation. the problem in thing it is a

phillip's curve tradeoff is believing that if we get ahead of inflation, then we have the tools to fight that. well, the tools to fight that are to raise the interest rate paid on reserves or to keep buying even more -- well, to interact more in credit markets and so i don't think the fed is going to start selling back any time soon and i'm concerned if they hint that they can raise the rate on excess reserves, which are already at a record high at 3.6 trillion, that they are furthering this tendency of banks to be more interested in interacting with the federal reserve than private lending and the way you get productive economic growth, the kind that actually increases the output of goods and services is to encourage small business that's where the jobs are. so i'm concerned the fed is in a little bit of an untenable

position in that they think by expressing a new tolerance for inflation they're somehow helping the lower wage workers when, in fact, they're the ones hurt the most by inflation and i think they're discouraging private lending, which is -- which

and other structural changes in te early years of the trump administration that got us down to those levels. it wasn't the low interest rate. so it is not going work this time by just staying low in terms of interest rates because you don't have the same dynamic. have i got that part right >> i think perfectly if you think about what happened after 2008 we stayed at zero for seven years and a very tentative quarter of a perngt gain at the end of 2015. another quarter percent gain in 2016 and then under chair yellen went up three times. in 2017 and they were under chair powell four times in 2018. that is nine consecutive increases in the interest rate and what i think they took from that is oh we better stop now.

they ended up pulling back three of those increases in 2019 but what it was really about, those excellent growth years when we were seeing more low income people. minorities more people employed so we had the record low unemployment we didn't see inflation. we were getting productivity gains in excess of the wage gains. that is exactly where you want to be. i think they didn't acknowledge that the real boom to business and employment were the structural changes and it was under the prow growth economic agenda of the trump administration that they cut taxes and reduced regulations. this is a how you create jobs and that is especially good for small business i hate to think that now we're even talking about removing those incentives because you really want to prioritize the private sector. you don't want to make banks into the utilities working with the government you don't want to have the fed

running the economy. if you want productive growth and you want to foster high wage jobs for the real economy. for people who don't just follow fed moves minute to minute but who actually go out and produce goods and services i think you have to have a smaller footprint for the federal reserve and to be very cognizant of how in a subtle way some of your tools are really orienting financial markets to be watching what the fed and the government are doing versus investing in potentially very prosperous opportunities judy, i have to admit i'm confused though. because despite what you are saying, back in the summer of 2019, when your name was drawn up to be a nominee, you were arguing publicly for lower interest rates >> well it is interesting. andrew, what i was saying at

that time. you have productivity gains in excess of wage gains you have record low unemployment and you don't see inflation. we're seeing the benefits of those structural changes that i mentioned. the tax cuts and the deregulation let that ride a little bit and i was criticized for taking that view and within two months everyone at the fed was taking that view. and they ended up taking back those last three interest rates. my point is that there isn't a tradeoff it is not a choice of inflation or high employment if it is productive growth if it is just empty liquidity, chasing after assets, financial assets, and not really invested, it is more speculative than true investment true financial intermediation aimed at a more prosperous future, then you have to be much more careful put when things are going well, then i don't think you preempt

it or you are back to that phillips kirve tcurve thinking >> is it story behind the story on all these nfss is the dollar is being turned into a crypto currency and that is the on and off rails to ma of these crypto currency applications do you have a few on whether the fed should just issue crypto dollars directly i think the fed has been rema remarkably accommodative of all of this bin tech innovation. and i'm glad because i think that's healthy all of the crypto currencies have one big disadvantage compared to the dollar the dollar has an exalted

position i can see benefits to a digital dollar and we don't want china to get willed of us on that but also, if the fed has a tendency to say what we think is good for the economy is the way it is going to go even if it does damage to the idea of our currency as a store of value or as a reliable unit of account, then they will tend to do that and always with the best intention. but if people had direct fed digital accounts, i'm concerned the fed might decide at some point maybe negative rates would be better stimulus so what does that mane that your depository account at the fed gets diminished and it is all in the best interests of economic growth i think people are attracted to crypto currencies because they like they are decentralized.

they like that they are meant to be ab unit of account, medium of exchange and store of value. right now where most crypt currencies are thought of in terms of how they can be translated back into the local currency, they are not a reliable store of value. but ultimately i think the idea is that people are looking to alternatives and the fed should be competitive and innovative, but we should also be concerned if the fed at some point decides that it wants to crush the competition. >> judy, in terms of where we are. wore here. there is no turning back are we past the point of no return in terms of the fed and in terms of the way the banks are conducting business now, doing less private lending, more transactions with the fed? or do we still have time to get back to more normal relationships.

>> well i don't see anyone concerned about the deficit. and if you just look at what the fiscal deficit for the current fiscal year was going to be and that is before the last 1.9 stimulus was added it was going to be 2.3 trillion. with the fed just buying the treasuries at 80 billion a month. i'm not even including the other 40 billion in mortgage-backed securities in a year that's 960 billion that is 42% of treasury debt so there already is a relationship between the federal reserve and the treasury that is quite unhealthy. and i don't know when the magic day is that people say we can't worry about that in the short-term but in the long-term we have to be concerned about fiscal stability. that day that's a long-term is

mythical to me so i think we're seeing the rise of non bank finance. as an alternative to people who can't get the services they used to get through their local bank. >> okay. these are deep, deep thoughts. i'm still -- my head hurts now actually but i'll be okay i'll be all right. we need to continue this conversation again, i think though and you need to spend time to understand it. and great having you on. hopefully we can do this, you know, once in a while. is that okay we'll -- will that be good for you? >> i would look forward to it. its been a pleasure. >> very good thank you. and we also want to -- i was going to talk a little bit at the end here, tom. you have about five seconds. thanks for being on with us today. heck of a mess we're in i think. fiscally and monetarily. >> yeah, everything is a bit of

a mess except my georgetown hoyas, joe so this was a nice distraction i don't know how i'm going to pass the time till saturday. congrats to pat ewing and the team. >> he owns his house. >> that's his house. >> i know. i do have them progressing they are peaking at the right time i think and michigan state and all these great teams trying to get in the former leaders anyway make sure you join us tomorrow "squawk on the street," bye, is next ♪ good tuesday morning, welcome to "squawk on the street." we're on watch for a bit of a consolidation today after six straight record closes for the dow. nasdaq at a two-week high. a fed meeting beginning. winter weather brings disappointing retail sales on this anniversary of the worst dough point drop ever. road map begins with the fed