it's so cool. yeah, it's really crazy. i'm really excited. we did this. good job. all: surprise ride! whoo! good morning welcome to "street signs." i'm joumanna bercetche with julianna tatelbaum these are your headlines taxing times ahead g7 finance ministers set the corporation rate at 15%. critics argue there are already loopholes. >> the global minimum tax would ensure the working class in the

u.s. and around the world. german chancellor angela merkel fights off the challenge to win a crucial state election in germany as the ceo tells us hurdles remain >> the problem of acceptance we need an open debate we are actually talking about a tri triangle and accepting new technology being built strikes a deal to sell its chinese baby formula unit to primavera in a $2.2 billion deal tesla cancels the model s plaid plus because elon musk says the regular version is so good as he comes under fire for his crypto u-turn.

good morning happy monday major development over the weekend. g7 finance ministers backed a proposal for a global corporate minimum tax of 15% the breakthrough allows for companies to be taxed on where their sales are, not just where they have a physical presence. the agreement provides impetus and will be put forward to the g20 in july. the finance minister says it would add to the global tax system >> reached historic agreement to reform the global tax system to make it fit for the global digital age and make sure it is fair so the right companies pay the right tax. it is a huge prize for the

british taxpayers. it is a proud moment i want to say thank you to the g7 colleagues for the leadership and for the willingness to work together to seize this moment to reach historic agreement that finally brings our global tax system into the 21st century >> u.s. treasury secretary janet yellen says this would create an equal playing field. >> the g7 has taken steps this weekend to end the harmful dynamic making commitments to provide tremendous momentum toward achieving a robust global minimum tax at a rate of at least 15%. that global minimum tax would end the race to the bottom in corporate taxation and ensure fairness for the middle class and working people in the u.s. and around the world the global minimum tax would also help the global economy

thrive by leveling the playing field for businesses and encouraging countries to compete oppn positive basis like educato and training work forces and education and infrastructure and development. >> tech giant amazon welcomed the deal and facebook's vice president of global affairs and former uk prime minister said the proposal is a significant first step in a statement to cnbc, a google spokesman hoped for a balanced and durable agreement. irish finance minister cautiously welcomed the agreement. tweeting any deal has to meet the needs of small and large countries and developed and developing for more on the highest and lowest tax rates around the world, check out cnbc.com. >> tweeted one of the charts showing that the countries that

are including the corporation tax rates in the world are not part of the g7 and g20 it remains to be seen how it passes on an international scale. u.s. payrolls rose by 5 $559,000 in may. missing for the second straight month. the unemployment rate fell to 5.8% wage gains accelerated over the month. speaking to cnbc after the data released, the cleveland fed minister said the approach is still right. >> we will get to the point where the economies come back enough there has been substantial further progress and we want to change our policy standpoint on asset purchases. later on, if things go, you know, according to what we're hoping on the funds rate those things can take time

i think we have been deliberately patient that's the right strategy. >> higher inflation is coming. policymakers are about to face toughest battle in 40 years. that's the warning from deutsche bank analysts say the return for pricing pressure is concerning we have jim read with us from deutsche bank. jim, great to have you with us you have done a huge amount of work you have come out with an alternative to deutsche bank's house view break it down for us why do you believe inflation is making a comeback? >> thanks for having us on the inflation debate defies everybody at the moment. the research is no different some people think inn

applic inflation is not a big issue and others do we want to add diversity to it we think the orthodox is changing we talk about the contrast with 40 years ago when it was put in place at the fed to combat inflation and everything was tight on the mondetary side if you look 40 years on today, we have a biden administration who is putting government at the heart of the economy and rebuilding the economy massive fiscal spending. you have a fed that has embraced average inflation targeting and wants to see actual gains in employment and wants to see inflation go above target. rather than lean against it. you know, this orthodoxy is changing it has changed the financial

crisis if you go back after the financial crisis, we quickly hit the crisis in europe the seminole work on the did he tell you could survive as a government we had a decade of fiscal aust austerity. the pandemic has blown it out of the water. now we have high levels of debt than when the crisis was ongoing. no serious comment about the full risk. governments around the world are saying we can spend more we can give the population more of what they want. at the same time, the central bank is supporting that. we think the economic orthodoxy is changing. that is why inflation will be higher in our view >> it is interesting to hear you

emphasize the central role government is taking here and how policy is changing and how government is really at the center of the potential inflation comeback if we do see inflation return in full force, what does that mean for government goals like climate change and social norms? >> i think the move to social policy at the center is admirable and shouldn't be criticized i suppose the risk would be if you did see inflation, it might make macroeconomics policy more challenging. if central banks did raise rates aggressively, it might reduce the ability to address the social issues. at the minimum, policy making is about to get more challenging if you get inflainflation.

>> i had to look through the report there is one chart that stood out to me. the crypto community likes to circulate. that is the one of money supply. i believe figure four in your report it shows money supply has seen an explosive growth over the last couple of years as response to the pandemic. if you compare to 2008, 2008 doesn't even register on the scale of how much money supply has been created in the last 12 months isn't it also true that in order for this extra money supply to be inflationary, you need the velocity of money supply to pick up you as well what is the catalyst for this to become inflationary? so far, very little correlation >> i think if you look at the chart over a very long period of time, money supply growth and

nominal gdp arecorrelated. if you see the spike of the likes of the pandemic, it is hard to think that some of it won't go into the economy. i suppose the real inflationary response here is probably what consumers do with savings. if consumers massively save all their excess savings and keep it as savings, then there is less inflationary impulse if consumers spend reason aable portion of it, it can filter into the economy i suppose this is why this is an art form in many respects. there are so many uncertainties of what the consumer will do now. for those on the inflationary side, we think the consumer will

spend and there is pent-up demand a lot of the excess for savings will make it through to the economy. look, in the last decade, you haven't had much inflation although you had a lot of money printing the money printing hasn't ended up in the economy. that is why this time may be different. the excess savings will end up in the economy in our opinion. >> it all comes back to the eventual outcome and the fact the fed is chopping off one of the tails. they don't know for sure that inflation is transitory. really interesting report from deutsche bank. jim, i want to take you to another topic. major development over the weekend before we let you go i need to ask about the g7 ministers come to agreement. i read over the weekend of the tectonic shift over the lower tax havens and redistributed to

lower or poorer income nations from the economist perspective, how you radical is this development do you think >> i think the news over the weekend is not radical itself. it probably is a signal of maybe things to come to be fair, i think in the two or three years leading up to the pandemic, it was obvious we were close to a turning point in corporate tax. we had a race to the bottom in the corporation tax. at the same time, we were learning more about the inner qualities of globalization and innequality of the tax base it is inevitable the pressure would gubuild.

the pandemic accelerated trends that would probably happen anyway i suspect we have had the bottom in corporation tax it is unclear how much it can move up ward in the world where we are still relatively gl globalized it is probably a turning point >> excellent jim, thank you so much for your thoughts on all things inflation as well as the g7 corporation tax development. jim reid at deutsche bank. quick look at markets. you see it behind me it is mixed with green and red flat from asia overnight we had the slightly weaker than expected chinese trade day to come in with strong imports. weaker exports the trade is lower than expectation. stoxx 600 is plflat

friday, the jobs numbers from the u.s. were lower than expected strong in europe and u.s. with the whispers of the all-time highs. this is the picture this morning. you see the ftse is up .25%. home builders are back up above the 7,000 mark we have the concerns of the full reopening of the economy on june 21st something the hospitality and retail names are watching closely. xetra dax is trading down .10% cac is below performance we have uni-credit trading lower today. in terms of sectors, this is the breakdown. we have right at the bottom, the tech stocks down half a

percentage point a focus on chipmakers. the health care is down half a percentage poipoint. weaker chinese data. banks are up .20%. autos with a rebound today up .60%. coming up on the show, with we will speak to the banking authority representative as the latest report looks back at a testing year for the banks we'll be right back. dealdash.com, the fair and honest bidding site. an ipad was sold for less than $24; a playstation for less than $16; and a 4k television for less than $2. go to dealdash.com right now and see how much you can save. remember, shipping is always free.

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every day in business is a big day. we'll keep you ready for what's next. comcast business powering possibilities. welccome back to "street signs. reckitt benckiser has sold to primavera. it has a value of $2.2 billion and reckitt will pay down its defendant.

t debt it is part of the group johnson which was bought in 2013 iwg shares are lower after the core earnings will be below 2020's level which was hit by the pandemic iwg posted 390 pound profit last year the owner of the brand said expectations were strong for a 2022 recovery which remain unchanged. the european banking authority says the covid crisis has been the first major test of the post-2008 regulatory reform. the annual report praises the resilience of the banking sector, but warns digitalization will remain key challenges the chairperson of the european

banking authority joins us sir, great to have you on the show today let's pick up on the finding of the report the european banking system has shown how resilient it has been despite the year of challenges economically and from a health peculi perspective. does a part of you think we, as regulators, have done a good job because we ensured the banks have a sufficient amount of capital and not overleveraged and as a response to the regulatory oversight, the system was better equipped? >> good morning. i think it is satisfactory over weathering the last year well and provide support to the economy over citizens and businesses in great need

it is the job of ten years after the financial crisis to rebuild the financial system we found it to be useful over the work in the last year. that is satisfaction for the sector overall >> the ecb came out with the financial stability report a month ago. they warned about the potential of the rising of the non performing loans after the fiscal and government support gets withdrawn how much of a risk do you think that is to the european banking system when do you expect to start seeing nplsss rise and are banks equipped enough to deal with the rise in nbl? >> i think this is the number one priority for all of this we are coming out of the last year which has not materialized thanks to the exception of the

fiscal stimulus put in place it is natural to think that some of the damage caused by the crisis will bring about the banking sector they need to monitor and make sure the banks are assessing the risk properly. as we go forward, we are now engaging in the middle of the stress test for the banking sector at the end of the july which will see results i think overall, the revisemingf the sector is looking good with no deficiencies in the system. >> sir, you called for a global coordination of regulations to combat climate change. how do you think about embedding climate risk in the stress test framework moving forward >> this is one of the key ch

challenges thank you for the question last month, we made a report in which we put forward a stress test information about the exposures the banking sector in europe has to climate exposures. particularly to sectors. we will show the ratio of exposures to corporate green currently is 110%. this was not surprising for us it is a reflection of how far we need to go i think as we go forward, climate change is a risk that is why they call for a global standard and continue to work in this direction it is too much progress in what is happening in 2021 and as we continue to go in this direction. of course, banks are not the only ones that need to make the decision the overall economy is doing

this with corporations with the banks need to adjust to the goals and particularly to the 2050 goals >> on the topic of risks facing the banking sector, the last year has been filled with scandals across the european banking sector most prominent is the hit from the collapse of archegos capital. what do you need to ensure to make sure this doesn't happen again? >> first of all, the turbulence of the financial markets have been large it was not surprising that accidents happen along the way to particular environments we need to make sure there are proper is where the focus shou be if i may, as we go into the introduction of new technologies

and there are new challenges that arise as you know, ic. it is a rising risk. we need to be aware of the challenges and opportunities for financial crimes we think it needs to be put forward. we need to be able to integrate the technology and enhance the supervision and coordination for the global market. >> sir, can i ask how the eba is evaluating the cryptocurrency? >> we are monitoring carefully as the environment the cryptocurrency had significant risks. those risks were mainly at the time and at the focus was on

regulatory gaps. we felt there was not a framework to be addressed. we put forward a proposal last year to address the challenges which is being discussed it will be proven throughout the year we are positive and helping making sure that will be implemented. as we h go forward, and as of today, as for the exposure of cryptocurrency in the banking sector, that is not considered to be a major risk banks are prudent in the decisions with the customers on the risks that investing in this asset. we don't think that is significant. we think it is important we create a safe ground for investors. >> one final question before we let you go most economies are beginning to emerge from the pandemic in

europe at least. is this a good year for european banking consolidation in your view >> well, i think for sure. one of the challenges the industry has put forward is the capacity profitability has been low it has been picking up in the first quarter of the year. that has been good the banking systems should have business models sustainable and also viable in the long term offering good quality to customers. that involves issues we have discussed. not just coming out of the crisis, but technology and building up for the years as we go forward that requires restructuring. i think consolidation is not a goal, but it is a tool to have business qualities to make the system more viable and better for the future instead of good business models put forward, it should be

welcome. >> sir, we will leave it there jose campa, chairperson of the european banking authority. coming up on "street signs." we get a much-needed boost in the campaign for the german chancellory. we will talk to anetta we will hear from the president of the rwi christoph schmidt in a few minutes.

welcome back to "street signs. i'm julianna tatelbaum along with joumanna bercetche. taxing times ahead g7 finance ministers set the corporation rate at 15%. critics argue there are already loopholes. >> global minimum tax would end the race to the bottom in corporate taxation and ensure fairness for the middle class and working people in the u.s. and around the world u.s. futures are lower as

tech giants sea red in pre-market trade following the g7 landmark global tax agreement. german chancellor angela merkel fights off the challenge from the far right to win a crucial state election in germany as the chairman of the cwe says hurdles remain. >> we need an open debate. we are talking about the triangle and accepting new technology built. sometimes close to your own house. tesla cancels the model s plaid plus because the regular model is just so good. welcome back to the show

quick check on the european markets. not a lot of trading volume going through today. this is the picture you see which is mixed ftse is up .20%. good day for home builders xetra dax is up .10% and cac is up as well. european banks with a boost today. of course, things are going to pick up. we have the ecb meeting on thursday people are watching closely for that and the u.s. cpi set. let's look at u.s. futures all opening in negative territory. the focus this week is going to be, as i mentioned, on the u.s. cpi on thursday as well as the implications from the tax perspective on the tech

companies after the g7 event over the weekend germany's christian democrats have retained the state surging ahead in the election and staving off a challenge from the far right the win is a boost for cdu leader in what was the final regional vote before the country decides who will replace german chancellor angela merkel in the federal election the carbon market included a tax on imports and ending free carbon input for airlines. this is coming after the series of climate policies next week. berlin has cut emissions by two-thirds by 2030 as it looks

to cut total emissions from the 1990 levels by the end of the decade speaking to arletta this morning, he added a global solution will ultimately be necessary for a level playing field for car carbonizing industries. >> it will be difficult to compete when you are forced in europe to decarbonize industries it needs to be clear what they come up with that they keep the level playing field. we only risk losing jobs and the acceptance of our society. >> anetta joins us now she is joined by somebody who knows what is happening in germany.

>> reporter: i'm now joined by christoph schmidt. also the co-chair of the economic export. thank you for joining us we were talking about the decar decarbonization of the industry. there are targets here, but no concrete steps what needs to be done? >> that is the issue it is easy to pronounce targets. climate neutrality is the objective we should pursue by 2045 that's okay. now the concrete measures. we need to know the complete measures by which the german economy should reach objectives. the clear message from academia is the guiding industry should be a carbon price. all of the other measures you can think of with infrastructure and subsidy should add to the

picture. should augment the prize the prize should be in the middle >> what do you think of the carbon tax on the borders of the eu countries like china, india and others and also the united states, are concerned about such extra tax. >> i think this measure or instrument is a two-edged sword. on the one hand, carbon leakage is a potential problem imports, steel, aluminum and other products come into the eu as imports from regions which are not using carbon pricing this is creating a problem, of course it's a bit naive we think as europeans that we impose a price on this and everybody else will follow suit. we should use the momentum in

the u.s. and the increasing problems with the climate situation and environmental situation in china to form carbon clubs and join into a joint effort to combine our approaches into the joint effort on carbon pricing and climate policy isolated european position is likely to fail >> the european commission kind of tries to sell the eu climate pact as a potential export best seller to the rest of the world. do you think that is naive in a way? >> any approach to the climate transition to the energy transition into climate policy needs to, i think, fulfill three requests it should be efficient, not only effective. it should be efficient that means you should use all means possible to avoid the waste of the economic resources. this is coming with the market oriented price system.

the eu is not really up to embracing, completely embracing market oriented climate policy this is difficult to get it to become a hit with international relations. second requirement is competitiveness. it is good to be climate neutral, but losing all or much of your economic potential and potential to generate prosperity is not really a good example thirdly and domestically, the most important discussion at the moment is the social balance maintaining social balance while at the same time transforming the economy is difficult again, carbon pricing is offering a good solution for this it sets relative prices to the disadvantage of fossil fuels and it generates revenue to re

redistribute households. >> let's look at energy prices in germany they are very high anyway. if you put on top of that higher carbon prices, where do we end can we maintain our competitiveness? >> the first steps of the energy transition in germany, we have built up enormous amounts of capacity in renewable electricity generation nobody would expected that success to happen 20 years ago at the same time, it came with the huge cost. namely the reimbursement scheme for solar panels and wind mills that increased the electricity price. now is the biggest obstacle to the coupling

we should use in heating, we should use electricity more intensely than we do at the moment in the new energy world if electricity is so highly priced, that's difficult this carbon pricing idea needs to be coupled with schemes that reduce the electricity price or increase the income of those with low incomes and suffering from high electricity prices especially the so-called eeg surcharge for the renewable electricity should be reduced and carbon pricing revenue should be used for that purpose. >> let's look at what the green party wants to do with the german economy they call it the great transformation at the price of 500 billion euro how realistic do you think is that plan by the greens? >> that we he need great

transformation of some sort is obvious. climate neutrality is a good objective to have. at the same time, we should be aware of what made our economy so prosperous. it is market or yen ientation. embracing a market oriented transition is a good idea and energy transition just without qualification might not be such a good idea after all. >> thank you very much for your time have a good day. >> thank you very much >> with that, back to you. the german economy is ready for a huge transformation when they want to reach the now toughened co2 targets. i keep reporting from genermany. back to you. >> thank you, anetta.

israeli prime minister benjamin netanyahu has accused the rival coalition of the greatest election fraud in the country's history. the parliament is expected to approve the new government, but a date has yet to be set speaking at the faction meeting, netanyahu said he would overthrow the committee if it comes to power >> the time is late, but not too late i call on you to do the right thing and vote against this left-wing government i want to promise that we, my friends and i in the faction, will expose the establishment of fraud. if it is established, we will overthrow it quickly. comesing up on the show, cryptocurrency enthusiasts gather in miami for a bitcoin conference this as the group is taking aim at elon musk over his tweets well have more after the break

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welcome back to "street signs. facebook has confirmed its ban

on former president trump will remain in force for two years. preventing him from using facebook and instagram until after the 2022 mid-term elections. the social media giant suspended his accounts following the insurrection on january 6th. it will reevaluate external factors before allowing him back on the platform. trump vowed to support republican candidates in the midterms he continued to repeat discontinued claims that he lost the election due to fraud. >> 2020 presidential election was by far the most corrupt election in the history of the country. there's never been anything like this they used covid and they used the mail-in ballots to steal an election it was the third world country election like we've never seen before look at what took place. i want to congratulate, by the

way, republican state senators in arizona and other places for their great work that they are doing and exposing this fraud. tesla has canceled the model s plaid plus elon musk tweeted the basic plaid model is just so good that an upgrade is not needed the new car was going to be a more expensive variant of the existing sedan tesla has been struggling with the chip shortage and other supply chain issues. international hacking group anonymous has taken aim at elon musk calling him a narsistic rich dude. cryptocurrency is under pressures that china will crackdown on the industry.

this after weibu suspended accounts citing violations of community rules. and el salvador is looking to become the first country in the world to adopt bitcoin as leg legal tender they hope it makes it easier to send payments moment the country's president tweeted the adoption of cryptocurrency will open up financial services to those who do not have bank accounts it could improve the lives of millions of people across the country. thousands of cryptocurrency enthusiasts have gathered in miami for the first conference the three-day event has speakers and scholars who discussed the rapid growth and future.

julianna, it felt like an alternative universe the hype and hysteria about the cryptocurrency and bitcoin it felt frenzied it reminded me of the conferences that used to happen in las vegas before 2008 one thing for sure, it served to underline how appealing this asset class has become you also had a fair share of institutional investors there and wall street banks and senior tech figures there were loads of different people coming together at the conference despite the frenzy and hype it tells you bitcoin has come a long way in the main-stream adoption one thing i want to add about the el salvador announcement this was a major deal when the person in question on stage

announced that el salvador was looking to make bitcoin part of the legal tender audience erupted it hasn't been confirmed yet you have to be careful and if this is the type of country or leader you want to hitch your wagon to especially with the state of the country with the leader making a lot of changes to the judiciary court and ongoing talks with the imf there has been no success on that front the imf has issues with the government in the country. at the end of the day, the crypto enthusiasts were excited about elon musk and that all turned when he touched y turned you have to be careful about hitching your wagon to a leader

with a patchy track record >> joumanna, there are still a ton of questions with regards of the logistics and creating the infrastructure financially necessary to adopt bitcoin in this way i was looking into why miami was chosen for the crypto conference cus curious. why over new york or los angeles. miami has actually as a city been hugely pro cryptocurrency miami heat the arena has gotten the naming rights to a cryptocurrency firm. bitcoin atms around miami. the miami mayor is a huge proponent of cryptocurrency. the other thing, joumanna, that stood out from the conference, the comments from jack dorsey. now he was a headline speaker there. he had some incredibly bullish words about bitcoin.

the reason they stand out so much is because of the role social media has played in pop pop popularizing bitcoin if you have the support of jack dorsey behind you, it has to be a tailwind whatever i can do and may companies can do to make it more accessible to everyone he is throwing the full weight behind it. that puts pressure on regulators if they want to take more measures to regulate the market. >> a good point. at the end of the day, it sounds incestous. the ceo of twitter is jack dorsey whatever we can do to help grow the community and also simultaneously invest in bitcoin does sound suspect it is something for regulators you know, at the end of the day, this does, again, underline how

much enthusiasm there is in the product. it doesn't stop the other forces at bay we were talking about increasing crackdowns from chinese regulators on the miners and institutions that are facilitates bitcoin payments it is not just china the rest of the world looking at this more closely. some bitcoin believers think regulation is a good thing because it is the evolution of the asset class and widely accepted with regulators increasingly having a heavy hand in the asset class will be difficult for the monetary transactions taking place. definitely a story that is not going away any time soon we will cover it on cnbc a quick look at u.s. futures before we close out the show today. it is mixed.

s&p is slightly lower. dow is 3 points higher all eyes this week on the u.s. cpi print. 4% a bumper number to watch in the coming days. that is it for today's show. i'm joumanna bercetche with julianna tatelbaum "worldwide exchange" is coming up next.

it is 5:00 a.m. at cnbc global headquarters. here is the top five at 5:00 reaching a deal on global tax reform infrastructure ahead the white house making a deal this week. with or without colleagues. too hot to handle? key data point due out this week enough to move the needle on tightening at the fed. speaking of rising prices. cathie