morning. company playing defense as a whistle-blower gets ready to testify on capitol hill. out later. and then earnings season, the most wonderful time of the year, happens four times, four quarters pepsi co about to roll out quarterly results. it's tuesday, october 5th and "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc i'm becky quick. along with joe kernen. andrew is going to be joining us a little later in the program. >> sleeping in. >> he didn't sleep in. i knew you were going to say that he did sleep in, but he slept in for a good reason. he's on the west coast so it's three hours earlier. it's only 3:00 a.m. and he's there with big guests this morning so we're giving him a

breather, at least the first hour. >> must have left early to take a train -- no train doesn't help either so he did fly? >> yes. >> commercial? >> i'm assuming, yeah. >> wow okay god bless him. it must be important that's all. i don't know what it is but it must be very important. >> it is part of the reason we have such an amazing lineup this morning he's speaking with treasury secretary janet yellen they'll join us this morning and we have charlie evans, senators richard blummen blumenthal and ted cruz. we have a big lineup of guests this morning and we'll talk with all of these folks throughout the morning. in the meantime look at u.s. equity futures things are looking better this morning, dow futures up by 133 this came after this dow was down 1% yesterday s&p down by 1.3% and the nasdaq down by 2%.

part of this was because treasury yields were moving higher the ten year is yielding just below 1.5%, at 1.495%. yesterday look at the losses that we saw across the board apple was down by 2.5% google off by 2.1% microsoft down by 2.1% but it was facebook that was the big loser, it was down 4.9%. you can see bouncing back slightly for all of those names this morning, but facebook we'll talk about the reasons behind it in a moment. mark zuckerberg yesterday, do you think how much he lost in net worth? 5% decline, $7 billion >> 7 billion. >> yeah. $7 billion, fell to number five in the world's richest list. >> that's the problem with the wealth tax if he got it the day before, wait a second. i was thinking about facebook how is it good for society, take a six hour break or whatever but i guess there's a lot of

businesses that -- a lot of businesses that depend on facebook a lot of elections that get -- >> a lot of people depend on facebook a lot of people went from delete facebook to where's my facebook. >> a lot of elections that get swung way or another on facebook there are bad things that can happen not just not seeing other people living great lives and things like that. but it's back. it was -- we all have to learn what dns, domain name -- >> server -- >> -- something or other issues. but what occurred to me because i'm still in the learning phase and getting used to someone in a harvard dorm that says i'm going to get my friends together so we know what -- it's so hard for me to imagine that's how it started. just, you know, instead of looking at a physical like paging through students and looking at their bios. >> that's what the facebook used to be. >> that's right. it started like this, and now it's this.

it's staggeringand the amount of money and the amount of what it really -- it's sort of like the underpinning of current society in a really weird way in terms of both social and business. and it's just -- it's incredible that it just happened in, what, 10, 12 years. >> i think mark zuckerberg has pointed out -- i think it's a little more than 10 years. >> 2005 maybe. >> 16. >> 16, yeah. but it didn't come -- i don't know i saw the movie. >> i remember interviewing him for the first time when it was still called the facebook. >> the facebook. >> yeah. it was when he was still in college, the very early days for some of those things but i think he recently complained that his big concern is they're going to run out of people they have so many people on the network, you can only grow for so long because there's only so many people on the planet. that's where they have reached. >> i'm going to do it right now this my space account. i haven't been on here in -- i

said that before >> once or twice >> yeah, once or twice >> but yes, it is impressive and the amount of business that gets done on it too is something to behold >> let's look at apple, yesterday with apple's declines you saw apple down 10% so it's now in correction territory. it's just taking a look over the last month that's when it happened if you look at amazon shares, amazon went negative for the year, down six sessions in a row now. down 2. 9% yesterday, so it's down 1.5% year-to-date according to this. one thing up, oil prices, natural gas this was based on the opec decision that came out that said they are going to go ahead with the slow gradual increase of supply, 400 barrels a day. but saudi said the demand for natural gas has been so strong it increased demand for crude by about 500 barrels a day.

so they're saying it won't keep up with demand because of natural gas prices going so high natural gas up 3.3% in london. >> saw bitcoin above 50,000 again. >> yes first time since el salvador made the move. >> i'm going to tell you about the whistle-blower i heard andrew say frances haugen yesterday. >> is it hawken or haugen? i wondered. >> in terms of pronouncers that may not be a good idea you didn't see 60 minutes? >> i read the transcript >> i was watching this this makes "the new york post" >> you and 30 million other people >> i was watching the yankees. >> i was talking about the brady. >> the yankees and the red sox it was a great game. i was watching that. so i did not see so what are we going to do, do

hoggen or haugen i should have just done it. >> just blew it, i was going to go haugen. >> what's between? facebook whistle-blower frances haugen will testify before the senate subcommittee later this morning. she revealed her identity in a "60 minutes" interview where she accused the social media giant of a betrayal of society facebook also suffered the worst outage since 2008, a major outage, which knocked out facebook, instagram, whatsapp for more than six hours. the company apologized for the disruption and revealed the problem stemmed from a configuration error. facebook fell almost 5% in yesterday's trading. right now you can see it's

rebounding about 1.5% this morning. >> and then there was the senate majority leader, chuck schumer, setting up a vote by wednesday to try and raise the debt ceiling. the house passed a measure to raise by until december 2022 but republicans indicated they would block the bill in the senate janet yellen has warned of catastrophic consequences if the ceiling isn't raised she's going to join us at 7:30 eastern time today it was mitch mcconnell who said you better figure out a way to do this on your own. there is a way to do that but one the democrats have been reluctant to do, which is put it through budget reconciliation, but that could create problems with other infrastructure plans they have because you can only use reconciliation so many times and it could get pretty complicated. >> we have cruz and blumenthal i don't know the universe might end they're not on at the same time but still that's anti-matter,

matter. >> don't cross the lines. >> no. dogs and cats live together. it's apocalyptic pepsi co just out with earnings, reporting earnings of $1.79 a share. we'll talk about it with ceo hugh johnston. he'll update us on efforts to make a good carb free or fat free snack not a huge perk but did you get your new products from pep see >> i didn't see one. but i didn't check >> some guy delivered it get off my lawn -- >> but give me all of your pepsi co treats? >> yeah. it comes with new flavors of mountain dew which has a

thousand milligrams of caffeine. >> sounds useful >> i tried everything else, what about chick-pea chips? >> i wouldn't knock it there's a chick-pea pasta that i really like. so believe it or not, it might be okay. >> this was bizarre. now they've kind of jumped the shark. i'll ask you about it today. i had lays potato chips that are flavored like dorito's the producer, rob is in today. rob says they are good that's all i heard so they are -- they're dorito's flavored lay's potato chips. >> are they baked or fried >> they weren't the horrible baked chips. >> i don't mind those. >> what happened to the other ones >> olane >> yes

that went away quickly did it not? >> there are hurdles and bars and things that make it worth it and things that don't. >> if it's medicine i'll take it if it cures me, but a potato chip, no. >> olestra and tried to pass it off as olean later don't worry this is something different. >> what was that maybe i did eat one. >> when we come back, bouncing back after the tech wreck. the futures this morning are indicated higher, of course, the dow was down by 323 points yesterday, indicated up about 120. nasdaq down by 311, indicated up just by 61 the question is is this a ditp you want to buy? that discussion straight ahead. and the big interviews coming up over the next couple hours. michael dell, janet yellen, lots

of people living up we're going to be talking to today "squawk box" will be back in just men aomt.

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relax people, my wireless is crushing it. that's because you all have xfinity mobile with your internet. it's wireless so good, it keeps one upping itself. let's get a check on the markets right now. joined by tiffany mcgee, from pivotal advisers and a cnbc contributor and greg branch a

cnbc contributor as well let's start by talking about technology greg i know you think we're not out of the woods yet so you wouldn't tell people to buy on the dips we saw yesterday? >> i wouldn't. don't get me wrong, there are long-term stories i like here. when we last heard from google they were putting up 50% top line and operating margins they're going to grow 30, 40% in 2022 there are plenty of stories i like the question is can i buy them cheaper three or four weeks from now. and every indication is that every single factor that people have cited for yesterday's sell off will get more acute and intensify from here. concerned about inflation i expect 6% pci and 5% pce before end of year. that's simply not priced in. worried about energy prices think it's linked to the rising yields we're entering the

heating months, expect that to go higher as well. increased public scrutiny on the tech sector as we saw stories on facebook in the week so every concern, every factor is going to get more acute over the next few weeks so i believe while they might be on sale now, we can get them cheaper later. >> tiffany, do you agree with that >> possibly. but i -- you know, i really think that investors have decisions to make. first, i do absolutely agree that the recent volatility is going to continue. but investors do have a few decisions to make. number one are they a trader or a longer term investor if you're a trader you have to get two things right, number one when you buy and number two when you sell a long-term investor like myself, i'm managing portfolios over a much longer period of time so it becomes less about when the prices, the entry and exit points and more about opportunities to buy at a good

price but you're going to hold for much much longer time. the second thing investors should be thinking about from a portfolio construction standpoint is passive versus active how much is a pass sieve strategy, etfs and how much are you rotating into active management so now i believe it still is a stock picker's environment and really an active management environment. how much of that is going to go into, you know, funds that are actively traded but how much are you going to rotate into individual names i believe right now is a good opportunity to buy some of the names. you think about what was down yesterday, twitter down 5.8% pinterest down 5.7%. even apple, it's a really, really -- some people will say overvalued, i never say overvalued but at least it's on sale right now i don't have a crystal ball to tell you what's going to happen in the future. all i know is right now these names are down. >> down, so you'd say buy? i want to know what the future

is going to be i assume they're going to be up eventually i would think. >> of course again, if you are investing over the longer term, right, you do think that there is -- you do have conviction around a longer term strategy and all of these names that i mentioned, i'm going to tell you, my portfolio is heavy into tech that's just conviction around innovation and things moving forward. if you look at what happened last year, and kind of, you know, what covid has done for our current world, everything is changed. and, you know, tech companies are positioned to take advantage of this, i'm speaking about that broadly, but so many opportunities i can't tell you -- >> isn't that something the market is going to figure out? the idea the pandemic really lifted all of these, maybe now it's time to let air out of the market >> absolutely. again, it really depends on what company you're talking about i believe some of the companies are well positioned to do well we're in a different time, right.

so we talked about the adaptation towards, you know, ecommerce and everything adapting digitally we're never going back i'm talking about this from a broader perspective. if there are names you liked, i mentioned names i like, this is a good time to buy now does that mean you won't get an opportunity to buy them two weeks from now i don't know possibly but at the same time -- actually let me take a step ack i believe volatility is going to continue all i can tell you right now is sometimes investors look at the markets, what happened and they panic. i don't want them to panic i want them to see it as an opportunity to buy i want them to see next month if there is volatility which i believe we'll see through the end of the year. i don't want them to panic and sell i want them to be looking at these things and thinking about them as a buying opportunity >> greg, let's talk about inflation. i know that's something you've been worried about and you talked to us about stag-flation,

what are the odds of that happening and what's a way to protect yourself >> yeah i think we're seeing the beginnings of it although i think it will be short lived we are seeing the factors in place that would limit global growth, energy prices, the energy crunch in asia and europe we're seeing still shutdowns, delays in shipping and i think this is starting to manifest many of the banks across the street have slashed their third quarter gdp outlooks and are starting to nibble at the fourth quarter gdp outlooks and at the same time the inflationary pressures are increasing we have to take note of ida. after harvey we lost 500,000 cars ida will cost us about 250,000. so the decrease we saw in autos last month is going to reverse after harvey we saw auto price

gs increase 3% when you combine that, the high energy prices, the fact that the labor pool is not expanding in the way the fed had expected with dovish policy, it had the opposite effect, when you combine the fact that the supply chains will be broken the next 6 to 12 months as the companies have been warning us, we are seeing the tables set for a dramatic increase in inflation from here for decreased productivity from here and so that's what i'm worried about right now. >> thank you both for your time today. >> no problem. coming up, another airline mandating vaccinations for its employees while a major bank says no vaccine, no travel that's next as we head to break check out the futures, bouncing back a little bit. it's -- it's kind of one day up, one day down i don't know whether that indicates something is on the horizon or not nobody does. "squawk box" will be right back.

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southwest airlines joining some of its rivals in requiring employees to be vaccinated against covid-19 workers must be fully vaccinated by december 8th in order to remain at the airlines southwest said the mandate comes after new rules from the biden administration requiring companies with federal contracts to have vaccinated staff and shares of southwest a little change on the news, down about a third of a percent also j.p. morgan will reportedly restrict travel for u.s. employees who are

unvaccinated or haven't disclosed their vaccination status this comes according to an internal memo seen by "reuters." the company requires unvaccinated staffers to be tested twice a week and those employees have to pay more towards medical insurance like we saw happen at delta. >> time for dom chu to join us with a look at tech stocks that lost on monday, and tesla forced to pay millions over a hostile work environment and about an hour from now treasury secretary janet yellen will join us to talk about the debt ceiling much more as we head to break looking at the s&p 500's winners and losers hey lily, i need a new wireless plan for my business,

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good morning, welcome back to "squawk box." you're going to see some green arrows this morning, indicated

up triple digits for the dow but we were down multi-triple digits yesterday. you're gaining back about 120 of it s&p down yesterday by 56 points. this morning indicated up by about 15 and then the nasdaq was the really big loser percentage wise, down 2%, it's indicated up by only about 55 points after yesterday's decline. a federal court said tesla has to pay millions to a former worker over a hostile work environment. they're playing millions to a former elevator operator who said he endured racial abuse the case was only able to move forward because he had not signed a mandatory arbitration agreement, according to his lawyers. tesla are up to about $788 facebook and the rest of the

social media sector taking a hit on monday, as we've been talking about. dom chu joins with us more. >> the reason why there's intense focus on the nasdaq 100 and specifically within the s&p, the technology and communication services sectors are because those two sectors make up 40% of the overall s&p 500, so when those stocks tend to go lower, everything in the market tends to follow along with them. to give you an idea what's happened first given yesterday's steeper selloff, right now apple shares trying to bounce back they're only up about .25%, microsoft up about .2% same thing for alphabet. amazon facebook maybe the outside gainer but after steep losses yesterday. social media coming under a lot of pressure driven in many part -- this is a broader based selloff but facebook with the

outage yesterday and concerns with regard to the regulatory environment they'll face especially today with some of the testimony happening before congress watch those particular names they make up a large chunk of the s&p 500. also, twitter caught up in that social media selloff yesterday up about 1% in the pre-market trade. other parts of the technology services also trying to bounce back as well on the semiconductor side, many got hit. square and paypal got hit hard, too. and moderna and norwegian cruise line took a hit as well. the pullback we've seen in the nasdaq brought us roughly 7% below the highs we've seen for the s&p 500 -- or rather the nasdaq composite if that move now triggers some kind of interest in buying, there's a reason why if you look at the moving averages, some of the trader out there like to check out the

moving averages with the 50 and 200 day moving average with the nasdaq composite the last year, the magenta line is the 50 day average price of the nasdaq on a rolling basis. the gray line is the 200 we're in between those right now just about 2% above the big gray line and roughly 3, 4% below the purple line. i want to highlight it because you can see the past year, every time we 'taken a roughly 3%, 4% dip below the line it somehow bounced. over the last year that's held true whether or not it happens this time around will be interesting to see the reason why it's important with the gray line, joe, we haven't been below that since the pandemic lows back in march, april of last year so certainly levels to keep an eye on, joe. back to you. >> magenta. >> scian. >> i thought that was yellow >> i don't know. maybe just urple i was listening intently to you guys did either of you try the sour

pickle dorito's? >> no. >> yep it wasn't sour i liked them i told -- did i tell you about that, mack i told someone about that. yeah it's -- is it sour pickle? >> i have a bag on my desk right now. i haven't tried it yet. >> i tried them and i liked them but those are actual dorito's. the others are potato chips that taste like dorito's. >> why not buy cool ranch dorito's. >> tangy pickle. >> how about the popcorn, the smart food. >> i've had cinnabon smart food, it's 150 calories 2.5 cups but popcorn is like air. >> i ask because i know you're going to check out pepsi co

shares. >> tangy pickle, not sour. >> that sounds better than sour. >> the snack and beverage giant reporting earnings of $1.79 a share, 6 cents above estimates why would hugh johnson not want to come on when we talk about their snacks nonstop pepsi co's cfo joining us at the top of the hour. could be why they send me stuff. reminder, you can watch and listen to us live at any time on the cnbc app

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in a new documentary, melissa lee examines the growth of apps that allows you to wager on anything any time they're being embraced by a generation of traders, gamers and sports betters like 22-year-old anthony >> you can look at all of my action so 3,100 bets. >> he's wracked up more than 3,000 bets in three years. >> what do you like about gambling >> it's a rush it's a challenge. >> during lockdown an entire nation went looking for a rush these days you can wager on practically anything from when you'll be able to buy a tesla with bitcoin to the weather and politics >> are you going to win today? >> got in early on biden, before he was the nominee

>> and how much did you win? >> a little under $1,000 >> under $1,000. >> yeah. a little bit >> whoa. the documentary is called "generation gamble" it premiers tonight at 8:00 p.m. eastern i've got some things going >> i was wondering, 3,000 have you done more bets than that >> no. >> only $5 bets for you. >> only $5 bets enter every once in a while -- >> but 3,000 total bets that wouldn't surprise me. >> yeah, yeah, probably. i get a free $5 bet and it's like i have one tonight. it's like i don't have to do anything, my account didn't change i have less than $200 in my account. when it says if you bet $500, you get all these free $50 bets, it's like, i don't think so. but then i go to the store and i spend like $130, and it's like, you know -- >> how many bets that could have been. >> what's that >> how many bets that could have

been. >> no. think if i lost it betting then i'd have to spend something else. all right. when we come back, we have new data showing how hard it is for employers to find workers. that's next. plus, don't miss our exclusive interview with treasury secretary janet yellen that's coming up in the next hour "squawk box" will rhtacbeig bk.

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this friday is the day, the labor department is going to be releasing the september jobs report our own steve leishman has gathered data for a preview of what we can expect although sometimes this data is a little better than the actual data we get from the government. right, steve >> that's right, becky after correctly signaling the street was headed for misses

higher or lower the past several months, we'll show you that in a second the data this month saying for this friday the street has it about right, that is plus or minus. ukg found workforce activity fell 0.4% in the survey period, that's the middle of the month to the middle of the month that suggests the growth for payroll is about right plus or minus. the high frequency data doesn't nail the number but it does show stremg strengths and weaknesses. like big gains in june and july and the disappointment that we found in august. the company said that covid and uncertainty over school schedules looks to have held back hiring somewhat good news, the data actually strengthened after the survey period, that's towards the end of the month but not picked up in the friday report the software company home base found out hiring in hospitality, food and drink those are key

industries leading the comeback, they're weaker than they were. a sign the delta surge took a toll the sectors are growing just not the strong lift they had that got us to a million jobs a month. we asked to look whether the end of the unemployment benefits brought people back to work and it's not in the data states that kept the benefits have stronger growth david gilbertson said this data does not very clearly show that the federal unemployment benefits were not the thing keeping people out of the workforce. it looks like getting covid under control, the population vaccinated and schools reliably open are the way to get people back to work. >> that was my biggest question. i thought this would finally be the month we would say okay we know how many people are going back because schools are opened.

i guess the question remains how many schools are closed. that's the issue you've looked to in the past schools open up, there's an outbreak and have to shut down that leads to the uncertainty? >> that's part of it if you're a mom and dad saying wait a second, can i go back to work now reliably? i think schools are learning to deal with this i have to look again at the data which we've been looking at. i did a few weeks ago, as you no e, and it showed this widespread but not very high number of schools that had closed. i think that might have bled into the uncertainty among parents. >> thank you we'll see you later. you don't want to miss steve has a big interview coming up with charlie evans in the 8:00 a.m. eastern hour the. j&j has filed with the fda for emergency use of the authorization of its booster shot it had been reported the company would seek such authorization

this week. the fda so far has only authorized booster shots using the vaccine developed by pfizer and biontech expert panels will be reviewing booster data from j&j and moderna next week. 94% -- increased protection to 94% against moderate or severe critical covid-19 in the u.s that's about what we had heard remember j&j's one shot did 50 or 60, people said that doesn't seem to be as good then they tried a second one it's kind of interesting, isn't it it's like the immune system does things a certain way you get pfizer, two of them, 95%. moderna, two of them, 95%. j&j the first one 60, a second one it's 94%. >> the question is going to be the durability j&j with one shot was pretty durable with the 60% >> and then there's the t cell

stuff that's hard to -- >> but that's -- that's been part of the question because you may have also seen the news yesterday that the pfizer biontech one -- >> 70 -- after seven months. >> after seven months it drops below 50%. >> still circulating ain't bodies. >> yes >> i think you do okay >> it protects you from authorization and death. >> yes >> so seeking the -- coming up, master works is working to lower the high bar it takes to invest in fine art by offering buyers the chance to buy fractional shares of major pieces talkg t c, at nt.intoheeoth'sex

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our next guest is shaking up the world of fine art, allowing investors to buy shares in pieces of art work masterworks was founded in 2017, has more than 200,000 users, signed up, artists involved include keith haring, and joan mitchell joining us is the ceo and founder. art has been a great investment over the years, scott. sometimes it outperforms other asset classes. so i understand how that's good

to democratize that and bring it to people. but, you know, in addition to having an investment you can hang something on your wall usually, too i'm just wondering, that's not why people would be involved with masterworks you don't have anything to hang on your wall, do you >> yeah, at the end of the day, most of the paintings cost millions of dollars. many of the paintings we bring to the platform are $10 million, $20 million, so there isn't a way for the average person to purchase these paintings and hang on their wall you're correct if you look at the performance of contemporary art from 1995 through 2020 appreciated about 14% a year so our view is really this is an investable asset class you should think of it like stocks, fixed income, any other asset class. but there really hasn't been a way, historically to allocate to it unless you have millions of dollars to buy a painting. >> could you -- have you had anyone buy a fractional share

and then get a decent copy and hang -- you know what, i kind of -- can you do it that way whenever we have people on, i went to an exhibit in paris and i liked the sutin, the stuff is so weird, so i keep asking the guy, you got one for like 1,100 bucks. he says, i'll look it's never going to happen for me, scott. but i can get a part of one and then hang the thing and say i own part of that this little spot right here. >> we don't have the ability to do that today. but we get that request a lot. so it's definitely on the road map. >> i'm not that crazy. >> we do >> would that work for you >> i'm the outspoken anti-nft person we don't view nfts as an investment so i think part of a portfolio just because of the volatility that can certainly change in the near future. but we're really focused on

se secureizing actual paintings. >> so the s.e.c., you do everything you need to do in that way and you make money like a hedge fund, too. 1.5 and 20 >> that's right. we buy paintings and file them with the s.e.c. just as you would take a company public. so each individual work of art is a public company that we're selling shares in and we have investors trading shares on the secondary market as well our big news this morning we just raised $110 million from a firm called left lane who led around a valuation of around $30 billion. so the business is taking off. we're seeing hundreds of thousands of investors adopt a new asset class which historically has never been available. >> how do you decide for your -- i guess your investors, you must have, you know, some really good people that judge what's likely

to come in to vogue. it seems a little bit hard -- i don't know, is it harder than regular securities how do you decide which pieces are the ones to securize and sell shares of >> it's like any other asset class. we saw the boscat up there if you look at his market, it's appreciated 16 to 20% for the last 20 years. really an exceptional performing artist we look at different segments of the art market see which segment have the most momentum and go into those artist markets and buy the paintings. >> thanks, scott it's interesting have you ever done a sutine? >> we haven't. i'm not sure that would meet our art criteria for the artist. >> my teaste is no good -- >> you can love it or it can be a bad investment.

>> i picked the one master who's been declining in value. it's almost at 1,400 bucks and maybe i can get one. thank you, scott >> thank you. when we kochl back, more of the big line upcoming your way including pepsi co's cfo we have michael dell on the tech sell off on his new book "play nice but win". and treasury secretary janet yellen on the debt ceiling stick around we'll be right back. it's another day. and anything could happen. it could be the day you welcome 1,200 guests and all their devices. or it could be the day there's a cyberthreat. get ready for it all with an advanced network and managed services from comcast business. and get cybersecurity solutions that let you see everything on your network. plus an expert team looking ahead 24/7 to help prevent threats. every day in business is a big day. we'll keep you ready for what's next.

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lucky! there's always a home for you at girl scouts... pepsi co beating estimates we have the cfo, hugh johnston joining us first on cnbc michael dell out a few book. joins us to talk about all things tech. plus treasury secretary janet yellen warning of catastrophic consequences if the debt ceiling isn't raised. she will be our special guest in a few minutes. the second hour of "squawk box" begins right now good morning and welcome back to "squawk box" here on cnbc i'm joe kernen along with becky

quick. and the count down is on, really i know that i've been just counting the seconds andrew is on assignment on the west coast today he'll be joining us in about 30 minutes, along with treasury secretary janet yellen janet yellen that should be interesting i don't know whether we've had -- this is a first time we've had secretary yellen on. >> it is. >> as treasury secretary >> right. >> and that's a different -- totally different job. the more you think about it. >> than her last job >> some people would say it isn't. that, you know, people say well, the fed is totally non-political and the treasury department ought to be political. >> you're expected to be. >> you work for the administration but then others think they're both political anyway. equity futures at this hour indicated up, 120 points on the dow, triple digits and then the other averages as well, 52 on the nasdaq and 15 on

the s&p. news out in the past few minutes johnson & johnson has filed with the fda for emergency use authorization of a booster shot of its covid-19 vaccine. the fda had already scheduled an expert panel advisory meeting for next week to review booster data from both j&j and moderna the fda so far has only authorized the booster shots from pfizer, as you know and in this case, included in the filing is that there is 94% in terms of preventing severe -- moderate to severe covid-19 after 56 days, if you found a booster with the vaccine given 56 days after the primary dose provided 94% protection against severe or critical covid-19 in the u.s. >> what i thought was interesting in the filing is they are asking anyone age 18 and up to be eligible for this pfizer and biontech asked for anybody age 16 and up to be

given this that's not what the fda and cdc eventually signed off on. >> right. >> you're supposed to be 65 or up or have some preexisting condition -- >> for now, yeah. >> -- or be in a position in a work place where you have a high exposure for some reason it'll be interesting, because j&j is only one shot to this point. will that make a difference or will this data they're giving them with the 94% efficacy of severe disease, will that be the thing that sways them, too >> i like that number. >> yeah. 94 is better than 64 >> yes >> yeah. all right. lets get you other headlines facebook is apologizing for a six hour outage on monday that crippled facebook, instagram, and whatsapp services. outside experts say the probable cause was a change in code

a new rapid at home covid-19 test this test that's made by acon laboratories is not the first of its kind but will address a shortage of rapid tests. and senate majority leader chuck schumer set a wednesday morning vote on increasing the federal debt limit he didn't say how the democrats planned to pass that bill without republican votes if a vote isn't done through the reconciliation process it would need 60 senators to clear a procedural hurdle. you need 60 votes to get past the hurdles. >> pepsi co beating the top and bottom lines joining us now is hugh johnston, he serves on our cnbc global cfo counsel. good to see you again. thanks for joining us. if i had to talk about the most

important thing you said this morning, is that the full year forecast for revenue, because of how well you did this past quarter you're now boosting that above previous expectations? >> yeah, good morning, joe and becky. great to be with you guys. that probably is the first headline of the morning is, super strong revenue growth out of the company right now we grew the third quarter 9% 8% the people have looked at the space and wondered, growth is temporary, i think that's the case it's not temporary we rarely see strong market share, strong innovation, as you all were talking about earlier on the show. and as a result, the demand for our products is terrific right now. >> a lots to to do with reopening. for a while, there is no doubt that your results were impacted to some extent by, you know, people not eating out. people not going to fast food.

whatever but when we were closed up we're kind of in this half open -- i guess we're opened, aren't we is that the bottom line from what you are telling us? we are still worried about delta. i think we are more opened than closed at this point. >> i think that's right, joe, as we look at our food service numbers, a lot of consumption at home both the snack and business beverage, those are up 20% it's gotten back to 2019 levels. i think for all intents and purposes right now, you can say we're back to normal as normal can be in sort of this challenging state of affairs so, what to me is encouraging is while the channels like food service are doing better, we still see in the grocery stores really good, strong growth, across the take-home channels as well that's yes say, to me, for us, it goes beyond that it's for a specific around the combination of the innovations that we have, which has been terrific and the

fact that we are gaining market share in about 75 or 80% of our markets around the globe so it's pretty broad-based strength, based on the things we are doing. >> if you had to navigate the global supply chain, the structure and the shortcomings and some of the covid-19 impacts on that and are you still navigating that? because it seems like it's still pretty problematic >> we are. it's been a challenge for us, just like everybody else i think because of the resiliency we had previously built for the supply chain, we're doing pretty well. particularly with packaging, which comes from a lot of areas around the world it hasn't been easy on us. our supply chain people have really stepped up and i think done a nice job. we're not immune to any of that by any stretch of the imagination. global supply chains are disrupted right now. the good news is because of the advanced planning we have done on it and because of the buying

we do on materials -- >> hugh, i was going to ask you about that, inflation, we talk about it all the time, how big of an impact is it we have seen energy prices skrovenlth labor costs have gone up significantly and commodity prices, too. >> you are absolutely right. the ford buying buys us about six-to-nine months of room so to speak. the whole point of that program has always been not ultimate inflation. to give us the time to price if a very rapid fashion that's what you see happening right now. our beverage prices have gone up through the summer into the fourth quarter snack food prices are going up right now. i expect we'll probably see a little bit more pricing increases in the first quarter of next year as we deal with the fact that costs are higher that's a certain reality for us

and everybody else >> hugh, it's kind of weird, there was a front page piece in the journal how strong the dollar has been and the dollar index. we hear a lot about inflation and you know that some call it a smile curve. i like that. if the globe is being affected a little in terms of growth, that helps the dollar if we're doing better than everybody else, that helps the dollar so we're in some kind of weird positive place for the dollar but inflationary expectations are soaring, too so it's weird, did you have dollar problems in terms of being a multi-national >> you know, if i look over the last tell years, for the most part the dollar has been strong. obviously, that has a depressing effect on international earnings when you dollarize them. this year the dollar has been a one-point tail wind for us, which is a bit unusual you know, my operating azim sum

shun is the cfo, the dollar will get a little longer, by virtue of the difference in inflation around the globe ultimately it seems to play out with differentials trading at the currency this year it happens to be a tailwind of a percentage point that's fine as well. we can manage through those. >> no more buybacks. do you think your stock is actually valued so you don't wanted to buy any more back, what do you think? >> well, i think our stock is under valued i think this company has a tremendous am of potential we've reached the potential. navgs we didn't buy back stock this year. we had done a couple mna deals as i look forward, we'll make that decision in february and have a decision as to where we go next. >> the dollar has been strong. let's say it wasn't as strong. i can't imagine the headlines,

pepsi decides to have some of its cash balances in bit coins, would you have have done that in crypto >> it's early. i learned over time to never say 7 when we have cash balances, we're generally interested in safety and liquidity than anything else. bitcoin, it's been a long time before bitcoin becomes a functional currency for us >> we always get to this eventually i would lead with this, but we have all that other important stuff to talk about. but you found the holly grail. have you found something you can make into a snack that's not going to make me fat that will be just as good as things that make me fat? >> joe, once again, i will remind you of high/low, 9 grams of protein, relatively low carb. we're making it more broadly available. after i talked with you on cnbc

last quarter, we saw the sales go up. this one is for you. i want to remind you of our beyond meat joint venture. early '22 i think you will see news that will make you happy there. >> that's a teaser, tells e tell us more. >> that's a really cool code name our jeff concerner >> don't do the kruciferrous thing. chick peas, are they uciferrous. c c cauliflower pretzels taste like a -- >> we need to touch everybody. >> i just figured what the --

project concekernon, making strides. i like the tangy pickle doritos. i get a plug in for that >> hugh johnson, cfo ceo. >> when we come back entre pre fewer and ceo of dell technologies, michael dell will join us to talk about his new back and what's happening in big tech and a special interview with janet yellen. she will be joining us at 7:30 eastern time check out the futures. especially on the nasdaq, things are bouncing back a bit. s&p futures up by 16 the nasdaq up by 48 after losing over 300 points yesterday. "squawk box" will be right back. . i promise to bring you advice that fits your values. i promise our relationship

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♪♪ since our beginning, we've looked to inspire and nurture each other by asking what's possible? what's possible when we connect? what's possible when we come together? when we open our hearts. when we grow together. after 50 years, we've learned that possible is just the beginning. my son romeo has sought counsel with some strategic advisors. they suggest that we marry our fortunes with...the capulets. blasphemy! fear not. these advisors managed one of the largest mergers in history, creating billions in value.

billions? plus, they have experts in global trade. this merger shall be a boon for our spice business. and set a course for growth. here, here! friars, send word at once. yes, m'lord. welcome back, everybody. dell technology's founder chairman and ceo michael dell joins us he has a new book out today. it's called play nice but win, it's number of lessons from his career, which included being the youngest boss of a fortune 500 company ever michael, welcome it's great to see you. >> thank you, becky, great to be with you >> i want to say, first of all, thank you for writing this book. i've always found you to be a man of few word and the idea that you actually opened up and told everybody what you were

thinking through some of the key critical moments we all followed is very unbelievable you are opened in this book. you tell us what was on your mind, what you were thinking through at the time. i was reading and thinking what inspired to you open up like this it inspired me how candid you w were >> well, i wanted to do it, partly because i felt i had a story to tell and i had never done it before my friends encouraged me to the largest private ever in tech and the biggest merger in tech to write the book it was a lot of fun. i hope people enjoy it and take some valuable lessons from it. >> one of the things people will be interesting to hear is your take onicahn because carl icahn was talking

throughout the entire thing. i have to say that is some of the stuff that dragged me in in kind of looking back and reflecting on that you said things like you called them a greedy pie, a pirate, things, carl, i would anticipate what everybody were doing you called his wife meatloaf have you heard from him? my guess is carl got an early copy of it >> i have not heard from him yet. he doesn't really -- he's more of a mm guy than an a.m. guy we'll wait to see later today. >> the things you were going through, entrepreneurs and potential leaders will take out of this book what it was like, what it took to korea it the company, be running on fumes, trying to be operating under such difficult conditions and making this up as you go along, growing at a phenomenal pace.

these are things you can't teach people these are something you have been doing since you were a teenager >> yeah. i wanted to really tell the real raw stories of what actually happened and not the sort of gram russ version. yeah, when are you doing new things, a lot of it is experimenting and testing and failing and trying again and learning and ultimately finding your way to success and you know, we've done that time and time again we are still doing it. >> one of the things that struck the is what you are doing and coming out of silicon valley today. there is this idea of fake it until you make it. that was not the case with you you were doing real things every step along the way it doesn't mean you didn't make mistakes or had done thing differently. this is none of the faking what do you think when you look

at silicon valley these days and seeing this fake it until you make it instead of actually doing with work? >> yeah, we were profitable our first quarter i shared the financial statements in there. we were profitable when we went public at a pretty reasonable rate look, i think one of the things that is inspiring right now is there is an enormous amount of capital that's going after some really big hard tech problems and that's great as we've seen, there is also a dark side to that where there are some bad things occurring in the market as well. >> you write about how, we knew you created this company in your dorm room. at least that's what legend told us it was far more than that. at apartments that you had in your dorm room new apartments, places that you set things up, you were the

original person, we were forced to live different places i wonder what you think consumers want, what employers want and how that works, work from anywhere and how the technology companies like yours adapt to that? >> right, i think through this last 18 months, we have learned that work is something we do it's not a place and i think employers are embracing hybrid work that's obviously created a lot of demand for technology and ultimately, i think it's leading to happier employees and more productivity it doesn't mean that there is not a role for offices, but i think it will definitely be different in the future. certainly, this period has given us a real glimpse of the future

as to how we can use technology and tools to work from anywhere. certainly for parts of our business and really for all of our business, it's been a great tailwind for us. >> we are looking at the chart right now. dell stock up 210% from the pandemic lows. and i know this last quarter, it was a really strong one for you with super growth, sales growth of 15% what's driving things right now? >> so i think we have a strong second half as well, so i think the demand for our products pretty much across the board is super strong if you think of the last 18 months, the only thing that worked was technology so organizations all over the world are investing heavily in

technology today is also in addition to my book, it's the day that windows 11 is being introduced and you got a disease out there right now. so, you know, there is enormous upgrade cycle. if you think of hybrid work, obviously, that generates a lot of demand, of course, all the cloud infrastructure and age computing 5g you know, all of these things and we feed to mention the cyber challenges and cyber threats out there, all of those are jen rating demand for the infrastructure and, you know, solutions that we provide our commerce around the world. so demand is strong and while there are supply chain challenges, we're doing the ultimate. >> i was going to ask you about

that, you wrote in the book how you went to asia for the first time at 20-years-old to peel back the layers of the onion an figure out how the supply chain works. what are you doing these days with the chip shortage of all the things you need? >> lots of forward buying and certainly i think the quality of our demand signal has been better than our competitors, the supply chain has been a strength for us for quite some time but we're not immune we do have very high backlogs, eastern though we are shipping more products than in the past and lead times where they're ext extended but we're doing our best to keep up i think it's still going to take quite some time for semi conductor capacity to rise to the demand that we see out there. so it's record demand and record

shipments even though there are chal challenges >> michael, you went public with the company, take it private and go public again. i think it's mind-boggling for people to get them around. what was the moment that you said, okay, time to go back to share hold,? >> you know after the massive series of things done, it was time to simplify the capital structure. you know, clean up a lot of the debt that we had we paid down an incredible amount of debt and got a double notch upgrade a few days ago

from s&p and a similar one from fitch. so, really going public was the simplest way to bring all the different class of shares of the company together and simplify the zrur and give us the flexibility we need and we transformed the company in a material way you see is that with our continued growth and success >> what do you like better, rung a private company? >> i like both one of the things when we went private is we reignited the entrepreneurial engine of the company. we talk about that a lot in the book we've kept that spirit and that approach going, you know, now that we're public again. >> today is not only the launch of windows 11. it's also a ten-year anniversary from when the technology industry lost skeeve e steve

jobs i know he is somebody you looked up to and admired. you met him early on when you were still a teenager. what do you think in terms of what's happened, the transformation ten years later at apple >> well, it you know certainly is amazing how the smartphone, the iphone has changed all of our lives. apple's continued to innovate. i think it's certainly different than what steve would have done. he had a different approach. his own approach and, you know, but, look, apple is an incredible company and steve, obviously, amazing leader that you know changed the industry forever and you know what can you say? i mean, apple is certain

certainly has changed the way we think about computing. now you got 5 billion people walking around in the world today effectively with computers in their pockets and, you know, apple was an enormous part of making that happen >> michael i want to thank you so much for the time the book again is really a very opened read. very honest and it was a pleasure to read so thank you for being with us the book is called play nice but win. we appreciate your time. >> thank you, becky. good to be with you. >> by the way, we should point out that act 13th is cnbc's at work summit. it returns with a packed lineup, including michael dell and many influential voices i will speak with ray daleo. you can go to cnbcevents.com/worksummit. andrew is here have you an important interview coming up right now. >> we do, but right after the break, treasury secretary

janelle yellen will be with us live in an exclusive interview we don't want to miss. we will do it next as we take a quick check on the markets as we take a break, "squawk" returns right after this my retirement plan with voya keeps me moving forward... even after paying for this.

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welcome back to "squawk box" this morning president biden coming out swinging against republicans saying there is no guarantee that the debt ceiling will be raised as they continue to oppose effort. janet yellen has been sounding the alarm that she supports efforts to remove the debt limit altogether joining us right now an exclusive interview is secretary janet yellen mrs. secretary, thank you for joining us >> thank you for having me. >> it's great to see you help us understand the state of play as you see it, you have warned congress they have until okay 18th to raise or suspend the debt limit to avoid what would be the first ever u.s. default. of course, the u.s. now has a 28.4 trillion dollars in debt. the votes don't appear to be there. how do you see it? >> well, you know, it's really up to speaker pelosi and leader

schumer to figure out how to get this done in congress. what i can tell you is that it's essential that this be done. i've said that by the 8th of october, we will be out of extraordinary measures, have limited cash and likely to exhaust it very quickly. and so i do regard october 18th as a deadline. it would be catastrophic to not pay the government's bills for us to be in a position where we lack the resources to pay the government's bills it really 81 mines confidence in the full faith and credit of the united states, our willingness to stand behind her and make sure that we've paid them and when you think about the impact it could have on 50 million seniors that are expecting

social security checks honor troops, waiting to receive their child tax credit payments and these would be delayed and the delays would grow longer and, of course, our debt, itself, u.s. treasury securities have long been viewed as the safest asset on the planet that partly accounts for the reserve status of the dollar and placing that in question by failing to pay any of our bills that come due would really have been a catastrophic outcome >> i recognize - >> i totally expect it would cause recession as well. >> i recognize this is ultimately going to be the responsibility of the senate and the house, but let me ask you this, senator mcconnell did put

it, the responsibility on the speaker of the house and the senate democratic lead er yesterday and then senator manchin yesterday said maybe the approach if terms of the tools that are available should be reconciling niliation. the democrats should do it in reconciliation would you support that >> well, andrew, i support getting it done. this has long been done on a bipartisan basis the debt ceiling has been raised almost 80 times since 1960 and almost always on a bipartisan basis. this shouldn't be the responsibility of one party or the other. we have to raise the debt ceiling as a routine matter whenever the contrary runs budget deficits and with the exception of a few years in the late 1990s, this is in fact

during most of the post-war period and it should be routine to raise it. when bills are passed and our text policy is put in place. that's the right time to debate what the fiscal policy of this country should be. we have those debates. once decisions are made, we have to pay the bills that come from those decisions and so to place an arbitrary ceiling on our debt and to create periodic crises, manufactured crises, that really place our economy and our financial system at risk, especially now that we're recovering from the pandemic in a fragile way, i consider this irresponsible. i believe that both parties have the responsibility to get this done and it's really up to the congress to decide how to manage it but i believe it must be done. >> one of the reasons that

debate is taking place is, in part, because the democrats have now linked these two other spending packages together that are quite remarkable in size and i'm curious if you'd take us in those conversations and whether you'd support linking those two packages together? >> well, i support both packages i think the infrastructure bill tachs crafted on a bipartisan basis has the support of the white house. i'm sure with that doubt we need to modernize our infrastructure. our roads and bridges in many cases are crumbling. we need to upgrade our ports, our airports to modernize our grid our electric changing stations in the country to promote the use of electric cars

to address climate change. this is really important but what's in the other package, the reconciliation package is also tremendously important. it involves child care, paid leave a child tax credit, investments in education, in early childhood education and very important climate change initiatives. and all of these initiatives are important for our economy to be able grow. some of the supports for children and families will raise a labor force participation. make it easier for women to work in the labor pool closer to -- and for women now i'm able to deal with that plus, this is a package paid for with proposed toogs increases,

enforcement, as if it would serve to close what's estimated to be a second trillion dollar tax cap for the next ten years so this is a fiscally responsible package and the total spending is less than 1% of gdp over those full years that's not very large. >> madam secretary, obviously, there are debate whether it will pay itself and what the costs will ultimately be given the debt that we have generated over, well, now, a very long time, frankly, on a bipartisan basis i want to ask you about a proposal paul crudman has gotten behind recently. that is the trillion dollar coin as a possible fix or tool in your toolbox to solve this effectively, minting a coin that

could pay off some of our debt what do you think of that? >> i'm opposed to it and i don't believe we should consider it seriously. it's a gimmick and what's necessary is for congress to show that the world can count on america paying its debts this is equivalent of platinum coin is equivalent to asking the federal reserve to print money to cover deficits congress is unwilling to cover by issuing debt it mizeing the independence of the fed with fiscal policy and instead of showing that congress and the administration can be trusted to pay the country's bills, it really does the opposite. >> madam sergeant it's great to have you especially since we can at least ask you about your former role

and i want to ask you about money supplies, someone pointed out to me prior to the pandemic, it's growing 7% in that march. it subsequently went to 20% and grew there through the pandemic and, two, it has now come down to a lower level that's still double what at 13% and this individual pointed out, it's responsible for the reflationary expectations we have are you paying attention at this point, still to monitor supply growth and do you think this could come back to haunt us to some extent all these dollars? >> well , i spoke to pay attention in the economy of course, the fed to make the right decisions. you know, we have been hit by

incredibly unusual shock and on the one manned, we're almost 6 million jobs short of where we were before the pandemic, which means a lot of people who still need jobs. on the other hand, many firms are finding it difficult to hire, we've had extraordinary shifts in the pattern of demand away from services and goods and i know the fed is trying to sort through the implications of that supply bottlenecks have developed that have caused inflation. i believe they're transitory that doesn't mean they will go away over the next several months >> madam secretary, you take the lead on a lot of things economy related. i don't know how much you get in the weeds on the appointments. the nominee is somewhat controversial because of some of her past comments about the u.s.

banking system i'm talking about sol anarova him some had said the biden administration is much more out there in terms of the left side of things financially and financial matter than we were led to believe do you support that nomination did you have anything to do with vetting this professor amarova >> well, professor amarova is the president's nominee and i'm aware that she's an expert in fintech and banking regulation i think she deserves a fair hearing by the senate. i hope she will get that >> madam secretary, senator warren came out pretty strongly against j. powell being nominated. she said she won't support it.

there are questions whether the administration will go ahead and re-nominate j. powell. what is your opinion should he get a second term? >> it's up to the president to make the nomination. the president hasn't yet made that decision. i know he will talk to many people and consider a wide range of evidence v evidence and opinions and make a careful decision >> i want to talk to you for a moment about taxes, because to pay for all the things that the administration is seeking, there is a big tax raise on the docket but also an effort that i know you are a proponent of for the irs to collect more information and more tax dollars, more information about taxpayer's bank accounts, including annual cash flows i was curious whether you think the irs has the wherewithal all

to actually do that? >> well, of course they do right now on every bank account that earns more than $10 a year in interest, the banks report the interest earned to the irs that a part of the information base that includes w-2s and reports on dividends and other income that taxpayers earn, so collection of information is routine. but there is an enormous tax gap in the united states estimated at $7 trillion over the next ten years in terms of the shortfall of tax collections to what we believe are owed and that's not coming from people failing to report wage income or dividend income where there is good information. it comes from place where the information on income is opaque

and can be hidden and a simple way for the irs to get a sense of where that might be is just a few pieces of information about individual's bank account itself nothing at the transaction level that would violate privacy simply aggregate inflows over the year and aggregate outflows. and that would really help the irs target their auditing resources, which would propose to greatly expand to do their audits on those usually high income wealthy individuals that may be concealing their transactions and their income and these would be helpful indicators of where it would make sense for auditing to occur. so it is not reporting of individual transactions or

anything of the like and it would be a simple thing for panks and other payment providers to provide along with the other information you are already providing. >> madam sergeant we want to thank you for joining us this morning right here on "squawk box. i hope we can do it again soon to continue this conversation. >> my pleasure thank you for having me. >> thank you coming up, playing the big tech sell-off. dan ives putting out why he thinks growth names are oversold and cyber security could be at play here. cesar ceo thomas reeg will join us live from los vegas "squawk box" will be right back. >> buried in receipts, invoices and other paperwork that's preventing you from doing what matters most? then get the all new epson rapid receipt smart

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. johnson&johnson filed with the fda for emergency ruse of a booster shot of its covid vaccine. meg, maybe it's noteworthy they are going for anybody age 18 and up even though the cdc turned that down. the pfizer shot, not for everybody. >> yeah, it's going super interesting to see thousand fdaa advisory committee and cdc looks at the booster applications from moderna and johnson&johnson. both have their applications in now for 18 an over and so that's ahead of the advisory committee meetings the fda said for late next week, october 14th, they

will look at the moderna booster vaccination and nih mix and match data that will essentially open up the door for folks switching brands for the booster. who is going to be the booster of choice? of course, they have that advisory committee meeting later in the month for the pfizer vaccine for kids ages 5-to-11. j&j reiterating the data we saw last week, but essentially saying when they gave that booster shot at two months, to it increased the protection to 94%. it's more likely the committees will be looking at boosters farther out, perhaps six months, j&j is showing there is quite an increase in anti-body. so they had to commit before this meeting late next week. it will be fascinating to see how they review it all >> thank you "squawk box" will be right back.

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. the nasdaq now almost 7.5% from its highs, but our next guest says this is a perfect opportunity to buy the dip joining us van nuys deputy securities multi-year, multi-year rally you say, dan so it doesn't really matter it's

down 7.5% is as good as time as any. would you buy more fit went down more you think there is more to come? >> yeah, we think tech stocks are up 10% plus. clearly from the fed, rising yields and even some of the debt ceiling, if i look at 2 trillion of digital transformation spend over the next decade on consume tore enterprise, i view it as a golden buying opportunity. that's the thesis when have you these periods of time when these times have doubled down and big names mike apple and microsoft as some of the others. >> the pandemic moved everything forward, brought things, made things happen even quicker for a lot of tech stock. that's not a reason to maybe i maybe wait for more than the pullback we've seen so far this is the time to do it right

now. >> it's a great question you can't paint a lot of companies with the same brush as some others seem more moderating grip if i look at cloud, we're a third of the way through this shift to cloud that's what i almost call fourth industrial revolution we see in cloud size, security, 5g technologies, forian one that has a multi-year horizon, we will go through these white knuckle series i view this double down on tech and creates more opportunities to own the secular winners as we've talked about >> so can see the 5 we have up now. just go and buy those? >> those are the ones to me if i look out the next one-to-two years, those are up. because we can talk about a ten year, i think they estimate growth by 10 to 15 years

there has been one on cyber security i think eighth golden need and paola and docusign. this is not we've waved the white cloud, hand holding clients over the last few weeks. i view this as the time. >> we got to go. do you have fixed income on your, i used to call it a flow tron, those are long gone, do you watch the ten year interest rates matter. is that something to keep an eye on for tech? >> focus on the 2 trillion of spend. >> dan ives. thanks appreciate it. andrew >> okay. we've got another big hour still ahead on "squawk box." senator richard blumenthal will be joining us on today's facebook hearing what lawmakers want to hear from the whistleblower frances hagan.

plus texas senator ted cruz and charles evans fed in the next hour on "squawk," back after this do you stay down? or do you get up? [announcer] and this fight is a long way from over, leonard is coming back. ♪♪ ♪♪

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♪♪ we see companies protecting the bottom line by putting people first. we see a bright future, still hungry for the ingenuity of those ready for the next challenge. today, we are translating decades of experience into strategies for the road ahead. we are morgan stanley. good morning futures point to a higher open as we get closer to the opening bell on wall street, coming up, a tough start to the week when tech shares dragging down major averages and facebook back online after its worst outage in more than a decade, the system

comes as congress prepares whistleblower, and we will talk to senator richard blumenthal and republican senator ted cruz. and a key banker speaking out on the federal reserve. hear exclusively from the fed president charles evans. as the final hour of "squawk box" begins right now. >> good morning, welcome back to "squawk box," i'm joe kernon along with beck question quick and andrew ross sorkin andrew is joining us i said that you slept in that wasn't the case, an degree you? but it's good to see you this morning. you do the jacket. if you want to do that, you can do that. you don't want me to

>> i don't have to if you want to do it, your ties look better with that look, you were able to use your -- >> pocket square. >> if you want to do it, i'm okay with that >> it's slimming, joel it's slimming >> you are slim enough so then why do you, you are suggesting that. >> i take that as constructive criticism. equity futures indicated up 168 points and this is after a weak session yesterday. i remember last week, friday, it was up 400 plus. so underlying it, we served the nasdaq down 7% we kind of go up kind of come down. i don't know whether these are tremors as we get into those horrible october teens, which in the past have made some good bottoms. treasury yields, just mentioned that to a tech investor, who says, eh, i watch them but tech is going to move, dance to its own beat. it doesn't really matter

but a lot of people point to interest rates as problematic. andrew >> meantime, chair janet yellen saying it is quote utterly essential congress finds a way to raise the debt ceiling before that deadline, coming up now in a little more or less than two weeks away we spoke with treasury 2nd janet yellen in the last hour. she called the idea of the government not paying its bills catastrophic and said the impact would span from seniors to military members to the government debt, itself. >> the u.s. treasury securities have long been viewed as the safest asset on the planet that partly accounts for the reserve status of the dollar and placing that in question by failing to pay any of bills that come do you would be a catastrophic

outcome. >> i recognize - >> i totally expect it would cause a recession as well. >> yellen also said she not in favor, actually shooting down an idea of minting a trillion dollar coin. an idea that somehow floating avoiding hitting the debt ceiling. she says it's important to show the world the american company and u.s. government can pay its debts. >> we are reaching that deadline she says october 18th is the drop dead day, basically she sees that as the day we are near to running out of cash. the wrong aling you are seeing in congress doesn't make sure it's a sure thing between now and then what is that, 13 days? >> 13 days i didn't get a sense she had a sense they were going to get any closer. >> yeah. there are so many things that are happening right now, that she was able to weigh in on. also just the question of will j. powell be nominated again by this administration? senator warren came out in the last week and was very dead set

she's not going to support that. janet yellen said the administration joe biden will talk to a lot of people and make his own decision she didn't come out saying she would be recommending him either were she was quiet on that point. >> she kind of said she was okay with the controller of the currency nomination. an individual went to moscow state on a lenen scholarship really said the soviet banking system is better than ours and would, you know, has made some very, i think what did she say about wall street? it's a bunch of a-holes, or something? >> that's an analogy >> it sound like she said, was she involved in picking that profess ore amorova? >> i did not get the sense she was involved in it i think that these people in these positions, as we know whether we've interviewed people in the prior administration's past, in these roles, you support the president.

so when the president has the position, you support them whether you do or you don't. >> right >> i think you are probably right with that. >> but i just wonder how much influence she has on policy then because she is the lead on financial matters, you would think. so i would have thought she'd have some say and if she did have a sense, yeah, this person seems fine to me, i think that's an indication of where we are. >> my guess is she is probably right. i'm sure she has an opinion on it she is not going to tell us. that's kind of where she stands with it. >> dog gone it, i wish she would have >> she'll whisper it to us >> right maybe we should check out shares of pepsi, higher after the company beat quarterly analyst estimates on the top and bottom line pepsi also raised its annual revenue forecast as easing a pandemic restrictions, boosts its sales at restaurants and movie theaters we spoke with pepsico, in the

first hour of the show earlier this morning well, we did speak with them hugh johnson he talked a lot about what was happening. he talked about how inflation has crept in pepsi has ways of kind of preventing all of those problems from creeping up they buy in advance. they said that only buys them six-to-nine months of a window before inflation catches them. it allows them a window of making sure they can raise prices gradually at least over the summer, they were doing that with beverages pepsi up about 1%. in a senate hearing later this morning, facebook whistleblower frances hagan will be testifying showing instagram can be harmful to teen girl's mental health and facebook's technology can magnify hate and misinformation joining sus senator blumenthal he's the chairman of the

commerce subcommittee on consumer protection, commerce safety and davis security and senator, what do you plan to start with this today? i know this is something you have been digging into deeply and you've had a lot of conversations with ms. hagen >> as the world now knows, frances has hagen has revealed documents that are truly a bombshell. what they show is that facebook purposefully exploited and amplified the insecurities an anxieties of teenagers, particularly girls who were worried about weight loss and dieting. it has used powerful algorithms to drive content act eating disorders to them, self injury and facebook has a lot of tough questions to answer, because these documents speak volumes and the whistleblower who revealed them is going to talk about why she included she had

to reveal them why she feels that facebook is putting profits ahead of safety and why there need to be reforms. we will talk very seriously about the reforms that are necessary. >> we spoke with facebook's monica bicker yesterday. she says the company is doing this research because they want to know how they might be able to help and improve things they are concerned about this and have taken some stems. what would your response be to facebook's position? >> they did research but then they concealed it. they continued to cover it up. they won't disclose all of the files. they refuse to say when they may decide to disclose that research and even more importantly, facebook's leadership projected the recommendations that were made to inkreesz the daeft of the site and stop dragging teenagers into these dark places, deepening their

insecurities and anxiety, increasing online bullying and self injury. they restrekt jected those recommendations. so the decision-making here is not the facebook spokesperson, it is mark zuckerberg. there are a lot of teen who's are looking in the mirror right now and feeling bad about their self image and bodies. mark zuckerberg should be looking in the mirror. he should be coming to congress. he is now on this no ipolling, no admission, no action approach, but instead of taking responsibility, in effect, he's going -- >> the company did say last week that putting a pause on this in instagram, kids younger than teenagers, does that factor at all? >> it's a positive step. a baby step, hardly the end of instagram for kids, which is another employ to exploit

teenagers. in fact, now, they're looking at the pre-teenages, which is even more dangerous and in her testimony last week, a facebook witness failed to disclose when or whether they'll make a decision about whether to stop the pause, again, mark zuckerberg's decision almost certainly, so, this kind of continued exploitation of children really has to end a pus isn't good enough. they ought to decide, just stop facebook for kids. they don't need it they're making plenty of money and all they're doing is increasing the money they're making without regard to the pain they're causing >> facebook's gotten dragged in plenty of times. there have been senators who have been upset with things the company has done but we've never seen it actually end up in any sort of additional regulatory scrutiny for the

company. anything that they have been told they can't do is this time different what are you hearing from other senators >> this time feels very different. in a way, big tech is facing big tobacco's moment of reckoning. i will never forget the moments when we discover during our legal action against big tobacco, which i helped to lead, that they had documents showing they knew about the toxic effects of smoke, about the addictive impacts of nicotine in their own file the revelation about these documents feels very, very similar and i think that facebook is facing a big tobacco moment here it is the sort of bibipartisan outrage if you closed your eyes during that last hearing on thursday and didn't know who was talking, you couldn't tell a difference

between democrats and republicans in expressing outrage and dissatisfaction. you had bills that can improve privacy, provide better tools to parents, make sure u sure there is legal responsibility, the 30 of the communications decency act. these times i hope will go forward and facebook will disclose all the research that it's done. >> senator, you took a lot of flack lost week when you asked facebook when they would be ending binis that and the general reaction has been maybe congress shouldn't be regulating these companies if they don't even understand how they work. what would your response to that b be >> i took some ribbing online. my kids had a laugh. i had a laugh, fairly in the first part of that hearing, i demonstrated that i had a full

understanding of what binsta is. instead of laughing. we ought to look at the deadly harms by instaand what can be done to prevent those harms to children >> senator, i wanted to ask you about a consequent from aoc, she talked about the breakup but not so much specifically about the hearings that you are having but about the plaingout and outages that facebook suffered yesterday. whatsapp and instagram, the service that they bring a and said, look, it's too big too many people are dependent on it what do you make of that >> i support an effort to break up facebook. the combination of instagram what's app and facebook are very, very power they dominate the market they prevent a lot of

innovation they have control of such vast swaths of data that they create in effect obstacles to entry and, of course, their tactics of buying or destroying competitors inhibits, entry to the market. so i think that their tactics are in many instances indicative of a need for anti-trust perform, type of faith mission and the department of justice obviously have a role here and they're undertaking action but those considerations are wholly apart from the outages that i've heard yesterday. >>blumenthal, thank you fo your time today. we appreciate it >> thank you coming up, three more big interviews you don't want to miss the ceo of ceasars in the state of the gaming industry

texas senator ted cruz on facebook, the whistleblower. the debt ceiling and the spending battle in chicago a fed president charles evans on his table time line and the recent spate of controversy surrounding some of his fellow and former fed oiclsffia you are watching "squawk box" on cnbc

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welcome back to "squawk box," i'm dom my chu a check on your morning movers so far we want to call attention to what's happening in crypto currencies, specifically when it comes to bitcoin we've seen a green wave across many of those crypto currencies, bitcoin right now 49,954 at one point today it did top that $50,000 mark. there are just about 50,200 odd. bitcoin a focus. the highest level since about september 7th. that's carrying through in other parts of the market as well, specifically other coins and tokens, etherium up 1% the last trade there some of the companies involved in that particular ecosystem, coin base global up 1% robinhood marks up two-thirds of 1% thin tech paypal and square each

up fractionally as well. as we do in this hour, we check on the tickers on our website, cnbc.com from yesterday's prior full-day session in the pre-market right now, i will note the ten-year note remains number one some of the stock-specific issues in the top ten include facebook on that news, 1% there. tesla up two-thirds, three-quarters, moderna shares up 1%. am half of 1%. merck on that possible covid treatment, right now down about two-thirds of 1% as well, we are at the domino. keep it right here, more "squawk box" is coming up after this break. my son romeo has sought counsel with some strategic advisors. they suggest that we marry our fortunes with...the capulets.

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welcome back to "squawk box" this morning the global gaming expo is ramping up in los vegas as the industry tries to chart a course to the other side of the pandemic contessa brewer joins us this morning from there we have a special guest. contessa. >> reporter: good morning, andrew i have to tell you los vegas is back it is crowded outside and lively i happened to be here on the weekend. look who is here, the ceo of ceasars, thank you for being here >> thanks for having me. >> first is new news coming from you. when we first met, you told me i

have no interest in japan, no interest in international. we are pulling out tell me about japan and why you now are reconsidering going for a license there. >> so for us, this is a toe in the water-type deal. we have been looking for ways to utilize our caesar's wards database and our brand without spending capital what japan offers us is a partnership group that is well positioned to get a license, finance themselves, get the property opened. we're happy to lend our brand and our database and earn a fee for that but importantly, we're not spending any capital in japan. so we're consistent with we are a u.s. krein trick brand and we will get our customers into the ceasar's reward system and export play into our properties.

we think it's a great deal >> i want to talk about los vegas. you pre-released results shattering records, give me a sense of what's happening here >> it's strong still in los vegas. we have an all-time record for los vegas strip ebitda in the second quarter out at ceasars. we expect to break that record in the third quarter you saw two of the three months. i know we're well on our way one of the examples is we've torn out the entrants to ceasar's palace. we are redoing the arrival experience it will finish early in the first quarter. it's about as much construction disruption as i can imagine. and we've seen no impact on our business people are still coming as strongly as they were before >> so that's the leisure segment. but the businesses, we just saw this announcement from the national association of broadcasters they were yanking their conference this fall this was happening next week what are you seeing in terms of delta disruption

>> so we've seen very little in the leisure segment as you've discussed on the group side. the cancellation rate in terms of conferences that do come is higher than has historically occurred but we are seeing improving numbers here in nevada the governor sent metrics that counties need to remove the mask mandate and clark county is getting close in terms of covid numbers where masks would come back off in los vegas. i think that would help groups start to come back >> caesar's entered football season with a lot of news, naming rights to the super tomorrow and new orleans, a big million market marketing push for sports app and your online sports betting give me a sense of how it's going so far and how football season is for caesars customers. >> we're pleased with our performance to date. we're in a bit of a volume,

we're looking at our own numbers, we're tracking ahead of the expectations that were the underpinning of the numbers we laid out on our last call. we'll see in the next couple of weeks where we shake out in the various states but there this is a long process, even though the numbers look better than we anticipated if they had looked worse, i'd be telling you the same thing this is a multi-year process for us, building the business from long term. we are pleased with the start we have gotten. >> tom reeg. thank you so much for joining us we look forward to hearing from you. we got sports betting results to talk about there >> thanks, contessa. >> contessa, thank you by the way, did you win over the weekend? >> i, you know what i have only placed one bet and i tripled my money and walked away. >> good for you. smart lady as alls. contessa, thank you very much. by the way, folks, don't miss a big slate of live interviews from global gaming expo.

catch melissa lee's new documentary generation gamble. it premiers tonight at 8:00 p.m. iran time. when we come back, a wide ranging interview with charlie evans. you want to play close attention to this one. so much happening with the fed right now. next in the wake of the facebook whistle blower going public we asked republican senator ted cruz if the social goliath could expect regulations soon. stay tuned you are watching "squawk box." this is cnbc

. they don't need it they're making plenty of money all thoo they're doing is increasing the amount of money they're making without regard for the pain they're causing >> that was senator richard blumenthal of connect earlier. his subcommittee will hear testimony from whistleblower frances hagen. here to talk about whether regulations are needed texas senator ted cruz and senior you're not on the subcommittee i think you sit on these things being on the committee, itself you know, i have to say it's heart warming to see the bipartisan shift and just both

sides have their reasons for bashing facebook i think and it's rare, but you've got your own problems i think maybe from a little bit different perspective. >> well, i will say in the past several weeks, we've had two different hearings with testimony from witnesses from facebook and their refusal to accept responsibility for their consistent misconduct is really stunning as you know in repeat weeks the "wall street journal" had a blockbuster story exposing the internal research that facebook conducted, that facebook paid for that examines instagram and the negative effect particularly on teenage girls, that it's algorithms take body image problems that teenage girls have take issues like depression teenage girls have and bombard them with images and content

design to bring them to depression a significant percentage of girls had a suicide thoughts and tragically some of those teenage girls carried out suicidal thoughts and as i said we had two hearings i questioned facebook. it's the sergeant schultz, i see nothing, i get nothing defense both refused to answer whether mark zuckerberg was ternally aware of that research the "wall street journal" apparently was the question i've asked is when you got research that said your product was declined, what did you change what did you do differently? and repeatedly the facebook witnesses essentially say nothing. look, we're in the money-making

business and if human lives are lost, what they effectively said is that's an acceptable collateral damage. i think that is horrific i say this as the daughter of two girls and i think we will see very serious scrutiny to facebook and i'm sure litigation will follow. that kind of brazen disregard, frankly, it reminded me of the testimony of the boeing ceo following the horrific crash of the 737 max, where it was the same sort of brazen disregard for human life that we ought to expect better from our business leaders. >> what does regulation look like kit self regulate? do you expect facebook to do the right thing in terms of the algorithms or do you think you never want congress or politicians to step in, do you >> no, and look, there are sort of twin directions that the two parties are wanting. you are right, there is bipartisan agreement, big tech has gotten too big and is too dangerous, but the direction they're going are different.

many of the democrats are arguing that facebook and social media should do anywhere more censorship, should silence any view they disagree with. you remember, facebook and twitter have both banned president donald trump and so they're brazen in their political censorship a lot of democrats say, do more, do more, do more the only views we won't aloud are the ones we agree with i think that's going in the wrong direction. i'd like to see facebook go back to five years ago and social media back to five years ago the original conception was it would be the public square, that it would let people talk. that you wouldn't have a political agenda from big tech engaged in censorship. at the same time, the problem with the teenage girls is they're designing their product to exacerbate really harm. tendencies in vulnerable kids and it has long been the case that if you have a company that

maximizes corporate profits by exploiting and endangering kids, they face very significant liability. the only thing that saves facebook and twitter and google right now is section 230 of the communications decency affect. an immunity that congress passed, essentially corporate welfare, a special benefit for big tech the reason congress passed it is because we believed they would be a fruit al public forum in other words, it wasn't fair to blame them if they were the public square. today big tech is nakedly censoring for political objectives i don't think it makes sense for them to have any special immunity from liability that nobody else enjoys >> we may come back to this. i have a feeling i need to talk to you about the debt ceiling >> yes. >> the president does have a point. the money is already spent maybe you don't like the 3.5 trillion or whatever it is 35 trillion and you know there is a

time and place to try to do it if you don't think that you want to that happen, to try to prevent that from happening. but money already spent, you know, that republicans spent, wouldn't it will the right thing to do? i hate saying that, wouldn't it be the right thing to do to raise the debt ceiling, senator? >> joe, with respect, the president doesn't have a point on this. let's talk about the substance and the politics on the substance of it, the democrats are in the middle of this most reckless and irresponsible spending binge this country have seen they are drunk with power. bernie sanders the avowed socialist is the chairman of the budget committee we're in the mild of debating whether the democrats want to pass bernie sander's socialist bucket it is massive. it is irresponsible, it's driving an inflation bomb through the the economy. remember joe biden sworn in gave a speech about unity, that

lasted for about 6 seconds and every minute since then has been a hard partisan democratic charge they don't want republican votes. they don't want bipartisan votes. the first thing they did is they rammed a $1.9 trillion spending bill through that was a bur partisan hard left spending bill that's still where they are. here's the important thing to understand the democrats control right now every institution. the white house, the senate and the house. they can at any time they want raise the debt ceiling they can do it using own democratic votes under bucket reconciliation by the way, they could have done it a week ago, two months ago, three months ago they schtotal power to do it so why are we having this deba it we're having this debate because chuck schumer doesn't want to take responsibility for the trillions in debts the democrats

irresponsibly are spending these trying to move it through a procedural vehicle because he wants ten republicans to vote for the irresponsible debt they're trying to put on the understand k. it's going to fail, she playing splil political games. at the end of the day, he will surrender and do what we told him three months ago, take up reconciliation there is not going to be a default. schumer knows, that biden knows that, pelosi knows that. they want to play political games first. >> one of the reasons that things are mucked up in this situation is the division between moderates and progressives in the democratic party. i've seen another cable network did the for the number of manchin and sinema states, you have 2% of the population trying to prevent this. they didn't count the other 50

republican senators elected by americans as well. it's a slim advantage that the democrats v. what -- do you think that they're or that president biden is not reading the room correctly on what the american people really elect politicians to do? i mean, this is overstepping >> yeah, look, i think are you exactly right. joe biden was elected. you look at how he bain campaigned he campaigned as this reasonable centrist moderate. he said no more mean tweets. but he's going to go back to the halcyon days toiesteryear. that' -- yesteryear. they didn't vote for chaos and a humanitarian catastrophe they didn't vote for a disastrous surrender and withdrawal from afghanistan. what's happenedbiden, schumer and pelosi have handed the

agenda over to the radicals, the hard left. the people setting the agenda are bernie sanders and elizabeth warren and chuck schumer a minute ago you asked me about the democratic talking point about the spending is republicans. i want you to understand that talking point is a brazen lie. that debt covered all the spending that had happened before then. the spending that occurred last year in the middle of the pandemic, yes, there was bipartisan spending last year and yes there was bipartisan agreement to raise the debt ceiling for the bipartisan spending what is different this year is you are seeing trillions of democratic spending, new spending this spending is about the $3.5 trillion of the socialist budget they're trying to ram through and i want you to think about the democrat's argument. think about it with a credit card if you have a credit card request a $10,000 limit. you're at the limit what do you do first raise the limit or go out and

buy $10,000 more you got to raise the limit first. the same thing is true here. every dollar they're trying to raise is mu money they are trying to spend. >> senator, that's the point we could debate that point, but both parties over the years i think we can say have spent more than what the credit card limit was and increase the limit i want to ask you a different question, if i could, it goes back to facebook and section 230 and this idea of what facebook has done with the algorithm. not only for what it's done for mental relevantth and the girls and a part of the algorithm did is create more engagement as extremist content and that has benefitted both folks on the left and the right on the extreme sides of the parties i would argue, possibly even to

your own benefit whether you think that's section 230 would help that, because, in truth, in the end, don't you think that facebook would actually limit the idea of a town square? >> so i think the word extremism is the new talking point that the political left uses to describe views they disa83 with. so, look, it has long been the law that a company can't target and abuse and exploit kids, by the way, the tobacco companies have paid billions of dollars in settlements because they did exactly that that's what facebook is doing here the separate point about quote extremism. i agree social media is polarizing much of our life is polarizing when you hear democrats say we want to shut down extremist conversations. they don't mean leftists, let's silence black live itself matter or antifa or socialists and

bols bolsheviks they don't mean the people harassing kyrsten sinema in a women's bathroom that's not what they mean. they mean yesterday merrick garland announced the department of justice is going to go after and persecute and prosecute sparnt parents standing up to school boards teaching critical their troy our kids. if you say, i don't want you teaching my children america is inherently racist that all white people are racist, that all of american history is a battle on racial lines and that that is inherent in who we are those are lies it discounts the incredible trajectory towards emancipation, civil rights but the biden department of justice is saying the parent who objects to that, is calling them extremism. i don't think those labels should be used they disagree

with i'm sorry. >> i'm sorry, you think black lives matter is an extreme view? >> i think black lives matter the organization is explicitly a marxist view the statement is a truism. the organization black lives matter was founded by a vowedmarksists who have called for a marxist take over of america and the abolition of private company, they called for the destruction of the nuclear family they are an explicitly racist and marxist organization. yes, i think that organization that seized that time is absolutely an extremist organization i think the statement that black lives matter unquestionable is true you know what's amazing, the organization, black lives matter lobbies for abolishing the police, which threatens many more black lives there are more african-americans being murdered today because the hard left implemented their agenda in city after city in this country of downsizing and

de-funding the police. i think that's an extreme agenda >> senator quick answer, you mentioned marxism, et set, et cetera, maybe you shouldn't conflate it. professor amorova, a lenen scholarship has written about the soviet banking system being superior to the u.s., is, number one, how do you, where do you think that nomination came from in the bind administration how does that work i wonder if you have an idea who suggested that as a nominee, whether it was the president, himself, and is it going to hasn't is a confirmation possible >> so i agree with you that nomination is one of the more extreme, some of the things she has written and said, including talking about the wage gap between women and men was so much better in the soviet union. i guess people are well paid in the soviet gula. you know i take that personal given my family was imprisoned

and tortured in cuba with the support of the soviets sow know her willingness to espouz really radical rhetoric is frightening i don't know where she came from i assume, you know, maybe elizabeth warren, she seems to have a lot of influence over financial appointments i don't know if she'll get confirmed. i will give you another example of a hearing last week, a woman rachel rollins in massachusetts. she is a radical prosecutor who has put out a memo listing all of the crimes she will no longer prosecute including resirsing arrest, possession of serious drugs, including press passing someone's home i mean it really is extreme to see democrats wanting to elevate people who refuse to enforce the criminal laws. >> i would ask you about senator

warren's views on j. powell and what that means. we don't have time we have a fed president coming up we got to get to that. thanks a lot coming up, we will hear exclusively from chicago fed president charles schwab don't go anywhere. we'll be right back. we'll be right back. >>don't talk. or maybe they're just really quiet. geico. your claims team is here for you, 24/7. well, got things to do mr. chestnut, so...

welcome back to "squawk box," everybody. just in have the fed tapering timeline and ethic concerns that are in focus at this point steve liesman joins us right now. hi, steve. >> thanks very much. i'm joined by chicago fed president charles evans. thanks for joining us this morning. i want to begin right away with the economic outlook indications are that the supply bottlenecks are getting worse and not improving. inflation is high. the federal reserve just raised its outlook for inflation this year but you have a benign inflation outlook. tell us why you're less concerned about inflation and think the problem is not hitting

inflation over the fed's target over the next several years. >> thanks, steve good morning it's certainly been the case that inflation has been higher in the last many months. we have seen increases in vehicle parts and home building products and all kinds of things and so i would say that most of these price increases have been driven by supply, supply problems, chips, semiconductor chips are in short supply. it's driven up used car prices by quite a lot housing was hot. lumber prices was high the supply bottlenecks have definitely been a challenge. there are many, many news reports describing what's taking place at ports like los angeles port and how ships are waiting to be unloaded and they have to be loaded onto a truck chassie there's got to be a truck driver to take them to the warehouses

i'm comfortable thinking that these are elevated prices, that they will be coming down as the supply bottlenecks are addressed. i think it could be longer than we were expecting. there's no doubt about it. but i think the continuing increase in these prices is unlikely i think they could stay at a high level but they won't be -- i don't expect them to be growing -- ever growing and so i think that the inflation indices will be coming down they're going to be 3 1/2, 4% this year. and that definitely is a challenge for households and businesses it cuts into income, wages and so that's a problem and we're monitoring that. but there's -- it's not really a monetary policy issue. it's a infrastructure/supply issue at the moment. i think inflation will be coming down once it comes down, we're still going to be in a low interest rate world where the effective lower balance is going to exert a downward bias and it's going to put a challenge on getting monetary policy to produce sustainable inflation at or

above 2% so we can average 2% over time. >> president evans, are we at the substantial further progress that you're looking for when it comes to employment and what kind of numbers will you be looking for on friday and in the months ahead to make that decision as to whether or not to reduce asset purchases. >> we made a lot of progress, obviously. the economy has come back, you know, it took a while. it came back strongly initially from the spring 2020 shutdown and we've been growing strongly. but it's been a very uneven recovery manufacturers have been able to produce safely, people are able to work remotely have been able to do that by and large. but leisure, hospitality, entertainment services have been greatly challenged because anybody offering those services have been limited. households are still tentative about going out and enjoying the

activities given the delta health risk. we've made a lot of progress the unemployment rate is in the low fives. i'm expecting it to go below five by the end of this year the fmoc indicated that we've been making good progress and we're close to the time where we're going to start adjusting our asset purchases, the so-called taper and bring that to a close we'll see what the pace is, what the timing is, but it wouldn't surprise me if by the middle of 2022 or the fall, you know, we're -- we would be finished with asset purchasing. that's assuming that we continue to see momentum in the economy i'm expecting unemployment at the end of 2020 to be more like 3 1/2, 3.7%. that's assuming that we continue on that path >> looking at your financial disclosure forms, you made no transactions in 2020 most of your funds look to be in

general -- in mutual funds of a variety. what is your philosophy as a fed president when it comes to the transactions you feel comfortable making and that should be made >> well, steve, i'm glad to see you've noticed that we do publish our financial disclosure forms publicly they're available. we've been doing this for almost ten years and, you know, we all follow the ethics guidelines, the code of conduct. my own finances are relatively simple and i've had a buy and hold strategy with index funds and cash and the like for quite a long time. so i -- you know, i think it's important that we maintain the public's trust i think our guidelines were intended to, you know, be in line with that they are actually quite tough, but jay powell is correct to ask for a review of those guidelines we need to make sure that we've got the public's trust, that there are no questions about the

information that we have and the actions that we take so that we can serve the public interest in the best way possible. >> do you feel it's inappropriate for fed presidents, senior officials at the fed to be trading individual securities >> i think jay powell is going -- and the board, they're going to look at the guidelines, the guidelines now, you know, all of your disclosures, all of our actions are reviewed by ethics officers and general counsels and the board has had the opportunity to review those too. and so apparently with the questions that are being asked about this, you know, it's worth asking if those should be adjusted >> charles, thanks for joining us this morning. chicago fed president charles evans. let's take a quick look at the futures as we get ready to hand things over to "squawk on the street." after the declines for the market yesterday, we're looking

at the futures up to about the highest levels of the session. dow futures indicate up by 175 points the s&p futures indicate up by 20 the nasdaq indicated up by 57. joe and andrew, obviously, fun show today be ready to be back here tomorrow and do it all over again. treasury, also something people have been watching closely and it was trading just below 1.5% we'll see you back here tomorrow right now it's time for "squawk on the street" after a quick break. ♪ ♪ ♪ ♪ ♪ ♪

♪ good tuesday morning welcome to "squawk on the street." we're at the new york stoc exchange another turnaround tuesday will it stick? futures are positive as facebook shares bounce following the worst day since november pepsi with a solid beat and raise. the vix back to 22 our road map begins with troubling mounting for facebook, suffering its worst outage since 2008 shares have been under pressure and the whistle-blower is set to testify today. >> plus, wall street looking for a bit of a rebound, certainly some of those large tech