war with elizabeth warren over musk's tax bill. google vaccine crackdown "squawk box" begins right now >> you see the dow futures are up and s&p up about five nasdaq down by 14 points this comes after a down day for

the markets we'll get that fed decision later today. people are waiting to hear what they have to say. >> they are the measure will avoid the default and toll after next year's election the bill now heads to president biden's desk google has told employees they must adhere to vaccine rules or loose pay or even be fired. the memo says the employees who

haven't complied with rules by january 18 will be placed on paid administrative leave for 30 days after that, they'll be put on unpaid leave up to six months january 18 is coming, which means i've got another birthday. i'm hurdlingtowards old age. i had to laugh >> january6.

>> my uncle who was a priest said it was the most important because it was when the baby jesus was introduced to us in the top three >> we should talk about other things happening out there there's a high-profile tax hike on twitter between elizabeth warren and elon musk saying, let's change the rigged tax code to the person of the year will have to pay taxes and stop free loading. >> you remind me of when i was a kid when my friend's angry mom would just yell at everyone.

please don't call the manager. if you opened your eyes for two seconds, you would realize i will pay more taxes than any american in history. he added don't spend it all at once, oh, wait you already did. >> one of the first things i saw, look, this guy is going to pay a ton of money in taxes. more than any american >> more than he should pay or anyone she's ever known. the office of the senate deserves respect you add up what he's going to pay and what share holders will pay you add up the ev market, you

add up the evs let's compare elizabeth warren's contributions. andrew, i know you love her. actual contributions to society and the world. >> those are the most enjoyable tweets i've seen since trump got banned wait a minute. >> let me try to play arthur brooks for the moment. the reason she is so frustrated because of not only what elon musk is doing by selling off stock this year before the tax laws not just musk doing this if you add up the $240 billion

that americans have sold in stock. far more than in the past because they know tax changes are coming not only in the united states but in places like seattle that would be the point too. we are getting at the money supposedly we were never going to forget. >> it doesn't change that fact andrew, what's going on? >> a couple of quick notes in elon musk's case and i will be defensive in a different way. saying this year, i would argue has very little to do with the tax changes coming up potentially next year or not

would have to do with the fact that he has to sell to pay taxes because he has these options >> i just want to put that to the side >> yes, there are other people selling this year that may very well be doing that for tax reasons. elon musk is not one of them clearly elizabeth warren doesn't appreciate how much in taxes he's going to have to pay. her argument is how much they'll make through stock and unrealized gains the last one to the point of honoring everybody. there is something ungraceful,

let's say about punching down the way the language and rhetoric is if we are all trying to live an arthur brooks life. the comment saying, if you would wake up for two seconds and see how much i'm going to pay. i say, if you are bullying and name calling that's a bad look. >> you remember first blood. once you start it, i'm going to do a rambo on your ass >> the name calling.

she doesn't even believe it, andrew >> hold on i'm telling you, joe i'm telling you in the most bipartisan human way that does not come across with most other journalists on television that senator warren often punches down herself andshouldn't. at a time he's beening call the the man of the year. he should defend himself he was

nicer to her than the other senator as well. >> but, politicians demagog for a living she doesn't even believe it. has to know what he's paying in taxes. to appeal to those she loves in massachusetts to stay in the perks. >> i don't disagree with you i absolutely disagree. i wish you would say the same thing about the other party at the time end of discussion. >> arthur said this is the biggest thing we are facing right now

i didn't i can't tolerate i can't. s. then what are we doing, joe? >> stop being so intolerant. stop the cancel culture. there is a million reasons they look at the other side and think they are ruining the country. both sides think the other is ruining the country. one of them is see. back on my team. >> andrew, you are so hard you can't come clean with it >> i don't understand. here i am telling you i think

senator warren did a disservice -- the wrong thing. >> we are never going to live in the same place >> i disagree with that. there is one version where you can be absolutely honest on both sides and say these guys over here, trump on one side. progressive democrats on the other is a problem if both sides are willing to say that by the way, you are suggesting you are not willing to say that. that's where we are. >> i'm saying that there are problems on both sides i'm saying one side has a lot more merit this their argument of courses that how i feel >> we'll continue this conversation when we come back, the fed is expected to take a big step

2w0erds a major policy shift right after this later, senator ted cruz will join us to talk inflation, vaccine mandates and much more that's coming up in the 8:00 hour "squawk box" will be right back. thanks for coming. now when it comes to a financial plan this broker is your man. let's open your binders to page 188... uh carl, are there different planning options in here? options? plans we can build on our own, or with help from a financial consultant? like schwab does. uhhh... could we adjust our plan... ...yeah, like if we buy a new house? mmmm... and our son just started working. oh! do you offer a complimentary retirement plan for him? as in free? just like schwab. schwab! look forward to planning with schwab.

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the markets are anticipating the fed will speed up the tapering of the bond buying project moving up the date to march from june. it was the best of times it was the worst of times. comparing to a charles diggens novel and says they are caught in a trap. joining us now, chief global strategist everybody is thinking about the fed and what they might be signaling today. >> you could say it is a digcken of a time. happy holidays and happy

birthday to joe. having known you for 20 years or more, you are just a kid >> that's how i feel i look at grassley he's running five miles right now in iowa and he's like 90 >> there you go. to answer your question, becky that is caught in a trap the governors and states are independent, the fed is not. it presents the government of the united states it wants to keep interest rates low the other part is the inflation rate

we are in right now. look at my notes here. the cpi was up 6.8% the highest and i look at the average of the two, which is 8.2% which means unless you can make less than 8% depreciation with the stock going up or through income and bonds, your negative to real rates i think today's fed meeting is one of the most significant we've had. >> is there a potential surprise out there? markets are pricing in and tapering things much sooner and know that they'll raise interest rates sooner too

the fed will come in with something higher or lower. there is a lot of people with differing opinions right now it is certainly not a unanimous decision the fed are taking. it will be interesting to say that the fed will win. you could see a tip to the equity market and a rise of 25 or 35 basis points aren't going to make much difference in terms of the economy i think there is a potential here for real surprise i think the fed is also saying they are not raising interest rates. so i would be shocked if they make some announcement about raising rates today.

and also i think chairman powell's commentary after the release will be very telling in terms of not only what he says and how he says it in terms of the yield and the inflation was transitory was a myth. >> it is in transit all right across the entire landscape. we've had this huge amount of inflation. i don't see that ending anytime soon that flows and will be slightly higher than the next time they announce it. >> if yields from treasuries or any bonds aren't paying you anywhere near inflation at 8% plus and you are not going to

see any returns in the stock market those returns are in cash because you are not going to see the difference >> the perfect varies with somebody's age and lifestyle one have plays and good ideas. two, i've transitioned out of bonds and i'm using closed in and extended trading funds yielding more than the average inflation rate i gave you of 8.2% there is double digit yields there. by the way, these things pay monthly. not all of them. you are getting a steady stream of income. that's what i've been using with

a lot of my clients that has replaced them for bonds, if you will >> we'll see you soon. happy holidays to you too. >> thank you, becky. god bless. >> you too a round up of the investment an tax strategies you should think of before the end of the y year funny, all tax strategies are designed to help you pay less taxes. coming up, check out the shares of uber. the company looking to sell stakes in nonstrategic assets including didi global saying the chinese market is a tough one with little transparency "squawk box" is coming right back

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as you are wrapping up your finances for the year, you may want to take advantage of a few strategies smart money moves to make by december 31 that could benefit your portfolio you are going to admit some of these things might be designed to save you money. >> that's exactly right. some of the money moves may be driven in part by anticipation for changes that might impact retirement savers and crypto investors. 2021, may be the last year for backdoor roth conversion

makes a nondeductible and converting to a roth account this would end the conversion. moving to a roth by december 31st makes sense if you want to pay the taxes at your current tax rate >> if your tax rate is going to go up in 2022, it makes sense in 2021, you may income taxes at a lower tax rate it doesn't mean you convert the entire balance you can do microconversions a little bit here and a little bit next year. >> crypto investors will be hit with the roth sale rule, if you sell an investment at a loss and buy back the same or identical within a 30-day period, you are not allowed to take that loss. >> it would begin to apply to crypto, foreign and commodities.

selling them and buying them back would shore up losses the third move now is considered with i-bonds you generally can't buy more than $10,000 a year. you need to make that purchase before the 31st. relatively safe option and experts say to keep in mind, i-bonds are not redeemable for the first year >> they need some new people in charge of those better at math

who is paying 7% look around. crazy, isn't it? i was listening to you we are not allowed to buy stock. i don't have any losses. what am i supposed to do people that bought at 65 have some losses. two years ago, year and a half, you are good >> thanks for doing that work. how to pay less in taxes you struggle with that morally thank you. take care, joe >> coming up, covid outbreak

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>> welcome back. an update. in the nba, seven net players were ruled out and the team only had eight players available. brooklyn beat toronto in overtime thanks to help from four rookies on the roster called up for service. the football world might even indict which teams will play in the super bowl the rams and browns being hit particularly hard. the rams coach saying all 13 players on the covid list were vaccinated

and shutting down cornell campus, my alma mater. all times moved to online format the curve, like a true jcurve. at least in the york or new jersey area on its way to outpace delta up to 3% nationally will be very interesting over the next couple of days or weeks. i don't know if you've had this yet a couple of events where

people are either canceling or adding testing protocol on top i think we are about to get into the soup >> i think it is going to get worse over the next month. >> hasn't had as many hospitalizations with omicron but you've got delta around still and flu season >> did you see hospitalizations are up with young people when it comes to omicron it is much more mild but still putting young people in the hospital if delta were gone, and you only have omicron around, do we get to the point of changing our

thinking >> i think we are looking at the last hoorah. you'll see people getting together in christmas and new years and you'll see spikes. >> omicron is probably everywhere it just is we'll talk more about it we have two hours to talk about it >> google telling workers to get vaccinated or face pay cuts. we'll jump into the mandate. that's next. hey businesses! you all deserve something epic! so we're giving every business, our best deals on every iphone - including the iphone 13 pro with 5g. that's the one with the amazing camera? yep! every business deserves it... like ones that re-opened! hi, we have an appointment. and every new business that just opened! like aromatherapy rugs! i'll take one in blue please! it's not complicated. at&t is giving new and existing customers

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achieve their financial goals. visit findyourindependentadvisor.com google telling employees they must comply by vaccine rules or they will lose pay or face being fired

l eventually requiring employees back in the office at least three days a week in 2022. >> good morning to both of you i'll start with you. i'm assuming you have a big problem with what companies like google are doing >> i do. most of those employees are relatively young the new variants have relatively mild symptoms for the young. we need to look at protecting the most vulnerable, which are the elderly population in the united states. i've read over 90% over 65 plus

has at least one shot. >> i don't believe in the vaccine mandate. i think it is counterproductive. especially when people are looking for more people it work and telling people they will be fired if for whatever reason they don't want the vaccine. >> you are opposed to businesses >> they are a private corporation. in florida, we don't have the government mandating it but we also don't try to get involved with some of the businesses. the governor doesn't want a vaccine passport or a customer denied access because of vaccine. and forcing that on them, that's

not the place for the federal government >> on the other side of this >> good morning. i want to thank the congressman for his service and voting for the january 6 commission >> on this, respectfully, he's incorrect. i commend with google. they are doing what my employee told me, which is we don't want second hand smoke on covid second hand smoke is illegal in some spaces. i'm participating in other people's smoking and i'm dying you don't allow speeding on a public freeway it is a 3,000 bomb car you have a driver's license still you have 4 million people injured by traffic accidents

every year with driver's license. we are in an imperfect situation. but 88% of employees work at private companies. i have 300 employees, just under that i got the mandate. ied a record year. they either get vaccinated or test once a week and wear masks or stay at home. you can't second hand smoke someone. my people are dying faster than anybody else as an african-american my employees appreciate it i gave them a pay raise. double revenue on my nonprofit donation and performance nothing got hurt so, yes. i think it is smart. we have a common enemy here, andrew it is covid. not you and me we have a common enemy

we have a war. we need a war plan to fight it 90 plus percent of everybody in the hospital dying are unvaccinated that's the cdc >> congressman >> i don't think he understood me i didn't say private companies didn't have the right. i said government shouldn't be in that business if he wants to have his people vaccinated and fire those not vaccinated that's his company and his right as an owner of a company i don't think the federal government should be telling businesses how they should operate. especially, look one of the things about the ocean mandates is that it really effects blue collar people more than white collar. if you are a white collar person and you can work from home, you aren't affected by this.

everybody that has to go to the office, they do if they have over 100 employees all those restaurants, those people can't do their work from the house. they don't have that option. those companies are forced to layoff people at precisely the right time when they are clamoring for help i can't tell you how many people talk to me every single day saying they can't get people to come to work and now they have these mandates and they can't get those people who are working. that's the problem if he wants the private company it do that i don't think he understood what i was saying >> i understood completely what you were saying. i can't believe i'm saying this to a congressman respectfully i was in new york two days ago you can't debt reservation

i don't like the mandate i tried to get reservations at 10:00 at night and you can't you can't fire anybody people feel they are protected and coming in. business is through the roof who is the government supposed to mandate if not people dolphins clearly, the government says you must have a driver's license that is a government mandate you must stop at red lights. we've been getting vaccines since we were children what is wrong with this one. this is silly. knock it off there is a place in the government killed off a million people in the u.s. alone every three days, the equivalent

of 9/11 die. they look like me and with large respect, they look like you and i know a lot of these people somebody in my family got covid five days ago because they were in a voluntary environment in miami where they were told everything was cool. it wasn't. i had to go through four days of testing. it disrupted my business, my family, my life. i'm a walking living testimony for the booster and the vaccine and now we can get on with our lives. this is no joke. we are at war. there is a role of the government >> absolutely disagree look, comparing new york to miami, please don't. our numbers are way, way better. we have a higher vaccination rate than new york and we don't

mandate it here. our experience has shown we don't have to have these darkonian measures and we can deal with the virus. maybe this is the last thing this is not. it is going to continue to mutate and evade the vaccine just like the 13 players from the rams they are all fully vaccinated and still got sick we need to protect the vulnerable that is the elderly like we did in miami dade county the older adults need to protect themselves and know they are more vulnerable. walking around miami, people some have a mask on. we are doing just fine down here we are doing a heck of a lot better than new york without these darkonian measures

>> but you had a massive wave over the summer. thousands of people died >> and you are going to have a massive wave in new york with all of the measure in miami, you are outdoors in the winter, you are indoor. we are going to have another wave we have another variant. omicron. more contagious but some what milder than delta. we need to see what happens with it and apparently, this variant also evades the vaccine. you are talking to somebody who had covid and this three vaccinations and the bufrt i'm going to take care of myself the best i can but we have to live our lives and move forward. >> do you encourage those to get

the booster and get vaccinated >> i do. absolutely i took it myself my wife took it. i'm not against vaccine. i'm against federal mandate. that's all it is >> the faster we get through this it is true all of us agree. the faster we get through it, the better we'll be. thank you for the conversation >> you remember him. he was on laugh time you thought he was anti vaccine and anti-buys. >> unfortunately, not every viewer tunes into every episode of every show. what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it!

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tesla's ceo elon musk sold billions of dollars in tesla stock for tax purposes joining us to talk about musk's portfolio moves and his high-profile tax battle with senator elizabeth warren is gene munster. you made the point and i referenced it earlier, it has been the year of the ev. so it may be -- obviously if he owes taxes on exercising options, he's going to need to come up with it somewhere. so that did force his hand but it's also not a bad time, in your view, though you think tesla is headed sharply down the road >> it's a smart move every year investors turn that page, that investing theme page and that is a magical part of the calendar a lot of themes in investing do

not change on an annual basis. investing themes do. the simple reason, joe, is because institutional investors are benchmarked on an annual basis. so they hit that reset bar it is rare that a theme that goes vertical in year one goes vertical in the subsequent year. last year it was a big year for the ev theme when i think about investing themes for 2022, i think it's unlikely that the ev space has the same vertical move you look a bit at tesla, you look at rivian, that one is still a head scratcher to me, 100 plus billion dollar market cap and almost no deliveries when i think about elon and his recent sales, it follows a trajectory that historically he has not done a good job of selling his stock. he talked about the stock being overvalued a long time ago and it keeps going up. in this case, it's judicious what he's doing.

he doesn't have to sell right now, he can wait until next august to exercise the options i think he's making the smart move as he thinks about the calendar >> asthma as mercurial as elon may be, things affect him. to lash out at a politician or, you know, a public service employee, sort of indicates that maybe -- i don't know. is he bothered by their point? do you think it's wise, as a ceo who will just get more frustrated birds got to swim, fish got to fly. elizabeth warren has to demagogue. what is the point of giving it credence i know i transposed the fish and birds before i get called for being stupid >> no problem. i'm with you all the way i think that the political

environment has gnawed at elon for the last couple of years >> it's bad -- he's the richest man in the world, he can say whatever he wants. do you think it's on -- i guess it's untoward, oh, no, no. he's mean on twitter we saw four years of people saying that. do you think it would be better served for tesla and what he's doing if he didn't >> when you put the whole package together, i think he's doing the right thing. i think tesla shareholders benefited from his ecentric behavior it doesn't fit all investors profile but it's gotten the company to where it is today i would mention that i think the -- i can't get quite in his mind, but if i happen to have a $15 billion tax bill and i was paying the tax bill, i think i would -- >> we have to go you have a 2,500 eventual target on this baby either way, right >> right on. hheink it's goingigr. >> thank you "squawk box" will be right back.

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♪ i had a dream that someday ♪ ♪ i would just fly, fly away ♪ early audiences give "sing 2" an a+. i counted nine smiles, two belly laughs and five chuckles. it's a heartwarming crowd-pleaser that will have feet tapping. a big day for jay powell the federal reserve taking a step towards raising interest rates. what fed investors need to know straight ahead.

protecting the retail investor games lik names like gamestop and amc down sharply over the last year should the s.e.c. step in? and the man behind some of the biggest media and tech deals on wall street is here with his outlook for 2022 we'll speak to aria bourkoff about lion tree and much, much more the second hour of "squawk box" begins right now ♪ good morning welcome back to "squawk box" here on cnbc i'm andrew ross sorkin along with becky quick the dow is almost up 3 points.

the s&p 500 is unch. the nasdaq off a couple points congress has now passed a bill raising the nation's debt limit by 2$2.5 trillion. the house approving that bill last night the measure pushing the next debt ceiling battle into a year from now that would be after the midterm elections take place google employees will lose their pay and eventually their jobs if they don't follow the company's vaccination policies, that according to an internal memo, and workers who don't comply with the rules by january 18th will be placed on leave and would face eventual termination. and new car buyers have no choice but to pay up jd power saying nearly 87% of new cars are sold at or above the sticker price in november. midway through 2021, that number was at 75% the pre-pandemic average was 36%. before i send it over to you, joe, a quick fact check because

the republican congressman from florida, i will generously say misspoke, but maybe worse than that in the last segment he said that floridians had a higher vaccination rate than those in new york. that is materially inaccurate and incorrect. i wish i had been able to say that in realtime >> andrew, i was looking at the same data, i thought the same thing. it's definitely higher for new york than in florida i was trying to dig through any anywhere -- >> statewide >> statewide numbers for new york >> what about miami or new york city >> the only thing i could find in florida for age 65 and older, it's 94.5% versus 92.4% for that age group in new york. so only among residents 65 and older is the only place i could find it on a statewide level my guess is new york city outpaces miami, too, because new york city had huge upticks for these things >> in every respect, the

congressman unfortunately lied to the audience. >> about -- womell, in that cas. >> yes >> you got him >> i think we have to be clear with the audience what's going on here. >> i was looking through the same numbers trying to find out what he was talking about. the only place i could find it is in age 65 and up. >> we're not making up -- we shouldn't be making excuses or anything for guests who come on and tell our audience -- >> not trying to make excuses, i was trying to figure out what he was talking about. >> in terms of vaccination rates. >> yeah. >> weird the states that -- it's weird which groups are and which aren't the whole thing is -- >> new york state has strong uptick and new york city especially >> if you're not boosted, even if you are boosted, you can still spread it. >> right >> but then when you spread it to someone who is unvaccinated,

they may end up in a hospital taking a bed from someone who is sick from something else so that's where the -- no matter how you cut it, that is where the weak link in the whole chain is people that are double vaccined, triple vaxed, they can still spread it. but when you finally end up at an unvaccinated person, that's a person that could probably get sicker more likely than people that have had even one shot and then you have the strain on the health care system and the costs. then you get into the whole argument about -- i mean, people who don't take care of themselves, people who smoke, but overweight, people that don't exercise -- >> people who are overweight can't kill you, joe. people who are overweight can't kill you that's the difference. >> but, andrew, people who are vaccinated can kill you.

so you can't -- >> hold on >> people who are vaccinated can spread it to you that's not the point your point lately has been that it costs money and it's a strain on the health care system, why should i pay for that. you are paying for a lot of people that are totally unhealthy that eat junk food, that don't exercise. you wonder how much you really want to get involved judging and pointing fingers at people >> the vaccine -- people who have been boosted with the vaccine have a materially less -- >> i know that >> less opportunity to be infected and therefore to transmit >> but someone vaccinated could still kill your mother >> in the same way that it's possible that somebody driving down the highway could kill someone accidentally we're trying to reduce the prospect of it happening >> absolutely. i understand that. but the people that are at risk for the most part are the unvaccinated and, you know, it's mostly their

problem, because people who are vaccinated hopefully won't have that worst-case scenario >> in the words of arthur brooks, we should all be in this together, and, yes, i think suggesting it's somebody else's problem is really not the answer but a debate for another day >> when you convince the other half of the country that what you say goes, we'll move on from there, andrew. i doubt that's going to happen probably not today >> i don't -- unfortunately i don't think it's going to happen i wish we were all in this together, apparently we're not when we come back, protecting the retail investor, jay clayton will join us to talk about the fall of meme stocks and what the s.e.c. should do about the promoters of names like amc and gamestop. let's check the markets. we'll call it unch dow up about 4 points. nasdaq o autffbo 25 points s&p 500 basically flat

the federal reserve is in focus for foreign investors. they're expected to announce a policy shift that could clear the way for an interest rate hike, that's not tapering, is it, steve liesman? that's qualitatively different than just pulling back on buying some bonds >> this is a different game,

joe. it's the big leagues a significant change expected in fed policy today with expectations that it removes the pandemic relief by tapering faster and sets the interest rate increases much earlier than next year. several important changes are likely to fed policy, it pivot from combating a weak pollity. speed up taper to $30 billion a month, will no longer call inflation transitory, steven stanley writes suddenly policymakers are faced with the prospect that they have already made a significant policy mistake by maintaining emergency settings for far too long. policy uncertainty heading into 2022 is as high as it's been in decades. some uncertainty could be removed when the fed publishes its new economic projections

today. especially the fed's own outlook for rates, the dot plot. the september forecast saw not quite one hike next year and a 1% funds rate by the end of 2023 1.8% by 2024 the fed is well behind where the market is. there could be a 70% fed basis rate hike in 2022. two more than the fed forecast for 2023 as it goes to 1.5%. that means the fed outlook has to change sharply to catch up. inflation, it's going to need to show signs of easing by the spring or the summer or the fed could be forced to move more rapidly than all that. today fed policy will likely take the first steps to position itself to combat inflation fed chair jay powell will set the stage for how strongly the fed plans to fight that battle and how quickly.

>> okay. keep us updated on that terminal rate, on the dot plots, and everything else. i feel a little bit better i am totally confused why we would stop under three, but at least, you know, that's not going to choke us off completely it would be worrisome, wouldn't it i know we had that discussion about the debt service and what it would cost at 5%, 6%, 7%. we can agree it would not be good for us if rates were to spike. >> yeah. >> at 9.8% cpi -- it was only ppi, i understand that -- but i don't know if you saw ackman talking about where inflation rates really are right now if we got to 10 cpi, there's no way we stay at under three. it has to be transitory or the terminal rate would change >> that's right. and i think, joe, the outlook of

the fed is not for 10. i think the question the fed is dealing with -- maybe it's not the right question maybe they should be dealing with the prospect that it gets to 10 and the fed has to adjust that the real question it's dealing with is we're not going to be at 6 or 7 we'll come back down and the question for the fed is where do you come back down to? do you settle in a 3% or 4% world or approach 2% i think, joe, with your focus on technology and the singularity and all that stuff, do you really think the world of low inflation is gone forever because of the pandemic? or that we have forgotten how to unload ships and do all the technology and fund global supply chain stuff that was responsible for keeping inflation low for almost 30 years? has that gone away i think powell and the fed still think some of that is still out there. so the world of lower inflation is not gone forever. it's just a question of how you

get there with policy to bring it back down and keep it there >> should be not only continue to see these advances, steve, they could actually accelerate they would definitely accelerate -- we've seen it already. look at how quickly the vaccine was developed and the technology there in health care -- we talked about it, i.t., artificial intelligence, just down the road, all these things. i don't know why we can't figure out the supply change. we can't plug that into a super computer >> i have another question for you, joe, which is on the other side of the technological progress is the economy as dynamic and competitive as it was before what brings down prices? competition does what have you seen in this pandemic which is the ability of companies to raise prices not just to take it down for the higher input costs but to

increase and improve margins that tells me the economy may be less competitive and dynamic even amid all tho at technologil progress i'm worried that we have a less competitive economy and at the same time there is all this technological progress >> maybe we'll have all these little tags on every single item in terms of inventory control and supply chain management. we already have transparency with the internet, amazon. that will all come through >> but only one company, joe you know those things, which one is it? is it amazon tesla? which is going to be big brother? >> we have to go we have to go. all right. >> we do have mortgage applications diana olick has more on that front. >> good morning. mortgage demand is sinking again. that after a super mini

refinance boom i want to show you a daily mortgage rate chart. you see that sharp dropoff, that's when omicron hit. rates recovered fast and seesawed last week that caused refinance demands to drop 6% last week. when you look at applications that were 41% lower than the same week one year ago, that's just a huge drop last year at this time, rates were about 45 basis points lower. applications for a mortgage to buy a home increased just 1% week to week, and we're 9% lower than the same week a year ago. while demand for housing is still strong, supply, i got to say it again and again, continues to be weak and prices are just off the charts. higher mortgage rates, they're not going to help home buyers, especially the first-time buyers who have very little extra room in their budgets mortgage rates held steady to start the rate but all bets are off today the expectation is that

the fed will announce a faster wind down of its bond buying programs, which will send rates decidedly higher, which is really not what we need with these incredibly high home prices >> and you saw the piece, i guess, finally the millennials, they're putting down roots putting down roots it says >> finally >> that's a big story in the "journal." you can't put roots down in your parents basement you can. >> you could in a single family rental home because they're doing an awful lot of that >> that's right. all right. thanks coming up, liontree founder aryeh bourkoff talks to us and a big day for investors as they await the fed statement this afternoon we'll break down what you should be listening for and talk investing opportunities. "squawk box" coming right back time for today's aflac trivia question. what company manufacturers the

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government the answer, general dynamics land systems the subsidiary of general dynamics delivered the first m1 abrams in 1980 meme stocks under pressure amc, gamegamestop, bed bath & bd and robin hood down in the last month. here to join us is former s.e.c. chairman and cnbc contributor, jay clayton. jay, this is a tricky area those stocks are down significantly over the last month, but they are still far higher than a year ago, year and a half ago if you look at those names. people will say the s.e.c. should get out of the way in the good times and when people lose money they will blame the s.e.c. for not doing something earlier. what's the solution or is it too late >> well, you have it exactly right. it's good to see you we've spoken about this. the s.e.c.'s job is not to

regulate prices. the s.e.c. protects investors in a couple of fundamental ways most important of which is regulating information companies, their insiders, control persons have to provide accurate information on a regular basis, a comprehensive suite of that. if the information they provide is false, they're subject to liability. that's fundamental the other thing that the s.e.c. does and we regulate is trading and exchanges. there, from pricing to anti-manipulation measures, to surveillance, there's a great deal done. what the s.e.c. does not regulate in addition to prices are the opinions of people who are not insiders or do not have some information advantage we have never gone there so the reddit boards and the like, they are a new medium for that, but wehad opinions about

stocks for a long time you captured it. >> let's take one of these stocks as an example i know you don't normally comment on certain stocks, but if you look at amc, people will say the ceo sold a bunch of stock, maybe that's something going on but he clearly telegraphed and told investors exactly what he was going to be doing. does it look like there's foul there? >> you're exactly right. we require insiders who sell stock to disclose that they have done so. some insiders elect to tell people ahead of time that they intend to do so for exactly the reason that you cite people look at insider sales from a credibility point of view and the more you telegraph, the more you're clear about whether you're going to be getting longer or shorter in the stock or money tizing the stock, generally the more credibility there is in your management.

look, i applaud insiders who forecast that they're going to be getting shorter in the stock. of course they have to comply with our rules that once they sell to disclose >> let me throw one more example at you tesla's ceo elon musk made a big deal on twitter saying he would do whatever the twitter res responders wanted in his polls, should he sell 10% of his stock or not twitter responders said yes. he sold some stock for tax obligations and making sure he could buy the rest of the obligations. but some of those sales were pre-ordained, things that were put into a plan before a twitter poll does that matter >> well, yes credibility matters. we've been talking about -- had the privilege to be listening to the program for the last half hour, and, you know, full and fair disclosure leads to credibility. your questioning whether the poll or whatever had all of the

information people should have to assess the plans for getting shorter in the stock these are the kinds of things that we should be discussing about leaders of large companies. but there's a lot on the positive side as well. >> so, is that something that you think the s.e.c. should look into then? did the people responding to the poll have all the information? is the s.e.c. going to do something like that and has the s.e.c. kind of had its time with elon musk and said forget it, this is not worth it >> well, what i'll say is any time a company insider speaks about the company or speaks about their holdings and what they're going to do, there's an obligation to have full and fair disclosure to provide a complete picture of what you're doing. so, i'm going to leave it at that >> jay, let me ask you about something that winds up in my twitter feed constantly. i've tried to look into it, done a little research on it.

there's an argument about an action that the s.e.c. brought on your last day as the chair of the s.e.c. this was the one to go after ripple labs executives, the ceo, general counsel and others and come after them for some sales that they had planned and whether they were up front there has been all kinds of speculation because brad garlinghouse and others are pushing back on the s.e.c. on this and did some mudslinging and said you and others at the s.e.c. were compromised in this decision that you had input that was coming in from people who were maybe ethereum fans or others along the way. i get this question constantly i want to put it to you. what happened and what do you say to those accusations >> becky, i'm not going to comment on any pending investigation or action in front of the s.e.c i think you know that. we've discussed that in the past look, it's america

people have the right to defend themselves they have the right to their opinion. i'm not going to engage in that either i think as government officials, you do the best you can. you let the facts stand where they are and i'm going to leave it at that >> can we talk more broadly just about crypto gary gensler is looking at crypto as a space he really wants to make sure that getting into the weeds on it and finding to set some rules about this he taught a course on it at m.i.t., so he's not lumbering around blindly on this are we going to see much greater restrictions or at least much greater rules of the road when it comes to crypto >> becky, crypto -- gosh, it's a wide variety of products and a wide variety of functions, touches on many areas. capital raising and the trading of securities is one area where the s.e.c. touched

i have long believed that the rules in that area are fairly clear and longstanding if you are raising capital publicly for a project, you generally have to register those sales, that capital raising with the s.e.c. if you're trading securities, it needs to be done on a regulated venue. there are many other aspects of crypto whether it's stablecoins that are not securities or other tokenized elements of our society that will be outside of the s.e.c.'s purview this is a whole of government approach let me say this, i'm a huge believer in this technology. i think that the efficiency benefits in the financial system and otherwise from tokenization are a mess i would look for the government to be reactive in terms of people who are violating our clear laws, but proactive in

encouraging the adoption of this technology throughout our financial system there are billions of dollars of transactions in tokenized form taking place each day where people have an incredibly high degree of confidence we should look at that and think about what that means for our financial system >> jay, i know you're not a market prognosticator, someone who is predicting where things are going. we heard from larry summers, the former treasury secretary, and he is raising new warnings suggesting that we could be at risk of spontaneously deflating the financial markets, that's his term for it. you've been around this for a long time. you know what happens when prices go down, how retail investors might react to this. do you think retail investors are prepared or open to the possibility of this? do they know the risks out there? >> look, one of the things that happens from time to time with retail investors, and it is

unfortunate, is they react quickly. most high-quality financial advisers and market prognosticators will tell retail investors, and i endorse this, if your time horizon is long, continue to invest for the long-term. don't pull out of the lows and buy at the highs we've seen that too many times if you have a 20-year path to retirement or a 30-year path to retirement, continue to invest regularly over the swings in the market time has proven that that -- that is your best way to go. >> jay, it's really great to see you. we haven't had you on often enough hope you're back here soon happy holidays in the meantime come back soon >> thanks a lot, becky >> take care still to come on the other side of this break, liontree founder aryeh bourkoff talking about the fed, inflation, dealmaking and maybe even a little succession given that

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with two wall street insiders. dow futures turned positive. up by 23 points. s&p 500 up by 4. the nasdaq up by 1 point again, we are awaiting that fed decision today later this morning, aryeh bourkoff will talk to us about media, technology and his outlook for 2022 stay tuned, "squawk box" will be right back ok, let's talk about those changes to your financial plan. bill, mary? hey... it's our former broker carl. carl, say hi to nina, our schwab financial consultant. hm... i know how difficult these calls can be. not with schwab. nina made it easier to set up our financial plan. we can check in on it anytime. it changes when our goals change. planning can't be that easy. actually, it can be, carl. look forward to planning with schwab. schwab! ♪♪

day two of the widely anticipated fomc meetings. investors will be listening closely for details around the fed's bond buying program and other things joining us to discuss the fed and the markets, anthony woodside, senior strategist for active fixed income at lgim america. lgim has $2 trillion in global assets under management and lgim america has 262 billion assets under management also with us is gabriella santos, a global market strategist at jpmorgan asset management what are we going to hear today, anthony? you live in that world it might get more interesting, i

think, than it has been. >> yeah. we're definitely on the verge of getting more compelling here in terms of what we think we're going to hear from the fed today, there's a number of things one, we expect the fed to accelerate the pace of tapering here to 30 billion a month, which would culminate into the completion of the program by the end of q1 of next year secondly, when you move to economic projections, we expect the inflation forecast to be revised higher inflation, of course, has been well above expectations. we saw the core cpi come in at 40-year and 30-year highs respectively last month. so we expect the fed to react and revise their expectations higher then on the growth fund, we expect the growth forecast for this year to be relatively steady however, the unemployment forecast should trend lower given the downward surprise in the unemployment rate last

month. finally and perhaps most importantly, we expect a steeper path of rate hikes probably around two to three hikes for the fed next year. if you look at the median dot plot, and moving closer to the neutral rate of 2.5% as you go out as far as 2024 >> i want to ask you,anthony, in a second about the components of these -- of this inflation that we're seeing and how you would break that down. i'll start with you, gabriella we hear one side talking about how inflationary, build back better would be. the other side says it would not be inflationary. we're still just in the planning stages we're still talking about it we have 9.8% ppi, that had nothing to do with the current social spending bill because it's already happened. so where was that from what -- where do we get 9.8% what moved the needle to that

extent, which was higher than we've seen in decades. >> i think there's been very clearly a big change in inflation here at the beginning of this cycle compared to all the disinflation we talked about last cycle there are certain cyclical elements related to the pandemic things like supply chain issues putting a lot of pressure on goods prices we see that everywhere no matter what we try to buy these days you also see this reflected in higher commodity prices, especially energy and food that's what chair powell would refer to as much more transitory i think what's also become clear is that there's more sticky elements pushing up inflation. things like rent prices, things like wages, things like higher inflation expectation. that's why about a month ago fed members including chair powell suggested the fed is clearly pivoting towards the inflation side of the mandate away from the employment side of the

mandate and that's why we need to get a faster pace of normalization, which we agree with anthony, should be announced later this afternoon >> anthony, for someone that -- in your line of work, i mean, inflation is the one thing that you would really need to, i think, think about to helpyour clients plan what to do with fixed income it's almost like kryptonite. is that all you think about? what do you think is causing it and whether it's going to be a real secular change between disinflation back to maybe even wage price spiral? is that possible >> yeah. we would argue that there are some aspects of the inflation that have been transitory. those have already been alluded to so you look at the goods sector th and there's been intense supply bottlenecks there. there's more factors that we can see being more entrenched in the economy. if you look at the service side,

we expect a handoff from goods to services as it relates to inflationary pressures wage pressures will continue to mount here if you look at the labor force, the size of the labor force decreased. what that means is that workers are changing the way they look at employment, changing the way they look at work. so bring them back into the market, you have to now entice them with higher wages so we do think that is a risk to deanchoring inflation expectations here. one of the key risks we see going forward is the fed is behind the curve and will have to hike rates at a faster pace than the market expects going forward. we think that this can lead to a lot of volatility in the market, push spreads wider and it's one reason why we are still modestly defensive as it relates to investment grade credit and corporate grade credit in general. >> what about stocks, equities, investors.

it's the end of the year inflation gives some companies pricing power. for people that -- i don't know why you would defend inflation, but some people say a bit of it is okay. is it ever okay? >> i think the point we would make is that this is going to be a cycle at the end of the day that is characterized with more inflation than the last one. we upgraded our inflation expectations for the next ten years from 2% to 2.3%. the conclusion for us is let's invest in this inflation that means overweighting stocks versus bonds it means overweighting certain more cyclical areas of the market that actually benefit from higher inflation prices that are able to pass those costs on to consumers, things like materials, industrials, certain parts of consumer discretionary or other parts of

the market that will benefit from what we believe will be a steeper curve like financials. another aspect of this is to overweight international stocks because they have a lot more of those sectors that we mentioned. lastly, really the big winners over the next cycle in a higher inflation environment are real estate, infrastructure, absolutely essential >> great gabriella santos, thank you. anthony, appreciate having you on bonds are back at least talking about them is going to be back fixed income thanks >> as a discussion, not an investment. iorefodeng up, lnte unr aryeh bourkoff will join us. new projects means new project managers. you need to hire. i need indeed.

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welcome back to "squawk box. unlock with purpose is the title of aryeh bourkoff's latest year-end letter. he writes coming out of a low-rate interest rate, growth alone will not be enough and 2022 will be a period of discernment for investors. joining us in a "squawk box" exclusive, aryeh bourkoff, liontree adviser and ceo liontree has advised in some of the most high-profile media space. aryeh, great to see you. you got this shout-out, amazing shout-out in the finale of "succession" sunday night. a media deal in the making

you're advising the family, i see. >> yeah. the -- we didn't know it was coming certainly it's been part of the zeit zeitgeist, and one of my favorite shows, and i'm sure maybe yours as well with our discussions. the deal is not one that we've been advising on, but we'd be lucky to it's great drama and it was certainly great to see for the firm and everything that we've been trying to build to see us included and the feedback has been overwhelming it's just been a crazy year and an amazing end to the year to see that >> we'll get your thoughts on how you would advise the logans in a little bit. let's walk through this letter you sort of walk through what this past year has been, but also what you think the next year is going to be, that includes where we are in terms of this cycle but also includes where we are in terms of the regulatory environment what kinds of transactions you

think may be allowed to happen >> yeah. look, there are a lot of currents coming, when you ramp down stimulus, and you come out of a period of growth at sort of all levels in 2022, which is the period we're entering. you highlighted a few things around inflation concerns, which we think is a bit overstated, but gres iinterest rates on the cross-currents of the markets, technology growth hitting the markets and the collision of those things overstated interest rates certainly on the rise regulatory concerns. technology growth hitting the markets at a collision of those things, plus kind of the classic industries moving into the innovation, the generations connecting in different ways when you have a delta at a time

of a chasm you're going to see cross-currents, and that means that there's a period of dissenment more of a stock pickers' market certainly. you have to give up something to get something, is the way i say it, and you need financial flexibility, but we certainly believe you have to still be looking towards the greater goal, digit economy, and the greater good in our case what we're talking about here, but can't just stay still. you have to do it in a way that appreciates valuation, gives shareholders a seat at the table long term and willing to risk a few things doing some m & a and some other decision for the innovator and ceos getting to the new economy we believe in. >> what is your sense of confidence right now in terms of transactions a number of companies. spac, now have a currency, never

had before a lot of legacy companies don't have the value that they had before are we going to start to see a bunch of sort of aol, time warner-style, not necessarily in terms of size but in terms of new economy buying old economy rather than old economy buying new? >> so talking about succession again or talking about real life that was -- >> real life wonder whether that's where this is going >> yeah. well, this is really what we've been seeing. so i think first half of the year we really started to put together transactions with ceos that were transformative but necessary in terms of getting international flexibility into the new environment. second half of the year we did see what you're referring to the fact ceos with high currencies, high stock prices, low financing costs, low cost of capital saying what do we do here coming into a new year and a new period of time are we going to lose that currency and lose that financial capacity or use it

that's, i think, what you saw with paypal, pin interest, in some ways. let's go and try to use that in some transformative way, and you have to do that, though, with some messaging to shareholders at some logical pattern. not pure transformation sake much more of a, bring the shareholders along with you, bring the regulatory alignment along with you, do it in a proprom aprom -- programmatic way not that easy. has to be optimal, logical, difficult to get done and approval patterns much more treacherous but same time doesn't mean m & a isn't a critical component of this the digital economy is moving we believe in it. that's toshiba, at&t transaction, all part of that. you have to see movement around the global structures to get to

the other side, to give up something to get something bull still see ceos and board members move into the new world. you can't stay still. >> great to see you, first of all. second of all, wondering if you could maybe tell us what you think all of this activity means potentially for the market valuations overall right now and i ask this, because when you see a deal like saks fifth avenue, spin off its website, neiman marcus following suit with that. a lot of insiders selling, who are making sure they're locking in valuations at this level. do they know something we don't? trying to make haynow? you mentioned it a little. make sure you take advantage of the valuations while here and use it or lose it. should that tell the rest of us valuations are coming? >> yeah. i think in a core valuation sense of period of time. that said i think we're in a tapering moment end of the year.

we have a lot of short-term investors not just in this market but retail now. it's a bit overdone in terms of selling pressure at end of the year so a bit optimistic beginning of next year, although i do think we're in a much more valuation sense of environment i think companies have to have longer-term scale with profitability, durable models not straight up. i referenced the letter stanley drucker said higher they go cheaper they look. no longer that kind of environment. you really have to have a grounding of metrics as a sustainable plan to get to the other side we are high in valuation that being said, i do think that relative to low rates, financing environments are very strong we're getting deals done we have a stronger pipeline going into 2022 than ever had since inception of the firm.

more attention paid to the regulatory factors more so than market factors to get those deals done, i would say, and look, we're coming to the public in 2021, anytime since 1977. definitely a digestion period and a focus period, but at the same time, the new generations coming up is very excited about the internet with crypto so tons of activities of models we believe in that are going to be a part of this new ecosystem. >> only got about 30, 45 seconds. bi into nfts, world into crypto and web 30 and sort of nanoverse do the legacy guys try to pick up crypto? too overpriced for them? crypto guys try to pick up the -- how does this work? >> well, if you're china you could have a digital currency in

the country. if you're the u.s., we are private industries a lot of times. a retailer, need a digital currency, a bank, token on your own. don't wait for the government to do so. for clients, accepting crypto from clients to do business together i definitely think doing crypto all the time spacs get by metaverse as well. a big believer in this not just the younger generation. >> you're taking fees in crypto now? >> we're going to take fees in crypto, yeah >> i think we just lost him but also think he made a little bit of news. arye he th aryehe, thank you for joining us. coming up, senator ted cruz,

approving to lift the national debt limit last night. stay tuned "squawk box" will be right back. today, your customers want it all. you have to deal with higher expectations and you have to lower wait times. with ibm, you can do both. your business can unify apps and data across your clouds. so you can address supply chain issues in real time, before they impact your bottom line. predicting and managing operational issues that's why so many businesses work with ibm.

good morning in just a few hours the world will grind to a halt just for a moment to listen to what the fed has to say central bank widely xlexpected reveal a tapering program and quite possible driving central bank talking risesing prices and

tied to president biden's bct bct plan, and texas senator ted cruz the "squawk box" begins right now. good morning, and welcome to "squawk box" here on cnbc live from the market site in times square i'm joe kernen along with becky quick and andrew ross sorkin equity markets are hmm let's move on. no the s&p sup less than 2. dow jones down 16. nasdaq down about 5. >> maybe waiting for something >> yeah. >> that's happening later today? >> could be. i'm getting excited about fixed -- fixed income's going get more interesting just had an interview with a master of the universe in fixed

income and hoe acknowledges, yeah maybe something to keep an eye on maybe not yet but maybe some day you'll want to own fixed income. >> i think watching fixed income, a canary in a coal mine might work, too. all inflation. interesting. we talk a lot about inflation and we do hear, have ted cruz on talking how inflation build back better, his take i know people have a different take, but inflation already happened we're still just talking about the bill i mean, it's not law yet so -- i don't know >> here are some stories investors might be talking about today. congress moving. potentially just in time to raise the federal debt ceiling house passed a $2.5 trillion increase earlier this morning. president biden is expected to sign it into law today. the day that treasury secretary janet yellen had said the

government might default if congress didn't act. seemed like a long time ago, here it is already and some covid updates as omicron spreads. google telling employees they'll eventually be fired if they don't adhere to the company's vaccination policy a document seen by cnbc says non-compliant workers first put on paid leave. then on unpaid leave for up to six months then lose their jobs meanwhile, jpmorgan telling unvaccinated workers in manhattan to work from home and apple now requires all shopper at u.s. retail stores to wear rasks and uber, a separate story, looking to sell non-core assets including it's stake in chinese ride hailing company dd global dd delisting the new york stock exchange, caught up in the china crackdown on home-grown tech companies. >> meantime, the fed's latest policy meeting wrapping us this

afternoon and investor expecting the central bank to wind down its purchasing program when the fed will raise interest rates, looking for clues for that joined by steve liesman with more. steve? >> yeah. big meeting today, andrew. a significant change expected in fed policy with expectations it speeds up removal of the pandemic emergency relief and set the stage for intrastate increases much earlier next year than previously it signaled. several important changes likely to policy and the language combating a weak economy fighting inflation, speed up the taper to $30 billion from $15 billion, no longer call inflation transitory and forecast a higher funds rate likely in 2022 and beyond. the difficulty for the market pricing risk markets and aggressive fed policy and uncertainty how hawkish it will be peter bookmark, chief investment officer for an advisory group

writes, i wesh they can but don't see how they can thread the need of moderating inflation and keeping the economy humming all same time. some unsirny could be removed from the fudd publishes new projections. markets looking for growth inflation but especially rates a big gap between where the stock market thinking the fed is going and the fed's own september rate outlook respondents to the cnbc, 70 basis fund fed's rate and looking for 30 median forecast. respondancy, 2023, or two rake hikes at just 1% all that means the fed outlook needs to change sharply to catch up, but today, fed policy takes the first step to signal markets extra rates are coming the question whether inflation and the economy give the fed a flexibility to wait until the summer or if it's forced to push up the timeline again.

andrew, thinking about what peter bookmar was saying about replacing assets s&p when powell made his hawkish turn end of november you know what's kind of unchanged? that's sort of like saying, yada, yada, yada, the fed pivoted. but when you go back to when he started talking about a faster taper and flexibility for rate hikes, you went up, you went down, you went back up and the here you are now nasdaq is off a lot more 3.4% or so if you date it from when powell first made the shift but the s&p is remarkably well behaved. i think powell takes comfort from that. maybe this was the right turn as far as equities were concerned >> what's your best explanation for why you think the market is "well behaved" >> i still don't think there's an alternative still have, no other place to go trade going on, and if the fed follows what is the most hawkish

outlook out there. not the most hawkish, the median forecast for the new median turn doesn't seem that bad. right? keep adding to assets even while tapering's that goes through march and maybe you do three rate hikes next year and end up at 75 basis points i think most rational people, and maybe that's wrong to impart that upon most investors, but most rational people say, look at this economy, and why do you have a zero funds rate why are you doing $120 billion in asset purchases it makes sense to bring it back down, even if you weren't being aggressive at fighting inflation. even if inflation were 2% or 3% the fed should move faster to move accommodation. >> steve liesman looking forward to mr. powell, chairman powell's comments, and your questions, of course. right now for more on what to expect from the fed this afternoon joined by former dallas fed president richard fisher now senior adviser to barclays serves on the board of

tenet health care and also a c nbc contributor. richard,this is kind of new ground that we're watching for the fed. earlier this morning mark grant said he thinks this is the most important fed meeting and decision getting for a very long time this is kind of where they have to readjust and let the market know what's coming what do you anticipate that we'll be hearing >> well, i would be surprised if they didn't do what everybody is anticipating, which is announce an earlier winddown of the federal reserve bank expansion balance sheet expansion. it's all been priced into the market just pointed out little weakness recently, but if you look at what steve just pointed out, i think it's been well broadcast if they don't do that, then i think we have a different kind of reaction. but, becky, i have been saying on this show forever since they put in the decision rule that they have, which is averaging inflation at 2% plus that it was

a mistake. and the reason it's a mistake is because setting aside market reaction, it takes time for monetary policy to work its way into the real economy, and waiting to see the whites of the eyes of inflationary pressure, not being transitory, quote/unquote, and then acting builds in expectations amongst businesses and consumers, and then it leads to greater inflationary pressure and by the time you act, then it takes 12 to 18 months 20 impact the real economy and meanwhile expectations build so i think the fault here was the new model adapted. to be sure, the old way we used to do things was highly inaccurate we weren't great forecasters, but we could have either inflation, deflation, whatever pressures we wished to ahead instud now they wait and raekd

if you wait and raeeact, takes longer to quell the forces. >> take this further larry summers, incredibly bright guy, somebody through all this and thought through a lot of what's out there, has said this morning you got to, at this point realize we're at the risk of spontaneous deflating of financial markets saying you should be presuming at this point the fed is going to be much more aggressive and have at least four rate hikes next year and more to come after that. is the market prepared for that? >> well, we'll see i don't know but it doesn't look like it, the way assets are being priced in trading markets, the equity markets. short end of the yield curve, two to five-year space already discounted two to three rate increases, i think liesman just pointed out you do a couple rate increases, three rate increases you're somewhere between 75 and 100 basis points, but as 1% or three quarters of 1%, i don't consider that to be very tight.

however, it's the direction that counts, and if they indicate at this meeting or future meetings they're going to move fastener that direction, then perhaps the market will have a little bit of a surprise and may have to react accordingly. >> i'm of the opinion that they're probably not going to be that clear or that direct, because not only are they fighting inflation, which jay powell made pretty clear he's going to get more hawkish and aggressive going after, also the rise of the omicron variant, and trying to deal with the unknowns of what this brings. my guess, tell me if you think differently, would be that they're a little more opaque about the exact specifics on this they give us some direction but maybe that's about it. >> yeah, becky, central bank should always be opaque. and i think we'll continue in that tradition so we'll see what powell says, how he dances around it. i think he's gotting have good at his press conferences we also can look to see where he

looks down and reads as opposed to just feels comfortable talking. i have noticed that -- >> that's a good tip you're right pap a tip. things i say carefully and don't say anything to make the markets wobble clear in the things i am reading versus i can answer this off the hip. >> i didnotice in his congressional testimony, the most recent ones, he's much more confident. i want to stress this, which people may not appreciate. he owes president biden nothing. because we know the white house worked extremely hard to give this job to somebody else. they couldn't get the nose count, in the senate so in my view, where i hit, i don't have that talent i'm not there. i would feel very comfortable in my own skin right now and he should just do what he thinks is right. and, again, he came up through the capital markets and the credit markets

you have to understand this. that's his background just like paul volcker the only two didn't have ph.d.s including volker he does not. came up through the credit side. understands markets, but volker had to do things painful as things got out of control. so i have great confidence he will move forward in the right way. that's my point. >> that's a really interesting thought, too not beholden to them they didn't want him there this idea of independence. others said they are still part of the government and have to be careful because they realize that if they raise rates too much, again, you know -- >> not talking about rates. >> historically low levels but if you raise rates too much, big things in terms how you pay back the government's debt. that those interest payments will end up eating much more of the tax payments that you take in, and it means what you can't spend on other things. how big of an issue does -- how big an issue is that for fed governors or anybody else

sitting down at the fomc meeting? >> i don't ever remember that being discussed. remember, as i was leaving we had already taken down an enormous amount, in fact 100% of the government debt issuance now, depends on timing we as yet don't have this new bill, a huge bill passing through. it doesn't look like you're going to have it before christmas. we'll see. but if you signal things in a new way, and rates react, which she haven't thus far, except for the two to five-year space, that might send a signal to congress that the cost of carry which is what we're talking about, all of this debt, will increase, and as secretary yellen and others have said, go big now, because rates are so low they have to start, if they're capable of doing so and i doubt, discounting the fact rates are going to be higher and they have to put that into their cost calculation. i don't think congress works that way, by the way but if they did, then this could

send a signal to them that, you know, it's not going to be as cheap as you think it is and, therefore, cbo would have to add that in. anyway, this is a different calculus, but, becky, you should be chair of the fed. what do you think? >> ah, no thank you. i don't know enough about any of those things, but richard, one thing we've talk and recently on the show is should the fed be tightening the balance sheet shrinking that maybe more aggressively before you think about raising rates quite at aggressively another way to get liquidity under control? >> that's why, becky, of course, this march versus later. >> that's not shrinking the balance sheet, that's just -- >> no, but you have start by stopping the growth, step number one and then step number two, as i think they would be disappoints everybody if they didn't act what they said when they're done, then they should move, and shrinking the balance

sheet is a possibility i just don't see it in the immediate future. >> when you say stuff like that, that makes me think, okay. we are really just tapping on the brakes here. not doing much of anything and maybe these good times will continue for quite a bit longer? >> well, the fed usually taps on the brakes unless it's urgent. volker did not tap on the brakes he slam and the brakes because it wa too late it they do this right they can continue tapping on the brakes. >> you think it's okay asoft landing that can still b navigated? >> i pray to god that there, because if there's not a lot of volatility and i still expect to see some volatility in markets going forward. >> richard, thank you. >> i miss you guys merry christmas, happy new year. >> we miss you, too, and happy holidays and hopefully we'll see you before we get to end of the year thank you. >> god bless you. >> you, too. coming up, much more on inflation, and the fed ahead of this afternoon's central bank update texas senator ted cruz joining us live for an interview you don't want to miss as we head to break check out

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with wifi speeds faster than a gig. click, call, or visit a store today. sing 2 futures flat down about ten points on the dow jones industrial nasdaq up a little over a point, and the s&p indicated, open right now up about 3.5 points this morning. meantime, the financial times reporting the u.s. looking to add more chinese tech and health care companies to its economic blacklist this includes the world largest maker of drones. dji included joining us now we have more on all of it. eunice >> reporter: thanks, andrew. the fp citing sources saying the u.s. treasury department is adding eight companies to its chinese military industrial complex companies blacklist on thursday for their alleged

involvement in the surveillance of china's muslim minority group known as the uighurs in the country's far west ching jeong region 60 entities all right on the list uk paper also says the commerce department will add another two dozen chinese companies to its entity list restricting american companies from exporting to them in addition, the biden administration is considering tighter rules to limit american companies from selling to china's chip giant smic. so the report hit health care as well as tech companies out here. not only in mainland china, also in hong kong, and then separately to that, the foreign ministry said today that it was very, very upset with the fact that the bill that had passed

through the house does support an import ban of chin jeong bills and will take reaction if that bill passes. >> we'll keep watching this. feels like the drama, a new twist in the drama every day thank you very much. when we come back, a lot more right here on "squawk box." new retail sales data. we'll bring you breaking numbers and instant market reaction, and nart ted cruz of texas weighing in on democrats' efforts to pass the build back better plan and also the vaccine mandates, hot inflation and so much more a debate you are not going to want to miss right here on "squawk box." competition beat us again. how? they have a better finance system than we do. i feel like they might have a better finance system than we do. workday. how do they make better decisions faster? workday. it's got to be something workday. i think i got something. work... hey, rob, you're on mute.

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box," everybody. keeping an eye on cryptocurrencies this morning. weaker across the board. dogecoin down most about 4.4%. remember, dogecoin up significantly after tweets from elon musk. keep an eye on that as well. crude oil trading brack below $7

a barrel crude oil swinging up and down lately on concerns about the new omicron variant. what that will mean for people getting out thglobally when we come back, breaking retail sales data. it's another important read of the economy ahead of today's fed decisions. don't go anywhere. we'll have that numb rht teth. erig

welcome back to "squawk box" on cnbc. seconds away from new retail sales and import price data. look at futures right now. haven't moved that much around this morning it's been kind of light. dow off now by about 26 points nasdaq up at seven points reversing itself a bit s&p 500 up about three points. show you the ten year as well. right now looking at about 1.450. our good friend rick santelli is standing by at the cme in chicago as we rate the numbers you want to make a, place a bet here go the, no know, 30 seconds. what are you expecting prices right rules >> no the make a bet or place a bet. venture out to say that the year

over year import numbers and export numbers going to be hot retail sales higher inflation is, higher retail sales are because not adjusted for inflation. that doesn't dismiss the notion that a strong retail sales isn't good, but do you have to be cognizant of the fact that as inflation goes high around prices go higher the register rings bigger sales on retail sales and empire's strong and strong again here we go 31.9, andrew, is empire for december the reason that's important is because 43, 43 is the all-time high the series started back in 2001. it was 43 back in july so these numbers are super strong retail sales for november, up 0.3 of 1%. a huge miss, andrew. about one-third of what we expected, and i'm sure there may be revisions but at this point, 1.7 in the rearview mirror sticks a big sequential miss.

look at x autos, still soft. still one-third of expectations up 0.3 of 1% strip out autos and gas stations sales, up 0.2. really soft numbers. control group number plugged into other economic numbers like g gdp down 0.1 of 1% not at all a good number the last time it was a minus sign, that was in july when it was minus 1.8. so once again, big miss there. now, let's look at what's going on with import prices. up 0.7 month over month, as expected strip out petroleum, still up 0.7. hotter than expected here we go first -- wait. first do export prices month over month up 1%. that is two times what we expected we were expecting a half of 1% export prices are running on the hot side some of that, of course, may be

energy now year over year, 11.7 on import prices year over year, and if we look at what the current high for the series is, it was 11.6. 11.6, and that was the highest in ten years so now this is continuing to be 12.7, that's the comp in 2011. still a ten-year high, just a fresher ten-year high. on export prices, 18.2%. that one's easy. the series started back in 1983, andrew never been hotter. okay so 18.2 is the all-time high prior to that it was 18 was the high, that was last month. pretty much every month for the last four has been new, fresh, all-timeyear highs see inflationary and a disappointment why? could be a variety of reasons. could be the variant, although

i'm not sure it is could be that this glut of savings we always talk about, because everybody was hunkered down during the worst part of the virus. maybe running a bit lower on that, or maybe people just aren't spending as much at this point. maybe a little nervous about, well, tina there is no alternative to stocks that's something the fed should think about as we speak. back to you. >> okay. rick, thank you for that steve liesman sorting through data as well what's your take >> a little bit more upbeat than rick i think you can't kick away the fact it is a big beat, a big miss i expected this. here's why look at the october numbers and all the talk about people bringing forward their holiday shopping, and then we had some data in our c nbc all-america survey that showed people indeed did begin to shop earlier. so we had a very, very strong

october. 1.8% huge number. i'm not surprised it was revised up, by the way, by 0.1 not surprised to see a falloff an example look at electronics. they were up 3% prior month. up a 17% year to date. go to look at what's happening in sporting goods. still up strong, actually. 1.3% and general merchandise, department stores minus 5.4, up 25% year to date they were up 2.5% in the prior month. i'm looking at this holiday season, october and november kind of together december the rubber match in terms of the two to see how strong retail spending is. one thing that's important here food service and drinking places the one service sector that we have in this report. remember, a third of consumer spending is goods, and two-thirds of services, but that was up 1%. you did have this little bit of a shift here from goods to

services that's pretty upbeat and also i like the new york fed empire state number showing manufacturing in the new york area is doing well that's important, andrew, for the outlook. >> okay. steve liesman, thank you beck >> thanks, andrew. when we come back, can't miss our interview with texas senator ted cruz waging in on inflation, the build back better bill and saying that icomron spreads. stay tuned you're watching "squawk box" on cnbc. your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

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sign a $2.5 trillion increase in the nation's debt ceiling after the house approved the measure early this morning today's the day, by the way, that treasury secretary janet yellen pinpointed for a possible government default if congress hadn't acted joining us now to talk about this, inflation and much more, senator ted cruz texas senator, good to have you on this morning. good morning >> good morning, good to be with you. >> this -- well, the debt c ceiling is one thing, but seems more yo

more, i don't know maintenance. everybody play that card more interested what happened with the big spending bill and the inflation numbers we saw, and republicans are talking about how that's going to be inflationary and we see the white house arguing it's not going to be inflationary and would actually help. so i don't know if we'll get anywhere on that, but it hasn't passed yet what do you attribute the 9.8% ay ppi increase and previous, cpi, both hot all happening way before the build back better bill was eastern, you know, still arguing about it, don't know if it's going to pass and we already have the inflation >> now, look, that's exactly right. inflation is raging across the country. the november numbers have inflation at 6.8%. that's highest inflation this country's seen since 1982. nearly 40 years ago. and it's at the end of the day, it is not complicated when you spend trillions of dollars you don't have, when you print

money, when you borrow trillions of dollars when you expand the money supply, you drive up inflation that cause and effect has been true from the dawn of time it's true now, and you know, you mention the debt ceiling the senate vote and yesterday, the house voted on early this morning. the current debt is $28.9 trillion today, joe biden is preparing to sign a bill raising that by $2.5 trillion $2.5 trillion, joe, is the largest increase in the debt ceiling in the history of our country. it is unprecedented. $2.5 trillion with stroke of a pen and that doesn't pay for a penny of the bernie sanders socialist budget what they call build back better, wa more and more americans are calling build back broke. it is trillions more somewhere between $3 trillion, $5 t4 trillion, $5 trillion on top of

the $28.9 trillion the inflation fire is raging and the democrats' solution, sadly, just to pour gasoline an it. want more what's causing inflation and if they succeed, we'll get more inflation hurting the most vulnerable among us particularly seniors seniors are hammered with inflation, and this white house doesn't seem to care. >> senator, we have people complain -- we have the republicans come on talk about the spending bill. democrats come on and immediately point out the trump tax cuts, which weren't in their view, democrats say, weren't paid for, didn't pay for themselves tax cuts for the rich. you're okay voting for that and increasing the deficit since it wasn't paid for for your rich buddies and corporations, but now we're trying to do child, you know -- get some child care and tax credits things like that for families and you're against that how would you -- how would you

explain you were for one and totally against this one >> well, sure. one is good for the economy. one's terrible for the economy you know, it's actually -- you're right repeating the talking points back that democrats tell you if you look at the 2017 tax cut. that tax cut was focused on jobs, focused on reducing tax cuts on job creators and the purpose of it was to create more jobs, to drive up wages, to bring manufacturing back to america. and it worked extraordinarily well we saw by 2019, lowest rate of unemployment in 40 years, lowest rate of african american unemployment ever recorded lowest rate of hispanic unemployment ever recorded median wages rising, poverty dropping it succeeded and by the way, their line that it wasn't paid for when we cut taxes in 2017, the next year, federal tax revenue went up and the next year, federal tax revenue went up and went up every year after

that generated more revenue because of growth and economic productivity and more jobs contrast that with the build back broke there's actually a big tax cut in build back broke but it's a tax cut for democratic donors. a tax cut for millionaires, billionaires in big blue states because one of the most expensive part of the bill, repeal the cap deducting state and local taxes. contrast the two more jobs for working men and women. repealing the s.a.l.t., pays off the rich democrat youic donors in blue states, number one and number two encouraging local politicians to raise taxes more. democrats are not fighting for working men and women. they're not fighting for the senior citizen who's on social security, who's got a fixed budget who with inflation now is seeing the cost of food going through the roof, seen the cost of gasoline go through the roof. the cost of houses and cars and

mortgages and rent all of that going through the roof giving a tax giveaway to billionaires who are democratic donors doesn't benefit them at all, but it's what the democratic priority is they take care of their buddies in government, and they don't fight for working men and women. we ought to be focused on working men and women which means we ought to be bringing jobs back this build, bernie sanders socialist budget destroys jobs because the democrats' approach to this is higher taxes, higher regulations on job creators and then they wonder, scratch their heads and are confused why the jobs go away. >> senator, switching gears quickly to mandates, vaccines. this isn't the latest poll, but it's pretty representative it's split down party lines. for mandates three quarters of democrats are overwhelmingly for mandates, and

much lower percentage of republicans. just one in four, republicans. 6% are adamantly against what causes, what about being republican versus being a democrat causes the -- this dichotomy between, or the divide between what we should do in terms of trying to take on the pandemic >> you know, it's a great question, and i think in a time of crisis character is revealed. on the democratic side in this time of crisis, we've seen the democratic politicians are authoritarians they will control your life. they will order you to obey and they will destroy you if you don't. let's take the state of new york just this week sadly the supreme court did not take a case and emergency appeal out of new york of doctors and nurses, front line medical workers, who had been heroically fighting this pandemic from the beginning and they're facing a vaccine mandate

and these doctors and nurses are choosing not to take the vaccine for religious reasons, and their facing an order to be fired, number one going to be fired and number two, the new york government, and really a punitive vindictive way is saying we're going to fire you and you're ineligible for unemployment so we are just going to punish you. i've got to say, that is wrong my view on vaccines is simple. i'm pro-vaccine. been vaccinated. my family is vaccinated. i encourage people to get vaccinated, particularly in a vulnerable population, diabetes, elderly, overweight. vaccination makes sense. but i also believe in individual liberty and responsibility joe, it's your business to make medical decisions in your life, and no government petty tyrant has the right to order you to undergo a medical procedure, and joe biden and the democrats are perfectly comfortable saying, it

doesn't matter if you're a young women and want to have children and are concerned that the science may be unclear on the impact on fertility, that's one of the groups we're seeing declining to get vaccinated are young women who want to get pregnant these politicians say, they don't give a damn either obey, comply or you're fired and as i travel the country, literally every day. there hasn't baneen a day i'm n stopped by soldiers, sailors, marines, stopped by airline pilots, flight attendant, doctors or nurses or firefighters or cops who come up and say, thank you for fighting against this vaccine mandate let's take chicago the chicago police union says that upwards of one-third of chicago police officers are refusing to comply with the vaccine mandate. joe biden was asked, what should be done about it he xsaid, fire them.

fire one-third of the cops in chicago. by the way, same thing about firefighters in new york city. listen, i'm proud to stand with chicago police union i'm proud to stand with the new york firefighters union, and these vaccines are wrong the government has no business ordering you to make health care choices nap ought to be a choice for you and your doctor, and you should weigh the costs and benefits for your life and your health >> senator, i guess the other argument is that, okay if you are unvaccinated and do you have a much worse outcome in terms of, you know, being hospitalized and in intensive care, there's other people with life-threatens conditions that don't have a bed, or our health care system is overwhelmed it's not just the individual that we're talking about here. i guess we are all in this together hear that a lot. if we all pull together and all get vaccinated, the hospital beds aren't taken.

people that need elective surgery on a heart valve or take your pick. chemo, all of those things get delayed when the hospitals are overrun. it can happen again theoretically with omicron. >> well, listen. if you want to encourage people to get vaccinated, that's great. but you don't have the right to force them to order them to get vaccinated you know what? if you're concerned about shortages in hospitals, then maybe tell the governor of new york to stop firing doctors and nurses one of the most asinine things we're seeing is thousands of doctors and nurses being fired, and so new york is now canceling elective surgeries why? not because of this flood of unvaccinated in the hospitals but because they fire doctors and nurses and have shortages. in airlines, seeing rolling delays one after the other after the other because they have shortages of pilots and crews, and shortages of air traffic controllers. these policies make no sense, and by the way, when they get challenged in court, we've seen

plaintiffs go in and challenge biden has four vaccine mandates. one for active duty military, one more federal civilian employees, one for federal contractors and one for private employers with 100 or more employees. when these get challenged in court, over and over again the courts are striking them down concluding they're illegal, unconstitutional, they exceed the authority of the federal government, and the biden white house doesn't care when the federal court of appeals struck down the private employer vaccine mandate or stated, rather, stated and -- the next day the biden deputy press secretary said, well, obey it anyway. never mind that court order. you should obey the decree from the white house that is just lawless and we live in a country with rule of law, not just the ability oflaw, not government leaders to make -- that people are forced to obey.

>> to the extent trying to be together, i'm curious how you think about it -- i think you're for drunk driving laws. >> sure. >> we restrict people from drunk driving, not because every driver is going to kill something, but they might. is that a similar analogy in some way that's sort of what we're trying to do. vaccines will not unnecessarily prevent every death or transmission, but will reduce it substantially. that is why we have laws like that on the road. >> look, there's no doubt, there is questions of costs and benefits drunk driving kills tense of thousands of people every year, it imposes enormous costs, and it's plainly unsafe. listen, when it comes to vaccines generally, i mean, we

require vaccines for children in schools, for other diseases, but there's a difference when you're dealing with measles, mumps or polios, those vaccines have been around decades we have seen the health consequences we've had the ability to test them, not just over 12 months, but test them over generations we understand they're medically safe when it comes to the covid vaccine, i'm incredibly grateful we have these vaccines i think operation warp speed under the trump administration where they streamlineded red tame and moved forward at an incredible space, that was extraordinary and i'm glad for it saying you're glad to vaccine doesn't mean you have you have to the fev fervor of a zealot, and anyone who questions them is

a her tetic i urged my parents to get vaccinated my father didn't want to get it, i told him at your age, it doesn't make sense to take this risk i had the same that's in my wife, so did my wife, but for kids 8, 10, 12 years old there's a lot of kids saying the risks of covid for a young child is relatively low the rate of fatality is incredibly blow. given the unknown as, the uncertainty of an experimental drug approved -- or experimental vaccine approved in an incredibly rushed circumstances, there are parents making a reasonable judgment saying, let's see what the long-term effects are before we get it to our children that's a reasonable decision that the government shouldn't

make for you government doesn't have a right to just force you to obey and sadly, we're seeing democrats, whether it's mayors, whether it's governors, or whether it's president joe biden, that believe they have the power to control your life. >> senator, we've got to run we appreciate your time today and all of your viewpoints we hope to see you again soon. thanks >> look forward to it. thank you. in the meantime we want to get down to the new york stock exchange, where jim cramer joins us now markets have been relatively muted. what do you think of the retail numbers? we all know there's nothing that costs more than and the retail sales number is -- so, i mean, i think he has to do something i think he has to make it so we

all spend less and buy less. we have to cool things it's a shame he has to do it with fed funds there's other ways to do it, but he's only the fed chairman so i do believe this is a way to say, listen we have to take it slower so omicron doesn't crush our country. you i was listening to senator cruz, i don't think he understands we're about to have a whole other epidemic, so it would be great if -- i think the healthcare system will be blown out. that's kind of what's missing in his logic, or his illogic, because i think omicron is closing schools right now. omicron is surrounding us. i'm not trying to be "invasion of the body snatchers" but it's just coming if you don't have your booster now, i think you're going to do it.

>> that's not hyperbole. senator cruz may be dealing with a different portion of the pandemic and may not be up to date with what's happening right now. >> jim cramer, always speaking straight we'll see you in a couple minutes general eisenhower, so let's just accept that -- last time -- general eisenhower was a republican >> check out the cnbc investing club reyoonsqwkn e ua oth stet" in just a moment care. it has the power to change the way we see things. ♪♪ it inspires us to go further. ♪♪ it has our back. and goes out of its way to help. ♪♪

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welcome back to "squawk box. earlier this morning we brought you what turned out to be an emotionally charged debate the congressman said, quote, our numbers are way better we also have higher vaccination rate than new york after the segment, you may remember, we, myself very much questioned those numbers, because vaccine conversations have become so emotionally charged. we wanted to be clear for our viewers what happened. so here are the facts. according to the cdc's website, the new york state's population 12 and older fully vaccinated is

80%, florida's number is lower that's what i was pointing out if you look county by county, that's what the congressman was doing, the percentage of miami-dade county's population is 84.2% the comparable number for manhattan is 83% so by a small marger, we point out that the congressman is correct. a bit of a debate. "squawk on the street" begins right now. >> if you're talking about miami, that's what he said good good wednesday morning. futures steady here. it is fed decision today statement and presser this