the supreme court blocking president biden's vaccine mandate for large private companies. details ahead. no love for novak djokovic his visa cancelled for a second time rely sewly on master card. we'll tell you what happens next, it's friday, january 14th, 2022 and "squawk box" begins right now. good friday morning, everybody. welcome to "squawk box" here on cnbc i'm becky quick along with joe kernen and andrew ross sorkin. and we want to take a look at the markets because yesterday was a pretty important day, tech stocks reversed three days of gains dragging the nasdaq down by 2.5%, significant declines there. the s&p was also down, down by 1.4% and the dow was down by 176

points after rising by more than 200 points early in the session. a part of what was happening here was hearing the tough talk also coming from lael brainard, the nominee for vice chair at the fed when it comes to inflation. she's been messaging this and that united front that all of these fed officials are projecting at this point because it wasn't just the two of them, it was also harker who came out, patrick harker, and said he sees three to four rate hikes in had 2022, you had daily coming out and saying a march hike is reasonable, and charlie saying three hikes are reasonable this year so all of that saying to the mark maybe they are serious about starting this and starting it quickly you will see green arrows, dow futures indicated up 93, s&p up by 9 and the nasdaq is up by about 11 treasury market not too active after this, we saw the big gains in the first week and a half of the year, the ten year right now

yielding 1.745%. when i mean gains i was talking about the yields not the prices. the 2 year 0.934%. another conversation in washington yesterday that's rippled across the country the supreme court handing down a major decision on vaccine mandates blocking the biden administration from enforcing what was a sweeping vaccine or test requirement for large, private companies. in the written opinion the court said, quote, requiring the vaccination of 84 million americans selected because they work for employers with more than 1,000 employees exceeded the authority that congress has given osha the court did allow the vaccine mandate to stand for medical facilities that take medicare or medicaid payments. the court's ruliing will not prevent companies from requiring vaccines for employees if they want and president biden urged them yesterday to do so interestingly a couple of groups

came out publically and said they will continue to pursue vaccine mandates at their companies. so while this will maybe change the outlook for certain companies in terms of how they approach this, some of the biggest companies in the country continue to want to at least do this on their own. you remember at one point you talked about how so many of those companies wanted that -- had wanted the administration effectively to step in to give them air cover so they could do it so this is an interesting new development in all of that >> there were other trade organizations that were calling this a victory yesterday, including the national retail federation, which did not want to be forced to look for these because they've had such problems finding workers i think some transportation companies feeling the same way depends on where you are how difficult it is to find workers and i guess if those workers are front-facing to the public, too, may make a difference

>> and there are more than a few that were up -- and some that welcomed the ruling but said they plan to continue with their own mandates it's almost as if they want the flexibility to do it there's a lot of conjecture yesterday. there's three divisions of government, not four, agencies all along this administration knew this was a long shot and a work around. i think the supreme court actually mentioned some of ron klain's comments about how we have a clever way for a work around to get it through and they were almost cynical about the notion they were trying to game it that way i don't know if it was punitive, but they certainly mentioned that so, you know, we're going to have brian on and brian is in charge of the nec and all things economic i don't think in his wildest dreams at goldman sachs he ever thought he'd have to be

secretary of health and human services his job is to get the economy going. and no doubt when you have all the issues surrounding mandates and people not wanting to work and quitting and leaving and not being able to have the labor force you have in normal times, i'm not saying he's like, makes his job a little easier but it does make his job a little easier trying to say a year from now our economy would be doing much better because of mandate, right now we have supply chains, we have inflation, we saw that yesterday. so i'm going to ask him that when he's on and say, in the back of your mind, are you okay that, you know, maybe we won't have quite as many -- with omicron, maybe we need to revisit the whole idea, because vaccines do not -- you know, you can be quadruple boosted and still get -- >> whoa whoa i think vaccines make it so you get less sick. >> yeah, joe -- >> of course of course. of course.

>> if you look at hospitalizations, they're almost all -- hospitalizations around almost all people who aren't vaccinated anything that keeps me out of the hospital i'll take. >> anybody who's dying is unvaccinated that's the truth. >> no doubt. >> the truth is omicron -- >> and most have kcomorbidity. andrew, please, i know how you feel it's friday -- >> if you've been boosted and get omicron you're fine. if you haven't been vaccinated or boosted, it's tougher. >> really, andrew, i know that no preaching today no whining, premiuming no whining, preaching, i understand that. >> you just preached for the last three minutes about how nobody should -- >> no i did not. i didn't say that at all once you told me do the news i'm going to do the news breaking overnight, top ranked tennis player, novak djokovic has lost his fight to stay in

australia. australia's immigration minister revoked his visa saying it was in the public interest to do so. it's unclear whether australia will move to deport novak djokovic because the decision can be challenged still by his legal team he had his visa cancelled last week, on monday a judge ruled he should be allowed to stay. becky? >> this one is pretty int interesting, because there were mistakes made on both sides of that but djokovic didn't do himself any favors by being picked up with pictures posing with kids and other people at least a day or two after he had supposedly tested positive for covid. i don't know if you -- >> are you circumsling around on this i thought earlier in the week you were on the djokovic side? >> i said, no, there should be no special rules for anybody

because of who they are. that's still the case. >> i thought you were on the other end of this. >> no. my problem was rules for thee but not for me if they have rules they should apply to everybody evenly, that should always be the case. even if you look for the fine details you were supposed to apply for the exemption by december 10th, he didn't apply and get covid until december 16th so there were rules broken along the way. the australian judges broke it up, one of the judges was angly they had taken his phone away. but he broke the rules and has flouted it and was exposing people to covid knowing he had it along the way it's hard to defend him. >> did you see the video of the two anchors in australia -- >> yeah. the two anchors in australia with the hot mic i think nailed

it no matter how you look at this, he's a jerk. they had saucier language for it but he's a jerk. love to see him play tennis but he went about this the wrong way. >> i was hoping nobody has us on the hot mic during the commercial breaks. so -- >> yes, there but for the grace of god or john our audio guy. president biden plans to nominate sarah bloom raskin to the federal reserve. raskin served as fed governor from 2010 to 2014, then as deputy treasury secretary during the obama administration yesterday the ranking republican, pat toomey, criticized raskin for calling on the fed to pressure banks to choke off credit to energy companies.

we should mention that sarah bloom raskin is a contributor on cnbc and we know her pretty well. >> and elon musk said tesla is accepting payments for some merchandise with dogecoin. he tweeted tesla merchandise buyable with dogecoin. including a belt buckle, cyber squad for kids remember last year tesla began accepting payment in bitcoin but later sub pended those purchases after musk expressed concern over the high energy use for bitcoin mining check out the price of doge kok coin, not where it was down about 18, 19 cents. >> we have almost three hours still to go. we'll talk about the dip in tech stocks so far this year. nasdaq down 5% in the last two weeks.

and later, carl bern seestein is going to be with us to talk about the big changes in the media landscape. as we head to break, a look at shares of tpg, priced of the chairs $29.50, closing at $34. we're back after this. esg is responsible investing. who's responsible for building esg into your investments? at pgim, the pursuit is on for outperformance. as active investors, to outdeliver with customized strategies, integrating esg best practices into our investment decisions. as asset managers and fiduciaries, to outserve, with our commitment to better esg outcomes.

join the pursuit of outperformance at pgim. the investment management business of prudential.

this is elodia. she's a recording artist. 1 of 10 million people that comcast has connected to affordable internet in the last 10 years.

and this is emmanuel, a future recording artist, and one of the millions of students we're connecting throughout the next 10. through projectup, comcast is committing $1 billion so millions more students, past... and present, can continue to get the tools they need to build a future of unlimited possibilities. welcome back to "squawk box. this morning, tech taking it on

the chin yesterday and basically the past two weeks over inflation and rate fears the nasdaq getting clobbered down more than 8% below its record high. we're joined by rachel levine from bny and paul hicky is here. welcome to both of you it has been a tough two weeks. i'm curious what you're doing about it and whether you think it's going to continue to trend the way it has or you think this all of a sudden turns into a buying opportunity >> good morning. and thanks for having me this morning. it's been a brutal two weeks for tech investors i think it's not entirely unexpected we've moved from talking about two to three rate hikes this year to including four and quantitative tightening and that happening earlier and faster than the market expected a few weeks ago. i think the first quarter will be a difficult one for tech.

as some of the multiples get squeezed and as we move into the actual hikes and market fears of tightening liquidity peaking having said that, i think on the other side of this, this will be a buying opportunity and investors should think of this year in terms of quarters and not necessarily the entire year very, very complicated fundamental picture this year. a lot of moving parts. a lot of issues that are not linear so i think while tech will have a rough quarter, we will ultimately see this as a buying opportunity in the next few weeks. >> so you say all that, i want to put a point of fact on this you say buying opportunity in the next couple of weeks but not buying opportunity now this becomes a timing game then? >> a little bit. because i think the squeezing on it of multiples in the multiple compression is a process it's not a day, and it's not a week if you think about what happened last week, the market did a lot

of work pricing in many more rate hikes and the recognition that qt was happening faster and not slower but, you know, it was a little too easy so we all felt relieved when tech rallied in the beginning of the week but it was a little too easy and i think this is going to be a process. so investors should expect volatility should be looking for names with net margins and earnings and invest accordingly having said that, the long dur duration assets and long-tail assets we don't think will recover and should not be part of portfolios. you need quality and earners in this market when you have tightening of liquidity from the fed. >> paul, what do you think, buying opportunity or hold out a little longer? >> i think you have to hold out a little longer here like you said at the outset, we're down about 8% on the nasdaq from the peak just from a typical midterm

election year the peak draw decline of the technology sector is closer to 20% in that year. so that coupled with the fact you have a tighter monetary policy, the shift from easy policy to tighter policy is never smooth i think that's reflected in the fact that coming into this week the nasdaq was at the most oversold level, it was at an oversold level that every other time in this post covid crash area has quickly recovered and trended back higher. what we saw this week is we saw a bounce but it only lasted about two days secondly, semiconductors yesterday were up 2% intraday and finished the day down 2% that hasn't happened since april 2020 so this kind of action is not the typical type of action we've seen over the last 18 months and it's reflected in the fact that the -- we're shifting to a tighter policy where you see less trending of markets and more back and forth chop

and the most chop you see is in the sectors with the highest valuations and coming into the year, tech had the highest valuation of any other sector. what's really important i think to keep in mind here is that we've -- the markets have a great ability to triage things here and focus the areas that are over valued and those repriced whereas the rest of the market has done relatively well just yesterday the market x technology was actually slightly positive so we're able to focus on other sectors where valuations are maybe more reasonable. while these other sectors reprice. >> i just wonder in the -- since everything is getting thrown out with the bath water if there's a baby in there that you want to save, and you think it's valuable right this minute >> so i think right at this very moment here you -- we want to look at stocks that have dividends or more reasonable valuations so you don't want to focus on

say a company in the software sector that's trading at a multiple of sales and is still at 20 times sales. but you do have some of these stocks in the hardware sector where they pay yields that -- where you have some cushion there. so i think when you want to focus on more hardware relative to share in the space where there's earnings and actual earnings in the present moment >> alicia, very quickly. i'm probably a bigger "star wars" fan than either of the other guys, is that an imperial destroyer behind you >> it is it's a 7,000 lego piece. this is what we did during covid lockdown. >> did you do it >> no. >> your kids did, i'm impressed. i had some of my son's legos up. that's a fete. that's like 650 bucks on the

internet >> we had a lot of time on our hands in lockdown. >> well done to the kids. >> thank you alicia and paul, we're going to leave it there. becky has the eagle eyes that caught that. i have to admit, i missed what was in the background there. that's pretty great, though. thanks for your perspective. have a great weekend. >> thank you. >> i hope there's not another lockdown but i'd like to see the next creation that comes out of your kids' lego experiments. we can't do that >> we have a millennium falcon also, over 7,000 pieces. >> next time you're on, we'll do a lego segment in addition to the markets. thank you to you both. joe, have you done legos in a long time? >> no. i thought that was the u.s.s. nimets you can't really do a scale

because we don't really -- how big was the original imperial -- >> probably about that same size. >> i have been to lego land, have you sorkin? i've been to lego land and saw darth vader, it's pretty amazing. but it would have been a destroyer. it wasn't flat on top. i didn't know what that thing was. you are right, you are definitely the "star wars" fan >> biggest nerd right here >> yeah. biggest nerd people are quitting their jobs at record rates. if you've recently left your job or are thinking about it we'll tell you what to do with your health insurance we'll bring you the numbers from blackrock, j.p. morgan in the next half hour "squawk box" is coming right back

feel stuck with your finances? move your money to sofi and feel what it's like to get your money right. ♪ ♪ ♪ ♪ move your money to sofi. you could earn up to $2,230 when you download the app, and feel what it's like to get your money right. throughout history i've observed markets shaped by the intentional and unforeseeable. for investors who can navigate this landscape,

leveraging gold, a strategic and sustainable asset... the path is gilded with the potential for rich returns.

million workers quit their jobs just in november and the resignation rate has increased in businesses large and small. if you recently left your employer or are planning to, sharon epperson is here with what you need to do about health insurance first. sharon, good morning >> good morning, if you quit your job you generally have three options to continue their health care coverage, keep your job based insurance through cobra which is available for up to 18 months after you leave your employer. you could buy an affordable care act plan through a public exchange on the health insurance marketplace at healthcare.gov or switch to your partner's health insurance plan if it's available. >> it's a three-pronged decision, spouse, apa, or cobra.

it's a way to weigh the cost of the premiums and cost of deductibles and co-pays. >> with cobra you can usually keep the same providers but you have to pay more so aetna's chief medical officer said to consider this when evaluating marketplace plans. >> you want access to the doctors, the drugs and the diagnostics. leverage the exchanges to look at the high quality plans alignment with your providers in an area that is affordable for you and your family. >> if you're on the fence about what coverage to choose, time is running out. tomorrow is the last day to enroll in or change an aca plan for 2022, becky. >> that's a good heads up if tomorrow is the deadline that cobra insurance can be really expensive if you have coverage through cobra because you want to keep the same providers, is there any way you can cut down the cost,

anyway to cut corners? >> if your cobra is running out or changed due to certain circumstances you may qualify for a special enrollment period to make a switch to a health care marketplace plan. that's going to likely be a lot less expensive a government report shows the majority of consumers enrolled in aca coverage have deductibles under $1,000, so you want to check out your options for plans, and you may find a lower cost plan that lets you keep your medical providers another thing, there's a tip here i got from one financial adviser, getting your coverage from cobra you can use money from your health savings account to pay the premiums. your hsa is not tied to employment. >> great tip thank you. you can go to

cnbc.com/investinyou to learn more up next, veteran journalist carl bernstein is going to join us to talk about the big changes in the media landscape as we head to break, let's look at yesterday's s&p 500 winners and losers well, would you look at that? jerry, you gotta see this. seen it. trust me, after 15 walks... gets a little old. i really should be retired by now. wish i'd invested when i had the chance... to the moon! ugh. unbelievable.

good morning

and welcome back to "squawk box. look at futures right now on this friday morning, about 93 points -- now it looks like about 90 points up on the dow if we opened now, nasdaq looking to open lower, though, about 3.5 points down. and the s&p up a little over 7 points the legacy newspaper industry is fighting rising costs, consolidating ownership and increased demand for digital content. carl bern ststein has a new memr out "chasing history". it covers his first job as a newspaper copy boy thanks for being here today. it's good to see you >> hello to you. >> this is covering when you started out just as a teenage boy started out in the newspaper business back in the 1960s when you're looking backand kind of reflecting on all of this, how do you feel about that, given where the news business has come to this point?

was this almost like going back and reporting on a foreign land at this point? >> no. look, i was 16 years old, i went to work at "the washington starr" in my native city, washington d.c and at age 16 i probably got the best seat in the country and for the next five years at this great newspaper, be mentored by the greatest newspaper people of their day. i got to see everything that was happening in this country probably the civil rights revolution, going to the white house under jack kennedy, going to his press conferences, covering the march on washington at the age of 18 it was an extraordinary journey. and pretty much everything that i learned in this business, all the things that we did in watergate, there's a straight line from my apprenticeship at "the washington star" to my

watergate coverage at "the washington post. with everything i learned even with the changes that have come about in the news business the basics are still the same, to be a good reporter, you're after the best obsttainable version of the truth, which is a phrase we used in watergate a lot. but it goes back to "the washington star" we called it the complexity of the truth. the objective is to get out of the office, go knock on doors like you see, and to get to one source after another, to make sure you're right by having multiple sources, by going back to your original sources time after time because the real objective is to get at this complexity of the truth. especially the context of it >> the limit these days is that there's not enough time for reporters to do some of these things because there's been so many cutbacks in news rooms and

in budgets do you think that's true or not? >> i think it's nonsense all it takes is one or two or three reporters to do what i was just talking about it's not about cutbacks in news rooms. if you have a few reporters, look, we have a big problem and news organizations very often are more interested in money and -- than they are in the best obtainable version of the truth. however, you get a few good reporters, if they don't just go google things, if they don't just occasionally get on the telephone in combination with google, and they get out of the office and start going to their sources, not going to visit them in their offices perhaps but going to see them at night in their homes or at dinner when there's a real chance to get information when people are not under pressure, they'll get the stories. incid incidentally, there is fabulous

reporting going on all over the country today. but particularly in washington, at the white house, and reporting on the trump presidency, i would say, by the greatest number of news organizations is really the best reporting out of the white house that i have seen really in my lifetime so it can be done. it just takes a determination and a commitment by news organizations. and yes, it requires a financial commitment but what it really requires is getting away from the laziness that permeates our business today. >> one of the big issues is there is not the local news coverage there used to be. things are folding up all over the place, including my state new jersey, there's not going to be the publications for many local newspaper. there has been a push by some places they would like to start opening more local bureaus, if you want to call it that, maybe for online publications, for newsletters. what do you see happening, at

least on the local level >> it's been a terrible thing, the death of local news, because it predates the internet, others came in, and bought up newspapers all over the country and two city newspapers all over america and they stripped them, these companies. they stripped them of their reporters stripped the staffs down to near nothing, then a joint operating agreement with another newspaper in a town or city, they would close down one paper. and the result was even before the internet, these were advertising vehicles more than real reported newspapers or news organizations. and then came the internet and look, local news in our communities and towns has been part of what holds the social fabric of this country together. and it's one of the reasons that we have the kind of polarization that we have this cold civil war

as i've called it in this country that has now been ignited during the trump presidency it's no longer a cold civil war. i think we need to go back to what this book "chasing history: a kid in the news room" is about. it's also about the joy of newspapering, of covering the news, of reporting the news, of getting the truth, of learning about the country and the people that we cover. you know, i was so lucky, i got to cover the civil rights revolution, the voting rights act of 1965. the march on washington. the kennedy administration the early johnson years. this is an extraordinary thing that a kid gets to do. so what you see in the book is the joy as well of what happens when a reporter, a kid, gets to be with these mentors who are covering the most important things going on in the world and

learns from these people when i went to "the washington star," the first thing i saw my first day at the paper, a head copy boy took me around and pointed to three people, all of whom had won the pulitzer, two of them were women, mary lou warner who got it the previous year for covering desegregation in virginia. ma marion ottenberg who had won it for her coverage of crime. so i learned right away about what great reporters do. i think the lesson we're looking for -- the other thing i did i became a dictationist after a year, i wore a headset, took the dictations, we had five editions a day of the paper, it was the greatest afternoon paper, and the last edition was the stocks "sports final. and one of the things i would

do, i would put on my headset and at 4:00 every afternoon i would get from the s&p, i would be taking down the stock results of the s&p and so, we learned about everything, including business news we learned about the world and it was -- you know, it was like watching the world go by from this amazing seat one of the things i did, i had been at the paper about four weeks. and the head copy boy said bernstein go out to burning tree country club, president eisenhower is there, playing golf, go out there, we have a photographer, we want you to pick up the film from the photographer who's photographing ike playing golf i had an employee's card that became a press card that i would wear around my neck. i went out to burning tree, and the caddy once he saw the press card i was wearing, took me

straight to the putting green where the president of the united states about ten feet from me was sinking putts. and off to presidentiz ei eisenhower's right was the photographer he opened up the camera and gave me the film. and before i left with it, i took out my notebook and studied eisenhower about ten, 12 feet from me. and i saw he had brown spots on his hand, he was the oldest president andabout to be succeeded by the youngest ever elected, jack kennedy. so these are the experiences that i describe in the book. meeting the people in the civil rights movement, et cetera >> carl, that just reminds me very quickly we're about out of time but when you talk about what you learned from being in the news room in person with these people, getting out with people

pm it makes me realize the youngsters today coming out are missing out on so much by all of this work from home, they don't have the mentors there to be able to learn from them in whatever business places they're going. >> i think that's true that we have got a kind of institutional quickness we're looking for easy ways in this culture and it's one of the reasons i think that the united states is having many of the difficulties it's having, including its place in the world. the idea that we have to do things that we know longer go through the necessary steps to do things right. look at our educational system failures of our educational system in this country institutional failures, regulatory failures. why do we find these things? because, one, great meritocracy that existed after world war ii no longer exists in this

country. we have institutions, yes, they're looking for profit, yes, they're trying to do some things, but they're not succeeding very often because of all the short cuts and particularly in news we need to go back to the basics as we see in all the president's men, as we see in this book about the joy of a kid learning the craft. go back to those basics and then perhaps we'll have a better news report >> thank you very much for your time today, carl bernstein we have to report on some of those profits right now. we appreciate it thank you. >> thanks, bye great conversation meantime, while carl is speaking blackrock came out with its earnings adjusted fourth quarter earnings coming in per share $10.42 compared to an estimate of $10.16 so beat their revenue. slightly below wall street forecast blackrock's ceo larry fink saying organic growth is at its

highest as are assets under management in the firm's history. looks like they collected up about $267 billion of active what they're calling net inflows in 2021. coming up we are awaiting earnings from j.p. morgan, wells fargo and citi group report the next hour. keep it here for full earnings coverage don't miss our interview with brian deese, talking inflation, supply chain cllgehaens and so much more. "squawk box" coming right back t would be the last thing on my mind. hey mom, can i go play video games? sure, after homework. thankfully, voya provides comprehensive solutions and shows me how to get the most out of my workplace benefits. what's the wifi password again? here...you...go. cool. thanks. no problem. voya helps me feel like i've got it all under control. because i do. oh she is good. voya. well planned. well invested. well protected.

you're a one-man stitchwork master. but your staffing plan needs to go up a size. 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

welcome back to "squawk box. we are awaiting quarterly results from j.p. morgan which should be out in moments, but in the meantime i want to bring in ma marty mosby. good morning to you. >> good morning. >> here's what i'm trying to understand not just jpm but all the bank earnings. over the last year and a half a lot of banks took some remarkable reserves given what was going to happen. so i'm assuming we're going to see numbers that look great but i wonder what you think is happening underneath it all? >> andrew, we must have talked before we got on air this is exactly the issue that investors need to be aware of. if you look at what happened as you went through 2020, the reserves were built.

we had the new accounting mechanism called cecil, made them increase the provision. j.p. morgan for instance earned $9 in earnings per share in 2020 we go into 2021, we reverse all of those reserves. they come right back out instead of earning $9, they earn $15 if you look at what they're probably going to earn next year, they're expected to earn about $3, multiply that by 4, about $12 of earnings for share. that's the pattern, because of the all the reserves you're talking about. if you just exclude all that noise, basically what you're going to see is that j.p. morgan's earnings went from $13.50 to $12.75 per year per share down to $12. that's all net interest margin compression. so that's the real underlying trend that's happening because of this liquidity, the pricing pressure that they're seeing on

the lending side and a zero rate policy so that's where we are at. we have the pressure it is underlying the earnings power of the banks has been deteriorating, not improving it's not the typical cycle that we see traditional in banks. >> so this is the part that i'm trying to figure out, though, marty. if that's the case, i don't know if you can see the stock chart, look, the stock has moved back up, there's a few that we're going to be in this tightening cycle, that's going to be good for the banks and everyone seems to think this is a terrific situation. the question is, is it really a terrific situation >> if you look at it traditionally, this is how everybody invests in banks you get out in recession, start to get in the recovery, start to move in to the banks and then you get into the expansion and higher interest rates. that's how everybody plays this forever. this cycle is different. in the recession, the banks hit

decent earnings as you saw in 2021 because this whole new accounting changed the way that this provisioning was going to react. so we're not going to have any follow through, we haven't had a lot of net charge offs so the asset quality doesn't get better the credit class can't get better from here on the other side we'rehere. on the other side, the interest rates stay flat. go ahead, yes. >> plarty at 3.33 a share is the incident and 29 .3 billion in hef nurse, jamie dimon says the economy continues to do well besides head winds the fourth quarter was below last year. weaker performance at the trading arm. but investment banking still pretty good. as far as numbers, how do those compare to your numbers and where the street was 3.33, the revenue numbers 29.3 billion.

>> when are you look okay in the revenues are slightly higher, but they were pretty much where we were expecting. what we will see sa little more of that provisioning, a loss release that will lengthen it over that $3 run rate. once we go around that noise, we will be around the $3 operating earnings, which is what the street expected. like i said, annualized like they said next year. there is the kind of core pressure that's being masked right now at the this employment before the fact the oval losses releases is creating positive earnings announcements each quarter. >> that's really low net charge-off, jamie dimon, why is that rates are low, obviously, why is that the case, think, marty? these people aren't getting overextended i guess >> think about this, net charge-offs are on the credit loss, it doesn't have to do much with interest rates. what happens is we've had asset

inflation. asset inflation means the fact that you can turn your car in and walk away with $3,000 in your back pocket so in a sense, all the asset inflation we have makes all these loans good money. there is nobody going to default on their loans when they can turn in the asset, sell the house, sell the property and make more than they owe the bank. >> it's not just the asset inflation, it's that consumers are pretty flush they have more money in their bank accounts, t they have high paying jobs than before. the economy overall, jamie dimon said this last week when he was talking, he said this the consumer is flush right now. you are going to see a very strong economy it may not play out in the markets. you could have some issue like in the trading there was some weakness in the trading. the consumer is flush. the economy is doing well right now. >> oh, there is no doubt about that but the issue is, in 2015 before

we went into this process with the banks, j.p. morgan traded at 35%. at this morning they trade at 235% of the tangible book value. when you look at the dynamics, the way this place out over the next year, we think a lot of the positive upside will be realized a lot quicker because of the if you accounting and the fiscal and monetary stimulus we've had out there and we won't have much of a problem through as we would typically have in the expansionary part of the space >> the other piece of this - >> marty. >> oh, go ahead. >> you got so much liquidity that asset prices and yields are under pressure the loan pricing is very competitive, very thivenl when you look another what you can get in the market for bond yields, they're low on what the books are, they're repricing down some we have to have in this group four-to-five

increases in the short-term interest rates that get a significant or meaningful uptick it's predicated on how many rate rises we have this wasn't much different tan 2012 or 2015 when we were waiting on them to november the banks came up and came back down >> is it just me >> party, let me ask you real quickly, wells fargo is out, the, and i can tell you the numbers right now, they earned $1.38 a share and came in two a revenue of 28.6 b. how does that add up they talk about credit losses they cut it by 785 million, 775 million for credit losses. discuss that kind of match up with what you expected, too? >> what we will get is the turn-around story. the evaluation is different tan we have at j.p. morgan we can see the exact same trends

leak you are seeing. favorable news it will have a much better impact on wells fargo stock price than it will on j.p. morgan's at this point >> all right marty thank you. wells fargo is coming up 1.38 versus what the street was expecting. wells fargro go up 1.8%. national director brian deese will talk to us about the economy and the labor market and m much more. >>

♪ ♪ wow, we're crunching tons of polygons here! 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! become an agent of innovation with invesco qqq

. bank earnings in focus j.p. morgan, wells fargo and citigroup reporting this morning. the white house announcing plans to use $27 billion of the infrastructure bill to fix america's bridges. we'll speak to national economic council director brian deese

about this plan. plus the supreme court (handing) down a major decision on vaccine mandates. dr. scott gottlieb will talk about the plan to buy 500 million at-home tests for americans. the second hour of "squawk box" begins right now ♪ good morning, welcome back to "squawk box" right here on cnbc him i'm andrew ross song along with becky quick and joe kernon we are set to open lots of earnings reports come in the dow looks like it would open higher, 33 points higher the s&p up 2.5 points. the nasdaq locking down again, what's been a tough two weeks now for the nasdaq j.p. morgan results out moments

ago. what's the highlight for you, will >> reporter: it's really interesting. essentially the hef new are in line, ahead fractionally 33 billion the forecast was 29.9. the eps pout $3.33 that the forecast was $3.01 you got at bit of a flattering eps because of a reserve release we want short coming into this corner there will be more released where all the pandemic builds in reserves was being released. we have another release of about 1.8 billion which has boosted eps about 40 or 50 cents that's in the numbers. it's a true beat it's just not a beat that will be repeatable forever more if we look into the under lying performance, net interest income is the stronger part of the business, ie, we're into that part where the yield curves will

matter 13.7 billion. the forecast was 13.5 billion and the capital markets performance a little soft compared to expectations, strong year over years ago a little soft, banking revenues 3.2 billion. basically in line, the trading saw 2 billion for equities, versus a forecast of 4.4 billion. it's better but fractionally behind estimates just to give you a snapshot there, investment banking up 28% year over year so still doing very well, obviously, in the grand scheme of things. trading down 13% year over year and the big question, of course, for capital market divisions if al in all of these banks, how long can it give. maybe not so strong going forward. it was a beat and did very well.

overall you are seeing this stock trade lower because of that reserve release being the reason eps was a bet and revenues in line if you look at wells fargo, you get a snapshot that you want to be in yield exposure, eps a decent beat, 1.38 versus forecast 1.39 billion. like j.p. morgan they have a reserve release which has flattered the eps. but they also have a decent revenue beat as well that's because of their greater exposure to the yield curve a. decent little beat 9.3 billion the forecast was for 9.1 billion the efficiency ratio coming down a lot to 63% so we have to work out why exactly that is. a big question for them medium and along-term, can they finally get tear expenses under control? it seems like they need to have a little and we feed a detail

whether it's a one-all i think a lot of people want to discuss the fet interest margin 2.11%. that's about seven or eight basis points better than expected of course a huge swing factors there if these banks can have a slightly different interest margin we got a glimpse, the numbers are up 12% in pre-market. >> i don't know if you heard marty mosby, you have used now the phrase flattered, flattered by this issue of the reserves being reduced. but his concern is actually that the underlying businesses are not as strong as perhaps as they appear and that over time this cycle may actually turn out to be different, meaning that historically, when interest rates have gone up, people bought into the bangs. it's been a traditional thing to do but he's not sure this time. >> well, i think to be clear, those reserves released, it is a true beat. everyone has factored into their

forecasts, it's not a one-off sale of tear business or quirky tax item it's very hard to predict what the banks will do on that level. and that's why they have a legitimate beat on the eps it will not go on forever it's not something you strip out. in terms of what will happen going forward, your guess, marty's guess is as good as mine we all want to hear from the ceos on these calls as to whether they are forecasting a big increase in net interest income for the year ahead because of the way yields have rised and that might really drop through to their bottom lines or whether they're cautious, whether they think the yield rise is going to cause all sorts of problems and loan defaults and issues with the economy, in which case they will be low forecast if we take a glimpse of anything we heard from jamie diupon's to

the interviews we have done, you did with david solomon in december brian moynihan on and other commentary they are all very bullish about the economy. they're all very relaxed about the consumer so i think the tone will get from the commentary on the earnings calls is yield call rise are good for us, good for our bottom line. because we don't think it will be accompanied by a dereg in the company. we have to listen to the call. >> i know you will be listening to those calls and bringing us news throughout the day. we should mention wells fargo's cfo will be joining the bell at 3:00 p.m. to talk mar about that >> the dow has been up 80 or so now we're actually down a little with the olympics weeks away, china is battling multiple covid outbreaks in a half a dozen

cities you can update us on everything from that unit including the, if you want to update us on testing again, update us on this previous thing i just mentioned. >> reporter: yeah, right now i'm at the trading station this is a big travel time for the lunar new year officially starts on pond but the tighter control because of covid have really put a damper on the otherwise festive move shanghai is the latest city to see tougher measures they suspended four more u.s. flights and 26 from other parts of the world american airlines and delta have been ordered to cancel two flights each the week of january 24th shanghai reported five new cases, all traced back to a chinese student flying back from the u.s. no confirmation as to whether or not those cases are omicron.

the shanghai authority suspended group tourists from shanghai to other parts of the country officials have told the residents not to travel unlike necessary, shanghai disneyland is still old shanghai port is operating normally the port is quite congested because of covid outbreaks from other ports. xiangin announced it will have its third round of covid testing of the entire 13 million population that will start on sea here in beijing, officials say they will leave no stone unturned to protect the capital and they have vowed that they are going to increase the screening for everyone who comes into the capital joe. >> talk about for olympics,

eunice, what, i have no idea what to expect here. but it didn't seem like the stars are aligning very positively to say. >> well, i think it depends on who you would ask. there have been actually quite a bit of i think choreographed celebrations or certain installations that have gone up around the city to showcase that the olympics are coming and that people are excited so, say for example in the area around tiananmen square there are lyion dances where people celebrate. this is a time china will be excited not only for the lunar new year but the olympics. one thing with the lion dances, the lion actually gets a covid tested but it's in the mouth. so nothing for you to worry

about. >> okay. all right. well, i don't know, i don't think i'd like to give a reallyion a covid test anywhere that we had talked in the past, eunice, but thank you for referencing our prior conversations, which you know are you up to date on everything we appreciate that i don't know, i'm worried ontario if you are going to lock down, the number of cases you are talk about number a place with billions of people sounds bizarre to me. i don't know how you run an olympics if have you zero tolerance. >> i think the chinese say it's the opposite, that they feel there has to be zero tolerance in order to have a successful olympics they want ph to make sure nobody gets sick inside or outside the

closed loop system gets ill. they think that clamping down and making sure there are no flare-ups is the way to go >> very good, thank you, eunice. >> just thinking about it. you have to give a lion a covid test, which end do you want? which end do you think you can get out of there faster? when we come back, bringing aging bridges up to par. the white house announcing $27 billion of the president's infrastructure bill will be used to fund bridge projects across ame america. we will speak to director brian deese about inflation and much more. things have turned around. a little lowers, the dow futures indicated down 50 points the s&p futures down 7.5 the nasdaq down by 42. and this continues after some weakness from yesterday. the nasdaq down 2.5% with the the nasdaq down 2.5% with the s&p off 1.5 with 1 pin .4 (mind!

1.4% "squawk box" will be right back. 5g ultra wideband is faster and safer. and what's this? 5g internet for your home and business? just plug and play. see ya cable! 5g ultra wideband is now in more and more places. verizon is going ultra, so you can too. [music: “you can get it if you really want” by jimmy cliff]

when you have xfinity, you have entertainment built in. which is kind of nice. ah, what is happening. binge-watching is in the bag, when you find all your apps, all in one place. find live sports faster just by using your voice... sports on now. touchdown irish! [cheering] that was awesome. and, the hits won't quit, with peacock premium included at no additional cost. all that entertainment built in.

xfinity. a way better way to watch. the department of transportation out this morning with a funding announcement for the new infrastructure law the bridge formula program will invest more than $27 billion in rehabilitating the nation's bridges. joining us to discuss this and more white house council

director brian deese brian, it's great to have you on this morning we can talk about infrastructure we can talk about one of the bright spots i know given the last couple of weeks for the administration i was actually thinking, brian, thank god you can just focus on economics and what you learned in a few years, goldman sachs and everything else, because politics is so difficult for many other areas have you found yourself running back to economic figures and numbers and, you know, things like that, rather than the rest of the world you are living in right now? or do have you to be involved in all of this? >> well, to get things done, you sort of have to be involved in everything but it's good to be here you can use a couple of numbers, the announcement this morning about bridge funding is the largest investment in bridges ever in our nation's history watt important about this is it will repair and upgrade 15,000

of the smaller bridges across the company. you think about the economic inner connections, the big bridges are, of course, important. the bill has transformational investments here what we're announcing are the smaller interconnects which means the goods can get to different parts of the country we're rolling that out today it's exciting. obviously, those investments will happen over the course of a couple of years. we are starting to make some progress on being able move goods more cheaply and easily across the country >> it seems like the administration, given the job of putting the entire infrastructure plan to work could have its work cut out for it already is there still an impetus, brian, to go forward you know with what we've heard from senator manchin and what we've seen with inflation. do you still think build back better should be a priority at

this point as nec director >> absolutely. if we think of where we are economically, our focus is what we can do to address the costs americans are experiencing and to operate on the supply side to get more people working to move goods and services more quickly through the economy. we need to be able build on what will be a historic year for economic growth in 2021, likely the strongest economic growth since the mid-1980s and build back better, it's not going to add to inflationary pressure it won't add to aggregate demand it will go at some of those costs that families are facing that most likely keep them from working. you think of child care, labor supply it's on employers in this country. in addition to immigration and the retirement issue, women are persistently fought getting back into the work force as quickly as we need them to and a big

pain point is the cost of child care and availability of child care and quality of child care we could take this common sense step, reduce the costs and give families the confidence they don't have to pay more than 7% of their income. it's common sense thing to do. it will be pro work. it won't add aggregate demand because it will be paid for over time >> we can talk about where inflation arises and what's inflationary and what isn't, some people argue maybe it's the federal reserve, we hear from j. powell and lael brainard we are seeing numbers that are, some, we haven't seen in 10, 20 years for inflation. we saw another one this week one of your former colleagues at goldman curry, jeff curry, talking about a few bull market in commodities, that's going to be years long and i guess what i was asking about the political side of things, you got a senator in joe manchin who has

been talking about inflation, the entire time as a reason for questioning when it was a 4 trademark or a $5 trillion bill. you know where he stands he has been very, very clear where he stands. don't you think you can say and don't you think the people of west virginia would say, what he has been warning about has been validated. why keep trying to just ram this through when he, obviously, is probably not going to go for it and it looks like he's been vindicated and validated it seems maybe the president isn't getting the right, the best advice from those around him. i think joe manchin actually said that, it was the president's staff that he had a problem with at one point. due advise the president on these things, brian? >> i do. and i haven't worked for goldman, but i appreciate the context. what i would say to that is, senator manchin is a close partner. we work closely with him

of course, advising the president on this set of issues. what we're advising him and what the president thinks is price increases right now are absolutely an issue. they're affecting families where they are they're also affecting sentiment and the outlook. which is why our focuses on what we can do concretely to bring down those costs in the context the federal reserve is moving around operating independently and focused on getting quality candidates in chair there. but the focus here is on how can we actually practically address the costs that families are facing while at the same time recognizing we don't want to add to aggregate demand, we want to fully offset the costs of investments we're making that's actually a plausible path we have here, if we focus on measures like child care, healthcare, the cost of prescription drugs, lowering those costs, offsetting those across time. from an economic perspective, that actually is a way to not add to inflationary pressures

but actually expand our economy's productive capacity. what you and many other talked about for years is we need to be more pro rowth we need to get growth going and expand our economy's capacity to make goods, deliver services the investments in the build back better plan, if they're fully offset will do exactly that >> brian, you mentioned some of the things you think are so important from build back better bill, including child care i think there is probably broad support for something like that. we had the president of the american chamber of commerce on earlier this week. she was talking how businesses would like to see that too if off could get broad support, bipartisan support, is there a chance those would be spun off singularly through the senate? >> well -- >> probably 60 votes or something like that. >> well, the challenge we have practically and this has been a challenge that's been acknowledgeed from the get-go, is that we are really focused

and the president has been adamantly focused, we need to pay for these things we are doing. we need to pay for things by taking reasonable steps to undo some of the most damaging parts of the 2017 tax law and to make sure we have a fair, equitable corporate tax in particular encouraging investment in the united states. unfortunately, there is no support for actually working to offset fully the costs of these investments across time. so our focus is on how can we practically do this in a way that meets the economic moment we have right now, that fully pays for these investments rather than doing them in a pay forward way. we have a pathway in the senate right now. to your point, there are a lot of areas where there is agreement across the caucus. part of the process is figure out how we can get to that outcome. these processes are always complicated. your.in the beginning, the process is heavy and it can be

hard and painful at times, we still think there is a real credible path here and a lot of good to come from the economy if we can get the done. >> brian, i have readers sending if e-mails saying, the united states government brought in more revenue this year in terms of tax, the corporate tax revenue than it has since 2007, that would reach that same high, and said, look at the tax rates. isn't this a function of that? i'm not sure i agree with that but i wanted to you speak directly to it >> well, i'm glad you reached that point i think it's not as recognized but, in fact, in 2021, the deficit fell notwithstanding the emergency measures that we put in place. the deficit fell the reason for that is we saw revenue growth but the reason was for strong economic growth we're tracking to see 2021 growth come in at between 35 and 6% we haven't seen those levels since the mid-1980s that robust

growth the fast rebound of the u.s. labor market has helped to contribute to a really strong economy going forward. but if we look at the share of gdp coming from corporate revenues, it's still near historic lows and there are issues with our tax code that 23 really need to deal with we need to deal with the fact that we have the global race to the bottom where companies are spending money on tax avoidance to try to move their profits to lowest cost jurisdiction tan rely on investments in the future those are things we can solve. we have worked internationally to put together a global coalition to solve those things. that's the focus of this legislation is putting our corporate tax system on a more sustainable path going forward, we will generate more gdp in a way we are growing the revenue overall. >> brian, i have a little pivot. we have been talking about it

all week i am curious your take we have been talking about whether congress should be allowed to trade stocks individually nancy pelosi said they should. we talked to gary gensler about this now jay clayton the former sec chair about this now, what did you think? i believe, you can tell me, you in your job are restricted from buying and selling individual stocks >> that's why k where i was going to go. i can tell you the restrictions on the executive branch are quite significant. there is no engagement on individual stock transactions, fact, more so beyond holding broad mark indices it doesn't put practical burden on our ability to do our jobs. i think there is a more fundamental principle going back to be, joe, the first point you

paid, there is a lot of distrust around how politics works around the political process and one of the things we need to do across the board is restore faith in our institutions, whether that be congress and the legislative branch or the fed and otherwise, so anything we can do to restore that faith i think makes a lot of sense. >> you know, brian, one of the things i'm deluding to earlier as a rough week and everything and watching the voting rights speech i saw from the president in atlanta and thinking back on january 20th and the inauguration and i mean both sides have a lot of answering to do in your domain, if you look at what senator manchin said about the way the one and three-quarter trillion build back better was sold and wharton said, what the fed piece, you know full well it was one year of spending and ten years of

taxes. it was presented that way because you can get the cbo to score it that way. but you were saying earlier how it's all paid for. as nec director you had to know at this point those were fake numbers, it wasn't paid for. could you not have geared that back to where it wasn't all the backlash, just because we knew the numbers weren't real, wasn't that your job to do that >> i appreciate the chance to set the record straight on that. if you look at the core components of the bill that passed the house, withty congressional budget office has scored, the joint committee on taxation has scored, that bill is comprised of long-term investments, long-term investment in child care, in pre-school, in clean energy incentives, long-term 10-year incentives in clean energy and healthcare those numbers are out there and ten years of revenue as well certainly the president has made very clear it's been the president who has driven this architect from the

beginning to say it's important we take the steps to pay for what we are doing. if you look at even some soft independent analyses that you mentioned, like penn wharton, their analysis is, in fact, this bill would decrease inflationary pressures across time. but our job is to put together legislative packages that would do good for the american people, help to continue to sustain this strong economic recovery and this president is very focused on doing so in a way that will be actually paid for across time all thosenumbers are out there the congressional budget office and joint committee on taxation have looked at this closely. and we're going to work from that to build a package that can pass the senate, pass the house and will help the economy going forward. >> all right thanks, brian. brian deese, nec director black rock i know black rock has a lot more money under management than

goldman. thanks, good to have you on today, brian when we come back, a breakdown of this morning's bank earnings we've heard from j.p. morgan and wells fargo. citigroup is expected at the top of the hour. then dr. scott gottlieb on the latest covid front "squawk box" will be right back. don't be shy, now. i like that prime cut. -aflac! -i love my gold jacket, but that aflac blue feels so right. when you feel right, you coach right. i know that's right! prime never believed in double coverage, but health insurance and aflac...is money. ♪ must be the money ♪ and i know how coach prime feels about money. -aflaaaac. -♪ aaahhhh ♪ now that is what this jacket needs. ♪ must be the money ♪ get help with the expenses health insurance doesn't cover. at aaflac.com

now the answer to today's aflac trivia question. the well-known hand sanitizer purell is owned by what privately-held sn rekica manufacturer the answer gojo industries indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today. well, would you look at that? jerry, you gotta see this. seen it. trust me, after 15 walks... gets a little old. i really should be retired by now. wish i'd invested when i had the chance... to the moon! ugh. unbelievable.

welcome back to "squawk box. i'm dom fichu on this friday morning trade with financials very much in focus let's get a check with what's happening we have j.p. morgan and wells fargo, both coming back better than expected. it got as low as 160 spot 70 earlier this hour. wells fargo up 2.5%. a couple bank etfs trading micked so far. also watching what's happening with the big casino operators, if macaw, wynn resort up 10% los vegas sands up 10%

mgm up big after they were going to limit the licenses up to sivenlths these are existing license set to expire. as we do on "squawk box," to check on the most popular tickers from yesterday's full session. ap until there, tesla in there fofd, microsoft and virgin galactic the rest is at the dinomo "squawk box" will be right back with dr. scott gottlieb. keep it right here zplmplts

♪ ♪ hey i'm joe montana. when you get to be our age, you have little patience for nonsense and inefficiency. after years of practice you become a pro at pretty much everything. so when i qualified for medicare, i got wellcare. they're pros at making things streamlined, efficient and convenient. i don't even need to leave the house anymore, because wellcare offers great benefits like free grocery, meal, and prescription divery. [ doorbell rings ] i have your delivery. appreciate it. ♪ ♪ yeah! plus, a flex card to pay for extra dental, vision and hearing expenses. an over the counter allowance, and even giveback plans that put money back into your social security check every month. and if you need to see a doctor, you can get in-home visits and 24/7 virtual visits.

wellcare is no nonsense. just great benefits and none of the hassles. wellcare is committed to getting rid of the nonsense and inconvenience associated with health insurance. instead, they're just focusing on giving you great benefits like free grocery, meal, and prescription delivery, an over-the-counter allowance that you can use on things like toothpaste, cold remedies, and mouthwash, a flex card to useold remedies, for your extra dental, vision, and hearing expenses, giveback plans that put money back into your social security check, and the ability to speak to a doctor from the safety and comfort of your own home with virtual visits. call for a free wellcare guide today. or visit our website at enrollwellcare.com. that's enrollwellcare.com. ♪ ♪ wellcare. it's medicare done well.

welcome back the supreme court hand down a major mandate blocking the biden administration from requiring large companies. they aloud a vaccine to stand to talk medicare or medicaid payments it will not prevent them to provide them others aplooud bin

laudining this dr. scott gottlieb is on board of pfizer and illumina you appeared to be applauding this at the same time i saw a number of other doctors saying this is going to lead to needless deaths. >> yeah. we've talked about the several times. what i said on twitter is i thought this was a bridge too far in terms of the divisive nature and the opposition of vaccination becoming an a vertly political issue, in part because of opposition to this mandate. my question is how much will we gain from a public health standpoint, that will plead into other mandates we take for granted and you see rates of child immunizations an other things come down the reality is we have 85% of adults vaccinated with one dose and will pick up another 5%

along the way. i'm not sure this mandate will get us much more many of the people that remain unvaccinated video had covid not once but probably twice. you have to ask yourself in an environment where the vaccine efficacy against reducing infection has been substantially reduced against omicron. that may be reclaimed as we form vaccines that target omicron specifically heading into the fall right now using vaccination as a tool to avoid transmission in a congress regat setting, we know they reduce transmission they don't reindicts nearly as much as they used to we need to be up front with that and what we are trying to achieve with these policy. the final point, the supreme court left the door opened and said the current settings you'd try to protect from vaccination. which leaves the door opened for the possibility the administration could recraft this legislation and be more specific about the congress regat settings to use the

vaccines to try to protect. >> public policy question, i agree when it comes to omicron, the vaccine clearly does not prevent transmission or limit it as much as you want it limited it does appear to limit the symptoms and the opportunity to go to the hospital and the like and in a peak scenario like we're in now where you have some hospitals being overwhelmed by it and, therefore, the cascade of ramifications fought just on those who have covid, but anybody that needs medical attention, the question is how should society and how should businesses think about that? >> right i agree with that. i think we need to be very explicit about what we may achieve. the policies may change as the technology changes and the circumstances change if we're up front about the tools we have, what they can do and what we're trying to achieve from a policy standpoint, it makes it much easier as the fact change the bottom line is if are you

mandating a vaccine for a congress regat sith setting. you will reindicts not as much as in the age when there is delta. there may be a compelling reason for that incremental rick reduction or you may want to mandate vaccination, to your point, you want to reduce the risk, people within your work force, within your community will progress that will put a strain on the local healthcare systems that will cost you direct outlays of money that will take your work force out for an extended period of time there are compelling reasons just want to mandate in a workplace sect we should be up front what we are trying to athief from a policy standpoint. it may change. if we're up front and say, look,ist not as protective as it used to be, come the fall, it may be protected again we pay say in the fall, we're going to reach back to these tools and try to re-implement mandates. >> i don't know if you saw the supreme court justices as they

came out of the -- there were reports about this as they came out from behind the red curtain if you will yesterday, all of them were wearing masks except for justice gorsuch. what do you make of that and the signal he may be trying to send? >> well, i can't dissect someone's individual decision about when they do and don't wear a mask in these settings. if you remember, the health committee panel everyone wore a mask while they were speaking except tony fauci. i don't know why he wore a mask in that setting. we seen people engage if different behaviors. a lot of people know they have been infected multiple times and have good infection at getting infected again from their prior infection as well as spreading the infection. people are making individual judgments for themselves, as long as they're complying within local laws, they're within their right to do that >> the issue is not about them and whether they're at risk. it's about everybody else who is at risk.

this becomes an interesting sort of workplace issue you saw that justice so to pair ended up actually who by the way has pre-existing conditions ended up doing the case or that day's worth of work virtually. she normally sits next to justice gorsuch. across the country, whether in this context, someone will be sitting on one side of the cubicle. the other on the other, your version, whatever you think your risk tolerance is may not be the risk tolerance to the person next to you in the cubical how as a manager you should be hasn'tling that? >> look. i agree with you i wear high quality masks to protect myself i continue to wear a mask and we had this discussion out of respect for my community i didn't want people around me to feel uncomfortable. so i think wearing a mask in this kind of environment is not just a public health tool to protect you. i think it's an act of community

around good will to give people around you assurance they will not be put at risk people are making these judgments for themselves people who have been infected, especially with the omicron variant probably know rightly so that they're at very low risk of getting reinfected immediately and spreading the infection to others some are choosing after recovery not to wear a management would i do that? i wouldn't i would urge people in a mooi high prevalence environment to wear high quality masks. but i can't dictate these behaviors on to people public health authorities can't either governments v. you seen them pull back from these kind of mandates. >> hey, doctor, we've seen the ncaa i don't know if you have any comments on that if you actually had covid, they've relaxed some of the restrictions the cdc when to the five days. i have asked you in the past, will society ever be able to transition from the delta kind

of sozeitgeist of what it meanst get delta as omicron do we know omicron as a rule is much less deadly than delta or is it just because so many people have been actually vaccinated the that we're not seeing the type of increase and deaths that you would have seen from a more virulent strain? >> there was actually a study that came out this week that tried to control for prior immunity the immunity required from prior infection as well as vaccination, made a determination that delta, omicron, itself, is infatly less virulent than the old strains so a part of the reasons the omicrons have less of an impact on society is clearly because we have an immune soviet foreign ministry we have been vaccinated, previously infected by the other variants, a part of the reason omicron is having an impact, it is innately a virulent strain on its own accord it's both of those futures

>> okay. dr. gottlieb, we want to thank you. we appreciate it as always, when we return, the impact on the consumer, frank luntz will join us with new data out we expect the numbers, mart ke reaction and so much more.

inflation has been affect consumers across the country with food, clothing and

automobile prices shooting higher a. survey from the norc shows that americans claim that during the time they are buying significantly less of their certain essentials, things that they used to be buying before like meat down significantly they are also driving less joining sus frank luntz a political strategist and pollster from fil ink. these are high numbers when you hear how the economy, is how much more flush consumers are and many more people have jobs. >> that's the whole problem. there is a complete disconnect between what they're being told and experiencing the reason why inflation is so important politically and economically it's universal, it's ubiquitous and understandable everyone everywhere, the host of a cable news show, whether you clean up another night, you are infected by inflation. it's completely ubiquitous

it doesn't matter whether you are putting gas on the car, food on the table, whether you are trying to buy that car it affects you everywhere and is immediately understandable people feel it every single day. i think this is going to have a much bigger impact on the electoral outcome in november than things like the voting rights act or january 6th. this is hitting people where they live. it is creating anxiety we did a session between voters. every one of them thought inflation was a bigger issue than january 6th this is as big a deal as it gets >> frank, if that's the case, i poo enthat has to be impacting the president's approval ratings at this point. but when it comes to inflation, that's a much trickier problem to try and solve you can't spend your way out of it >> you can't blame the republicans. this is something that's only happened over the last year. it pay fought be joe biden's

responsibility the public is increasingly thinking it's his fault. the consequences are significant on democrats in the upcoming elections. it's one of the reasons why you see falling support to build back better. you see the president's ratings dropping on almost every single issue. he is now in the upper 30s to put this in context, joe biden is less popular at the end of his first year than donald trump was when he was president. nobody ever expected that. >> so if you look at the problems, again, the cpi, the consumer price this is year showed 7% gains year over year that's the highest going back all the way to june of 1981, but the president can look at this and say, okay, this is because of the logistical problems and the supply chain problems that we're having and labor issues all related to covid what can he do about this? i don't know how he can fix what's gotten out of the barn at

this point >> one of the first things is start telling people things are great and empathizing, that you understand and you feel their pain as bill clinton used to say. his communication is completely wrong. he is telling people you should feel great, things are coming back nobody feels that way. no don't tell them happy days are here again when are you in the middle of the great depression now, we're not there that disconnect is causing him significant political trouble. for the business community, they need to be careful, they're going to get targeted. if i am an automotive dealer, if i am in the food industry, i am afraid that i'm going to become a political target i'm raising my prices because my wholesale costs more shipping costs more. everything costs more. the politicians that don't want to be held responsible will try to find a scape goat those are the two i would be

more nervous about this. >> the manufacturers are looking for ways for a higher item the you can't get a fully loaded vehicle. the ones that do arrive, are disappeared immediately they are adding additional charges on top of that again, you can understand how these things kind of work their way down the pike. >> someone is going to be held responsible. it takes a while for inflation to be felt this was actually having an impact months ago. we didn't feel it until thanksgiving and christmas but it takes even longer to get it let's say the president is successful in stopping the price increases. it will be six months before the public recognizes it it's why i wonder why in washington they're spending so much time on political issues and social issues and cultural issues when inflation is actually the voting issue of

2022 it's gentleman to have on impact on what we think of organizations and our political leadership that's what the public is talking about. that's what washington should be addressing >> frank, you called this, could make the case that inflation isn't necessarily something that was caused by president biden's economic policies. i understand general-related things, cancellation of keystone, maybe things like that but it's a monetary phenomenon usually. if we were zero rates, we have seen bill crystal say why isn't trump being blamed for the current inflation? because he was presiding over j. powell and fed back then then i realized, a lot of this inflation is probably covid-related. maybe you can blame the biden administration for being blindsided to some extent by a few variant and not rank up testing and maybe not doing more

with therapeutics? do you see what i'm saying i guess it doesn't matter to people, though they see the inflation and he's president so they blame him? >> but as becky said earlier, the challenge for this white house is they can't spend their way out of it. you can spend more money to hire people you can spend more money to juice the economy or help small business but on the issue of inflation, spending more money makes the problem worse. this administration auto to thank joe mannequin and kyrsten sinema, the two of them are responsible for preventing build back better, which would only be a fuel, the a lubricant for greater inflation. that is something we feel day-to-day something we feel in our pocketbooks, we feel in our bank accounts i got to tell you, we're not just anxious anymore this country is getting angry when they go to the supermarket,

when they fill up tear tank. they will take that out on the ballot box if november. >> thank you for the warning good to see you today. when we come back, the nasdaq snap ac three-day winning streak we will talk more about the sell-off next. the new ceo of ups talks about the supply chain and ranking on the stju 100 list. stay tuned "squawk box" will be right back.

. good morning, here come the bank earnings. quarterly results out for j.p. morgan and wells fargo, crossing the wires, literally right now the numbers straight ahead a real update and how shippers performed over the holidays. the ceo of ups joins us with on exclusive interview. president biden planning to nominate sarah raskin. we get reaction from former dallas fed president richard fisher as the final hour of "squawk box" begins right now.

good morning, welcome to "squawk box" here on cnbc, i'm joe kernon along with becky quick and andrew ross sorkin we have succumbed this morning to some apths about something, whether it's interest rates, j.p. morgan, but the dow, which had been up 80 or 90 points is sharply lower after a real tough session and the nasdaq lost 2.5% on generic tech stoix guess worries along with rising rate worries, which affect multiples except forecast now down 162 points not a good ending at least forecast this morning in the futures marks for if final trading day of the week. we do have quite a few earnings from the banking sector and we're going to talk about that

right now. >> this is the third one this morning, citigroup out with its fourth quarter results >> similar things to the things we have spoken about a. lot of noise as well because of tear restructuring. so revenue, the forecast 16.become. eps probably going to the 199 number ahead of forecasts at 188. it has gains from the sale or age of the business. the key thing blue should or not as an eps beat flattened like j.p. morgan by $1.4 billion reserve release. by the way, the things are solid and similar to what we saw before the net income, forecast is 10.4, fet interest margin 198 was a bit ahead of forecast of 1.93%. again showing you are getting a bit of performance from the yield curve move there in terms of the investment banking performance, that came

in at 1.8 billion the forecast 1.7. the trading sovths fixed income 2.5. equities 785 million bit behind the forecast. so again a little bit of a miss on the trading numbers, which we did see as well on j.p. morgan of course still decent contribution there now, they are also changing tear reporting structure based on the businesses they're xikt. so they're creating a new legacy franchise portion which will contain the consumer business and many excan which they announced this past week they will be exiting in due course. late last night we heard hoff a sale of their asian business, the southeast asian to uob and singapore for several hundred million. they have half their businesses to exit. they've now exited half of them and gotten the consumer part of it so a lot going on to update us on, on the call

also, worth noting, overnight, we got an announcement from the head of hr that 99% of u.s. stock matched the vaccine mandate that they've asked people to meet by the end of today. that's the deadline. they said, a source said that they expect more to comply by the end of the day it leaves 1% of the stock that may be fired at the end of the day. so we're trying to ask about that on the media call coming up i quickly wanted to touch on the time on j.p. morgan down 4%. some of the reason is the forecast, right at the back of the presentation, which we want to ask about on the calm, 77 billion in the forecast for expenses in the year ahead 50 billion for net interest income in the year ahead both of those not quite as good as we are looking for. the expense is a lot higher, has a bigger gap compared to what analysts were expecting, probably people are focusing on the interest guidance, which is fought terrible compared to what

we were expecting. it's such a key, key thing for banks the year can they make more money jp forecasts disappointing on that in there interesting. falling short, the view is what i've seen a lot in the headlines too, it's interesting to see the financials sell off like this especially j.p. morgan citigroup is down by three and a qua quarter percent too. every day those interest rates are expecting to rise. >> coming into today, the bank index was up 12% year-to-date and over 50% since the start of last year. the performance coming in was fantastic, wells fargo and cit ahad a good start. last year wells because of under performs over the last few years and so you know they do all have quite a lot of performance that they can give up in the short and the medium term and that's what's happening today him i think when we get onto the

calls, jp has just begun, it will be interesting to see why they're not coming out with more constructive forecasts given rising rates it's weird, because i think when we heard from brian moynihan last month, he was pretty characteristic on it maybe things have changed. or maybe we will get general stock differentials this year and wells obviously is doing pretty well. the expenses for wells really impressive expected efficiency ratio 63%. people expect it 73% you want it lower on that number again we got j.p. morgan guidance on expenses, 77 billion. that was more than people were expected. >> will, thank you we will see you a little later this morning >> we get to the broader marks, just a little bit in yesterday's steep tech sell-off, which is continuing today, the nasdaq

lost 2.5% led by microsoft the index on pace for the longest losing streak in terms of weeks since last spring joining us is senior research analyst at new berg berman, it started again today, dan, so we're glad that we were scheduled to have you on what do you point to give me three zplings j >> joe, rising interest rates, rising inflation and slowing growth the continued concerns around supply chain labor challenges and regulation but if we step back and think about this in the historical context, even where the ten year were it to be at 3%, interest rates are still very, very low historically and i think what's key to driving shareholder returns in the technology space is innovation and growth over the next one-to-two years. we still see a lot of that so, for example, looking at key areas like artificial intelligence, if you look at a

leader like nvidia, which is providing solutions to commerce and industries like healthcare, to help with drug discovery, nvidia has an important role to play there's well as int da center newer areas like the metaverse, if you look at 5g, you have qualcomm which has a lot of differentiation in its solution and it's very early there. they have a role in the new devices, i'll round it out with google or alpha bet, where the core remains healthy, youtube remains very strong. we think there is an under appreciated opportunity in the cloud business the google cloud has a lot of differentiation in key areas like analytics so i appreciate the concerns that we're going to face in the near term and probably over much of this year, but i still think there is a lot of room for out performance from some of these companies over the next one-to-two years >> as an investor, if you just

looked at the prospects for different companies in the s&p 500, you'd always business in tech that's where all the future promise seems to be at all times. but that doesn't mean you will always make the right move based on what you are paying for the security that you are buying i guess that's it. and i guess you have to take into account multiples, especially when they've had, the stock has had is up big run-ups in recent years. you think a tightening monetary policy, do you think there is a lot of froth in these as well? this is where money has flown down or run downhill with the fed at zero with all the qe as it moves into technology is that another head wind's that reverses >> joe, i think their pocks are froth in technology and clearly parts of the broader market. if we look out at the growth and the earnings prospects for many of these companies over the next

two-to-three years, those remain robust i think they remain attractive even in the face of what will be higher interest rates. what we've seen historically are that the companies that are able to develop solution and power others you look at apple, a big story has been about empowering the developers they'd e they've paid out over 260 become so these platforms are really extending into newer markets so to your point on technology, certainly being frost frothy, there are cases that's the case. this expansion or extension into new markets, new areas look at the automobile industry as another area being transformed. that presents opportunities for those that are willing to look out a little bit longer term >> all right and you would be absolute low that we'll see in terms of the nasdaq, what do you think would really shape things out?

do you think we're there do you think we go another five, ten, 15? what would your view be from what you can buy from both hands? >> joe, we're buying with both hands here and sure there might be additional downside in the near term. we're looking at names like nvidia, alphabet, amazon, microsoft. we're looking for substantial upside over the next one-to-two years. so the risk/reward at current levels with that longer term framework remains very attractive today in our view >> thank you and we're in the red so we'll see if you are right. thank you. coming up, after the break, we will conclude a week of big interviews with the leaders of just companies, carole tome joins and the supply cane

challenges and impact on omicron, keeping a close eye on the futures, they're falling on some pressure from some of the big banks like j.p. morgan and citi we will let you know what we hear from their callins just a little bit skwa you, is coming right back

welcome back to "squawk box. all this week web speaking to the leaders of the just 100 list leading in investing in their workers and prioritizing good governance joining us is ups ranked number 42 in the new just 100 number. number one in the transportation sector carole, it's great to see you. congratulation on that achievement. i want to talk about that and so much else. you are right in the middle of what's happening in this economy. you now made it through the holidays but tell us where we are in terms soft supply chain issue and given omicron what's happening on the employee side of all this? >> well, andrew, it's great to see you and what a challenging environment we're operating in i just want to give a shout out to our 543,000 upsers around the

world. they do what they do best, that's deliver we paid it through the record holidays through record levels it's a challenging time for sure but since covid came to the world, we've done our best to keep our people safe so they can take care of our customers, they've done just that >> and in terms of what you are seeing if terms of staff calling out sick, what not, what that's doing to your ability to deliver, are you having to hire even more people knowing that this is something you are having to deal with how does that shake you out? >> well, clearly, we're not immune to what's happened with oem krovenlt we had serious callouts we have been able to manage through that because of our work force. as you know, we hire season am workers to help us through the holiday season we asked those seasonal workers to stay on longer to help us

through this time frame. so we've had no disruption in service. albeit there is disruption because of the snow f. you ignore the snow, we have had no disruption of service. >> what do you make of this larger trend in the company? i don't know it's happening in the ups, called the great resignation. people saying, you know what, i'm done i'm finished and how hard or not that's making it to hire on your end? >> we hear stories every day, don't we, from companies who are really struggling with that. i think at ups, it's not just about a job, it's about purpose. about 15 months ago, we unveiled our purpose, moving the world forward, it was a rallying cry for our team so when we talk to people, with eta you can to them notup about the job, we talk about careers and purpose. so we haven't seen the great resignation a lot of companies are faced with but i'm certainly aware of it.

doingpy best to keep happily happy and engaged. >> carole, it's becky. the supply chain has been one we have talked about an awful lot there was a reporter, a photo journalist who overnight released videos on his twitter feed as a fe tom none. these are trained burglaries happening in los angeles he's got unbelievable footage of just garbage all over the tracks where if things start to slow down as the trains pull into l.a. and people break into the cargo shipments and steal stuff and law enforcement agencies told him these thieves routinely target ups, because the packages that are going to consumers are way more valuable than if they brack into something bold like toilet paper or something coming through. i wondered how big of a problem this is and how you handle it? >> so our service levels, long-time service levels are in the high 90s, becky.

so we're managing through it we're not immune i can tell you a story of a tee ter driver here in atlanta who left one of our largest hubs in our network at 3:30 in the morning to deliver an 18-wheeler filled with packages he was well stopped at gunpoint. he was zip tied, thrown into the back of his feeder car and took the packages so that's a problem for commerce we're taking care of them the best we k. we're not immune to it our team is leading in to protect our packages and their cargo. >> we've heard from retailers that have had much higher left levels taking place. how much hire is this in terms of a level of a problem it's become >> i wouldn't say it's materially higher. it's something we all need to be concerned about. >> carole, i'm curious about what you describe as the work force sort of class divide that's taking place during this pandemic, which is to say that

your work forces have has largely been on the front lines and out there doing their job every day and there is the corporate office how that dynamic plays out, given so many white collar workers are working from home? >> yeah, no, it's something top of my mind classes upsers, in a way we do, 75% is governed by a collective bargaining agreement so we have you in non-union workers and we have essential front line workers and office workers. what i'm trying to bring is hor manization, during the holiday season we had to hire 100,000 to help with the holiday delivery, we found pockets in the united states where we didn't have enough people. you know who went out and delivered the packages people from the corporate office we're trying to harmonize and be one ups, fought a class of upss

>> i want to ask you about esg broadly, clearly one of the reasons you ranked highly on this list is you have tried to address a lot of the esg issues. i'm curious how often the investor class actually asks you about those metrics relative to deliveries, profits, revenues and the like. >> well, it's interesting. we're being more questions coming from the investor group we welcome those questions esg has been important to us since our founding days 115 years ago and we declared we will be carbon future tral by 2050 we are getting more questions how we will do that? we laid out a road map and talked about the investments and the return to get on those investments. we talked about diversity, equity and inclusion i'm super proud of that, it stops at the top of a very diverse board, if terms of thought and experience and age,

which is a good thing. so the questions are increasing. >> i also wanted to ask you, given the conversation around purpose and character and the like, specifically i wanted to ask you about ups's do nations in washington. after january 6th, you were very vocal in condemning what had taken place there. you had also said that you were going to halt donations to politicians who had supported what some are described as an insurrection you have since it appears based on some reports gone back on that can you explain why? >> i think there might have been a misunderstanding of what we did. every time there is a change in the administration, we halt all political contributions. and that's what we talked about when there was a change in the administration we then took a hard look at our political action committee and

put in new governs, new oversight, just to ensure that the donations we are giving to elected officials represent the will of our people as well as supporting the issues that are important to us. like transportation, like tax -- like pension, which was really resolved in a great way for the workers of america >> but just help us understand it, there is this distinction, on one end you were very public saying what you thought was the importance of democracy and condemning those involved nit and those who pushed it, including politicians, then it appears you halted it and then said, well, actually -- and there are people that look at this and say maybe you care about taxes and these other issues over the issue which you were talking earlier because you are giving money to those same politicians again? >> so again, we are committing

dollars to people who are representing our best interests on the issues that matter to us. but i will also say, andrew, with retaking a fresh look at this and our political giving broadly speaking so more to come in this regard >> okay. carole, it's great to see you. we appreciate you being with us. we're so glad you got us all around the country through the holidays we wish you lots of luck hope to see you very soon. tanks. >> thank you so much >> thanks, andrew, when we come back, what the government can or should be doing to get a hold on inflation? venture capitalist kevin o'leary and ro khanna. "squawk box" will be back after a quick break.

when we come back, we will get december numbers next a few major stocks reported this morning. so far you are looking at red across the board j.p. morgan off 4% blackrock off 1.5% wells fargo is the only one in the green up 1-and-a-half percent we are pointing to a drop of 200 points for the dow we'll lk auttabo what's happening when we come back. >> s different networks. so how do you get everyone on the same page? microsoft surface devices, orchestrated by cdw. they adapt to each user and deliver multi-layered security, so your workforce gets seamless experiences wherever they roam. for devices that fit your unique workforce, trust microsoft surface and it orchestration by cdw. people who get it. ♪ ♪

wow, we're crunching tons of polygons here! 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! become an agent of innovation with invesco qqq [copy machine printing] ♪ ♪ who would've thought printing... could lead to growing trees. ♪

what does a foster kid need from you? to be brave. to show up. for staying connected. the questions they weren't able to ask. show up for the first day of school, the last day at their current address. for the mornings when everything's wrong. for the manicure that makes everything right, for right now. show up, however you can, for the foster kids who need it most— at helpfosterchildren.com when you have xfinity xfi, you have peace of mind for the foster kids built in at no extra cost. advanced security helps keep your family protected online. pause wifi whenever for ultimate control with the xfinity app. and family-safe browsing gives parents one less thing

to worry about. security, control and peace of mind. with xfinity xfi, it's all built in at no extra cost. welcome back to "squawk box" rick santelli live with breaking news, our first 2022 on how retail sales closed out december it was a great year for retail sales. the monthly numbers are out minus 1.9% that's about minus 1.8%. more than we were expecting. if you look at x it's under pressure strip out auto sales and gas sales,py fuss 2.5. these are big numbers down and if you look at the retail sales

control group plugged into higher economic data points. that's mynous 3.1. that is huge now i do warn, okay, these are big year-ending negative numbers, but for the year, it's not necessarily about how december was, it's how many shoppers, of course, spent.earlier in the year. if you look at march, for example, of last year, big strong gain. so, yes, we ended with a wimper, but overall, it was really how they spaced out sales and how many consumers, of course, heeded supply chain issues and shopped early. now, if we consider that retail sales is not adjusted for inflation, that really makes these eye-opening numbers for december now let's switch gears, import, export prices, we're expecting up .2 once again, exact opposite down .2, but in this instance, any pod racing isn't a bad thing, do remember, china had record exports last year

they're going somewhere, they will price it extra trillion, up .3, finally the year over year number, this is important year over year 10.4. last look was11.7, which was the highest level in ten years so we have moderated a bit there and if you look at export prices month over month, down 1.8%. that is much worse than the up couple of tenths we were expecting. finally year over year export prices last month were up 18.2%. that was the highest read ever going back to 1984 we moderated the 14.7% now, if that's a low footnumbero do you make it look good you start out at 18.2% there will be a lot of inflation reads that will start to moderate in various forms. the kicker is some of the lasting durable inflation levels throughout the economy, whether

it's rent or labor costs or food costs, some of these will be much stickier. that's a key issue interest rates well, we closed right on top, the key yield support yesterday 1.70% or so. we have climbed up a bit we are coming back down. in this week has any surprises, it's we had hot inflation reads and interest rates are actually down for the week. how do i know that yield close for 10s was a two-year plus high becky, back to you >> right now into the december retail sales numbers him look, you can say, first of all, people were shopping ahead of time, maybe november or earlier because they knew about the supply chain issues. that number when you strip out both automobiles and gas is pretty concerning to see a down football 2.5%. we had frank luntz on earlier today. he said that americans are really starting to feel inflation and they felt that

around the holidays when they started to buy meals for the entire family for thanksgiving, for christmas, when you saw the christmas price for presents and things you might be buying going up, is it too much to re-visit the set of numbers do we need to see nor data before you can say that? or does it start to say, yeah, if you are getting squeezed on gas and other places, maybe you cut back where you can >> you know, the most dismal areas in my opinion by the bulk of americans are food prices and energy prices, the exact thing we subtract under the guise of core prices. but the real issue in my opinion is not only the lingering notion in those areas, but, becky, policy areas look at all the questions for some of the fed governors and some of the new fed nominees it's all about withholding money for areas like fossil fuels. why? inflation in energy is going to be huge. if there is a lesson to be

learned here, look towards europe they are now beholden to the russians for their energy because of bad policy. i think people in this country have gotten a real early warning sign on how badly this could turn out. >> all the fed speak that we got yesterday was pretty tough on inflation. it was pretty hawkish when you started listening through with lael brainard, parker, mary daly, charlie evans made some comments that sounded hawkish. it's surprising to see ten-year yields actually come down. what have two-year yields done from a week ago? >> you know, two-year yields a week ago, we settled with 86 basis points we're now at 91 basis points they are up a bit. that's a good call but the issue i have with fed speak is, you know if the principal brings you in front of him because your child has an issue. you say i will make sure this

doesn't happen again i think with respect to inflames it was a faux pa, the fed left the welcome mat open for compensation and the tier, they're overcompensating for the guidance, will they have four or five tightenings next year my answer to that is think 2018. >> we'll see you're right >> i think how the economy responds is going to be key. this is going to be done and we're going to see in live terms when they raise rates, when they give guidance at the march potential for increase, how the equity markets react how nasdaq reacts. anybody who doesn't think the federal reserve is trying in many ways to keep the equity markets higher is deluding themselves and you don't put all that effort forth and suspend all that capital just to let it

flow away. >> rick, thank you good to see you this morning have a great weekend okay >> you too, thank you, becky >> okay. coming up, after the break, the great inflation debate you saw a bit of it there. what can government and businesses do about it what does it mean r fothe markets? that's next right here on "squawk. ♪ ♪ ♪ ♪ 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 what the world needs now... is people. people who see flight a little bit differently. so it takes less fuel to bring people together... ...and make faraway places feel a little closer... ...with engines that power planes more efficiently. because seeing a better-connected world isn't far in the future. we're building it... now. ge. building a world that works. hey lily, i need a new wireless plan for my business, but all my employees need something different. oh, we can help with that. okay, imagine this. your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, like asap! so basically i can pick the right plan for each employee. yeah i should've just led with that. with at&t business. you can pick the best plan for each employee

and get the best deals on every smart phone. zblamplts. welcome back to "squawk box. the futures right now are

intlietly slightly lower. 100 on the dow, 40 on the nasdaq a person presidentage point loser yesterday, s&p down 34 a lot of this, in part, thanks to some pressure on the big banks, we're seeing j.p. morgan down 4.5 now citigroup down more than 4%. morgan stanley, wells fargo is important. it was a little better i guess if some trader's eyes than others this week brought us the hottest consumer rate we seen in a while. almost 40 years, that's putting more pressure on president biden's economic agenda, prompting a new round of how to contain price spikes joining us to talk about that congressman ro khanna of california his district includes communities in the silicon valley and venture capitalist entre pentre pre fewer kevin

o'l o'leary. we are a dynamic duo on your twitter feed, you are young, you can watch how it's done ro you call yourself a pro growth progressive because you need to make that zrengs distinction. most of them are like many potter and the normal progressive is probably pro-growth so i can talk to you about inflation. kevin with that in mind, let's talk about where it's from i will be on ro's side for a second ro, inflation takes a while to conjure up it's taken years and years since voelker. we saw japan, it doesn't happen immediately. so i'm not convinced as far as

monetary that this was all joe biden's fault but not everyone can anticipate something like a covid, a supply chain and labor issues where do you think it started, ro >> i think there are two things. i mean are you right to point out that the trillions of dollars of spending started actually under donald trump and were feed to respond to covid. but the pain thing is the production supply. let's look at semi conductors, semi conductors were too dependent on them for south korea and taiwan we had to import them. shipping isn't working so the question is, why aren't we talking about increasing production in this country and we can do that, the chip set, bipartisan, figure out how can we increase production and supply manufacturing in this country to deal with some of the inflation issues >> but, kevin, i mean, even build back better, that's not even passed.

the infrastructure deal, with ehaven't started spending any of that yet i will giarrantano some of the energy-related reregulation in certain areas that the biden administration has instituted, that all trickles down that doesn't help. but it's tough to point to cause and effect for why we're here other than a lot of covid effects, which maybe you can't blame the bind administration for. maybe some we obviously haven't handled it like he said he would. what do you attribute it to? >> i agree that the reason we have inflation right now is we did something unprecedented over the last 24 months, which 12 of those months were under the trump administration we have not printed this much money before ever. it's unprecedented the build back better is dead, that's a gift. that's so inflationary, that would be suicide if terms of mid-terms. but it's gone. we don't have to worry about it. if i were bind today, eb can be an armcare hair comparterback

he is in trouble for too many reasons, energy costs and food inflation. you do you el with those every day. what do you do about it? you know the chief executive controls the agenda. that itself the job. what is he spending his time doing? voting rights. i agree it's important but right now who cares. what you really should be focusing on is bringing down food costs and energy costs. now you can blame him for policy mistakes on energy and i do believe that keystone and job owning federal land leases away, explaining we will go green was way too early. other countries that try that are in real trouble. so what do you do about it you softly, most of the energy costs are in the futures contracts. if all of a sudden the president is more accommodative on solving this energy problem, prices will drop you do not want to see $100 per

barrel oil when i heard biden's first speech, i got out of those stocks i am in them now, energy prices are going up because of this policy you have to assume the problem is logistics everybody is buying protein and seeing it up 20, 30% that really hurts. so you could argue that you are on the way to 'polling booth, you stop at gas station by $6 a gallon, you know what you will do, you are pulling the lever on that one it will be brutal. food is about logistics, what do we have in this country, the national guard they have the trucks with edon't have so get to work, tell the american people, i'm going to solve this for you right now i will solve energy for you by job owning down those prices, explaining if the policies are more accommodative, prices will drop on food you get to the ports right now here in south florida, right here in miami beach, i

can't buy ham. there is no ham, there is no truck driver to ship it from the slaughter house to the grocery store i've never seen anything e anything like this calm it what it is, it's an emergency. it's the logistics of the generals that know how to drive from l.a. to the distribution centers. you focus on food and energy that's up you can control and try to save the mid-term elections. right now, you talked about it earlier, joe biden is less popular than trump, that's really hard to do. his party must be really sweating bullets and he's got to fix food and energy el pronto. >> congressman we still have time i mean, this is in the works for us, someone wrote in ro joe, no, joe ro but congressman, earlier, we had a discussion about some comments from a democratic senator that j. powell and the fed need to be careful not to just help wall

street by raising rates, but to make sure you don't hurt main street by raising rates and taking the punch bowl away and maybe ending qe. and that to me sounded like that makes no sense it's almost the opposite because assets get marked up when are you at zero and rich people do well and it engenders inflation do you think the feds should be more hawkish is that what you would argue or stay very easy does that help main street >> well, first, i think they are independent, but, second, i think that they probably bought these mortgages too long and a lot of the problem of the expansion of quantitative easing was fed policy and i don't understand why they continue the mortgage buying now they're they're tapering that off. i think they have to balance with the interest rates and not causing a recession or not hurting the american class

but we can't just say, continue to expand to the money supplies. let me make two points where i agree with kevin and disagree. i agree with him, let's mobilize the national guard on food production and distribution. look in 1938, we had 3500 planes in this country. fdr said i want 50,000 people laughed at him n. two years, we had 60,000 planes. when this country wants to mobilize we k. we should be mobilizing on logistics or manufacturing or semi conductors where i disagree with build back better there are certain provisions, if something is fully paid for then you don't have to to have the treasury bonds buck from the fed and larry somers says that doesn't create an inflationary agenda if you fully pay for certain things in build back better, that can help, particular in drug costs, let's lower drug costs, have medicare negotiate and electric vehicles which will, in part, if we build that

infrastructure lower demand and the final point on oil look when oil was 20, $30 bucks a barrel, they weren't building, that's why price went up this wasn't a joe biden problem. two, three years ago they weren't increasing the oil supplies they didn't want to do that. maybe his policy will have on immactwo, three y-- impact two,e years out. it's not the cause of the high prices today >> you can't answer, i'm sorry, we've got to go. but you were great take it on the road. we will see, both of you again soonsh kevin o'leary, we see you all the time are you everywhere ro khanna, i think pro growth progressive, that might be what we run on, pro growth progressive is such a novel concept i think. maybe that will be our third party. that's the ticket we run on, it's so different than what we're used to.

good common ground. >> believe everyone has something to sell. >> excellent i agree totally. we always come together. thank you boat bye. when we come back, former jg takeaways from the fed nomination hearings this week. stay tuned you're watching "squawk box," and this is cnbc 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.

hello! hey, rob, there he is. workday. the finance, hr and planning system for a changing world. make fitness routine with pure protein. high protein. low sugar. tastes great! high protein. low sugar. so good. high protein. low sugar. mmm, birthday cake. pure protein bars and shakes. for every fitness routine.

well, things have move faster to the down side. the dow off about close to 300 points, nasdaq off about 145 jpmorgan down after its earnings report this morning. if you look at the nasdaq 100 laggards moderna is lagging behind. a lot of movement.

choppy, choppy, choppy maybe that's putting it politely, becky. >> also wrapping up a big week for the fed. the latest news, president biden will nominate sarah bloom raskin, and philip jefferson yesterday lael brainard told senators the fed's most important task is getting inflation down joining us right now to go over all of this is richard fitcher he's now a senior adviser to barclays he's a cnbc contributor. richard, maybe we need to start with inflation, because the numbers we got this week are incredibly hot once again. we got to december retail sales number they showed a surprising drop as well

you wonder if you're starting to get to the point where inflation matters to americans, even though the unemployment numbers are so low and -- >> during the hearings for powell and for brainard, from both sides, democrats and republicans in the senate, so that reflects what their constituents are telling them, what they're worried about, especially if you look at what was pointed out in the previous seg segment. in food prices, which are stripped out, as you know, energy prices are stripped out very importantly, in the numbers reported, which were awfully strong in terms of the inflationary impulse, the way they impute any rate for rents, if you actually look at apartment rentals and what they cost, how fast they have rich, you put that in that number,

we're looking at around 10%, double digits. that's what people are living with right now yeah, this is an issue you saw that enormous shift. i was very proud of lael brainard for making it pretty clear, as did powell, that inflation is an issue, they're behind the curve they have to do something about it, and they will. >> that's what kind of surprised me, to see the market trade higher after powell's confirmation hearings, where he was talking before the senate. he said things and the market brushed it off, that maybe they won't be quite as aggressive as we expected before listen to go him and lael brainard, this is a fed that's pretty committed, and definitely recognizes the risks to inflation and is looking at that as their job number one right now. they think the employment market is pretty well taken care of in the diggal work there will have to country through the first mandate of controlling

costs. >> becky, i have said this before, their decision model, which they have now abandoned was the wrong way top handle thing. the way it used to be when i was there and for aeons before, you anticipated, did your best, and sometimes you were wrong, and you moved to prevent this from happens. i think it's a catch-up game they are behind the curve. i'm happy for them to acknowledge that, and look of looks what is happened the last couple dates, what's happened this morning in terms of the futures. it's not instantaneous, and i don't think you can judge much from that. >> in terms of what comes with these new nominations that we've been seeing being nominated to head up enforcement on, i have

seen some speculate this could be some tougher sledding are they facing more difficult times ahead in terms of what to anticipate >> first, i'm a fan of sarah she was phi beta kappa in economics, by the way, which is kind of nice she was on the fed board when i was there, only 3 1/2 years, deputy secretary of the treasury she has a good administrative bureaucratic background. i think she's well qualified for the job. they'll have to take a close look for example, the green agenda, the climate agenda, you might go too far if you're not careful, in over emphasizing this and cutting off certain credits so

hopefully they'll be balanced this she has the background to handle that kind of work. she's very smart my gap is there will be some who will hold her husband's portfolio, i think they will hold thatagainst her, but i think she'll be confirmed. one thing that stuck in my brain after those hearings was listening to senator menendez of new jersey, who is not really my kind of political guy, but he was right. where are the hispanics, the latinos? we don't see them in any senior economic position. small business administration is not the most senior cabinet post i hope he presses that very

hard if you said a fed board that looks like america, we have to have some latinos on there we haven't in memory i thought that was an interesting point. >> it is, and we'll very to dig into that at a later point thank you for being here. >> thank you, becky. on monday we'll be off, along with the markets for martin luther king day, but we'll see all of you book here on tuesday have a great long weekend. "squawk on the street" begins right now. >> goodfully morning welcome to "squawk on the street", i'm david faber jim and carl have the morning off. let's look at the future we are headed for a significantly down open after yesterday's significant sell-off as well, particularly in th