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tv   Squawk Box  CNBC  March 17, 2022 6:00am-9:00am EDT

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good morning fed approving the first rate hike this year stocks jumped. we'll show you what is moving. tech stocks jumping in china after regulators signalled more support for market friendly policies a live report from beijing. netflix preparing to crackdown on password sharing. testing fees for people who don't live in the same household. it is thursday, march 17th, 2022 "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from times square. i'm rebecca quick along with joe
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kernen u.s. equity futures after two gains in a row red arrows not celebrating st. patrick's day. dow down 157 points. s&p down 25. the nasdaq off by 98 this comes after the dow surged following the fed announcement closing higher 1.5%. s&p up 2.2%. nasdaq up by 3.7%. the day before, the nasdaq was up 3%. the s&p was up 2% and dow up the day before it was up 600 points add that together and are you looking at strong returns for the week we saw a spike in treasury yields the ten-year note 2.115% the same thing if you looked at the dow. pressure on the dow and s&p 500 stocks as you originally got the
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announcement as jay powell talked, he will be data dependent and maybe that gave hope. if you were listening to him, he was hawkish and the market took that as we will wait to see. crude oil prices coming down from $130 last week. wti this morning up 4.8% brent is above that at $102.94 >> think about the world we're living in which might be a simulation it was an addition to the comments from jay powell volodymyr zelenskyy talked to congress and standing ovations the video. all of these things are happening juxtaposed that jay powell is talking. when all is done >> the market is up. >> jay powell was more important
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on the big picture financial markets. you would not say it is important. >> you listen to president zelenskyy and appeals and tying it to the attacks on 9/11 here >> and pearl harbor. >> he was very deft at tying these things together and making us feel we understand where his people are >> we will ramp up with migs let's get back to our purview. the fed rate hike and plan an for more forecasts for inflation and economic growth. steve liesman joins us steve, i missed days when one word they took it out it's gone. major policy change. was there anything we saw yesterday in the tone or body
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language or anything that makes you think differently than you felt before? >> i thought overall, joe, it was more hawkish i could not help but think the market being kevin bacon in this sense where he said thank you, sir, may i have another? >> it made we think of jim carrey so you're saying there's a chance the market looked at this, but you might not raise next time, right? >> a couple explanations i heard were hey it could have been worse. the other explanation i heard was hey at least now we know the plan guys, skip to the first screen there that i put together which is showing the rate hike plan. the fed said it would hike or laid that out in the forecast. there is the fed fund rate
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forecast from the thank you, sir, may i have another forecast is the fed increased the outlook to 2.8%. that is above the right. the long runner neutral rate the fed is telling you it has to slap on the brakes harder than it thought it would. that's what is interesting there. the other thing that happened, obviously, is powell said as soon as may, we could be announcing reducing the balance sheet. the trouble with all this, guys, is enough. that is what we don't know. powell said if inflation doesn't come down as fast as we expect, we may go faster >> we'll be looking at the data and looking to see whether the data show expected i mprovement on inflation we will look at the jooutlook. each meeting is a live meeting
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and conclude, if appropriate, raise rates more quickly, then we'll do so. >> upside is powell saying strong job gains it meant the economy was in good shape. even the more hawkish forecast from the fed and is that enough to bring inflation under control? the fed admits it isn't. the forecast for inflation is still above target even while it raises rates above neutral >> do you like when we coin terms? ya s asymmetric risk. we talked about it yesterday it is not asymmetric they could err either way. is it always like that, steve? they could go too fast or too slow i guess that is the worry about stagflation. inflation and worried about slowing down the economy at the same time.
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that's when i said jay should withdraw and say this is someone e else's problem >> joe, i could imagine a cocktail party and people are all over the place somebody says, oh, he is talking asymmetric risk and go over there. i do remember, joe, when was it in 2000 when the nasdaq bubble was going on and before that when i introduced myself as the reporter for the wall street journal. that was the one shining social moment for me and my job >> you remember? >> it's been a long time joe, it is true. the fed is paid to be in a box powell's job is never easy they are trying to balance the two things happening i think what powell is saying is
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we're going to do faster than we have done before, but maybe not as fast as we think we need to go because you have the uncertainty of the war which the fed talked about which generally seems to be providing higher prices to the economy. i think he's laid it out if you look at the probability, they are sure about the first four and the next three after that so, they are supposed to be in the middle it is never an easy job for the fed. we pay them to be on a tightrope. >> i'll go fast. i want to get to china do you remember kevin bacon's name i looked it up yesterday i tweeted it out chip diller. i tweeted it out yesterday one of my friends was going back on the view, she said. i tweeted out. really thank you, sir, may i have another. why would you do that?
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why go into that >> did you do that in context of the fed yesterday? >> no, it had nothing to do with it you did it for the fed i did it in terms of showing up in that -- i don't know what you call it. why would you do it? i don't know.liesman chip diller. i looked tit up. you know "animal house." a lot of stuff is bad. >> joe, we were having a conversation about the songs you can't sing these days. you know >> i know. >> they don't work >> the current world and simulation we're in right now. a lot of things you have to be careful. we're not talking china? >> okay. >> kremlin >> the comments. breaking news. it might not be break. >> we have breaking news from
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russia appears to be weighing on stocks kremlin out with comments after president biden called vladimir putin a war criminal yesterday the criminal saying putin is wise and international figure. he called biden's comments unforgivable russia would not take heed of the world courts that russia halt military operations in ukraine. russia says the conditions for the peace deal are true. the dow right now down 184 points you see this watching what is happening they were flat about an hour ago. falling after the kremlin's comments similar to yesterday when it looked like comments that sounded like they were more interested in reaching a peace deal you saw futures rise on that news you will see this happen because this is pretty tenuous >> the whole place is one big
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baghdad bob. ludicrous. if we were ever under illusions that the propaganda machine from the soviet union, the stuff they would say with a straight face it hasn't changed one iota. >> the person to comment on this someone who lived there as the moscow bureau chief, when he was there, and this is going back a while, more than 20 years, when he was there, the russian people didn't believe anything they saw on television. he was saying it was the opposite is probably true. >> straight at you and say left is right and up is down. the pregnant lady did not die in the hospital that is not a war crime? what is a war crime? the president came back. >> you know, not a war crime then turned around he thought about it. that is what is in his heart he says what is happening here
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makes him a war criminal >> makes him looks like. >> the official. the way you have to investigate all of these things and go through it i think he did come back and say what he thinks from what he is seeing >> right stocks in china surging at the top of the show. second straight session overnight. that comes after china's securities regulators would widen access to the public market and encourage to buy back the hang seng was up 7%. the hang seng has erased all losses from three sessions of sharp declines hong kong souared for the secon straight day >> unbelievable gains back-to-back daydays listening to the rhetoric, it makes it difficult to reach a
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peace etsettlement when it ramps up >> what is scary is that his ground troops are suffering serious setback and casualties >> he's cornered >> leaves him are cornered with weapons that he has and ukraine depo doesn't. it ramps up to chemical or small nuclear device terrorizing the civilian population is how you win wars and he knows that. what is a war crime? do we need a -- >> these are unforgivable actions. all of them are unforgivable actions. how do you negotiate a peace settlement >> how do you trust the other side when their lips are moving, they are lying. >> the lying >> if you are negotiating a
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settlement >> does it surprise you? we are moving troops from the border back in february to where we are right now >> we knew the false flags were coming they are still selling that to the people in russia we are going in to protect the genocide we are seeing in the breakaway regions. >> right when we come back, we will have a live update from ukraine. this is a day after the country's president pressed u.s. lawmakers for more weapons. you are watching "squawk box" and this is cnbc >> announcer: this cnbc program is sponsored by truist securities ♪ ♪ ♪ ♪
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let's get a look at the update at ukraine. the day after volodymyr zelenskyy made a plea for aid for u.s. lawmakers, we have molly hunter from ukraine with the update >> reporter: becky, good morning. we are focused again on mariupol the southeast town city on the black sea which is besieged by the russians the russian air force hit a theater in the center of town. at the heart of what was a bustling area of the town. now, according to satellite images we have seen, they wrote
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"children" in white writing in russian visible from the sky and it was still bombed. 1,200 people were sheltering there. we do not have a death oll the news from the city is that 30,000 people have managed to escape in the last couple days according to president zelenskyy. this is in private vehicles. humanitarian corridors, nine new ones negotiated today, including out of mariupol. they have failed because the russians have continued to bomb the humanitarian aid convoy trying to go in. the solution has been private vehicles racing and escaping with families. 6,000 people, including 2,000 children, moving to the capital kyiv the humanitarian corridors around kyiv, residents desperate to get into the capital for the safety as we have seen in the last couple nights, as the russian troops stalled on the ground and
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stopped their ground progress according to the ukrainian military, they are ramping up the bombing. we are seeing apartment buildings and metro stations and railway stations and botanical garden bombed. these are civilian targets that the russians are going for right now. >> they are saying putin is not a war criminal molly, what is the situation in lviv you are on the western edge of things we have been talking this week how no place feels safe. it looks like things are bustling behind you. >> reporter: you look around and it is hard to remember this is a country at war there are families out walking it is sunny and freezing there are street musicians out it is the air raid sirens that rattle people. we had one last night. an hour later, we got the all clear. it pierces the families sitting
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out with children. i think as the air raid sirens pick up, because we have seen the attacks on the west of the country pick up, we will see more and more people heading to poland and elsewhere this europe pec becky >> thank you, molly. three weeks you have been there. molly hunter coming up, we will talk about netflix which is cracking down on password sharing how much you have to pay to share your account with someone outside of your household? >> like college kids >> as we head to break, here is a look at cryptocurrency you see bitcoin back above $40,000. "squawk box" will be right back. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates,
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if you share your netflix pas password, listen up. the company is testing a fee for account holders who want to share their service with people outside the households two test features rolling out in chile and peru extra member and profile transfer extra members for people who want to pay to add an account for up to two people the transfer option is a simple way to split the account of freeloaders without losing viewer history and saved show in the effort to encourages borrowers to sign up for their subscr subscriptions. how do they figure it out? how do they know it is not you
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traveling or at vacation home or if you are a college kid, you have to pay for the college kid away for seven months? >> to do it to all of your customers, you have to have fancy ai >> right. >> okay. a college town how could you? >> or they there a lot or vacation home? >> you need to know a lot about your customer. you need to delve. >> you need to get mean and cutting them off if you are sharing with people not in your hous household. we will delete your account? >> will you sign up and say where else are you using we need a list of places >> how do they know you are not just listing places that use your passwords >> we want people to do the right thing and not cheat or share with people who are not in the household. i can think of a lot of situations where you naturally be using it somewhere else and
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not cheating >> well, i went on netflix yesterday. unless you get something you feel like watching, i don't know why you want to share this thing anyway >> there you go. >> you can't just low budget series all the time. >> what are you talking about? >> i don't know. i try to watch them all. there are three seasons. >> you know what i got sucked into >> i'm 98% i try watching and it sucks. >> i still got sucked into it. a korean szombie series. it is really not good, but i can't stop watching. >> we went from the pandemic to the nuclear apocalypse >> it follows a lot of high school kids. i forget the name of it.
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>> i'll try it i'm looking for anything the playboy. >> why don't you expand? >> too much hefner for me. he died just in time that's what i'll say in hindsight, it doesn't look different from harvey. walmart wants to hire 50,000 workers by the end of april. it is the time when many retailers pull back on hiring following the holiday season walmart is looking to add staff. including advertising and health and wellness the secrets of playboy a documentary. eight-part documentary >> thank you for catching up >> it is so disturbing, that i don't think i can watch more this comes amid the tight labor market many businesses, including retailers and warehouse
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operators have been struggling to hire enough workers >> the name of the series is "all of us are dead. >> eventually, i think that is unfortunately true >> fantastic >> dpexactly. when we come back, we will get you ready for the trading day ahead and another rate hike from the central bank. the squawk planner is next dow futures off 114. you had two days of big gauins. the dow has been up in that time the other indexes have fared better the nasdaq up sharply. up 3% or better two days in a row. as we head to break, look at yesterday's s&p 500 winners and losers >> announcer: executive edge is sponsored by at&t business keeping your business connected. so we're giving every business,
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good morning welcome back to "squawk box. checking futures now we trimmed the losses to less
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than triple digits on the dow. the nasdaq down under 70 s&p giving back 15 and change. we have something called a squawk planner today's planner includes the bank of england expected to raise rates to the pre-pandemic level that decision is due at 8:00 a.m. eastern we will get housing data at 8:30 a.m. eastern on the earnings front, fedex is set to report after closing bell. the fed hiked rates for the first time in more than three years. the markets liked it eventually rallying solidly after the announcement for more on where we go from here, let's bring in vincent rin rinehart vince knows what we should be reading into these things. we also have anastasia omarosa
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vince, i want to start with you. everything i heard yesterday sounded hawkish. more hawkish than anything from jay powell yet what was your take >> it was extremely hawkish. they did not do much with the fmoc statement because they don't want to change it. the forecast suggests six more tightenings this year they marked up considerably in the inflation forecast they understand they have an inflation problem and they will deal with it i think markets liked it because jay powell was up beat about the economy. he said it could withstand the policy and it was flourishing and the recession risks were not particularly elevated. >> did anything surprise you by
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the idea that most fed or fmoc members will now raise rates seven times this year. is that what you would have anticipated? >> we were forecasting a good amount of tightening bank of america has been at seven. we were getting up there i think what surprised me is the forcefulness with which chair powell asserted they would do whatever it takes. i think the other saying that surprised me is the forecast that doesn't quite square with that set of policy action. you know, we talk about policy tightening the nominal federal funds rate will be below the long run value. it will be negative in real terms. if that is policy firming, you
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know, it is hard to square how you get inflation low. >> anastasia, i was surprised by the markets yesterday. what do you see after the fed makes sure they get a handle on inflation? >> becky, there are two or three things the fed did they gave a market a path to look forward to. prior to the meeting, we did not know if it was every meeting or every other meeting. they said here is one for march and the total likely seven for the year that gave the market a degree of certainty. it was hawkish, but not a hawkish surprise the markets were pricing in that much the other thicng that moved the market in the press conference is the push back on the
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recession fears. that's what the markets started to worry about powell was forceful in pushing back on that saying the economy can withstand it that's why i think the markets rally. the third thing is the optionality. we say it is seven rate hikes this year, but if we have to recalibrate, they will readjust accordingly. this is why the near term it seems like we put a pause on the recession fears and markets can sigh a sigh of relief and rebuild on the wrally here if we look at 2023, if the investors deliver 11 rate hikes, we are looking at a fed fund rate at 2.75% over the rate and above the long-run rate. we might be in tightening
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territory. we might put a pause on the recession risk that is something we have to watch into next year sdp >> it is as close to goldilocks. vince, have recession risks gone up in recent weeks with ukraine and commodity with wheat and nickel do you see recession more likely >> it is usually gold goldilock the forecast when you think about it, there are a number of recession indicators flaring a run up of oil prices we have a flattening in the yield curve. we have the fed reserve on move. one policy firming in the modern era not associated with
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recession. we don't have a lot of spare capacity when the economy is working at or above full employment, recession is around the corner recession risks are elevated probably on the order of the 30% or coming into next year i think it will be a hard row for chair powell to hoe. later in the year, financial conditions will tighten and the economy will slow and inflation will be off peak he will have colleagues who say are you sure you want to keep on going? >> that was my question. jay powell has to know this. is he not saying this because he doesn't want to spook the market >> i think part of it is you don't talk about your future colleagues he will have four or five new colleagues when you look at the dot plot,
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remember, there are four or five dots at end of the year that come from people who are more dovish than the immediate member of the fmoc. they don't want to spook the markets. that's why they go gradual if the economy begins to roll over, they stop sooner gradual is a way to essentially litigate different market views. >> it makes sense. you want to pump the brakes, but not slam on the brakes or try to send us crashing into a recession. anastasia, how much is yesterday the reality of stocks sold off significantly that there is a reason to look for a reason to buy? >> that is a big part of it. i want to say quickly, although we might be heading toward recession at some point later this year or 2023, the markets
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typically don't peak until closer to the recession. that is part of the reason why we might be in the intertinterme period becky, we have not seen the full square of position and capitulation the technicals are not looking good when i look at markets this morning, positioning has cleare up a lot hedge fund leveraged and back to more much 2020 levels. it truly is remarkable it is not quite there, but getting close. if you look at the risk appetite indication across the sentiment, you are looking at december of 2018 type levels and prior to that, 2015 and 2016 we have seen a great deal of capitulation from the faster moving investors
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then you add technicals. the reason why i'm more encouraged this time as this might be the bottom tested and the bottom we can rally off of more sustainably, we tested the s&p. we managed to bounce off the rally yesterday and we have surpassed the prior levels of rally attacks. that is constructive technical on top of the positioning. the third point is you have catalysts with negative. last month, they seem to be turning around it seems like regardless of the day-to-day, there is some desire to have a negotiated solution in russia and ukraine it is give and take. back and forth we are moving in that direction. now we have the fed that as hawkish as expected, but no more we also have priced in a great deal of recession probability.
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i think i heard vince say 30% or 40% is what the current recession risk is from the red flags. that is what the s&p and credit spreads are pricing in you put that together and i do think this time around we might have a rally that is not a couple days long, but a few weeks. >> let's hope that is true especially when it comes to sort of settlement or peace negotiated in ukraine. anastasia and vince, thank you >> thank you coming up, a roundup of the biggest corporate stories to watch. and later, we talk to galaxy digital mike n oovach. stay with us
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>> announcer: currency check is sponsored by interactive brokers. the professionals gateway to the world's markets.
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welcome back u.s. equity futures down 108 points on the dow. 116 on the s&p nasdaq down 65 we are watching shares of
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lennar record high property prices and demand continues to out pace supply earnings missed estimates. the company faced volatility from the platform that invests in companies that focus on home building down a little. we are watching shares of kohl's after the journal reported that private equity firm sycamore partners and hudson bay plan to submit takeover bids the bids could be in the high 60s per share. valuing the company above $9 billion. the kohl's spokeswoman says they will weigh potential bids against independence kohl's rejected the offer of 64 back in january saying it under valued the company good play. canadian pacific railway is
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locking out employees if it cannot reach a deal in 72 hours. the company will wind down unless the parties reach agreement over wages and benefits and pensions. it could disrupt the movement of pine ash and coal. canada and russia and belarus are the main areas of pot ash. that is the main ingredient for fertilizer. and bank stocks jumping after the first interest rate hike in years. we will talk to marty mosby about it higher rates coming. "squawk box" is coming right back e're c ng ton of polygons her! what's going on? where's regina? hi, i'm ladonna.
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bank stocks rose in yesterday's session after the fed announced its most aggressive campaign to increase interest rates in years. now here to talk about what's working in financials is marty mosby, director of bank advisory and strategic service. a lot of financial companies, marty, pride to be over the years to diversify, be less dependent on when interest rates go up. so they also went benefit as much, i guess. who will be the biggest winners if we did get six hikes just in terms of, you know, the spread >> there's a couple of things we really have to consider here the traditional macro trade, which is always been buy the
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banks when you come into recovery and when interest rates start going up in expansion has been well anticipated. so the valuations going into this are little bit significantly higher than they were back in 2015 when we started this process the last time so that's one thing a bit different. they have the commercial and industrial and floating bank lows also you can look at the trust banks, northern trust, state street, bank of new york those are the ones that really benefit from the short-term interest rates going high, and that's where you're going to see most of the favorable impacts. >> what about unfavorable? i mean it takes a while before you see trading activities or
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valuations what are the ones this would be a negative, that aren't set to benefit from it? >> it's not a negative but won't benefit as much. these portfolios still have to reprice lower and the competitive loan pricing in these products is going to hold back the benefit in the rise we've seen so far. as you talk to banks there's not a lot of pricing ability to move higher because there's so much liquidity in the system. so most of the banks won't participate in these rate hikes. >> go ahead. finish your thought first. >> the only other thing you have across the group of this inflation is going to push up wage and expenses which we haven't experienced in decades
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>> this is kind of tangental to what you cover what are we going to be seeing in terms of mortgage rates, what people have to pay to take out a loan for a car, to pay on a credit card. right now there's still a lot of liquidity. are those rates going to go up and how quickly? >> it's interesting, baek. last time we were talking about this we were talking about deposit rates. deposit rates will stay about the same for consumers on the loan side there's still competition. it's going to be positive in the sense of getting credit cost wise and availability. so that's still going to be a
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positive for the economy >> that's what i figured you'd say, marty so in terms of the loan book or i don't know high yield, any type of what you consider somewhat not risky, you know, loans where you have to take a pretty good -- you might take a little more time to okay some of the loans at these banks it'd be years from now >> it is you've got to add in the fact these asset prices have all gone up 13% over the last few months. you look at the loan books and see little evidence of any credit risk whatsoever at what point in history could we take a car we bought three years ago, take it to somebody, trade it in, get paid a couple
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thousand dollars and they'll pay the loan off for you this is because of the loan situation we're not going to see any credit pressure. >> so would you put money on six hikes? and is the rate now only six quarter point hikes from here? that'll do it? >> i think what we've done is preloaded this thing, so the anticipation is we're going to get, six, seven. i think at this point what we've seen in the past if you go back to 2015 and 2016 is that the fed comes out of the chutes over promising and under-delivering as they see the impact of these rate hikes begin to have any influence. i think there's a little less
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capacity to raise rates. there's things that are natural constraints for what they can do over time, so i think they'll underdeliver in what they're promising right out of the gate. >> the only issue you pointed out banks themselves we are going to see wage pressure we haven't seen in a long time. they may want to slow down because the economy is starting to feel the impact of higher rates, but it may not be enough to really attack that inflation that is working through wages in every single industry you watch. and thought just there, you've also got things like commodities prices that are higher, too. will it be enough to tackle inflation even if the economy slows? >> becky, this is the critical question we're asking ourselves because that is what the fed is trying to do is fight inflation.
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they literally can't raise rates fast enough to take the teeth out of inflation at this point inflation is related to the growth and money supply that we saw. that's been 30% infusion of new money since we started the fiscal and monetary easing that we went through for the pandemic, so the increase in money supply is what literally created the increase in prices what you have to do is begin to see that money supply, which it already has done starting to slow if that slows prices are going to start coming down poland was basically saying the costs are going to get better. that's what he was talking about. as you just roll into these higher prices which we already have over the next 18 months inflation will take care of itself, and so we need to have some modest reaction by the fed, which we're seeing but in general this is something we're going to live with, recalibrate and start at this
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higher point going forward >> should i hold off an refinancing my floating rate and do a fixed since rates are going to 12% are they floating up there anytime soon, marty, for my house? i don't want that to happen. >> i hope you did the last two years. i mean, you shouldn't have waited to this point >> too many fees, too many signatures >> i've got to tell you rates jumped in the last week and a half >> you going to do a fixed now >> i was already fixed >> becky, you did -- she did it right. >> it was like 2.99% if you did it >> just floating >> rates are still low, you're going to be able to refinance. >> writing that down marty mosby says 12 is not coming >> this month. >> this month. thanks it is just after 7:00 on the
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east coast, and you are watching "squawk box" right here on cnbc. i'm becky quick along with joe kernen andrew is off today. let's take a look at the futures right now. you'll see there are some red arrows across the board. the s&p was up 2% three days running and you are talking about some significant gains for this week leading into this morning. oil prices this morning have been a little higher, still below $100 a barrel the last we checked. crude is up over $100. bitcoin is hanging in there just over $40,000 among the stories making
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headlines this morning the senate banking committee has voted in favor for jay powell's nomination for another term as fed chairman the nomination now goes onto the senate that vote came hours after the fed announced its first rate hike since december 2018 that brings the total holdings in oxidantales to 14 million shares and by the way they still have a big stake they could exercise that would bring it up to a stake of about23%.
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with bird flu forcing producers to cull from their flock just before easter. >> the stocks in china surging overnight after securities regulators said that the government would widen access to the capital market eunice yoon joins us now with more again two straight days of market friendly stuff, maybe, eunice >> yeah, that's right. beijing pledged substantial measures to stabilize the market and investors are really encouraged by that the expectation now is that the central bank could cut a key bench mark lending rate as early as next week china continued to fuel this optimism by announcing it was going to shelve a property tax trial that was planned for this year and also by slightly shifting its stringent covid
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st strategy authorities now saw light cases no longer need to be hospitalized and approved more rapid antigen tests for public use and mulling olympic-style covid bubbles for factories so that they can stay open despite the bigger outbreaks the tech hub said it was going to allow the bubble arrangements for its factories to resume work in what they say is an orderly way. apple supplier fox con will institute a bubble sunday. and it will rethink its tight covid restrictions early next week in addition investors were encouraged by an ft report that said that china is now ready to compromise with the sec on audits, offering more audit information and possibly clarifying a law that currently bars outside or overseas
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regulators from conducting investigations in china. just as a word of warning or a reminder that the tough regulatory crack downs aren't necessarily over, the cyber watchdog also republished its mission for 2022 saying that it needed to cleanup the internet and prioritize national security so we're seeing those two parts of the government, one that prioritizes the financial aspects as well as the economy, really still much in conflict with the national security folks. >> okay, eunice. this is the easy stuff for you, the business stuff anything in the papers that give you any indication on the mood about that recent cozying up with these warmongers in russia? do you read anything that people are saying tread lightly, president xi >> no.
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so that statement that we had yesterday had covered a whole host of issues that investors were concerned about what was interesting, though, was the one talking point people in the market are worried about and of course everyone is concerned about is the cozy relationship between russia and china. that was not on touched on at all, and outside of that statement the comments we're having officially are still very much in line with russia even though i mean there's some tweaking like i said on the margins to try to not totally seem as though they're -- they're completely in line with russia, but at the end of the day i mean it looks very much like they're -- they're in line with russia. >> i've seen both, and i know this is a difficult topic, but i've seen both sides written about in that if mcdonald's, starbucks all the companies,
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multinationals that have left russia, that would be a major blow to consumers in china i don't think anyone would like that, and i don't think president xi would like that if you go too far down this path with your new friends, but i also see china is all in on the new world order which includes an alliance against the west and against the united states with russia so i guess they're trying to balance both of those things >> exactly yeah, absolutely that's exactly what would be going through the mind of the leadership just in the various conflicting statements that we're seeing that on the one hand they want to really make sure that they, you know, stay in line with their close relationship with russia because they see the long game that this is going to be beneficial to them but at the same time they want to -- you know, they understand that the markets in the west, in the u.s. and in europe are really important so how do you -- how do you
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maintain those vital economic ties while at the same time still staying close to a friend who you -- was currently wreaking havoc in europe a difficult one for them to balance. >> still wishful thinking for me, i guess. i'm not crazy about the human rights record about china either, but at this point they certainly don't look like the worst actor on the world stage at this point, eunice. thank you. thanks thanks for -- thanks coming up -- right i wish they would say, hey, vlad, you know -- >> what the? >> exactly seriously. >> at least say we're not cozying up >> the first fed rate hike ipover three years and what it means for the real estate sector stay tuned
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"squawk box" will be right back. i think you're going to like it here. umm, why is everyone... throwing things at me? look, as cfo it's my job to be ready for whatever's next. that's why i have my finance team, randomly hurl things at me. it's also why we use workday. it gives us insights, so we quickly pivot our strategy, people, planning, you name it. sorry, sir. i will aim straight at your next step. see that you do. would you like some coffee? workday. the finance, hr, and planning system for a changing world. ♪ (typing) fo(toddler laughs)ld. ♪♪ (train whizzes by) ♪♪ (toddler babbling) ♪♪ (buzzing sound) ♪♪
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the fed announcing the first rate hike in more than three
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years indicating another six in the year to come joining us right now with what it means for real estate is scott wreckler, the ceo of rxr realty he was recently elected to the new york fed board of directors. and scott, let's just talk about what we're seeing in real estate right now. on the residential front it is a hot, hot, hot market what's happening right now, and what are you seeing around the country? >> thanks, becky you know, i think as you said it's a hot market both on the for sale housing side and the rental housing side. part of this has been there's been two decades of undersupply. if you look at the statistics we've undersupplied probably by over 600,000 units and probably developers would have to increase inventory per year by 60% just to catch upon housing so we went into this with a supply crisis, and now as the market has rebounded that's made things worse on the rental side like the
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general economy when things got bad, people pulled back. rents went down but now they're surging back in the last year you've seen rents in new york city increase 35%. and that's similar in places around the country and the sun belt in particular you've seen again rents in those levels you had a big surge in rent and some is driven by the economic economy but some has been a lack of supply. >> so if mortgage rates start to go up is that going to have much impact at all on the friendy or bidding wars out there or is that something that can't be fixed because of the inventory problems >> i think the -- as mortgage rates go up you're still going to have the supply constraint.
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inflation has gone up, materials have gone up, labor cost has gone up. so it's harder to create more supply in that marketplace i think you're going to still be in a period where there's a tight labor market and i think, you know, raising interest rates as we've seen in this economic recovery and trying to cool down what's happening right now in terms of price surges i think is a healthy thing. it's going to take time but something we need to do. >> what about the commercial market right now that was hit pretty hard by the pandemic when we look at occupancy rates or level of white collar workers coming back to the major cities it's still incredibly low. >> two years ago today i left this office and closed it down as we all were facing the pandemic we came back in june ouroccupancy and 25 million square feet of space we're now
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every week hitting a new level of high, we're now mid-30% and talking to our clients i think by this summer we'll be at the 80% level of occupancy i think people are bringing back their teams. they realize how important it is for that personal interaction. it may not be five days a week it's a hybrid workweek where we're three to four days a week in the office and one to three working repotely and then you see companies actively in the market taking more space ibm took 300,000 square feet of new space. we signed leases with roku for 250,000 feet so people are taking space because they're planning on bringing their teams back. it's going to be a different work environment than it was pre-pandemic, but they realize it's critical to have those social interactions to continue to have the culture building,
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the productivity companies now need to play offense. >> i just wonder what are the rates that some of those big name clients -- it sounds like they're being pretty opportunistic. if you saw occupancy fall back 40% but nowhere near the 80% later this year, that sounds like a pretty big time >> let me be clear when i'm using those ocpaeps numbers i'm talking companies and tenants in our buildings. we're 95% occupied and of that 95, 99% have been paying their rent all through the pandemic. it's fundamentally a stable market on that side. what you have seen is the companies in the market are moving to the higher quality buildings. and they're less price sensitive. they're more quality focused this is about bringing their teams back they want to bring them back to
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environments that are energizing, compelling, magnetic and so the higher quality buildings are doing better and you're seeing that opportunistic side on quality. >> that reminds me what happened to the retail space where you didn't have any "c" and "d" level models and "b" models were hard to get people lined up. how many lower quality buildings are we talking about in a place like new york city or another large city >> that's a very appropriate analogy. when e-commerce happened the class "a" malls that had experience were doing well the class "b" and "c," there wasn't a price you could actually lease out -- i think you're going to see in the office space there's going to be a widening and divergence, so that's going to happen >> i'm trying to figure that out just from a new york city perspective, if you want people back because overall you're looking at what your tax base is
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going to be. there's going to be a lot of buildings aren't occupied because people aren't going to pay for that as a whole it's still going to be bad for new york city they won't have the tax base they did >> the good news is new york city is thriving right now all the talent has come back all the apartments are filled. there's bidding wars for luxury residential we haven't seen since 2006 to your point, though, there's going to be dislocation particularly in some of the cbd midtown marketplaces where you have older buildings going to sit vacant what's going to be required is converting those buildings to multifamily or class "a" buildings and tearing them down. and that's a process like we're looking at actually acquiring those buildings and converting
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them to multifamily buildings versus office buildings. >> scott, thank you for your time today coming up amc's moved by a gold mine. a look at whether the move is strange or smart join us in just a bit. before we head to break let's get a check on the markets "squawk box" is coming right back ♪♪ care. it has the power to change the way we see things. ♪♪ it inspires us to go further. ♪♪ it has our back. and goes out of its way to help. ♪♪ when you start with care, you get a different kind of bank.
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if you've been sharing your netflix password, you better listen up. the company says it's testing a new fee for people who want a share their service with people who live outside their household. costa rica and peru they're called extra member and profile transfer extra member is for people who want to pay to adan account for up to two people they don't live with for a fee up to $3. the profile transfer option is a simplified way to split-off the accounts of free loaders without losing viewing history of saved shows in an effort to encourage password borrowers to sign-up for their own subscriptions. they come back to how do they
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know what if it's really you and you're traveling, what if it's you in your vacation home? >> ai. >> there are legitimate cases where you're using it from a different ip address because you're traveling maybe they use the camera to make sure it's really you. >> why don't you give me some content i actually want to cheat with to give to somebody else? right now i'm like what do i need this password for there's nothing i want to watch. guildedagy, have you tried to watch that there's a lot going on you didn't like that one, right? >> i never got into it i was a little busy. i had a baby at that point >> you had a baby. >> i had a few things going on >> yeah, okay, fine. excuses. toyota motor corp cutting its
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vehicle production by 150,000 units, the 750,000 in april, the semiconductor shortage and pandemic weighed on the auto maker. average monthly global production for the period april to june would be about 800,000 units it went onto say when we come back former federal reserve vice chair roger ferguson on yesterday's fed decision and what investors can expect for the rest of the year when it comes to interest rate hikes. you said he'd be back. as we head to a break let's get a check on the crypto currencies this morning. mostly up kraubld. bitcoin flat still, about $40,000. "squawk box" will be right back. time now for today's aflac trivia question. what former business executive and ceo ran for governor of california in 2010 e answer when cnbc's "squawk box" continues the aflac pre-pain show.
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now the answer to today's aflac trivia question. what former business executive and ceo ran for governor of california in 2010 the answer, meg whitman.
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>> movie theater chain and meme stock darling amc this week announced its paid $27.9 million for 22% of a gold and silver mining company has amc lost the plot, or is this smart diversification john fortt is here to weigh in john, we've all wanted to buy a gold mine. it's kind of cool if you find a nugget you've thought about it, come on >> joe, it has come to this. i mean amc is a recently failing movie theater stock that couldn't fill theaters in a pandemic i was rescued last year by reddit traders looking for stocks that could squeeze higher now it's using meme stock money
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to mine. amc now has expertise to convince retail investors to buy in a year ago investors bought into amc with a meme -- i mean a dream, a dream that the company would invest in shiny new movie theaters, a block chain backed crypto friendly digital membership and payment system, the future the stead amc is buying a penny stock mine with commodity prices spiking. amc calls this dursification, but this is not diversification. when apple invested in the company that spun off chip design firm arm holdings 30 years ago that was diversification. when mcdonald's invested in chipotle that was diversification. when amc bought shares of imac, that would be diversification. this is big distraction. pinterest is not a gold mine operator they can't afford to mine gold,
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joe. >> it's interesting, john. gold and silver were down in the big market rally yesterday when amc was up it's diversification >> yeah, on the other hand, as crazy as it may seem at first amc buying in is legitimate tw diversification. and amc has plenty of cash left for other projects it generated $200 million and in 2021 with 1.1 billion liquidity. high cost fortunes are linked to the price of gold and silver if those prices go high and stay there, the mine can afford to operate and makes more money one of the things driving gold and silver prices concern about the war in russia and ukraine. there's a new scenario where
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there's another variant and amc needs to burn through its cash chances are higher gold is higher in that environment and amc could raise capital by selling some of its stake. it has a skill when it comes to selling a stockterry to individual investors but maybe it's true. amc has done more to directly engage in retail investors and has used its stock to get lug liquidity to transform the business >> kind of crazy but i immediately thought of what the hell is microstrategy, exactly they're a company but they're just a bitcoin proxy now, right? i mean i sort of understood this to some extent if you are worried about inflation or debasement of the currency or something like that. i mean, you can draw -- you can connect the dots to gold, can't you? >> i mean probably more than you can to bitcoin arguably as ahead
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bitcoin and crypto currencies seem to be moving more in tandem with risky investments tlan as a hedge against them why not a gold mine? >> i might differ with you on that the other day he said bitcoin over gold. >> but he also said don't buy the nasdaq >> he said a lot of things in the past >> maybe they should all buy gold now >> it is pretty cool when you find, john, it doesn't even have to be a lot. you find some gold panning and i think that's a feeling you don't get very often >> speaking of gold mines how
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about zavlov's compensation? >> for me i would say that's too much >> you would say no thank you? >> maybe not it's not coming anytime soon for me i think, john, or you >> that's true all right, still to come this morning former fed vice chair roger ferguson gives us his take on the fed decision yesterday after the fed raised rates by a quarter point, first time we've seen a rate hike in three years. and michael inuso lkjos tta about the latest moves in crypto stay tuned "squawk box" will be right back. ingenuity... in motion. it listens, learns, adapts and anticipates your every need. with intelligence... that feels anything but artificial. the eqs from mercedes-benz. it's the car electric has been waiting for.
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the fed raised rates by a quarter point as expected yesterday. and expectation is six more this year finally seeing some move up in yields joining us now once again is roger ferguson, put today's fed action and dot plot in perspective. he's a distinguished fellow. that's like a greatest title, you know what i mean in general you are a distinguished fellow, but you
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actually are a distinguished fellow at the council on foreign relations. it's pretty cool when it's official, i think. the former ceo of tiaa, former vice-chairman of federal reserve as well as a cnbc contributor. you said that the most important thing would be what we could surmise from the plots after chair powell, after the action and some of the comments basely what you thought? >> basically what i thought and the market taught. 25 basis points, straight down the middle a little more hawkish. perhaps stronger than some had
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expected what i did find interesting is clearly a focus on uncertainties, but then chairman powell is clear in the post-meeting conference that -- teleconference and the one thing i find interesting is doing whatever it takes to get inflation under control. what they are expecting to do is get interest rates back to a sort of neutral level that is neither restrictive nor accommodative. they clearly double the risk going into inflation, and they believe going back to a neutral level over time, over three years or four will get inflation under control. so what they expect to do is actually, you know, pretty neutral, pretty modest, and we'll see how that plays out for
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them >> are you surprised, roger, or can you explain how the terminal rate that we're seeing, i don't know what it is eventually, two or three, let's say, how historically that compares to what we were used to is it after the financial crisis and all that accommodation and staying at zero after the pandemic the entire curve has moved way to the left and it's going to stay there even with inflation, higher than it was when rates were much higher >> that's one of the major depressions in the business with central banking but more broadly. what you're talking about is the neutral rate, and has in fact come down because of fundamental change in the economy so one is an aging population.
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those are the questions i think are the fundamental ones on the flip side, though, joe, we are seeing an age of deglobalization, decoupling. so there's a flip side angle or anxiety which is are we going to be more prone to inflation therefore requiring higher interest rates because we're seeing decoupling and jury is out as to which way it goes. the point i made earlier they are expecting to get inflation gradually back to 2% while only raising rates to basically looks like a pretty neutral rate to your point >> hey, roger, we spoke with vince rinehart earlier this morning. he's a pretty smart guy, too formerly on the fed as an
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economist there. he said odds of recession have gone up substantially maybe a third to quarter percent because of the actions coming out of ukraine. what do you think? >> i also think the odds of inflation have gone up, and i would not dispute a 30 to 40% story there for a couple of reasons. one is there's always some odds of inflation anyway. >> not to confuse odds of recession. >> oh, odds of recession, got it i think i have to agree with that as well remember yesterday i said the miss on both sides have gone up, and that's an example of what we're talking about. so talking about odds of inflation, odds of recession absolutely also the same and frankly also we see a number
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of central banks moving to tighten, so it's not just the u.s. but the bank of england as well and although they -- the most recent trend visa vi retail sales was a little bit disappointing. so i do think as i said yesterday risk on both sides have gone up, so odds of recession i wouldn't disagree -- >> beth of you have said that calmly, odds of recession going up 30 to 40% it seems extreme, but maybe we should talk about what kind of recession. it doesn't necessarily mean a recession like we've lived through recently in 2008, 2001 >> you're saying exactly the right thing, becky let's not create a sense we're going back into the deep, sharp
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recession we saw recently. secondly, you know, the fed does have the ability as we said yesterday and they said in a statement to make decisions case by case meeting by meeting and the statement was very balanced on that, which is prepare to be nimble either way. and the third to recognize the odds of recession, as i said earlier the fed does not want to or feels it needs to engineer recession. and so they're going to avoid having that 30 to 40% become a reality, but we should be clear as i said yesterday the risk on both sides have gone up. to your point it does not mean we should batten down the hatches and expect a decline of things we've seen in terms of really deep moments and the fed does not want that to occur.
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>> those great demo points you made about why inflation could stay low, why the terminal rate is lower, but inflation still is up there so if it's supposed to be under control, something's amiss and that makes me think maybe you believe in the notion that maybe this won't be as long lasting or as systemic as some of the periods in the past where we really got in trouble so maybe this is an outlier based on supply chain, the war, reopening during the pandemic. and so maybe we're not that out of whack in terms of rates >> i think that is what the fed believes, and it's obvious and they said in the statement yesterday as well three things driving inflation, one of them oil prices but we've seen how volatile those are and how subject they are to headlines if this war stops anytime soon
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and oil markets return over time, that risk will go away supply chain i'll say a bit more worried on that being sticky because we see the possibility of china the supply chain getting the global economy to open in a synchronized way after a covid shutdown has perhaps proven to be more difficult than anyone imagined. and we are seeing and the state had talked about it a broadening of inflation behaviors the thing that i think helps the fed now and helps all of us is quite different from the 1970s is inflation expectations while they're still a little bit elevated are within the range of what the fed is hoping for, and so we don't have yet a society where the expectation is, you know, this wage price -- i do
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think he wants to keep inflation expectations contained even as they battlethe kind of inflations we deal with coming from three separate and very disparate forces >> roger, thanks good to have you on today. and i can aspire, i can try to a distinguished fellow i don't know it seems like a really high bar. doesn't it >> yeah. >> how we talk about age doesn't equate to actually being a man -- >> clearly maturity levels. >> i tell that to people all the time i've waited and waited and waited when we come back we have a live report from ukraine after another night of air strike by russia this is now day 22 of the invasion and later mike noagrad will talk
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the biden administration approving another $800 million
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in ukrainian military aid. this came after an impassioned plea from ukrainian president volodymyr zelenskyy to member of congress yesterday saying if the united states is unwilling to implement a no-fly zone there is still more it can be doing to assist this comes as talks between russia and ukraine continue today. let's get over to nbc's molly hunter in lviv as russia continues its assault. molly, hearing the talks about potential peace talks, at the same time watching some of these images whereas you showed us in the last hour theaters where children were sheltering, and it was very clearly marked, that is kind of hard to get your head around >> that's exactly right. while the russian troops are bombing places, they know for a fact civilians are sheltering, where people are sleeping in their apartments in kyiv, peace talks are trying to make some progress and of course the ukrainian's priority number one is a
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cease-fire that comes as president zelenskyy is making the rounds and he spoke with the canadian parliament, congress yesterday today he spoke with the german parliament a very different message to it germans today, really scathing and really making a direct plea to german chancellor scholes to be the leader. we just got a statement from ukrainian member of parliament and he said the rescue operation is ongoing we can confirm the bomb shelter under the theater with stood the attack and people are being evacuated at this moment the shelter held mainly women and children so our understanding before we got that statement is about 1,200 people were sheltering at this, anyone from above would have seen in the russian language the demarcation of children they knew that civilians were there. we have not received a death toll, but it is good news people
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are being evacuated. of course the other thing we are expecting today nine different humanitarian corridors are currently being negotiated, one of which is out of mariupol and so far the only way out for civilians has been on private vehicles there are buses waiting to go in to pick up women, pick up children, anyone who hasn't been able to get on one of those vehicles if a temporary cease-fire is agreed so far no signs that is happening. >> these acts are so atrocious and so in your face. and it's hard not to talk about that you understand entirely why president biden would turn around and say, yes, i think putin is a war criminal. at least that's his opinion on things as we continue to watch the investigation and see what happens with some of these things it's what all of us think, all of us feel and at the same time you can understand the idea that the raising of the rhetoric makes it all the more difficult for peak
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peace talks to continue. name-calling is the worst that's happening here but you do understand that all of that rhetoric doesn't make it easier >> yeah, exactly i'm not sure that rhetoric, that ramped up u.s.-russia rhetoric helps the ukrainians at the negotiating table. we heard from president zelenskyy a few days ago who said he didn't think the u.s. was involved enough, the west was involved enough. yesterday we got out of the peace talks he said they were starting to look realistic and they've been nearing a draft with some concessions and talking about compromises that might be made around kyiv with neutral status nothing from either side yet whether or not those have progressed and i think as blatant and brutal civilian attacks continue like we've seen, becky, i think it's going to be harder and harder to make progress at the
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table. >> molly, thank you very much. molly hunter from nbc who's been covering all of this from lviv coming up what the fed rate hike means for big tech. dan iefbds saying while it could be a volatile time for the sector, he joins us after the break. check out the futures. down 114 at this hour. "squawk box" will be right back. ♪ ♪ hey, i get it, commitment can be scary. but not when you're saving up to 15% with subscribe and save at amazon. you get free repeat delivery on your favorite items and if things don't work out, you can always cancel. seriously, no one will judge you if you call it off. ok! learn all the ways to save with amazon.
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tech stocks are down this morning after news of rate hikes from the federal reserve, relieving some uncertainty on this sector but still one that's been whipsawed lately. joining us now is dan ives let's start with you first we know what the fed is going to do, a little certainty there, but that certainty minds it's not necessarily great news for technology we are going to see higher rates. what do you do in this scenario? you buy here or not? >> i think it's a great green light to own stek stocks here. i think there was fear about this i think tech stocks are the most oversold i've seen in five years. especially cloud, cyber security, enterprise some of the faang like apple and google. we've been advising our
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investors here to own a high quality tech stock, still going to be volatile, but ultimately with that band-aid ripped off we believe tech is really the time to own it. we are talking about very long bear market here still because things are priced lower doesn't mean it's a bargain price. >> that's right, becky yesterday some of those moves were really, really mind-blowing up 10%, its best day since last year nvidia, meta jumping around 6% each still despite those moves higher what we are seeing is a prolonged bear market in tech and nasdaq as of tomorrow it'll be the longest bear market of the nasdaq composite since the 2008 financial crisis i think the dilemma many investors face right now is do we turn to the slower growing companies that may be better
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positioned for what could be a tough interest rate cycle or to the covid play book and go back to the growth and tech stock that did really well the past two years and much of the past two decades or much of the past decades. so that's why i think we're seeing some of this back and forth with these huge intraday reversals. >> i guess the saying is true every time is a little different. this time the focus on innovation and just the idea that technology is so intertwined in just about every single business, every industry at this point, it does make a difference we're not talking about tech spending so much as just business spending. >> that's right. think back to a few weeks ago where russia first invaded ukraine. we saw people did step in to buy that dip in tech stocks, in
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growth stocks. so i think there's a real back and forth and dilemma for investors here how do we proceed in this higher interest rate environment? >> dan, you have do some favorite names what are your top picks right now? >> software that's where it's oversold cyber security especially what we're seeing with the cyber war on the way and our favorite name continues to be apple. i think we look back at this a golden buying opportunity despite the white knuckles with the band-aid ripped off. >> dan, thank you very much. we'll see you soon it is just after 8:00 a.m. here in new york, and you are watching "squawk box" live from the nasdaq market site in times square i'm becky quick along with joe kernen
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andrew is off today. the futures along with yesterday's rate hike from the fed are looking a little weaker but you have to put this uncontext with the previous two days s&p futures you had gains of 2% two days in a row, and then the nasdaq 3% and 3.2% on those two days so the give back here maybe not a huge surprise. dow futures indicated off by 112, the nasdaq down by about 63 it is a very strong week overall after all the weak weeks we've seen recently. we have much more on the market moves, crypto and more with mike novogantz. and you see markets there and these are markets have been whipsawed by what's been happening in ukraine the fed hiking rates for the first time in three years
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yesterday. more on the white house response to the move. >> reporter: becky, good morning. the white house has for months said interest rates need to rise which the treasury secretary now sees extending into 2023 yesterday jen psaki was asked again whether the rate was appropriate and whether recession would be averted >> i would note while we respect the independence of the federal reserve as of course we've said many times the president has also said in the past he recognizes not only their independence but that it is appropriate and necessary for the federal reserve to recalibrate their support to maintain stable prices and obviously they made an announcement today >> that's been the positionof the white house since november when president biden announced he would renominate jerome powell as chair. those and two other nominees advanced in the senate last
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night, but the president must go back to the drawing board for the fed's top regulator. congressional sources suggest the likely candidates would be atlanta feds raphael bostic, nelli lang and those names among others the white house official tells me that nominee will likely come from the president's prior short list for the job and should be named in a matter of weeks becky? >> thank you very much >> let's get to mike santoli who's looking at some charts after the fed's move anyones in particular, mike, or just a bunch of different charts >> a bunch of different charts i've narrowed it down to three let's start with the s&p 500 there's a very clear pattern and you've probably picked this up over the years you often get a bit of a reversal move. kind of a rethink or
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repositioning the day before gets unwound came into the week all the indicators said, you know, this market is primed for a bounce. it's trying to hold up in this area this is the s&p 500 index fund, but in this area between, you know, 410 and 430 which is 4100, 4300 on the s&p, it's kind of done that at this point. in any case it's barely risen to that down trend. that's why people say we're still keeping the market on a short leash, 2% gains on consecutive days is not something to dismiss typically that does show you there's at least some underlying demand right there some are saying didn't quite get to that convincing level this is from the middle of last
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year and strong bounce with a shot of maybe making more up side headway. take a look at the volatility index. this is somewhat significant based on history it's been a couple of weeks below the 30 level and cracked below that historically that's been a pretty good indicator of returns. >> are there any others that didn't make the cut, mike, that were interesting those were good ones but what else is happening? >> the treasury yield curve is a very interesting one maybe you guys have shown that so far today the fed is actually now on record we've got let's say a half dozen rate hikes ahead if things go according to plan. people aren't sure and that's one of those things it's not
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telling you a recession is coming but just moving in this direction of being kind of late cycle as an indicator even though we're at the first rate hike and that's why i think people are off balance in terms of what the message is >> you're good at those things, you are. can you -- you're not quite phil conners, the famous weatherman remember there'd be a front and he'd go -- and the whole thing -- >> covid breath, thank you >> i don't have it -- >> all right, just bad breath n then >> you remember what else he said out west we're expecting some very tall trees. >> i do not remember that. i do remember calling hairdo who's he referring to you or me? >> i'm glad i'm in the running
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is that your natural -- well, i'm not going to ask you meme ask me. >> you know it's not >> i can say the same thing. >> there you go. >> no, i can't coming up wti sitting -- i swear -- just above $100 a barrel >> liar. >> you know that, right? >> i do. >> it matters to me people know that we're going to talk the energy sector wild ride with former energy secretary plus mike novogratz gives us the latest moves on crypto and why he's still bullish on bitcoin. stay tuned this is "squawk box.
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oil on the rise this morning. the international energy agency says starting next month 3 million barrels of russian crude and other products could disappear from the market each day, and even though oil prices are well-off their most recent highs, consumers are still facing near record gas prices. here to talk about all this and the push for u.s. energy
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reindependence, the former energy secretary in the trump administration and now president of sempra infrastructure, a global transitioning company there's some positive things in the lng marketplace today, dan, that i think we've refocused on how positive that could be, that industry and that type of energy globally is going to be paramount in the future. we now know that >> yeah, no doubt about that, joe. thanks for having me this morning, and you did pretty good on that name you got close. >> you're right. okay close enough >> yeah, you're fine close enough you're absolutely right. natural gas plays an important role in the energy portfolio not only in the united states but every country in the world and
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provides in many cases energy security and in many cases i think this is an important point it allows these countries including the united states to meet important environmental goals that have been set these are goals related to either the paris accords or cop 26 goals and usually are defined by time frames i'll give you an example when natural gas displaces coal around the world the combined impact of unleashing u.s. lng would be the same if we electrified the entire united states if everyone went to electric vehicles, if all we produced was electricity from windmills it would not meet or match the emission reductions you could have simply by increasing u.s. gas production and having that gas replaced >> so what was the -- what happened today or what's the latest in the marketplace? we hear about things being held up, regulatory issues across the
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board. but as far as the lng and the administration, is it moving quickly towards loosening up things there >> well, not quickly enough. i think, joe, we could do a bit more the administration made an important move yesterday we applaud them for that they approved two lng authorizations, export authorizations i should say. these are the permits necessary to move u.s. molecules off the u.s. shores. there's still four pending at the u.s. department of energy. those permits have received final regulatory permission orders thatcompleted the environmental assessments necessary. all that's left is to approve the export authorization and these projects will move forward. they'll be built, and we'll be able to not only meet the needs of u.s. consumers, but as we look at the catastrophic events in europe allowing these will allow u.s. companies to help
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supplant or replace gas that russia will no longer supply to europe >> everybody's got a -- a reason or story for what happened, why we're not quite as independent as we used to be and people point out how there's a, the dark night and the pandemic which got oil in a negative number, and there's no doubt and you mentioned it in fact, in an article in the germ the other day they actually called 2030 the climate raptor for a lot of people, that regardless of whether republicans take -- you know, let's say they make some strides in 202 we're still hurtling towards a climate reckoning based on a zeitgeist we're in right now. >> that's again where natural gas can have a very positive impact many of these developing nations
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are still using fuel sources very carbon intent importantly i'm speaking from an infrastructure standpoint this is the business we're in -- importantly if we can continue to develop the infrastructure that's necessary here in united states pipelines, export facilities that allows that gas and allows that product to get to the market, we're going to have an environmental impact >> yeah, i just wanted to get to some of your comments about the permit lease debate that we have we keep -- is it disingenuous when we hear the administration or jen psaki just say it's not our problem, we don't have to beg these people to -- to produce? they've got 9,000 leases they're sitting on i've seen it written there's permits, there's leases. there's regulatory issues, and it takes time for both and red tape and then you need an infrastructure once you -- and these are long-term things one,
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two, three, years down the road. you need infrastructure to move the oil and hydrocarbons you find, there's all kinds of red tape there as well is it as simple as that, that companies just aren't using the 9,000 leases they have, permits they have? >> no, joe, it's not quite that simp the statement is a bit misleading because you have-- because you're renting a piece of property doesn't mean you have a permit to drill for oil on it. you have to go through a separate process and go through a process of the department of interiors and perhaps the epa or other environmental agencies at the state level, so there's a long process you may need a permit to build a road to get to that property where you'd like to drill. it's a very complex process, and the permits are at every stage of the value chain so it's a bit misleading to suggest there's 9,000 leases
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available on the industry simply sitting on them. >> do you think we've passed -- crossed the rubicon on lng where you're not going to esg people, the government trying it say, look, leave that in the ground this is going to be part of the transition you're not dwoek to have the same type of pressure on financing that is being brought to bear by regulators, shareholders, esg, everything else they're going to skip lng? that's going to be okay? that's going to be one of the good ways of transition? >> no. >> you've still got problems >> i wish it were the case because we talked about lng has a very positive impact on the environment. it's the perfect fuel to complement many of the renewable technologies we see coming online saz you know the wind doesn't blow all the time and the sun doesn't show all the time. what you need to ensure customers maintain the level of
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service they expect, the lights stay on, the iphones work, you need what's known as base load l l electricity power. natural gas serves that purpose. to the extent you want to increase renewable capacity, it's important we also increase that base load electricity, and that's where natural gas provides not only that type of source in the marketplace but it's cleaner than some of the fuels -- >> you've got to drill for hydrocarbons to get natural gas, don't you? so it's the baby getting thrown out with the bathwater, sf not >> in many cases it may be >> you're so nice now. you're so reasonable about -- >> well, i still feel very strongly about these things, joe. you and have talked in the past it's important for america to
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develop its energy security. i feel passionate about this energy security is in fact our national security. you can look across the continents of europe and see what's happening there and understand very clearly that america has to produce more energy and that we should be producing it right here at home. >> okay. well, that's as strident as you'll get i'll take it you're like a ceo now. you've got republicans buy sneakers, too, i guess that's good. all right, mr. secretary i think it sounds a little cooler, a little more cause mow. this is some important news from washington. president biden is going to be speaking with china's president xi jinping tomorrow. the white house says president biden plans to discuss multiple topics including competition between the two countries and maybe most importantly the war in ukraine
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when we come back, what the latest signals from the fed mean for investors of all stripe. we're talking stocks, bonds and crypto right now, though, as we head to a break check out the dow transports index wow, up 5.5% yesterday it had its best day since november, and it's on pace now for its best -- for its best week since mid-2020. transports have had a lot of trouble as we headed into the last few months. yeah, what a difference a week can make you are watching "squawk box." this is cnbc, and we are live from the nasdaq market site in times square ok, let's talk about those changes to your financial plan. bill, mary? hey... it's our former broker carl. carl, say hi to nina, our schwab financial consultant. hm... i know how difficult these calls can be. not with schwab. nina made it easier to set up our financial plan. we can check in on it anytime. it changes when our goals change. planning can't be that easy.
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there's more to come and the ten year this morning 2.16% after yesterday's quarter point increase >> and a lot more volatility for nickel of course it's jumped during the russia-ukraine war because russia provides about 10% of the globe's nickel supply, and it's a really important component in things like batteries for electric vehicles. trading in the industrial commodity halted once again on the london metal exchange today, so it opened up again after halting yesterday and immediately down with the new limits that widened from 5% yesterday those limits when a technical glitch also temporarily shut trading. remember, though, nickel got above $100,000 so it's down at 41,945 but, yes, every time they open that market more volatility hitting it pretty hard warren buffet adding more
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occidental petroleum stock to the portfolio. separately yesterday berkshire hathaways hit an all-time closing high while the s&p is down by 8%. and i think, joe, if you're looking at this this now makes berkshire hathaway in terms of marngt cap the most valuable company. >> how much of berkshire is apple because it is a tech company. they've got a lot. >> 5.3% of apple it is the biggest holding by far >> returns wouldn't be nearly what they've been in recent years.
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i love the purchase. he goes one way and other people going the other way. the trial of a major player in the theranose case has been postponed. opening statements were set to begin yesterday in the trial, but the judge sent a packed courtroom home as a health precaution citing a covid exposure the ex-boyfriend of the theranos founder elizabeth holmes holmes has been convict of 4 of 11 similar charges and faces sentencing in late september coming up, breaking economic data and try to fix it housing starts and initial jobless ai aclmsre all coming up next "squawk box" will be right back. leaving you lost. you need to hire. i need indeed.
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welcome back to "squawk box. we're just seconds away from initial jobless claims and housing starts data. we'll see whether any of this is impactful on what we've seen some small losses in the averages this morning. dow indicated down maybe 120 points or so nasdaq indicated off 77.
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we're still down more than 20% still in correction -- i'm sorry, bear market >> i don't know. we were 6% the last couple days. >> just came out of it the ten. year note as you can see 2.16% rick santelli standing by at the cme in chicago give us the numbers when you get them, please >> absolutely. and let's start out with housing permits for the month of february 1,769,000. that's seasonally adjusted annualized units, and that really, really is a biggy because that takes us all the way back to 2006 to find a higher number. and of course how that breaks down between single family, multi-family is important. we look on the permit side also a whopper of a number, 1,859,000, and of course that follows the slightly revised 1,895,000. these numbers all take us back
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to 2006 and housing. and we know the issues there there's supply issue we'll see how interest rates potentially effect maybe bringing out more supply or how that effects pricing as they correlate of course with 7 to 10-year treasuries now let's look at what's going on with the philly fed index 27.4, that's almost exactly double what we were expecting, and that's the best number since november of last year. and finally initial jobless claims 214,000, and at least right now 227,000, joe, from last week remains unrevised. so we'll call it down 13,000, and just to put a face on it the cycle low here that goes all the way back to beetles in the 60s that was in early december and finally the last set of report numbers here is continuing claims, a week in
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arrears, 1,419,000 that is a new post-covid cycle low. and indeed this is very good news we know the fed may think we're getting close to full employment i have my doubts i never underestimate how we don't count unemployed people sometimes. interest rates have moderated, but they're at much loft yr levels than they were a couple weeks ago as we continue to monitor how close we get and the big traffic jam between three, fives, seven, tens and the fact that bonds are king of the hill. >> yeah, demolition derby all of them playing at this point rick, thank you very much. more reaction right now from steve liesman and diana oleck. and steve, you go first. >> can i go after diana? i'm fascinated what she thinks
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>> the gentleman cedes his time to diana oleck >> here it is. i'm pleasantly surprised for the home builders because i'm going to break this down the biggest numbers are in multifamily, but we were concerned about single family because of rising mortgage rates. what we're seeing that the home builders are not apparently particularly concerned and i was watching the permits closely, and we saw them down month to month 0.5%, not terrible, but up year over year, single family starts up 12% month to month and only down slightly 1.7% year over year and this is important because we saw home builders sentiment yesterday. it has three components, and of the three buyer traffic and current sales were not terrible. it was sales expectations over the next six months that dropped a whopping 10%
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so we thought the builders were concerned, but then i talked to stewart miller, and their earnings came out yesterday. and he was still very bullish. he said in surveys across all their homebuilder sites they were seeing strong demand from buyers rates were still coming up through february, through march and we're still a full percentage point higher on the 30-year fixed than we were a year ago we touched almost 40% so again buyer demand is still very strong in its affordability. we still have high home prices, so, again, pleasantly surprised but we still have a ways to go when we get into the next couple months and get into the competition in market. it did report it was having trouble because of inflation for all the building materials, et cetera, but, again, pretty good numbers. steve, i cede to y you
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>> yeah, that's what i wanted to hear and that's what i thought jobless claims down to 3 # it's even better than we mostly did before the pandemic. philly fed swimming at double the rate we had before, and now housing. and let's just talk about where we are in the cycle here diana just mentioned it. we have 100 basis points extra on the mortgage rate rick was talking about it i don't know 140, 150 basis points up, tightening built into the two-year we also have this shock from the war in ukraine of which some of this data is post for example the jobless claims data, even perhaps some of the late month housing data came before it. and the economy seems to be doing just fine. it's kind of echoing to me what powell said yesterday that the economy is doing well and can withstand these rate hikesch so i'm gratified to see this,
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becky. you don't want to say it's a done deal because we did have that somewhat weaker retail number yesterday we need to look inside consumer spending and see if they're taking money for spending for oil and gas and energy and reducing spending elsewhere. right now on those three components we have manufacturing, housing and the jobs market and the economy seems to be doing well and even better than expected on all three. coming up billionaire investor mike novogratz joins us we'll get into what higher rates means for crypto iesrsnvto stay tuned you're watching "squawk box" on cnbc world of work. each day looks different than the last. but whatever work becomes, the world works with servicenow.
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we'll be looking at the data as they come in, whether they show expected improvement on inflation. we'll be looking at the inflation outlook and making a judgment, and each meeting is a live meeting and if we conclude it would be appropriate to raise interest rates more quickly, then we'll do so. >> that was fed chair jay powell yesterday after the u.s. central bank hiked interest rates a quarter point.
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fed members see six more increases this year. joining us now to talk about the fed's move and its impacts on stocks, bonds and of course crypto galaxy digital ceo mike novogratz. what's on your mind? syracuse is in got them going into the final four >> unfortunately, those are princeton colors >> too bad >> novogratz, i once wore by accident an orange tie on st. patrick's day. do you have no idea, what you're saying to the entire irish community right now? that is like fragrant. >> and my mother is irish. she's going to smack me. >> did you think about that at all this morning >> i was thinking about the market >> let's stick with colors have we had enough red do you think now we've got the rate hike under our belt, are we
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going back to the green for the tech stocks? >> i don't think so. will it go a couple more days, probably, right? there was a lot of nervousness between the war and fed, and there's some relief the fed says, okay, we're going to hike a bunch, it's mostly priced into the market you priced in seven, eight, hikes and so people feel like that's probably enough for now but let's not forget, you know, if you take the chart of the nasdaq or the s&p and you go back to covid, the covid lows, it broadly went parabolic straight up. markets don't behave like that forever, and we're in this correction as we're going to pull liquidity back, right the chairman started talking about, you know, removing some of the buying the fed's done that's both treasuries and mortgages. treasuries they'll probably let most of that roll-off. it's hard for me to think that
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with the fed taking out liquidity we're going straight back up. listen, there's a case -- we have a huge equity culture in the country and so these market rallies can get, you know, more painful if you're short than most people want to stand. and so it's a really hard way to make a living, right your short market rally 7%, but i'm still in the belief you sell upticks in stocks and sell upticks on fixed income. >> you've got a lot of things. i wouldn't know where to start with crypto. some of your comments you think within five years a half a mil million dollars per coin you talk about south korea and an election there, and you're going to see more adoption of crypto >> trust is breaking down around the world. i don't know if you saw the -- the chinese guy who said we don't really trust the treasurys anymore, right it was a risk free asset and if
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you're russian it's not rich free anymore if you're china and we own $1.3 trillion trfory treasuries sitting in custody in an american bank, they don't feel like they're so risk free anymore. and that's going to move to a dedollarization of the world and get replaced by a collection of other assets crypto will be part of that. digital will be part of that i've gotten bullish gold again it's -- we're in this giant shift that's just starting, and it's too early to figure out exactly where it's going to go, but it's going to add uncertainty and volatility >> let me ask you this, mike you see adoptions coming and five years you think it could trade much higher. that would be a ten bagger at least, maybe even more >> so part of that is where i travel i see people wanting to buy. >> it's going to be transactional then because people still say you're never
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going to use bitcoin for transactions, that's always going to be digital gold because it's too volatile and it doesn't fit the smell test for using it as a currency. you think it eventually will be a currency >> i don't think it'll be a currency i think it'll be a store value when people buy nfts they say how many does it cost? i think you're going to have this world where we have opt in community. like people are opting into the bitcoin community. there are literally more people that own bitcoin than live in russia it's the eight largest country in the world by participate. >> they freely opted in and said we believe in the ethos of this community, which is a hard money way to store our wealth. and i think that will gain momentum as trust continues to break down listen, if jay powell and janet
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yellin can get our economy back to 2% inflation and have our debt come back and growth is so high we go from 140 debt gdp to 70, americans won't have to buy bitcoin, right but if you're in russia you feel pretty stupid having all your money in ruble or turkey you feel pretty stupid having your money in the turkish lira. our storeship has not been great, let's make no bones about it bitcoin makes a great alternative for people to store their money. >> the more russians use it or more you see some -- the more nefarious use you're going to hear people like senator elizabeth warren >> listen, you know i'm the left side of the senate >> wait a second, did you say left side of the -- i love the way you people think i'm way out here, i'm fascist
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but you're just slightly left the center >> the whole world depends o where you sit. >> it does >> warren is dead wrong here state actors cannot use bitcoin to evade sanctions, right? first of all most of the transactions, the lion share happen through exchanges that do kyc. bitcoin operates on a public block chain that all securities have looking at those things so she's thinking about it wrong. you can't use if to hide illicit goods, but the little guy who warren should care about, right? the worker, the middle class guy can use it to protect his wealth i think we've got to flip that narrative and the young congressmen are saying, why are we listening to these old
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people it's popular i think the democrats anti-crypto i think is really shifting to, hey, at best keep your mouth quiet and what you should be doing is learning how this is really going to help progressive causes >> yourkd could say that for jut about anything for those people i think. you saw the executive order, right? did that do anything >> it made the crypto companies like ours breathe a sigh of relief, right? we were worried that warren was going to have so much influence it was going to be anti-our industry what they said is we see this as a burgeoning industry and we want to have regulation that makes sense. and stable continues, central bank digital currency is a national security issue. we're behind china, and how we construct our stable coin says everything about who we are as a
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country. we can do it china-wise and give up our privacy or the way brooks the head of the occ suggested and keep privacy your bank doesn't tell the government what you buy. your credit card company doesn't tell the government what you buy. so it's a big, big deal. >> look, the -- mike, i understand your point on that, but banks do give transaction histories if you make a transaction over $10,000 or if they get near a limit on something like that. if you have a lot of money coming in and out they are responsible on making sure the government knows about it. >> and the exchanges if it's continue base or other brokerage exchanges are going to end up playing by those same rules. >> sooner rather than later they don't want the government cracking down. make sure you're rooting this stuff out. >> listen, we're regulated by 25
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different agencies >> you just said that eventually they will play by the same rules that the major banks do. >> there are no rules right now, right? so the industry is asking the sec and the government to set clear rules. they're regulating by enforcement not by setting rules. no one knows, you know, is a crypto security or not they know bitcoin is not we're 99% sure etherian is not, but there's this hazy area because the sec has not been clear. >> sewercuyracuse out and they run at the end you made an entire part of the world mad.
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we have to get to the new york stock exchange and check in with jim cramer. jim, give us your take what do we think of the fed meeting yesterday after jay powell spoke hawkishly, yet the market went up. >> if you deal with a lot of
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companies that makes things, do stuff, sell at a profit, they haven't been able to make as much as they'd like to, because of chain of broad costs that are pushed up. i know jay powell said it wasn't endemic yet, but the companies i deal with, if you're making a business in plastic, you have to pass on that incredible price increase so anything that breaks the cycle is viewed as positive by those ceos it's not viewed by the guys who don't make any money and have a negative cash flow i was with a lot of companies last night every one of them cheered the fed. they wanted cycle of price increases to end they know they needed the fed to do it. >> i spoke with a lot of them recently, too. they sound like they're more in favor of, you know, the
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expectation there will be seven hikes this year, meaning at least one it would be -- basis point or mott. >> i cooperate great with you more, becky, that's what people are saying they may need to deal with it more aggressively. i wonder how long it takes before -- when you hear about how angry workers are, workers that have been happy for a long time in places, suddenly aren't, and want more money, and you're having trouble to find as many workers as you need. >> very true, which is a reason why, i think, again employers want things to cool off a bit. it is hard to find people. it's also hard to find people who want to stick around the office there's a generation of 25 to 35, they just don't have what it was like in my era they're in, they get trained, they go, because they can get
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more money elsewhere i think that's another part of the cycle people want stopped. and they all feel if powell gets tougher, it will be easier most of the money managers say he's a softy, but i thought it was great what he said he said the coast is clear to raise rates, and a lot of companies i talked to all say the same thing, thank you, jay, this is what we need. >> jim, thank you. we'll see you in a few minutes. a little more than a half hour to go on the wall street. sylvia jablonski is here with us we've had a few conversations with former fed officials that suggests that the odds of recession have gone up significantly, just based on what we have seen over the last couple weeks you say that could be the case we could by looking at a
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recession, but it could take a while before it gets here. >> that has a big impact on whether we could go recession more quickly, because it increases prices, so the longer that goes on, the risk is higher, but in my mind, i think if we can get past that and past summer chain issues we're seeing, it's unlikely just because jobs are good, you have the 2.7 trillion in the savings on the sidelines yes, it's down, but it is positive i think a lot depends on geopolitics and supply chain issues the gains in the market today as well -- >> i don't know. i think this is a typical volatile range what makes sense to me is we are on a tradeable bottom here i do think we have a reprice
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market, and if you look back to 2008 that was the last time we saw a nasdaq bear market perhaps investors are ring that. if you bought apple in 2008 and held it until today, you would be up 3,000 percent. >> sylvia, thank you very much great to see you. >> thank you good morning. folks, that does it for us this morning happy st. patrick's day, everyone see you tomorrow next is "squawk on the street.
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good thursday morning. welcome to "squawk on the street." i'm david faber with jim cramer. carl quintanilla has the day off. we've had a couple strong days, at least if you're long. if you owned chinese stocks yesterday, you had quite a day, but we'll see what we get today. a lower -- our road map does start with that potential paw in the rally.

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