good morning stock furious higher ahead of today's big inflation data we'll get you ready for the april cpi numbers. coinbase plunges and stablecoin trading at 40 cents plus, a stick somewhery situation at starbucks an actor glued his hand to the counter. we'll tell you what he was protesting wednesday, may 11, 2022 "squawk box" begins now. good morning, everybody, welcome to "squawk box" on cnbc live from the nasdaq market site in times square. i'm becky quick along with joe

kernen and andrew ross sorkin. yesterday at this time we were up really big. dow futures up by almost 300 points yesterday we were up big but that didn't matter by the end of the session because the dow ended down by 38 points after fluctuating throughout the day, up down, up down, up, down, down nasdaq indicated up by 168 points it did close higher yesterday as did the s&p 500 and the s&p is indicated up by 45 points. this tells you guys there are a lot of nerves out there that are still pretty raw you see people selling into some of the big rallies as they happen, a few hundred points up and it's hard to say where they will be. we do have big numbers coming up cpi will give us a look at inflation numbers. that's something the market is closely watching treasury yields at this point look like the ten-year is trading actually below 3%. 2.9, we've come down from 3.1% a

couple of days ago andrew >> let's talk a little crypto because it's been a wild ride and it got wilder in certain ways for certain coins overnight. let's show you bitcoin at 31,000, close to 39 -- close to 32,000 we're at 31 right now, closing in on 32 we had gotten down right below 30 at one point. check this out this is what has people thinking this morning the so-called stablecoin that's supposed to be tied to the u.s. dollar the ust, it is plunging today, trading down now around 35 cents. that's according to coin gecko data 35 cents instead of a buck the other main token from the controversial crypto project terra kuld luna plunging more than 80% we're digging into why and we

hope to have more on cnbc for you all day long lots of nerves about the world of crypto. in fact, some of that coming as a result of coinbase, its shares falling as well. the company reporting a first quarter loss of $1.98 a share and revenue that dropped 27 cents. shares falling around 15% in extended trading, headed to a drop of 12.6% as crypto prices declined the stock is down now about 75% year-to-date retail monthly transaction users fell to 9.2 million from 11.4 million in the previous quarter. trading volume dropping in q4 to $309 billion in q1 first debate on whether you wanted to own the coins. then debate about whether you wanted to own the exchanges. exchanges seemed like the safer

bet. >> 370 was the high. 368 and change on that one you mentioned gecko. did you get that yesterday, andrew >> i did not. >> you didn't get it on wordle >> i did not. >> you guys skipped days >> i didn't do it yesterday. >> that was a tough one. >> no, i tried and i failed. >> you failed? >> i gave up. >> oh, you gave up you didn't fail. that's a better idea you go through all six and then for them to tell you, you feel -- >> do you ever get five down, five down into it and you know you're just too far off to get there and you just write the word in table or something like that just to see what the answer is. >> your first word is always farts? >> no, that was a guy on twitter who said that. >> i've been thinking a lot about this thinking, wow, so bitcoin, 68 to

30 to 29 and then it's like, how can anyone invest in it? then i looked at peloton i mean, stocks do -- it's just a risky assets are able to go -- they don't just go down 50%, 55%. some high fliers go down we know that now the correlation with bitcoin is uncanny. >> you have to think there are forced selling issues. >> you would think so. i have some money here. >> if you were on margin and you have to raise money somewhere to sell off something that's dropped significantly. if you look at what's happened with ust, that's a run on the bank there's a crash in confidence. and people want out and they're worried and they're worried terra would have to sell bitcoin underneath to prop up ust so it gets into the cyclical issue of confidence and that's what you

see when you have a bank run. >> i don't worry as much about ust. remember when the money market started breaking the buck. >> yeah, that was terrifying. >> that was a little more of an issue. i finally realized, okay, so the argument for bitcoin if we're debasing the currency and printing all this money, there's only 21 million bitcoin, so this is the way you hedge against the declining dollar but at the same time they're printing the money you're hedging against, all the speculative money is going into bitcoin. it's a double whammy you're buying is for both reasons. when it stops and the fed goes the other way, speculative money is no longer flowing into it and rationale for doing it becomes less. >> that was always the point we always talked about, you know, you could dig a hole in the ground and it could take you energy and cost you money to dig the hole but the hole may not be valuable to anybody. >> no, i don't buy that. looking at the way money -- what money is, you get a ledger

entry. trying to figure out a ledger entry, and i don't think it's going to zero. i think it's weird to watch it go down. >> as more and more institutions are -- >> it could be around 5,000 bucks or 10,000 bucks or - >> does it have to be around there -- it was 20 and back to 60. >> don't you think it goes to this moment where people are looking at peloton, for example, and saying, what's it good for what can it actually do for me what are the earnings actually going to be? >> i think it is what -- i think it is -- i think it's a store value. i do >> it's a lousy one. >> well, we'll see it's at 30,000 up from 2,000 where it was a year ago so it's not that lousy

i see gold bugs laughing now about bitcoin. they were saying at 1,500 that gold's going to 5,000. bitcoin is never going up. now gold is at 1,800 and they're laughing, the thing that went to 66,000 is now down to 30,000 >> more than 40% of people who bought bitcoin are under water. >> everybody that bought peloton is under water how about inflation. i think inflation is going to be a respite today. >> we are hoping. >> then i think we're off to the races. when you think about diesel and how trucks, trains, planes, trains, automobiles, everything that runs on diesel, when it's so much -- it's so expensive now and headed higher probably. >> did you hear michelle who was on in the last hour, she was just talking about that very issue. for the month's numbers we'll be getting for april, we did have a drop in energy prices. she's going to start stripping out energy prices, even though

we know it's going up and down to look at the numbers underneath to see what kind of volatile we're seeing aside from that you have used car prices probably coming down. >> then you still can't find anyone for what you're paying them so -- energy costs and labor are both -- i think there's reason to be concerned about things getting worse midsummer cpi wise c carva in a is laying off 12% of its workforce. in an email yesterday morning the ceo said the company overshot its growth strategy and would have to cut around 2500 workers eventually. some fired employees took to twitter yesterday complaining about being laid off over zoom carvana said the executive team would be giving up salaries the rest of the year to help fund the severance pay for the workers. the news came as they closed a

deal to buy a network of used car auction sites for $2.2 billion. the financing for that transaction was problematic, forced carvana to buy at higher costs and it closed 90% off the all-time high last august. >> rocket, the mortgage company, has offered severance packages to about 8% of the workers because you're not seeing the refinancing activity some of the big booms that came through these situations, they hired up to staff for it and now having to stream line. by the way, rocket was offering some really generous severance packages, including letting you keep your health insurance for a long time, having six months pay or more. but the one good news is that in this job market you can probably go out and find another job pretty quickly. >> i still think if you have a building that looks like a vending machine, you have to be worth 200.

it should not be at -- right if you go, it's so cool, looks like a vending machine. >> looks like a matchboxcar. >> don't you think that's worth 200 a share? i don't see how it can go down you don't like that? how do they get them up there? >> i don't know. >> how much would you pay just for that building, joe >> what's that >> how much would you pay for that building? there was a joke going around the other day that's the market cap of the whole company. >> what's it good for after this a lot of skittles, i guess. >> it's a cool parking lot. >> that's right. that you can't really get your car up and out of and into in less than four hours, which is what it takes around here half the time. actor james cromwell glued his hand to the counter of a starbucks in midtown manhattan yesterday. it wasn't an accident. he's known for his roles in "babe" and "succession." he was protesting the coffee

chain's extra charge for plant based. if anything gets me, charging more for plant-based milk. most starbucks charge between 50 cents and $1 more for plant-based milk he feels very strongly about this could be soy, almond, oat, coconut, none of these are milk because plants don't lactate, or do they? >> no. >> he wore a t-shirt that said, free the animals and protest the upcharge he was arrested in 2017 for interrupting an orca show. anything actors do, i want to know because they're in touch with the rest of the world. coming up, it's the biggest

economic move of the month inflation data is due at 8:30 a.m. everything you need to know about expectations and potential market reaction next go back and watch ricky gervais at the golden globes. >> coconut milk is pretty expensive. i don't know why they're protesting the upcharge. it does cost more. later, dr. scott gottlieb is going to join us. >> you eat bacon every day >> i don't i don't eat that i had it when we had it here the latest on china's covid lockdown and surge in cases in the new york area. pretty high for the daily rate you're watching "squawk box"n bc o welcome to your world. your why. what drives you?

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just say “watchathon” into your voice remote to add a channel or streaming service. investors will get a read on inflation when cpi is released at 8:30 a.m. joining us for the data and impact from the markets is stephanie link, chief investment strategist at high tower and cnbc contributor and chief economist from oxford economics. what worries me is the notion that we're going to get a respite today. there are certain factors we're all aware of that could make it less hot than in previous months so if it's the slightest bit hotter than expectation, whoa, we diplomat get that, and if it's lower than the nominal

read, i don't know if that helps us because it's going to get worse. >> the risk for inflation is still on the upside, no doubt, joe. we are a little bit above consensus looking for 0.3 headline, 0.5 core, but you're still going to be above 8% on headline inflation and core is still going to be above 6% according to our estimates if it comes in a little higher, especially with the sentiment of the market and the hawkishness of the federal reserve, probably spooks the market. it is unclear with gasoline prices, diesel, you mentioned that earlier can hitting new record highs, that's only going to keep pressure, especially on headline inflation. i think the key question isn't when we peak, it's really, you know, the deceleration, the outlook over the next 6 to 12 months inflation will remain incredibly sticky even if we have peaked, you're

still going to remain around 5% year-on-year by year end that's going to keep the fed in a tightening mode and that just keeps the fears that we get this wage price spiral still going to be prominent >> stephanie, kathy made some good points, obviously the energy, maybe that's volatile and maybe it doesn't mean it's really in the system systemically, then you go to the weight side of things and that's not a great picture either are you assuming as an investor that june, july, august, the way we're looking at it, people are pent up ready to go vacation they may not go on a crowded plane, so they're going -- with diesel where it is and regular gas probably going to catch up with it, it just seems all the cards -- all the stars are aligning for much higher

inflation during the summer. don't you think you should buy stocks that either won't get hurt or would benefit? >> yeah. and thanks for having me, joe. i totally agree with that. you definitely want to have first and foremost, diversified portfolio. you definitely want to have companies that will benefit from inflation, those with pricing power. we know services and the economy, they have pricing power because there is this pent-up demand you also want to have some commodity exposure as well for obvious reasons. at the end of the day, i think kathy's right in terms of inflation staying high for a long time. we can look at core which is ex food and energy, but we are eating every day we are filling up our tanks every day. we are impacted by the -- these two items very much so if we have 8.1%, if we have 7.5%, if we have 7%, which we're not going to get, these are still very high, high numbers.

what bothers me and why i think inflation is going to stay persistent is exactly what kathy mentioned in terms of wages. wages are 5.5% we look at labor costs, they're up 7.3%. these are all year over year numbers. i know we look at month over month for the inflection point but these are very high numbers, joe. rent is also a sticky part of inflation and those are going to stay elevated. even if the headline number comes in less than expected and the market will rally on that, i still think inflation is here to stay exactly to your point >> stephanie, have you done the math on 150 gallon long-haul diesel trailer, tractor, these guys that drive the big rigs i guess they use credit cards because you don't carry around that much cash it was like 2 grand to fill up your tank. >> i'm going on an rv trip this

summertime i'm dreading that. it's those companies that have the pricing power. you're talking deere and caterpillar, their margins were much better than expected when they reported earnings because they had the pricing power how much can you raise prices and what does that do to demand destruction, that's the question. >> you got the eddy model or the guns n' roses model. what's yours closer to >> it was my husband's he owns it it's nice. >> do not run the hose out to a normal store. >> and definitely don't smoke around it. >> i just saw that he watches sometimes i love randy quaid kathy, where you're going by july what do you think it could be if energy prices stay where they are and diesel starts filtering

through to everything and then wage pressures could we get to double digits? >> it's not our expectation. again, the risk lies on the upside keep in mind, you do have easy base effects to compare against. you know, that alone should help push the year-on-year rate lower. >> meaning we're already so high a year ago we're going off high comps >> exactly really what you hope isn't necessarily -- it's just that things don't have to -- it can't get worse, right even if you stay where we are, the year-on-year rate will trend lower. again, let's remember, what is the fed really aiming for? they're aiming for 2%. even if we go 8% to 5%, that's the right direction but far above the target rate. >> okay, steph, we'll see you

later as part of our panel kathy, good to have you on this morning. >> thanks. >> thank you, joe. we have a lot more coming up on "squawk box." the retirement savings moves you should consider making right now given everything that's happening. we have sharon epperson with a special report. disney earnings due after the closing bell preview coming up at 6:50 a.m. 'rcongacrit ter this

welcome back to "squawk box. trying to time the market is impossible but you may be able to figure out the best time to

reduce the long-term tax hit on your retirement savings. cnbc personal finance correspondent sharon epperson joins us as to why now might be a great time for a roth i.r.a. conversion explain. >> the market downturn may make this an ideal time for some investors to consider moving pretax i.r.a. funds or an old 401(k) money into a roth i.r.a here's why >> it gives you awe window, an opening in time, where you can convert some of those assets into tax-free retirement assets, be a roth at a discounted rate >> can a roth i.r. amplgts conversion, you're transferring pretax retirement savings to an after-tax roth i.r.a. account. you have to pay taxes perform when making the switch when the value of your pretax account has dropped significantly, you can lessen that tax burden

if you had $10,000 in a pretax i.r.a. at the end of 2021 and the value of that account is now down 15%, your investments are worth $8,500 but you'll pay tax on that smaller amount >> you're saving on the tax liability, but by putting it into the roth i.r.a., you have a longer time horizon given there's no requirement of distribution so you can make up for the down market by having a longer time horizon and taking advantage of compound interest from investing >> if you decide to convert to a roth i.r.a., financial advisers say just be sure you have enough money outside of your i.r.a. or your old 401(k) to pay that tax bill because it will be due next april. >> is there data showing more people are doing roth conversions actually right now >> in fact, we have seen a rise in roth conversions.

the largest provider is fidelity investments and they have seen the number of roth conversions, those transactions up about 18% in the first quarter of this year compared to 2021. the average amount of that conversion is up about 7% in terms of the amount of money totally we're looking at the amount of money in roth conversions up about 25%, 26% since last year when you look at the first quarter of this year >> if you have a traditional 401(k) plan, can you take that money as well as a traditional i.r.a. and roll it to a roth i.r.a., is that allowed? >> it has to be from a former employer it's not a traditional i.r.a. you're contributing to right now. if you have an i.r.a. -- sorry, if you have a traditional 401(k) from a former employer because you retired or left it there, you moved to another job, you can roll that money from the traditional 401(k) into a roth i.r.a. you just have to make sure you

check with the plan rules and make sure you know when you can do it and how you do it. but you are able to do that. >> very, very useful information this morning, sharon thank you. we should tell the viewers this morning they can read more about all of this if they want more details at cnbc.com. you should also note nbc universal and comcast are investors in acorns. when we come back, fallout from record high gas prices. we're going to dig into the big moves in the energy sector and tell you what you might be expecting this summer. during may, we are celebrating asian american and pacific islander heritage and featuring some of our cnbc teammates and guests here's jpmorgan managing director joyce chang. >> one thing about the asian american community, there's real diversity of asians often not recognized i was born in peoria, illinois,

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good morning and welcome back to "squawk box" right here on cnbc. let's show you the furious we are in the green this morning. things look up of course, we have the cpi data coming up at 8:30. see whether that swings this in different directions dow up about 285 points. nasdaq up 180 points and the s&p looking to open up 45 points higher. the senate voted yesterday to confirm lisa cook to the federal reserve, making her the first black woman to sit on the board. kamala harris's vote breaking the tie in the senate, becky according to the american automobile association, the average price of a gallon of gas

now stands at $4.37, with some saying that even higher prices are ahead. but there may be some relief on the way with crude oil prices receding a little. for more on the energy markets, let's bring in damon, head of research at goldman sachs. prices have come down a little bit, at least oil prices a lot of people are wondering, is this likely to stay what do you think? >> it's a key question we've seen four transient shocks which have been the chinese lockdown, the spr release, seasonality demand is weaker at this time of year and initial gradual decline in russian exports. so, we're actually in a surplus today. the first one since june of 2020 the key, though, is as we look forward, those relief valves will reverse and the market will be back in deficit so, it's helped but it's definitely not sufficient to balance our market >> what eventually brings prices

down, do you think we get to the point where there's more production does that happen more quickly or demand destruction only ways to dewith it, demand or supply. >> yeah. a circle commodity market would combine with supply elasticity today the supply elasticity is close to nil shale producers are doing as much as they can, given the service sector tightness they face so, we're down to that last component, demand elasticity when you think about oil prices you really have to think, are we at the price yet where i slow demand growth enough to stop this record long deficit that's the function of prices. that's why, sure, on a two, three-year horizon, high, sustained prices help. i think what we have to worry about for the next few months is how do you achieve that sufficient demand destruction? >> with this happening at the same time the fed is trying to bring down demand to deal with the supply chain issues we've

seen, again, the only thing they can do is hurt demand. they can't fix the supply side of things. does this put us in a position, do you think, of right now the economy is kind of soaring here in the united states, going long, going long, consumer demand is really strong. does this put us in a position where it's really strong until the bottom just drops out for everything and we crash? >> yeah. i think that's something we have to worry about in economic terms, the output gaps, my ability to produce is tighter in energy than anywhere else than in the economy you can have tightening financial conditions from the fed, from financial markets, but if you don't have the deal that runs the global economy, you're going to have to stop growth much sooner. when you worry about the potential further declines in russian exports, i think that's a nonnegligible risk we have to keep in mind we're not there yet from a pricing perspective with this strong momentum, seasonality,

people wanting to fly this summer so, there needs to be another leg higher in prices or forecast for brent is 125 starting this summer. >> your forecast for brent is 125 and you think that's the tipping point where consumer demand drops off because people aren't going to drive, they're not going to fly, prices will go up too much? what does that mean for transportation and just getting things places? >> so the idea is that it slows growth, right? we're not yet arguing we need to see outright declines in demand. but at the price point, on the margin, people drive a bit less. what's going to be difficult this year are two challenges on the one hand, some of the demand will be quite resilient to higher prices again, think about people flying this summer if they haven't flown in years, that demand is relatively not price sensitive and governments will try to help on gasoline, reducing taxes. that's the challenge on the one hand the uncertainty is russia.

russia is a big e port of diesel if we lose a lot more diesel, what drives the global economy won't be there and prices have to rise even further that's the two challenges you have to keep in mind our initial estimate is 125, brent. consumer prices, by the way, are high, right, especially in emerging markets due to the dollar let's see how that works again, the risk i see more to the upside than to the downside. >> how much trickier did this get to forecast yesterday when ukraine said it was going to be stopping delivery of a lot of russian natural gas that has to go through ukraine the force majeure, that's the first time since the invasion began back in february maybe they're feeling stronger to do this, having more support from the western leaders at this point to go ahead and do that. does russia cut it off to say, forget it, we're not giving it to you does the eu say, forget it, we're not taking it? now you have this wild card in

the middle, ukraine saying, we're not letting you transport through here. >> all flows go through ukraine so initially you can go around it but i think that's the key risk for europe, is more on the natural gas side they can import record amounts of lng, which they have done recently but that's only a third of what they take from russia. that dependency will be there, potentially impacting sanctions, but if you think on a global landscape, it means this is different from 2008. the u.s. consumer from an energy dependence perspective is better off than, say, european consumer or emerging market consumer. that's very different than 2008. if you're thinking about demand deconstruction, where we're looking for it is outside the u.s. most. >> we have to run, but it's bad news for consumers across the board. what is the opportunity for investors, what are you telling people to do >> high oil prices can help companies invest more but the

uncertainty is high. what our energy sector needs is a lot more capital to be able to invest in the energy we need when you think about the relative performance year-to-date of energy versus the prbroader market, the s&p, that's just starting to correct the imbalance of the last ten years. we need a lot more of that we need a lot more capital for producers to be able to deploy it on large-scale energy products that divergence seems quite far. it's just the beginning. investors need to be in energy. >> thanks for your time today. >> of course coming up, the countdown to today's key inflation data is on predictions straight ahead. later dr. scott gottlieb will join us to talk about the rising case counts again and what to expect on the covid front this summer. a reminder, you can watch or listen to us livon t cc e henb app any time forev—or not. do i just focus on when things don't work,

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welcome back to "squawk box. the biggest data point of the week is just a couple of hours away we'll get the latest read on inflation at 8:30 eastern time here's the number to beat. economists estimating april's

cpi will -- i shouldn't say the number to beat core cpi, excluding food and energy, could still gain on a monthly basis and remain high for months take a look at where futures stand right now, joe, because we're at about 300 points higher on the dow right about now 301 poins. nasdaq up 200. s&p up 46. if it comes in hot, i think people will get a little more nervous. if it comes in low - >> if it comes in hot, people will get cold when it comes to investments. >> it's the opposite reaction. >> is it the new jobs number, is that what we're -- >> i think so. >> probably. >> because it's measuring wage inflation, kind of going into the consumer stuff we're buying. this is what's driving the fed right now for sure >> and when the jobs number comes, we look at the wage components definitely front and center for all. and it's been -- you know, it's been so long, it's been so long.

you have to hand it to volcker only someone 6'9 could have done that. >> for decades kathy said this earlier when we were talking to her, the good news is we're already at such high levels, the comparison factor when you're looking year over year, we're only going to be up x amount because we're already in the nosebleed seats. >> seeing the gdp numbers from forecasters, they're coming down. >> coming down. >> after a negative print for a quarter. so, i mean, the horror of stagflation is -- it's -- >> consumers are willing to spend right now. they're spending on anything and everything it's crazy inflation is going to continue they continue to pay any price that's asked >> and then covid. in china, this is related probably to covid, consumer and

producer prices rose in april, rose by 2.1%, boosted by a surge in energy and fresh vegetable costs. analysts say food prices rose because of rising transportation costs because people were stocking up in anticipation of lockdowns. >> they lock you down with no notice and then you don't know how long you're stuck there with no food. >> different from a lockbox. that cromwell guy did a couple of pig movies, didn't he >> "babe" and -- >> do you think if you work with a pig for a long -- for the entire movie that that's why he's now - >> probably. i mean, pigs are - >> babe was pretty cute. babe was a special pig, too. >> you think carl icahn and him could team up. >> you would think you would think. coming up, though, we'll talk about - >> put those two together. you can make it happen, can't

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"experts see deep flaws." "that was the worst thing i've ever seen in my life." to stop tesla's full self-driving software... vote dan o'dowd for u.s. senate. welcome back to "squawk box. after the bell today, disney's going to be reporting second quarter reports, and wall street

will be watching those disney numbers closely. joining us right now, sarah fisher, media reporter at axios. i want to say is this a make or break quarter, but tell me what you think the distinction is going to be. as we've seen the multiple on netflix come down, it's impacted every other media company, disney specifically as well. and if disney has anything like this kind of issue, i think it takes the whole sector a leg lower, no? >> i think so. but the thing to remember is disney is a diversified company. so even if it doesn't announce expectations on subscriber adds, we expect their advertising revenue actually to be pretty up in this quarter, and i think they're also going to wonder about parks. we know shanghai is closed in china due to covid but otherwise, we expect huge gains in parks disney, even if it doesn't have that change in subscriber

growth, i don't think you'll see the mass drop like netflix because its business is divers diversified across so many things and many of them are doing well >> what do you think we're going to hear? we hear some say spend you hear netflix say we're going to get a little more disciplined about spend. the flip side has been going on at disney, folks like dan loeb have been pushing the company to spend. does that change in this new environment? >> perhaps slightly. disney said it's going to be spending about $33 billion this year, but they're caught in sports rights. bundle in the agreements espn has agreed to pay for long term for many things nhl, et cetera and in addition, the content is theatrical releases. a lot of things they put on

disney plus is things they were already getting money on in theaters anyway. think about "eternals" which came in q1 so yes, i think they're going to have to be disciplined but they're in a different position than netflix. they can't just pull out and some of their spending helps to float other revenue streams, so it acts as double positive here >> what is your sense of whether there's going to be -- and i don't know if you think it's going to come up on the call, this whole debate, fight, brouhaha call it what you will, down in florida. >> i hope it comes up, because it's a big deal. the reason that disney's parks in florida are able to operate the way they are is because disney has jurisdiction to operate them like its own quasi government the joke is that there are no potholes when you go to disney world. that matters to the consumer experience and if they can't have that kind of power over their own

jurisdiction, it's going to be a huge problem for disney. politically, they just got rid of their head of comes. i want to hear about their ad-supportive tier what is it doing to stay competitive? it said it would roll out an ad-supporting tier and to your point, the other big thing i wanted to hear was about the politics >> okay, sarah, always good to see you. we will listen to this call intently we'll be reading you in axios all about it thanks so much >> thank you >> you bet, beck >> thanks, andrew. whether we come back, coin base shares are plunging. we'll show you what's driving some of the selling, some of the underlying issue too the stock's down by about 14.25% it is inflation day today. we will be getting the read on

cpi, consumer price inflation at 8:30 a.m. eastern time we're back from the nasdaq market site in times square. stick around well that's why we e cyborg assistants to everyone in the company. they handle the "home" parts, so we can keep working. mmmm, delicious. shhhh, shhhh. you know at cdw, we can design a productivity solution with lenovo devices that offer fast, reliable connectivity to help your people manage their workloads, with or without cyborgs. perfect, 'cause this guy needs a little work. for technology that moves you forward, trust lenovo and it orchestration by cdw.

good morning, and welcome back to "squawk box. take a look at the futures it could all change in about an hour and a half when we get that cpi number, but right now things are looking up at 270. points. take a look at this. shares of coinbase slumping. maybe worse than the word slumping in the premarket, they reported an unexpected quarterly loss and seeing user numbers decline. bitcoin dipping under 30,000 as we reported yesterday before rebounding, but you're looking at some of these cryptos are continuing to go down. but much of the focus in the crypto market has been on the

terra usd stable coin, which has been anything but stable that digital coin is supposed to be pegged to the u.s. dollar but dipped near the 30-cent mark michigan state university, lisa cook, has now won the senate confirmation to serve on the federal reserve board, the first black woman to se serve as a fe governor voting was divided along party lines. >> that's right, andrew, we are just about 90 minutes away from april's consumer price index report, which sectiis expected o show that inflation has already reached its peak j we're looking for numbers above 0.2% in the headlines, but that's up 8% yooear-over-year.

how comfortable do you feel with that consensus estimate? >> we do feel pretty comfortable with that consensus estimate we saw a huge push from energy prices, gasoline praisices in particular, in march we do think that will be a pretty subdued number, especially compared to the 1.2% increase we saw in march but, again, we're talking about headline and correlation, year on year changes that are just so elevated and so well above target that it really, it has little bearing on fed policy, at least in the near term >> so everyone's looking to say, okay, we can say that we've reached the peak we're coming down from peak levels, and that's going to be good news. but aside from the headline and the core number, what are you going to be digging down to really look for in this report that will show you that? >> we are lacking for what the trend is, because that is what is driving this inflation and narrative. but also what we expect to see

now is some stabilization. the pent-up demand that we expect to see in services over the next few months, we expect to see that stabilize. but, again, there are so many uncertainties arising out of geopolitical events. china lockdowns disrupting supply chains once again and the energy component from the war in ukraine, not only energy but food as well so those are the things we tracking this month, one month is not really going to make that much difference it's a move in the right direction. but if you look at gasoline price month to date, there again, i don't know, you know, as much as we'd like to be enthusiastic about this, you know, i do think that inflation is going to remain high and risks are to the upside over the next several months. >> energy number that you mentioned, the rising price for gas and things, those numbers have come up month to date we're looking at last month's

numbers where you will see a little bit lower food and energy are the two areas where you maybe are seeing the most price increases >> i think we are looking at both headline at this point. as your previous guest mentioned, everybody is feeling the gas price. everybody has to spend on food every single day and if you look at households, as much as wages are rising, really you're seeing declines in real disposable income and wages. that's where we are trying to assess high energy prices, how food prices when will the consumer pull back because that is going to have an effect on how businesses respond, because it's a demand side and you have the fed raising rates which is also a demand side effect. so we really are looking at a period of your honoruncertty

the trend in food prices is very concerning, and i do think that that's something that's going to change consumer psychology >> it's never easy to forecast, but this seems like a particularly difficult time to kind of get your arms around, but what you're expecting for the full year. what are you looking for in terms of inflation what are you looking for in terms of gdp at this point >> we're still looking for positive growth. we not forecasting a recession that's not our base case but again, there are a wider range of uncertainties around it we're still around 2%, you know, sl slightly above 2% on gdp but the real question is what happens with inflation and, again, we're close to 5%. you know with, again, another, you know, a lot of uncertainty around outcomes as you said, it's a very good point. it's very difficult it forecast over the next three to four months, let alone what's going

to happen in the second half of the year but it remains that there is still positive momentum in the economy. and on inflation we should see, as demand starts to subside, we should see some relief but, again, with a lot of uncertainty around outcomes right now. >> president biden making comments yesterday about what he plans with his administration to kind of do to tackle some of these numbers. i guess one thing would be the idea of getting rid of the national gas tax for a while another idea might be what he's talking about, just trying to make sure that nobody is gouging prices, but i don't know if you get into price setting or any issues like that, what do you think of what you heard yesterday? what strength does the administration or what tools does the administration actually have in terms of trying to address these things >> i mean, they're noble efforts, but really at the end of the day you are going to see one-time effect, price setting that really, the '70s experience

is not really positive on that so i do think that we're going to have to manage the supply chain. because a lot of these price increases are really coming from the supply side. the fed is doing what it can on the demand side, you know, the administration, what they are proposing, like i said, you know, these are good options, but i don't think that they really address the problem which a lot of it is coming from the supply side. >> let's say that there's a surprise number that comes out today that's stronger than the 8% year-over-year. how big of an issue or how big of a concern, how would you react to that if you saw that? >> you know, i don't think it's going -- unless we're talking about inflation that accelerates from 8.5%, that's going to be a real shock our best case is that we are going to see, you know, favorable a year ago comparesons. so if the number comes in

slightly above consensus, that's not really of concern. if we don't see any relief on energy prices, if we don't see any deceleration from the 8.5% rate, which is again, not our best case, i think that's where our concern lies because obviously, we expect to see some of these price pressures abates over time. >> thank you for joining us today. >> thank you coming up, covid break through in reinfection cases rising steadily this new york since early march. we're going to talk about that surge and whether or not vaccine updates will curb the spread of the omicron variant. before we head to break, going to check on the markets. "squawk box" will be right bac ? and you had to wrestle a massively complex supply chain to satisfy cravings from tokyo to toledo? so you partner with ibm consulting to bring together data and workflows so that every driver and merchandiser can serve up jalapeño,

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...on netflix... ...prime video... ...starz... ...and hbo max! just say “watchathon” into your voice remote to add a channel or streaming service. . welcome back to "squawk box" their morning. covid cases continuing to rise in the northeast, driven mainly by the omicron variant joining us is dr. scott gottlieb, serving on the boards of pfizer and illumina there does seem to be, i don't know if people like to use the word surge, but it feels like there is a surge in new york and parts of the northeast what's going on, and is there a peak in sight? >> look, there's clearly a wave of infection going through the northeast right now. if you look at the data coming

out of the states, connecticut, new jersey, new york state, it seems to be peaking right now when you look at the modeling. this is a wave with b.2, two sub lineages of omicron. they appear to be more contagious but the infection should be cross protective probably a little less so against b.2.1.2.1. remember, this is against the backdrop of lessening mitigation people have gone back to work and they're catching it. >> at least anecdotally, i know a number of friends and colleagues and peers who had

omicron in earlier in the year and they appear to have gotten infected again in the past couple weeks >> the immunity is going to be robust for about three months and pertinent for about six months but it's going to start to wane. it's possible that people infected back in january are experiencing reinfections. infection with b.1 is only 95% effective with b.2 probably less so with b.2.1.2.1. the immuneit conferred by b.1, while they're reduced they should be protective enough that most people will not get re-affected. by the fall, most people infected with omicron will be

vulnerable to the new variants it's probably not enough to have host cell reinfection. most of the people who are getting infected probably haven't been infected with omicron. if you are seeing refoinfection it's probably i with this b.2.1.2.1. >> you talked about the fall let's talk about the fall. clearly vaccines are going to play a role in the fall. are you of the view and i know one hasn't been selected yet, but do you believe the vaccine in the fall is going to prevent not only hospitalization but where the vaccination prevents infection like that appeared to last fall when it was up against

delta? >> i hope it's going to be more protective and restore some of that promise we achieved against the original strain. right now there are studies going on looking at the immunity conferred by these new vaccines, and they are based on an omicron backbone, based on b.1, both moderna and pfizer there are studies going on looking at whether the anti-bodies are going to be protective against the new variants i'm hopeful that they will be. there's data out of south africa that shows that when people are vaccinated with the old vaccine and infected with omicron b.1 they have very robust protection against b.4 and b.5.

a lot of the infections in south africa are reinfections of b.4 and b.5. >> if it doesn't, is there time to reformulate at this point or, or is this sort of where we we're locked in to whatever you're going to do this fall >> we're not locked in both pfizer and moderna have been manufacturing these omicron vaccines at risk so they'll have sufficient supply heading into the fall probably for a september vaccine campaign there's time to reformulate. you would probably choose a b.2 backbone based on ep dem logical alone. probably based on half the one

lyn lineage. and perhaps you'd follow up later in the year with a b.2-based vaccine or whatever variant you think is going to circulate. i do believe, we'll have the data soon. i'm hopeful it's based on the b.1 variant and will provide protection against these new sub levels of omicron. >> we're looking at the china and concerned about the health issues and the supply issue. how do you see that playing out at this point? >> well, they managed to get control of the wave of infection that they were experiencing in shanghai obviou obviously with very brutal measures that they employed. i don't see a way out for china at this time it's going to be very hard to adopt a zero covid policy with such a contagious variant, and they have a population that's largely immune naïve

there is a study that was out saying that the vaccinations weren't that effective and people who were vaccinated were vaccinated a long time ago. they haven't rolled out a broad booster campaign i think they're very vulnerable as a country, and the only way they're going to keep this out in any meaningful way is to continue to have onerous lockdowns. you're going to continue to have disruptions like we saw in shanghai the only other option they have is a mass vaccination campaign with more effective vaccines >> that gets us back to the point that we've discussed in the past, the rolling lockdowns continuing because they are not prepared that has implications for the entire globe because of how much we rely on the supply chain coming out of china. we're hoping that we're going to get relief a couple guests we spoke to

think things are going to get better as the lockdowns come down, but you don't think that's likely just based from a medical perspective. >> hoolook, i think people are going to have to base in the lockdowns. the leadership right now seems bent on its zero covid policy. there's speculation in the financial times a week ago that so leadership is trying to adopt a different policy i don't think they're going to keep this infection out, given the fact that this is a much more contagious variant. just with mitigation alone, they're going to have to rely on vaccines and therapeutics. maybe they'll pivot at some point soon, but so far they haven't done that. >> big picture question, i was talking to a friend about this the other day, given the surge that we're seeing in new york.

how long away do you think we are before medicine is ahead of this pandemic? and i know we're moved probabl from a pandemic to something that's more endemic, how close do you think we are? everyone's going to get some form of this once, twice, three time as year at this rate? >> a good portion of the populatio population has had this. with the b.2 wave it's picking up additional people most people have been vaccinated at this point as well. many people have been vaccinated and infected so we have a very tall wall of immunity here in the united states that doesn't mean that a new variant can't pierce that immunity and spread very quickly, but it's different from the same type of death and disease. barring something happening where it mutates in a direction where it becomes more vir

length i think by the fall it's going to be spreading along with normal behavior with a widespread availability of vaccines and therapeutics. i think we're going to see a more normalized picture this winter you're still going to have people overconfident about the immunity they have inferred from prior infection with omicron that's going to be waning going into the fall. i think you are going to see a wave of infection in the fall and winter, whether it's something predicted by the white house or something less than that, it's hard to know. >> dr. scott gottlieb, it's great to get your perspective. you make us smarter every time >> thank when we come back, the impact of rising interest rates on your mortgage option. and then graduation season is upon us, and this year's class could be the most in demand in years.

mitch tan daniels will join us talk about job prospects, and the state of the economy right now. how he see it is in the hoosier ta state. we'll be right back. time now for the aflac trivia question. according to aaa, which two states have seen the most rapid increase igalin sone prices in the past week? the answer when cnbc "squawk box" continues ohh, mark is about to become a living piñata. luckily, aflac will help cover his unexpected medical bills. aflac? - (whimpers) i don't think he has any candy in there. am i at least going to get hit hard enough to forget this? nobody is going to forget this, ever. (bat hitting) - ohhhh i'mma call his momma. aflac! aflac! new projects means new project managers. you need to hire. i need indeed.

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. now then answer to today's aflac trivia question. according to aaa, which two states have seen the most increase in gasoline prices in the past week? the answer, michigan and new jersey prices have jumped 25 cents and 26 cents in the last week. hey, good morning, how are you? >> shares of sofi, hi, i'm fine,

how are you. the stock plunged 12% during yesterday's session after the company accidently released its quarterly results early. the fintech company's guidance that really disappointed the street the stock is up this morning by 3.6% the guidance it was giving below the street's expectations, anthony noto was going back and forth. obviously the reaction in the stock said some of the investors were surprised, too. we do have anthony noto coming up a little later this morning on "thech check" meantime, we are watching shares of roblox it's a sign of how much their business has cooled from the

pandemic when kids were stuck at home and spending time on their screen still up 28% from a year ago it increased by 22%. so that stock off, we'll call it marginally that might and good sign, it's relative given the way the market's been acting >> i was watching someone on cnbc talking about how they'd been in this stock at $77. they were still in it, kind of disappointed that they were. they missed their opportunity. this has been a troubled stock if you look back over some time here pandemic plays, all these companies. still to come, a check on the, speaking of which, hard-hit tech sector, and maybe where to look for some opportunity next plus, we're expect being the latest read on inflation data at 8:30 we hope we're not disappointed we're expecting it then. futures right now indicate up

about 300 points you're watching "squawk box," this is cnbc

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the the nasdaq closing up yesterday managed to die verge a little bit any-wraway still bel

12,000, breakingi its three-day losing streak. joining us now, jared, any reasons it might not be? >> good morning, joe i think there are multiple silver linings that are quite frankly overlooked right now the tech sector has been hit incredibly hard. and it's the sector that's most sensitive torising interest rate environment m-faang as a category. we're talking about 12, 13 times ebita. facebook is at seven times ebita. so we really have a ton of carnage. look at the software sector. while there's a ton of selling

pressure that's clearly been impacting the sector, private equity's emerging. we have $70 billion of mna over the last three to four weeks, semis are starting to outperform relative to the s&p and earnings have been really strong. i do think there are pretty significant silver linings underneath the surface >> valuations when they're very rich might be meaningless because stocks become loved or whatever it is but when valuations get to what you just stated on a lot of these, that's hard to ignore long term. that gives you some type of confidence and maybe some type of floor, where it may overshoot as people get negative and, you know, are forced into selling. for whatever reason, but, but that's something you can sort of be confident that's all can you use that's all you can do in this

business is try to stack things in your favor. that's all pretty positive what you just came up with the only thing i'd say, jared is if we don't know about inflation and where interest rates stop, multiples could even get much worse than what you're talking about now. in a, like in past bear markets, they can get, you know, ridiculously low levels. >> for sure. listen, we always can overshoot on the down side but we do have, you know, while inflation is clearly unprecedented for our lifetime in the context of what's been going on over the last you know, 20 to 30 years, when you think about the fact that we do have a benchmark in terms of going back to 2018, right the ten-year was up 3.25, and we see where some of these valuations can stretch to the down side. the cpi print in an hour is going to be incredibly important. let's also not forget the really

difficult cpi comps we're going to be having here over the next two to three months. the chairman obviously knows this but with him doing a relatively dovish move last week take ing h 75 point off the table, there's been smoichbo much money that'sn taken out of the sector could you have a vicious rally to the upside >> we constantly hear about the, a lot of the maybe stay at home, maybe they weren't, but they got five years of growth in a year and a half and i think a lot of that has been wrung out of these stocks at this point. is it safe to go back in to some of these, just based on if we return to normal that they're back to where you're not paying for the pandemic premium anymore? >> if you look at some of the internet darlings that benefitted dramatically during work from home covid, right, whether it's ebay, etsy, amazon,

netflix, these names have been decimated. so for sure you pulled forward years' worth of growth in a 12-18-month period and now we're decelerating, but you sort of prospectively look where we're going. march quarter was the toughest comp that we're facing and now you're dealing with valuations that are very reasonable across the board. no doubt these names in particular are going to face head winds as the economy reopens, e-commerce as a percentage of north america retail spend, it's clearly going to remain depressed relative to the depths of the pandemic but, you know, you look at amazon for example you know, clearly there was a profit relative to expectations, but you start dealing with some of the parts on amazon, you're basically getting the core market place for free, based on how robust aws is growing.

>> there are brand-new industries, whereas other companies, the old industrials or consumer products, whatever, you can't expect that. so when do you say, look, i'll step the down side to technology being, being hurt more in a rising interest rate environment, but i'm going there anyway because that's where the action is, there's where the growth, that's where the future, the innovation is, the smart guys and gals coming out of college, that's where they're headed. and i think sooner or later you'd say all right, i accept the multiple contraction but i got to be in tech. >> i think that's point. if you have duration, some of the entry points that you're getting from a technology sector perspective are potentially, you know, some of the greatest entrance points we're going to see. you're talking about names down

60% to 80% to date whether or not we're talking about a 3% or 3.5% yield, we're talking about so best structural growth in the market we need to make sure we're not in a run away inflation environment, then all bets are lost but you've got a fed trying to rebuild credibility. you have the ten-year that's trying to hover around 3%. to the extent that we do have a ten-year that's relatively in check at these levels, you're talking about valuations that have been compressed so significantly for some of the best stories in the entire market >> do you view crypto in the same light it is technology do you have an opinion on whether that, at this point, is getting to where it's maybe sold out or not oversold where the selling is going to start easing up? or that's not your --

>> i better be following crypto. and it's tough, right. you have, crypto was supposed to be this asset class that was supposed to outperform the context of rising inflation expectation. and unfortunately, it's shown its ugly head over the last two oar or three months. i think there's no doubt that crypto has made incredible progress over the last three to five years and become institutionalized in a way that you have sovereign nations that are making crypto their de facto currency you've got the new york city mayor being paid in crypto, athletes being paid in crypto. it's clearly becoming institutionalized. there's no doubt that crypto is lee here to stay for the long term for sure >> thanks, jared had to make sure there were

three es in jeffries it's amazing there are that many es in a name that is that short. >> you didn't know if it was the e-r? >> we always skip one of them, make it jeff-rees. when we come back, rising mortgage rates and the height of the spring selling season. diana olick explains and we're less than an hour away from a very important number we'll be getting the cpi, the consum consumer price inflation numbers hitting at 8:30 eastern time there are some sinayg it has already reached a peak we hope that's case. we'll be right back. (vo) while you may not be closing on a business deal

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m&a h ha welcome back to "squawk box" this morning take a look at the futures again, this could all move around things are much higher than they were before. nasdaq looking to open about 195 points higher. we will get the cpi data in now under an hour. and we'll see whether it's hot, cool, and how the market reacts. but crypto prices right now, bitcoin at 31,628. ethos at $2400 right now we were looking at the stable coins, the usd stable coin in particular that doesn't look that stable at the moment at about 35, 40 cents on the dollar so concerns there. >> stable. stable coin. >> mortgage demand from home buyers rose for the second straight week. but the 30-year fixed is falling out of fashion di diana olick joins us right now it just says diana i'd like to get to that point. diana. >> you fixed it. we're all casual here. >> i don't think i needed to diana. diana joins us. >> it's all good, joe. all good i'm going to talk about arms

now. not these. but adjustable rate mortgages. they offer lower interest rates, and that appears to be the way home buyers are competing in this pricey spring market. mortgage applications to buy an house rose demand was still lower than a year ago, but that annual drop is shrinking and it could be in part thanks to a.r.m.s last week, they surged to 11%. and that is a 14-year high the average rate on the 30-year fixed rose but the rate on a five-year arm, 4.7% they can be fixed for five, seven or ten year. they require a down payment. this was not the case in the early 2000s when poorly-written

arms were blamed for the epi housing crash. as for refys, arms are not helping too much and we're 72% lower than we were a year ago joe? just joe >> just joe. we're going to just, are we going to do that thank you, diane that. diana olick. but from now on, that's going to be, i'm thinking we may do that. just when we put who she is, don't put, just -- cher, diana, beyonce. >> just put diana. met me ask you one other question everything's in elastic now. we're going to pay for gas we're going to pay for whatever we want, because we haven't done what we wanted to do for so long, so we don't care how much it costs how long is that the case with interest rates and mortgages before it really starts sticking, do you think, or even prices? >> well, i don't flow know thatt

rea really applies to a house. but the fact that people are risking a little bit more, and i'm not going to say that arms are more risky, but they are risky if they adjust to a lhighr rate after five years. still, i am hearing from real estate agents that they are having to have tough conversations with sellers that the sky is not the limit on prices anymore there's still demand, people are trying but the sky's not the limit. >> are you hearing that people are pricing things low and getting five, ten, 20% higher? >> after two days on the market. it's the bidding war, you bid it up and see what happens. and you're right >> but we're seeing expectations slowing down it will sit there if you price it wrong and if you have these huge expectations. again, literally, in our town,

houses don't even go on the market they're sold before you even have an open house just because there is so much demand and so little inventory, and diana, you've talked about that, the inventory levels that are, if you've got to have a place to live you've got to have a place. >> i think's time, diana. it's been long enough. there was a single diana for a long time, but we've mourned it's been years and years and years, it's open it's available and i think you have it. diana. see you later. thanks >> okay. when we come back, purdue president mitch daniels joins us to talk about college graduates and much more. and later, mohammad el-erian joins us "squawk box" will be right back. so you tap ibm to un-silo your data. and start crunching a year's worth of transactions against thousands of compliance controls with the help of ai.

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...on netflix... ...prime video... ...starz... ...and hbo max! just say “watchathon” into your voice remote to add a channel or streaming service. . all right, welcome back to "squawk box. this is cnbc and the u.s. equity futures at this hour have been significantly higher of course where you staurt the day isn't necessarily where you end the day, let alone where you open the day dow futures up about 330 points. this was a head fake yesterday dow fluctuated all throughout market and ended down by the end of the session right now s&p is up by close to 50 points and the nasdaq indicated up by 177. the cpi numbers we get in 40

minutes time could be an impact even before the opening bell it is commencement season and new graduates from across the united states will be flooding the job market. for a look at what's ahead for the class of 2022, let's welcome mitch daniels, the former governor of indiana of the and miindiana. let's start with theis job market it has to be the best job market for the graduates. >> good guess, becky, it's not just the best since i've been here but the best in this century, as far back as our records go this was true last year. in our case, 98% of purdue

graduate al graduates had a job that we know of and this year looks stronger we know that employers have relaxed in many cases their requirements, either gpa or even of a diploma, which indicates the issues on the demand side. yeah, there's no question it's never been hard for a purdue graduate to get a job >> there have been reports that even with the great job market, graduates could have too high expectations in terms of salary. i think i read that the average graduate expects an opening salary of just over $100,000, and maybe that's about twice what the reality is. is that the case or does this depend on what your degree is? >> reality comes to young people in a number of ways. wait until they start paying

taxes. that will be another wakeup. all that said, whatever their expectations, they can certainly look forward to high prospects for employment and to employers who are, we now know are very eager. i'm tempted to say desperate, to retain the workers they have so possibly good opportunities for advancement, career development and so forth >> yeah, you just said something that employers are dropping demands they used to have, including even the demand for a degree does that mean people are dropping out of school or maybe not applying to school as a result because you don't need the degree to get hired? >> it's a very important point their i this is one of those best and worst of times situations. i think the prospects for young people, regardless almost of educational attainment are very, very strong. on the flip side, it has led to, along with other factors like lockouts and so forth has led to

a plummet in the percentage of young people seeking college you know, we may well have had for a long time too many students pursuing a four-year college degree i think we're running the risk now, after a 20-some-point drop of too few seeking the credential that would serve them so well throughout their lives >> let's talk about loan forgiveness. student loan forgiveness very a pretty good idea of where you're going to come down on this the idea that the president could forgive loans for people making less than $125,000. you've done a very good job at purdue of maintaining cost, kea keeping levels since all the way back to the 2012, 2013 year. what do you think about what's happening with college inflationary prices and what happens with student loan forgiveness? >> i think the forgiveness idea

may be the worst public policy idea of recent times i can't find any redeeming feature. it's a very unfair to those who did pay, as 99% of our graduates do pay their obligations it's a give to the wealthy doctors and lawyers are the two category whose would benefit the most even 5% even of the most modest suggestion, there are only about 5% would go to the bottom per percentile this is probably illegal congress is supposed to have the power of the purse it would be unprecedented in that way it's a terrible, moral hazard as the economists say meaning that people in the future will figure they can get off the hook, too and will borrow more than they should that will push up college costs. i just, i really wish this he

wo they would abandon this we should have to stand behind our performance. that would be a lot better way to get at it than this, you know, incredible pillaging of the taxpayer bit way, the final irony is who's going to get the bill if they add another several hundred billion to the national debt the very same young people in whose name it's being done >> and the people who have paid their loans in the past, too i think this idea of having skin in the game is really important. why aren't universities held to some of these things, too. the idea that cost go up every year without fail is kind of crazy. we're short on time, but how would you draddress that >> you just said it very well, becky. we all know that flooding of the market with subsidies has been a contributing factor to pushing up college cost and requiring schools to stand behind their performance would, i think,

really cause some moderation of that >> mitch daniels, purdue university president by the way, on the way out, i noticed that your students name add new virus that was discovered after you daddy daniels in your honor. how do you feel about that >> oh, you know, i've had animals of various kinds named after me in the past but this was always a secret aspiration of mine to have a mi mi microphage carrying my name. it's the nicest thing that's happened to me in a long time. >> mitch daniels, president of purdue university. coming up less than a half hour away, the biggest read on inflation data coming out at 8:30, basically 33 minutes

stay tuned, you're watching squawk on cnbc

good morning, and welcome to "squawk box" here on cnbc, live from the nasdaq market site in times square the u.s. equity futures are significantly higher this morning. right now, dow futures up. the nasdaq indicated up by about 1 175. in the meantime, treasury yields have come down a bit even from where we were yesterday at this point. you'll seat ten-year at 2.938% cryptocurrencies, which have suffered recently, are a little bit higher this morning. bitcoin is just above 31,000, almost 31,500. check out some news. the co-founder of terra usd saying that stable coin will adjust its pegging mechanism in

an attempt to stabilize the cryptocurrency this is the token that broke its one-to-one peg with the dollar and falling as low as 30 cents this morning according to the site coin gecko. terra usd's co-founder announced what they're call ing a recovery plan to rebuild it so that it is collateralized that means that it's backed by reserves but this had been a big concern, if they would be selling bitcoin, some of their reserves to stabilize things, turned into a cyclical muplummet. >> this is pretty interesting. >> what a run on the bank looks like >> i'd love not to have collateral for anything ever if i could throw a few algorithms with it >> the u.s. dollar used to be backed by gold

>> that doesn't sound totally safe, i don't know. >> that's been the issue with all these stable coins how well are they backed nobody seems to know some people think there's chinese paper behind these things it's the wild west and either the cfpb or something is supposed to come and look at this in some way there was a thread last night related, but unrelated, coinbase, brian armstrong out there saying everybody who has their money in coinbase is safe, yet, if you look through the actual risk documents, could you be a creditor of coinbase, the cryptocurrency you have in your account technically, technically, could go to the creditors of coinbase before it actually comes back to you >> that's crazy. and by the way, this idea, we call these things a run on the bank, something that looks like that the reason that you don't see runs on banks like that anymore is because the fdic which

guar guarantees up to $250,000. none of this stuff lives in that same realm, even though we call it currencies or compare it to something we've seen in other places >> right i should say, by the way, in the case of coinbase, brian armstrong makes an argument online that he doesn't believe that the folks are at risk and he believes that their money is protected. i should say that's what he says, but i will also say some of the documents athave languag that would effectively allow them to be creditors toyota says its profits could take a hit they would work with suppliers to come up with alternative materials. up till now, they have weathered the computer chip crunch well, tight supplies catching up and

china's covid lockdowns are taking a toll. meanwhile, tesla exporting cars for the first time since the middle of last month chinese-backed media outlet saying 4700 cars left the country today bound for show conv slovenia an economics professor, lisa cook cook, winning the vote to serve on the federal reserve board vice president harris breaking the 50-50 tie. just under 90 minutes until the opening bell on wall street and under 30 minutes now to the big inflation report senior markets commentator, what a title, mike santoli, joins us with what he's watching ahead of the data

is there a number, mike, that with cpi that could cause, light a fire under the market, do you believe that something, could it be soft? anything soft or cool that's going to be, well, that's tem fath temporary. >> a hot number. >> as expected, it's showing a slight deceleration. if it hits the forecast, and it's where the market's coming from right now you have to wonder if in fact we've already kind of built in a lot of apprehension about the overall inflation picture. i don't flow it seems as fif the market has been pressured enough. you are kind of going back to april, march of last year in terms of we were at these levels yesterday the market did hold. it's very twitchy.

up as much as 2%, down half a percent. but did not realliy have a pile-on effect there's a lot of rebuilding process that's going to have to happen take a look at some of the hardest-hit parts of the market. it's kind of a picture of the party being over in a lot of the more aggressive parts of tech. block is sort of a crypto-connected stocks. you have the cloud computing etf. ipo etf. vilification of the arc complex. maybe it's a little worse. the point being there's been this whole realm of the market mostly built on very excited expectations about market growth and then vyou have the same shap of downturn. the big question is, this is sort of like a post-peak 2000 to

2002 type of shape of a chart. of course you also have to drag down the bigger blue chips which did eventually happen back then. but now maybe they're a little sturdier we'll see. on the inflation story, the commodities index, it tracks the index of commodities it looks a lot like oil. but you've kind of been capped here for a little while. it's trending higher, but this is going to create a little less impetus. commodity's not the only story but a big element, joy, ae. >> mother of all bubbles or jeremy grantham, if you remember what's a little bit concerning or frightening, mike i remember '87 pretty well i'm not saying we're anywhere near '87 you're down so much at one point that you figure you've done almost all the work you need to do on the down side, and then

for that final capitulation you get the levels that are just beyond what you even considered possible and people are looking for this, you know, real violent final capitulation i don't know where that would take us. that would take us down to levels in some of the averages that would be frightening if this really is the end of a mega bubble because inflation and rising interest rates. if it's the end of an era, it could get much scarier or not. maybe we are making a slow bottom where you don't get that final panic. >> it can happen, obviously, either way it's been pretty orderly i know it maybe doesn't feel that way in terms of the overall indeces. you're down 17% or something like that. it's happening in this ratcheting fashion you're right one definition i like to use of a bear market is the overshoots occur on the down side that's where you get the sticker shock as opposed to a year ago,

year and half ago you say what could stop this market it just wants to go higher we're in the whiplash of that. >> all right, thanks, mike >> talk more about the markets right now with liz young, head of investment strategy at sofy it has been a whipsaw. and we are now about 20 minutes away from this inflation data. are you expecting it to come in hot, cold? what's goldilocks for new. >> first of all, this is the first data point that we might get that shows that inflation is cooling. i do expect it to come in close to expectations. we're looking at 8.1%. but again, one data point does not make a trend even if it does come in cooler, that does not fix the problem. >> we may see a little brief market rally on that and a little relief from it. but we still need more time.

and nothing is going to fix this but the passage of time. it's difficult to get that bullish over the next 60 days or so until we have a couple more hikes and a couple more cpi reads. >> here's the question if the conventional wisdom, and i'm not saying you're conventional but if the conventional wisdom is that we still have more to fall here in terms of where the equity markets are, i thrink th likelihood is that we're going to see interest rates go up. is there any argument to say that you should be buying in this market? because the conventional wisdom always turns out to be the opposite in terms of when the buying opportunity actually s >> well, so i think right now there's this huge temptation to call the bottom, and the conventional wisdom would tell you that we've gone down far enough, but maybe there's a little bit more to go. to mike's point we tend to overshoot on the down side i do think there's a little more space we could go down here, but yes, we've seen a lot of the contraction already.

we've seen multiples come in quite a bit. you could start dipping your toes into places like tech, like high-quality health care, like high-quality bonds, but don't do it with the expectations that we won't see more volatility until the second half is over. we have to get to it first if you must buy things, you can do it right now, but i would average in, and with a vix at these levels you can't have the expectation that things are going to bounce off the bottom and go straight up >> how do you look at the valuations today of what were the pandemic plays that did so well there are so many people looking at those, at the prices they are today. and of course they're looking at where they used to be, and they say look, it looks cheap relative to that, but life is relative, and i don't know if those prices at their highs ever made any sense to begin with how do you begin to say, okay,

this is a good entry point or it's still a terrible entry point? >> i think a lot of those plays maid made sense in the environment we were in which was very, very low rates and very, very low inflation. those valuations do not make sense anymore. and you have to think of it from a thematic standpoint. if we are thinking about stay-at-home stocks i don't think a lot of those make sense going forward. when you look at what's going to happen in the economy and the future of the american economy, there are still a lot of things that can do well, but they're getting hammered right now so thinking about things like liber electric vehicles, cloud computing. yes, they're going to go through some pain, but they're also going to survive this. those are some of the things that when you think about dipping into valuations that five years from now we'll look back on this and they'll look like a great bargain, think about the things that will do well over the next

three-to-five-year period. >> liz, always great to see you, thank you. >> thank you >> becky >> still to come that is correct nucome, that number of the morning. why more oil or coal cing om out of the ground in the united states may not spell much relief for consumers. this is "squawk box" on cnbc and not appreciate when they do? i love it when work actually works! i just booked this parking spot... this desk... and this conference room! i am filing status reports on an app that i made! i'm not even a coder! and it works!... i like your bag! when your digital solutions work, the world works. that's why the world works with servicenow.

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let's hit energy right now a new report from the federal government shows that higher prices are finally likely to drive up oil production. however, that does not mean that prices are going to come down, at least not anytime soon. brett brian sullivan is hireere with that >> this report is part of the federal government's latest outlook piece that covers oil, gas, electricity, coal the ei outlook says despite all the political groaning about u.s. oil companies being stingy on raising output they are projected to hit a new daily record next year at 12.8 million

barrels a day, surpassing 12.3 million barrels a day in 2019 that was the record. the agency also sees continued high prices. with great crude in europe staying above $100 a barrel for the rest of this year. they do note that this forecast is highly uncertain, given the russian war, understatement. we've also got major labor issues and oil fields and shortages of things like steel tubing due to import issues. all of this coming as wholesale gasoline prices hit a new record high this week i know you talked about it earlier in the show. prices at your local pump are likely to go even higher i'm sorry. that is not all. you're likely going to pay more for electricity this summer. because they are predicting overall electricity use will grow a little bit this summer, even though forecasters are

calling for slightly cooler temperatures that demand growth will help push wind and solar use up to about 11% of our power-generation, but guess what else is going to rise? coal coal the note reports that coal as a power source may grow about 3% this is in america, buy ty the this year from last year, and that is below their previous estimate of 7% for coal. the agency saying the limited capacity to increase production. no kidding that is going to keep drive natural gas prices higher. now the hub will average $8.59 per unit the second half of this year, a dollar higher than right now. that would be an 88% jump in gas prices from last year, which means if we do have a hotter summer, viewers' electric and

gas bills could also rise like what's happening in the uk and europe, maybe motte tnot that m more >> maybe we should get to this news from ukraine. just the idea that the gas that flows from that key pipeline from russia may have been cut off. ukraine says no more what do we know, and how will that impact things in the united states >> well, it could jack up natural gas prices all around the world. let's go to what we do know. there are reports that a key natural gas pipeline had its flows cut ovulateff late yester. the ukraine suspending flows from this one pipe hline, providing 25% to 30% of the eu's gas. clearly some issue with russian troops, either in and around the

pipeline that the pipeline operator said could compromise its safety there are no reported damages to the pipeline and gazprom says that they are fully, basically sourced and that they are ready to send gas through it again, this is about 33% of yurp europe's gas coming through ukraine. ukrainian officials say they are working to shift those gas volumes to another pipeline further in the forth, becky, but gazprom saying that is difficult to do if not impossible. all this as the eu is trying to figure out how to get fully off russian gas and oil. but before any solution is found, if we see gas flows get cut off with this pipeline, extensions even more, it will impact prices particularly in

asia buts also likely here because everybody's competing for the same gas, particularly u.s. lng for the first time, we have seen natural gas flows get cut off, it may be only for a day or couple hours but it is the start of something and a scary situation and another development in that war in ukraine. >> you know, there are some things happening in the energy markets right now. i think we need you here just about every day to keep us up to date, brian. thanks, we'll see you later. coming up, it is acoming a deep dive with mohamad el-erian he's going to join us out of his new cpi data coming at the bottom of the hour coming in moments. you don't want to miss it. stay tuned quk x"etnsft this.

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when we return, the final countdown. new consumer inflation numbers next the market's been waiting, and we have a panel assembled and waiting with predictions don't go anywhere, "squawk box" will be right back

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welcome back to "squawk box" on cnbc. we're just under two minutes away now from april, the consumer price index for that month. we have a panel, yeah. usually that's reserved for jobs fridays, but we have a panel lined up for you to take us into the number and share the insinstan reaction let's bring in austan goolsbee

also tyler goodspeed, former acting cea chairman, now at the cato institute and stanford's hoover institution stepha stephanie joins us, we have a mike santoli and a rick santelli you know, that's just, that's problematic. we're going to get to you in just a second, rick. for starters, it's easiest for me to go bright aright and then clockwise. austan, are you nervous? going into this number or do you think it might be a little bit of a respite? you never get nervous. >> we know 11 of the 12 months that make up the headline number for this year, but the month over month, what was the new

inflation, i'm going to keep an eye on that. this could tell us whether this is going to stick with us for a long time or whether team temporary's going to come back out of the closet. >> i was going to go clockwise, but i'm going to stall rick santelli, the numbers please >> the numbers please. and here they are, our consumer price index for the month of april headline expected up .2, up .3. and remember this is a big drop from up 1.2 last month, which was the highest since 2005, if you strip out the all-important food and energy, expected up .4. a bit more, up .6. the high watermark here is up .9. that was in april of last year, and that went back to 1981 and the money ball, year-over-year headline, up 8.3% it breaks the streak of 7 higher

year-over-years in a row because in the rear view mirror, we have 8.5% and of course 8.5% takes us back four decades itsa it isa small reprieve but a reprieve nonetheless same dynamic, higher than the 6% expected it was up 6.2. 6.5 in the rearview mirror is the highest since 1982 we see interest rates. they have changed rather dramatically rates aacross the board have moved from down five to up four or five. the reason sqis quite obvious even though there are moderations, the moderations are very small we do want to keep a close eye on several things. food and energy really did

throttle up to the upside. so when we looked at headline, when you stripped out food and energy, the fact that it shoved up showed us that those moderated a bit in the headline number yesterday what did we learn, $4.37 a gallon, a new high for gas. some of that feature of prices moderating a bit may be something tenuous at best. i will kick it back to the team to discuss some of these numbers. >> we have some really eminent guests, but i got to go to mike first. the market reaction has been swift. we talked just a few minutes ago, mike santoli whether it was asymmetric there was nothing that was going to make people happy, and it was not as much of a respite as we had hoped. the market immediately sold off. >> if we somehow got a light number i think the market would have embraced it the last few days you actually have seen yields come in, market

implied projections. you saw people moderating their expectations lani leaning on that foot i think the number comes as an unpleasant surprise today's number doesn't settle the peak of inflation in any satisfying way i think we're stuck in the same m market and same drivers. >> i think the market was looking for a respite. and things are going back up i don't know if it could have been cool enough the market would have said it's going back up. i don't know we will never know tyler goodspeed, what do you, this is a 30 or 40-year change in what we've come to expect so it is jarring >> it is jarring, and joe, i wish we'd had a chance beforehand, i was going to say i was going to take the over on

this one is there go real wages for the month of april the second reaction is that there were some transitory factors that were actually bringing this number down. i'm looking at used cars which shaved .4, which were down .4 of a percentage point there were base effects that weighed down on inflation last month. but it's a mistake to be looking at a lot of individual components the bottom line is this is a broadening problem when you look at any survey of households, expectations have risen and we're seeing a broadening of the inflationary pressure public rent up .5. those are big kpoecomponents of. >> austan, we all have our own biases, and i know you'd like to be sanguine or happy but you're always honest when it comes to being a concerned

economist. >> we shouldn't describe it as anything other than what the facts are. hopefully, this indicates we hit peak inflation in the past it's down. it's not down as much as we wanted or we expected. it's in the context that in europe, because of these energy and food components, their inflation's going up even more, but i think, you know, on those components, we're likely to continue to have some bumpy ride >> it might be worth clarifying on this, gentyes, in the last cl months since the invasion of ukraine, if you look at a harmonized picture of inflation, in the 12 months through february 2022, inflation, the increase in the rate of inflation in the united states was more than five times that of the yeuro area.

>> that's through february and not taking intoaccount what i just said, if you look at the energy and food since the accumulations of troops around ukraine, you've seen in the last two months, inflation going through the roof in europe so compared to that context, it is a little better in the u.s., but it's still not where we wanted it to be. >> i'll agree with that. it's just in terms of the underlying inflationary pressure building in the u.s. versus elsewhere, it's a lot more broad based. >> i want to drill down on this a little bit more. so tyler, do you blame fiscal, 1.9, i don't know, whatever we spend in rescue act, you blame that you blame an overaccommodative fed? where do you place, or there's reopening, the pandemic, supply chain, there's a lot of blame to go around. where do you put the blame >> there's a lot of blame to go

around, and austan's right, in europe, food and energy have been a big deal in the last couple months, but in terms of the underlying inflationary pressure the real diversion between europe, inflation in the united states is a little below the euro rate. it was in march 2021 that the diversion exploded demand exploded. demand for goods took off, growing at an annualized rate of 240% that's a lot of demand on a supply side that was still recovering sgll >> maybe it was necessary, austan, with what we were going through? >> rather than argue what happened more than a year ago and emphasizing that if you look at the producer side of inflation it's up everywhere in

the world more than on the consumer side and up more in europe and asia than in the u.s. instead, if your fear was demand driven from stimulus, you should be fearing deflation this year if you look at the gdp number, we now roll off the stimulus and it cut 3 percentage point off gdp growth i don't think the demand stimulus can explain the continuation of inflation. i think for that you've got to look at the supply side. >> oh, yeah, it's called the trade deficit. we want imports so badly that spells demand d-e-m-a-n-d. import demand. >> cost push and demand pull factors and inflation expectations have now risen. >> they've not risen to 8% >> before rick got in,

stephanie, i want to get to you, but i really want to let rick pile on with austan if possible. maybe we'll get, i'm kidding, austan sort of. >> you're not kidding. >> stephanie, what do you do would you change what you said earlier for, you know, how to position yourself now? >> no. look, the last couple of days, mike said it best, i think there was chatter that we going to say oh, this is the peak. the number was going to be so much lower than expected and it was going to be a surprise and then stocks could rally, and it's actually not happening. no matter what, as i said earlier, inflation is high, even if this number came in better, it's high. it's going to stay high for a very long time, and i'm more worried about the wage side and the rent side of inflation because i think that's much stickier and we've seen a lot of various different data points that suggest that we are seeing a lot of inflation on the wablg side, flight so wages are up

5.5% o these are year-over-years. employment cost index of 4.5%. these are huge, huge, huge numbers. my point about mentioning this is i don't think the fed can really do anything unless it goes into a big recession. that's possible. to get this inflation down and on the rent side, the, they a are talking about rents being u higher so this is a really challenging market we see multiple contractions it went from 21.6 times on the s&p 500. we could go back to the average of 16 times or even overshoot for that matter. so that's on a down side the fact of the matter is there are always uncertainties i would still look for quality

companies, free cash flow companies, good balance sheets a lot of stocks are on sale, but you don't want to go all in. that's kind of what i've been doing. i've been nibbling on the margin, definitely on the service side of the ledger so just quality and some growth names that i think are way oversold >> rick, you've had plenty of time to think. i think both tyler and austan, my spin meter didn't go off lik didn't go crazy for what either one of these guys were saying. they were factual but taking a look from maybe different viewpoints but did your spin meter go off for one more than the other, rick >> you know, there's certain big things i would say a little bit of my dial moved there on the notion that this is much less on the demand side. i don't necessarily see that another thing nobody's bringing up that's really bothered me

since friday afternoon that was the big jump in consumer credit that we saw. that was over $50 billion. han t and that is disturbing. when you sighee what gas pricese doing and when you think of how much of that is going on credit cards, are we running its course on that? is our consumption driven economy running into a problem known as high prices and credit? we need to really pay attention to that. because the one thing we just keep assuming is that we're going to continue to see the consumer very strong in the u.s. and i'm not necessarily questioning that maybe the consumer credit number was a one-off. but it is something to pay very close attention to >> bank of america >> did you, what did you tell them to do do nothing don't do student loans? don't do anymore build back -- it's got a new name now, build back

something. >> build back later. i don't think that there's a lot that the white house can do. 95% plus of economic growth and inflation is happening in the private sector as i say, you keep an eye on the producer price side, which is, gives you an indicator about the supply chain it's up double digitsary where everywhere in the world, and we've got to get control of those costs. hopefully, fingers crossed, we can get out of the covid era if we can put the fear behind us and get back to normal times there is the possibility of a positive supply shock, of labor supply going back to services. people can start spending their money on services again instead of physical goods which is the thing that's been overloading the supply chain we could see some relief as we go throughout summer but if the war escalates or covid gets a new variant and we

go back into the same kind of variant we played out at the end of last summer then i think we have problems. >> see austan doesn't really want to spend anymore money, i don't think, tyler so you don't have a foil >> right, although -- >> i'm not quite as -- >> ever. >> i'm sorry, go ahead, tyler. >> i was going to say, i'm not quite as optimistic that this pivot from goods back to services is necessarily going to deliver us from this challenge, because at the end of the day, services are five times as important in cpi as goods. so even a 5% decline in goods price inflation is going to be offset and we're starting to see services creep up with components like rent i agree that there's not as much the fiscal pollicy can do but i wouldn't be advising the administration to be signaling an intention to raise taxes on

capital formation, domestic business formation last month labor force participation among every age cohort over the age of 30 declined in the united states. it was only those in their teens and 20s who increased in the higher rates >> it's amazing, bitcoin, immediately, just like the ten-year, the kwyield, they're all, we're back to, dare i say risk off, makes me feel really smart. people people who say that. >> risk on, risk off >> i don't know about 12,000 holding on the nasdaq. and it's great to tell you that i covered my shorts.

thanks for telling us you were short, david thanks oh, you covered your shorts. okay so you've been short this whole time god, you're smart. thanks for telling us. next time tell us that you're short. anyway, what do you think, santoli? >> yeah, well, it all is pretty binary in the short term i do think that, you know, the market was leaning in one direction. it didn't get, it didn't get confirmation of the way it was leaning. we'll see how it plays from here i tedon't think this really changes the fed trajectory probably financial conditions have to tighten, which means the markets have to get a lot worse for the story to change at this point. maybe motte tnot that much in t policy was affected by today's number >> austan, behave your self. i know you're kind of on the defensive a little bit

things are not really going so great for your side here thank you. tyler goodspeed, good to have you on steph, thanks for the market and santoli and santelli, i kept it straight it's very close, and i never even said "higher. >> i will put my market down around 3.25 ruffle troughly. >> good to end there the thank you all. see you later. thanks. >> >let's talk more about this inflation number want to get down to the new york stock exchange where jim cramer joins us yesterday you were talking about how you thought maybe we were at a bottom and mr. tenpper was talking abot how maybe we at the bottom >> there's two kinds of stock,

the stocks that don't have any possibility of seeing profitability and those are still sales, but what they've done is created a very attractive opportunity in those that are going to have profits i think that there's two sets of stocks the stocks that are going to keep going down because they don't have a viable business model. and then there's the companies that are doing quite well whose multiples have come down but then they start bifurcating. and once they bifurcate then you have a chance to do some buying. >> i have a question that came in from someone on twitter a couple days ago. we often talk about individual stocks that you like are there actually active managers these days? a lot of our audience buys mutual funds, buys etfs and the like are there things in that space that you would do in. >> no.

there's, the overindexing is kind of repulsive. and there's really not anything that i think is really meant to be able to help us what, i mean that. i think what you're trying to do is find high-quality franchises that are doing very well within the context of a lot of companies not doing well a lot of companies that have gone public that don't seem to have any opportunity to be able to be profitable so as those go down, it puts a premium on the ones that are very good the and i think it's just good hunting here we don't want to get in a situation where we hate everything as the coinbase comes down, it actually makes the real bank look better. obviously right now everything looks bad today. there's a lot of companies doing the wrong thing, but there a lot of companies doing the right thing, and i think they're going to be rewarded >> bitcoin is now coming in

under 30,000 >> that guy armstrong, he tweets, look, we're not in ink dau danger of goin there are otherworldly things happening. a lot of stocks are down big, a lot were public in the last 18 months they're trying to pivot but they can't because you don't have businesses that were meant to be able to miake money. businesses meant to grow revenues, not unlike 2000. things switched. you went for companies like merck. that's happening every day look at the end of the day -- i know that koopman said there are not a lot of stocks that open down and come back up. i'm hesitant to disagree with lee, but there are a lot of companies that are real like a general mills that go down and they come back up, clorox goes down, comes back up, colgate,

which did not have a good quarter, goes down, comes back up but they're household names. instead of going after things that have been obliterated with no reason to own, there are incredible companies i think the etfs are a tremendous distraction these things were created by people wanting to that's fine, that's the american way. but don't think for a minute they were trying to help you, not even for a minute. >> jim, we'll get a lot more of your commentary and thoughts in just a couple minutes. meantime, we'll have allianz advisor hamomed elle-erian joining us do i just focus on when things don't work, and not appreciate when they do? i love it when work actually works! i just booked this parking spot... this desk... and this conference room! i am filing status reports on an app that i made! i'm not even a coder!

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cpi krep consumer price index coming in at 8.3%. joining us now to talk inflation, what its means for the fed's next moves and for the markets is mohamed el-erian. he's allianz adviser and president of queens college,

cambridge. markets reacted as you might expect ten-year rise, yields up, stocks down on this news because it probably means that the fed is going to have some more significant work to do and if not, inflation is going to be really hard to tamp down >> you're absolutely right, becky. what these hot numbers tell us are two things, for economy, for social and political aspects we have a persistent inflation problem that can also become a growth problem, and then for the markets not only are we dealing with interest rate risk and liquidity risk, which we've been dealing with for weeks now, but we have to worry about a bigger mistake. so these numbers are consequential and the reaction of markets, be it stocks, bonds, bitcoin, it's understandable >> let's talk about what this means for economy first.

somebody pointed it out, maybe tyler who said that this means the real wage growth that we saw for month of april is wiped out and then some. people are going to be under more pressure. things like gasoline, things like food, things like rent, those are getting more expensive, and that's something nobody can avoid >> that's absolutely right that's whennen inflation problem becomes a growth problem affordability. the extent to which high prices destroy the mark it's just a matter of time until we're talking about a cost of living crisis, and this is what it is. everybody is focusing on the headline number, that's understandable, but look at the call, 6.2, and look at the composition of inflation that suggests that there are many drivers now. this is no longer an issue about just the ukraine war this is a broad-based inflation process that the fed has fallen behind in a major way. is too how dud the fed digest

this this morning? are 75 basis points back on the table? is there something else they can do >> first, they have to be more humble and they can't take anything off the table the market was right in reacting negatively when the fed tried to be too specific. it was period precision. you can't say a 75 basis points is off the table you cannot say the neutral rate is 2% to 3%. you have to keep your options open so the fed right now needs to be a little bit more open minded, not trying to just give us good news, be brutally honest as dudley said today in a comment, be brutally honest about the situation. follow the bank of england that has been very open about the risks facing the economy >> from a policy perspective, the administration, joe biden, the president saying yesterday that they're looking for any and all steps that they can take i can understand the idea of a gas tax holiday on a federal gas tax, but just about everything

else they're talking about could be more inflationary it's hard for an administration to sit on its hands as you get closer to an election day. but the things they've been talking about, what do you think of those policy, mohamed >> it's hard to say sit on your hands. this is a political problem and social program as well as an economic and financial one as to what they can do, look, the ball is mainly in the fed's court. it's up to the federal reserve to contain inflationary expectations having said that, whatever the administration can do on the supply side, be it supply chains or labor force participation is going to help, but it's not going to help immediately. it's going to help over the longer term. so the administration must continue on that track, but really the ball now is in the fed's court and it has been for a while. >> very quickly, what do you tell investors to do today i tell them what i've been telling you for the last six,

seven, eight weeks -- be cautious we are pricing in a whole host of additional risks into this marketplace. so be cautious look for companies that have strong fundamentals, that have two things -- pricing power and relatively inelastic demand. >> mohamed -- >> good bargains >> we cured ourselves of if dip buying that was your thing. it had to end and ended. you should have called us and said it's over >> i put it on twitter i've been dying to talk to you. >> i thought you were banned from twitter oh, no, that wasn't you. >> it's been on twitter. i said -- >> okay. what was it? three things >> foe mo and tina. >> mohamed, appreciate it. dow futures down by almost 200 points the nasdaq is down by just over

200 points you're watching the s&p futures off by 40. ten-year rising again on this expectation that the fed will have to do more or that inflation will get out of control. make sure you follow your coverage on cnbc all day join us back here tomorrow see you later. it's time for "squawk on the street." >> good wednesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber dow futures lose a 300-point gain and then some as april core cpi runs hot, up six points, even as the two-year rockets near 2.9%. we begin with the market reaction to the april cpi data jim, used cars down month on month but new cars as you suspected -- >> phil lebeau yesterday i think there's enough so that the fed keeps pu