it is 5:00 a.m. on wall street here is the top five at 5:00 the fed rolling out the biggest hike in years. investors cheering it, but futures are down again as wall street eyes a coming recession a new potentially housing headwind climbing under the radar. collapsing mortgaged back. another company pumping the brakes on hiring. and mr. musk goes to san

francisco. elon set to go before twitter employees and set his case for the takeover it is thursday, june 16th. you are watching "worldwide exchange" here on cnbc good morning, good afternoon, good evening welcome from wherever in the world you are watching i'm brian sullivan thanks for being with us let's get to it. kickoff the hour with the check on the markets and money after the fed rate decision. stock futures are accelerating on the down side down across the board. dow futures down 500 points. nasdaq down over 2%. investors eyeing more rate hikes and likely recession we are seeing the markets right now should they open here wipe out everything they gained yesterday. stocks had a decent day. a little bit of relief rally on

wednesday following the fed rate decision dow down 1%. the nasdaq still down 30% on the year if futures hold, we will eliminate the gains yesterday. bonds really are the bigger story around rates 10-year treasury and borrowing kost costs starting to soar the oil market crude oil under $116 per barrel. this is after president biden urging owners to produce more gasoline he said he will take some kind of action on it. refineries running 100% now. it is difficult to see what can be done. it is wti at $115 and change right now. we see bitcoin up.

it was a moment ago. now $21,700 not rebounding let's go around the world with julianna tatelbaum in the london newsroom with the trade in europe and interest rate call by the central bank overseas julianna >> brian, good morning in terms of overall trade here, the story has matched what you have seen in the u.s. futures. european equities lower this morning. the dak is down 2.5% and one stock is trading higher in the index. we are seeing losses for the french market of 2%. italian market pulling back more than 2%. the swiss market under particular pressure today. under performing down 2.7% you mentioned big action from the key central bank the swiss franc is soaring after the bank hiked rates for the first time in 15 years

lifted rates to still negative 0.25%. it said it cannot rule out further increases as it looks to slow inflation it surprised the markets with an interest rate hike and went more aggressive with 50 basis points rather than 25 swiss franc is strengthening against the dollar the swiss market up 2.7% brian. >> julianna, it is not just them we have the rate decision from the bank of england this morning as well. what is the timeline what is the expectation? >> here is the deal. brian, the bank of of england expected to hike the rate 25 basis points today aside from the decision, investors will watch how they vote over how to tackle price pressure to give you a sense of the

inflation picture. 9% in april. and expected to hit 10% this year brian, the expectation officially for a 25 basis point rate hike, there is a lot of debate if they go for something bigger now we have seen 75 from the fed and 50 from the s&p. >> those are big inflation expectations 10%. wow. julianna tatelbaum in london thank you very much. back here at home on wall street investors digesting the fed reserve's biggest increase since 1994 .75% the central bank expects the funds rate to increase by 1.75% over the next four meetings to end the year with a benchmark rate above 3%. jay powell adding it is all about flexibility. >> i think we'll know when we get there. honestly, that would be -- you would have positive real rates

and inflation coming down by then you have positive rates around the curve. the neutral rate is pretty low these days i would think it would you know what? we will find that out imperially we will not be model driven about this we will look at this and keeping our eyes open and reacting to data on finance conditions and what is happening in the economy. >> all right keeping theeyes open and reacting many investors now questioning if the fed reserve has lost control of the economy joining me now is priya misra at td securities. priya, welcome back to the program. do you feel like jay powell and had fed are in control >> you know, they have a dual mandate. they have a tricky job of balancing both sides thi

i think what we heard from jay powell, the market was priced for it i think he tried to downplay the negatives. he said the next meeting doesn't have to be 75. 75 is not the new 25 he tried to keep price stability. he tried to talk about the soft landing. here is the big problem. the fed is responding to inflation which responds to a big lag. i think they will keep hiking. we expect a 75 in july 50 basis points until then the economy is already starting to slow. i was surprised with the reaction after because the fed is calling for cuts in '24 they have the unemployment rate rising it is hard to finesse monetary policy with rates rising i think they did the best they can. the problem is inflation is too

high and they have to slow things down. i think the long end is already telling you that things will slow down. the economy responds to long-end rates than they spiked in the last couple months >> correct me if i'm wrong, priya, i do not believe the last few recent decades don't take me back to 1912 i don't think we ever hiked rates in a slowing economy and not had a recession. have we? >> right there are some episodes. not this space of rate hikes '94 was a bit of a soft landing. it was very tough for the market we had orange county and tequila crisis if they are following the path of '94 and it is not clear inflation comes down quickly enough, but i think that slowdown is something we have to navigate next year

it is all about are we slowing down to a growth recession which is what the fed is calling for i'm more nervous with the rate hikes over 4% and quantitative tightening which did not happen in '94 that is adding to pressure and even the fed that is nimble. they are moving data point to data point we are in the hard landing camp. growth will not just slow down to 1.7%, but recession of close to zero gdp. it is a tough market to navigate >> you know, it is 5:10 in the morning, priya i'll ask an insane question. i'll blame it on the hour. at what point do we talk about rate cuts? i know that sounds ridiculous right now, but i feel like the federal reserve is slamming on

the brakes because they see an accident and slamming on the brakes once we go around that which is recession or slowdown tslowdownv to gun the gas again is it too soon to talk about that >> no, that is a good question i have been getting that question that's very clear. they want to tighten conditions. there's no date. for the last 30 years, there is a date on growth the fed should slam on the bre brakes if inflation is too high, i don't want to say stagflation. if inflation is well north of 2% or 3% or 4%. chair powell talked about negative if headline inflation stays high, how can they slam on the

brakes that is the issue. that was clear yesterday the price stability is the number one goal. we are looking for rate cuts i have to say in 2024. late '23 that's a lot of time between now and late '23 if things slow down, we hear from the fed it is slowing to potential. i think they will have to look at inflation and if it is too high, their hands might be tied oftied >> yeah. if you are an investor, you will look out 9, 12, 18 months. not the next few months where they raise rates you have to look out at 2023 priya misra, i appreciate you getting up early priya, have a good day. >> thanks for having me. all right. take care. we are just getting started on this thursday. when we come back, jenny

harrington and dana peterson layout the economy and russia escalating the energy war with europe putting ppesher pressure on gas suli the fallout ahead as we roll on after this short break stick around 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! and it works!... i like your bag! when your digital solutions work, the world works. that's why the world works with servicenow. (vo) get verizon business unlimited from the network businesses rely on. that's why the world works like manny. event planning with our best plan ever. (manny) yeah, that's what i do. (vo) with 5g ultra wideband in many more cities, you get up to 10 times the speed at no extra cost. get verizon business unlimited

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welcome back to "worldwide exchange." it could be another tough day

for stocks dow down 480 that is more than we gained yesterday. if futures hold here, we wiped out everything we gained and that mini post feder rally we h yesterday. crude oil is still high at $115 natural gas rising to $7.63. it could be another difficult day for stocks we look at a likely recession later this year or early next year outside of that, let's check on the other top headlines including russia ramping up its energy war with europe pippa stevens is here with more on that. >> good morning, brian a story you have been following closely. natural gas in europe is surging after the russia's gas is

cutting the pipeline it will reduce delivery through the nord stream i pipeline it is to service equipment according to russia, but germany says this is political rather than technical kids under the age of 5 are one step closer to get a covid vaccine. fda committee voting to recommend pfizer and moderna shots for the age group. the fda is looking to authorize the shots this week. the cdc still needs to sign off on the vaccine before administered the biden administration says the shots could start this tuesday. spotify announcing it is slowing hiring by 25%. the ceo revealing the move in the email to employees yesterday. the the move is the latest in employment reductions.

it still plans to bring people on, but we will hear more of this type of announcement, brian. >> by the way, i know you do a good job with energy pippa, that slowdown in gas coming ahead of the expected heat wave in europe. they don't use air conditioning like we do that could jack up costs more. the timing is interesting. pi pippa, thank you. on deck, the manufacturing plant at the center of the baby formula shortage closing again weeks after restarting what it means for the race for the critical baby food back on store shelves. coming up. what's on the horizon? the answers lie beyond the roads we know.

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welcome back a market flash for you shares of robinhood falling to another new low yesterday which gives it a market value below the value of the cash it has on its balance sheet. robinhood's market cap falling to under $6 billion. they had $2 billion of cash on the balance sheet at the end of the first quarter. some analysts cut their target this week. that stock continues to fall it is below $7 a share market cap below $6 billion. ouch. now let's get a check of the

headlines outside of the world of money and business. frances rivera is in new york with those good morning, frances. >> good morning, brian the january 6th committee will be back this afternoon with the third hearing on the capitol riot the panel is expected to make the case that former president trump put his vice president's life in danger we will learn more about the pressure campaign on the former vice president john eastman pushed the theory that pence could stop the election certification by rejecting some slates of el electors we can hear from former aides of the president who rejected that plan. the monroe county sheriff says multiple buildings were damaged incentral wisconsin after the tornadoes tore through. and game one of the stanley cup finals looking for the first three-peat

in 41 years. the lightning tied the game at 3-3. that score held until overtime where the avalanche found the back of the net. the avalanche win 4-3. game two is in colorado on saturday those are the headlines, brian back to you. >> the hotbed of hockey. tampa bay. frances rivera, thank you still head the federal reserve going big. raising rates. the most in 30 years will it crash the economy in the desperate raise to squash inflation? we have jenny harrington and dana peterson with us. and as we head to break, here is former golden state warriors president rick wells. >> i just think june for the

lgbtq community is a time to reflect on the journey that we've been on. take stock of where we are right now and think about the future i'm proud of the people out there telling their stories and all walks of life and really help people understand that we're rt othfaicf ispaf e br oth country.

all right.

steep stocks selling following the interest rate hike by the federal reserve. this one done other than our fed. futures are down jay powell looking to hit the brakes on inflation. announcing the biggest rate hike in 30 years. will it be enough tie a bite out of inflation and record gas prices. do they have you eyeing an ev? if so, tesla has gotten more expensive. today's thursday, june 16th. this is "worldwide exchange" here on cnbc welcome or welcome back. good thursday morning. thanks for joining us here on "worldwide exchange. let's get to it with the check on the markets and your money. i'm sorry to say it is not looking good even the buying yesterday and maybe that rally yesterday is accelerating on the down side.

nasdaq futures are down 2.5% basically, if we finish here or close throughout the day like this, we will wipe out what we gained yesterday s&p and dow are down as well tomorrow, by the way, is triple witching three different options index and equities options expiring tomorrow that happens once a inqquarter. why is that important? we talk about it on the program about the market structure and the options trades matter to what happens to the stock market options have been happening. that could accelerate today into the expiration as people reset positions tomorrow wbi, wonky but interesting red on the screen. dow futures are down big 540 points in the bond market, the 10-year treasury at 3.38%.

bonds having a huge yield spike over the last couple weeks all that coming to a close today. at least not moving any more than they have we will see the market react the crude oil market $115 a barrel. crude oil. i stand corrected. $114.60. oil being sold, but still very high speaking of oil. here is a story you may not want to hear. russian oil revenue is not only rising, but back to pre-war levels at a conference yesterday, the russian energy minister saying export jumped 600,000 barrels this month from may levels if true, that would still have russian energy exports now below -- below pre-war levels, but with higher oil prices and russian revenue likely at or above that before they invaded

ukraine. also the international energy agency says those sales of russian oil around $20 billion month is up 11% from the month before the russian ruble is the strongest currency in the world this year. s&p globaliza saying with the embargo, asian buyers are buying up russian oil and india with russian crude. they do continue exports to slowdown the full european ban on russian oil starts at the beginning of next year. russian oil revenue at or above where it was pre-war and pre-sanctions. india and china just keep buying up all that russian crude at the discount let's get back to markets and your money in a macro way and the fed decision and rates

matters. with the rare panel on "worldwide exchange" is jenny harrington and dana peterson jenny and dana, thank you for coming on. we love having you on. jenny, we will start with you. your clients, i got your note yesterday, it was measured and calm we are going to fall again today. what are you advising your clients right now? >> i advise everyone to stay the course i know that's the most boring routine i can possibly give. it's real. i have been down on the eastern shore of maryland meeting with cli clients. here is the conversation the market is down 22% year to date let's say it gets trade to a mul of 14 times and that brings the market down 32% of the year. most of the work has been done

i met with a client yesterday who was surprised with a portfolio i do to the manage and it was down. both of those worked against her. i said it is too late to do anything now the bonds are down 12% year to date the growth stocks are already down at this point, most of the damage is done i don't think it makes sense to start to get aggressive and pi pivot. now is where you check on what you own and stay the course. if you have real dogs where there is never a recovery, fine. maybe you get out of those for the bulk of the portfolio, grit your teeth and get through it remember the fact you made more money over the past decade than you expected you put your head down and keep moving forward it is boring advice, but the right advice >> yeah. we'll call that bbi. boring, but important. you want to buy low.

you want to look for discounts everywhere else in your life, why not stocks dana, talk about the macro economy. i don't know what to believe, dana with my eyes, i see people spending every plane is oversold. i don't know what to think now we higear recession is imminent. >> there is a difference of what is happening now and what is happening in the future. you are right. consumers are spending although goods spending and retail sales was weak, we know people are shifting to services. they are thinking about going on vacation and going they are going to restaurants and back to sup sporting events the current conditions are fine. consumers are okay they are working they have jobs they have seen wages rise. after yesterday's 75 basis point

hike, many of us are saying this is illiciting a recession if the fed raises rates close to 3.5% and close to 4% at some point next year. that is aggressive that is raising rates into restrictive territory and that will slow the economy. >> dana, i'll do a follow-up with you this is, in many ways, global inflation story and supply chain story. i half joked the other day with all due respect to jay powell and the fed, unless they want to dlrill an oil well, i don't know what they can do about inflation. this is not a normal monetary policy issue, is it? >> no, it isn't. the thing is there are two types of drivers

demand and supply. on the demand side, yes, there is still consumer spending people are working many people are still looking to buy a house. the fed can address the demand drivers by raising interest rates. the fed cannot address the supply drivers that are lifting inflation and things you mentioned already. the war causing global commodities prices to rise or china shutting down over covid china is a major manufacturing hub and supply chains. >> you know, jenny, you ever listen to sports radio >> nope. i don't. >> okay. if you did, you would know that everybody now is a gambling expert sports gambling is a boom. everybody out there says you have to put $100 on the bengals minus 3.5. i feel the federal reserve is the sports radio guy who went

7-44 in his locks of the week last year, but is still asking you to follow his bets i heard jeff on cnbc yesterday saying jay powell has no credibility left they got it so wrong why do we listen to them because we have to and they're moving markets do you trust jay powell and the fed? >> yeah, i actually do i think it is overly cynical and attention grabbing to be too negative on the fed. here is what we know about the fed. they are really smart. you are really smart, brian. i'm really smart i don't get it right all the time you don't get it right nobody gets it right all the time you trust people who are trying their best with a lot of information and more information than you do. i think they did the best they could. this is one of the things that i like about the fed there is fed leadership which has been the least partisan

agency i experienced i think they try their best. what i love about jay powell is he does exactly what he says above all else and you talked about this earlier, i will remain flexible. that's what i want i don't want him to dig in so hard that he can't do something. you know what the reality is he saw the cpi numbers last week and the fed said, oh, boy. this is worse than we expected we are going to be flexible. that is what i do as a portfolio manager. that is what you do in your job. you adjust to the news coming your way you try your best. you listen to the fed. you do hope for the best i think it is overly cynical not to i think it is unintelligent not to say this is an agency that is trying its best. the truth is they have done a good job here we are -- go ahead. >> no, no. i was going to say and i'll go

to dana because we're running out of time. i'll agree with what jenny had to say because there is no history book for what happened the last pandemic in 1968 and 1918 we didn't have a global economy. we didn't rely on shipping from around the world and covid lockdowns and the export terminal in china. there was no playbook for this do you trust the fed going forward? >> actually i do i think markets also trust the fed. in fact, after yesterday's actions, stock market rallied. that is because people believe the fed is credible. that is one of the three things the fed is trying to address of the make sure to bring down inflation and make sure that inflation expectations remain anchored and markets and businesses see them as credible. i think the fed is winning at that >> all right little love for the federal reserve from jenny harrington

and dana peterson. we are trying to play both sides. jenny and dana they have love for jay powell and company yesterday. by the way, great restaurants in ea easton, maryland check it out >> ai'm a pro at the food down there. >> you know it got to love caroline county. thank you very much. let's get a check of the top stories this morning including elon musk telling twitter that he still likes likes them is this eighth grade, pippa? do you like me or like like me he >> this is an ongoing saga here. elon musk is expected to talk about the desire to own twitter. he will answer questions for an hour at the virtual town hall meeting which starts at noon

eastern time musk is likely to clarify recent comments about working remotely and touch on his strategy for twitter. including advertising and sub distributions. twitter is aiming to hold a shareholder vote later this summer and close if possible. tesla is hiking cars in the united states. the company's web site shows the price of the model y increased by $3,000 to now $65,995. the price hikes come as the price of raw materials surged. including aluminum used in cars. abbott labs stopped production of the baby formula after heavy rains flooded the plant in sturgis, michigan abbott notified the fda and said this will delay the formula distribution for a few weeks

it says it has enough product until it with reopen the plant had been closed in february and adding to a nationwide shortage. revlon has filed for chapter 11 bankruptcy. the move was expected as the company dealt with falling sales and rising debt load the company is controlled by ron perlman. brian, tesla's hikes with raw materials are hitting everywhere >> you reported on it. lithium, cobalt. everything is up rivian tried to push through a $20,000 per car rate hike earlier this year until customers rebelled i don't know how the companies will make money. >> they have all of the ev targets and they keep getting

pushed back because with we do don't have raw materials now they are passed on to customers. >> people are saying high gas prices are good. it forces people to go to evs. wrong. it damages the economy it raises the price of evs because people can't afford to buy them it is a negative for electric cars pippa stevens, thank you very much why not go out and buy a $90,000 electric car that will solve all of the problems right. on deck, the fed decision and our exclusive straight from the summit in berlin we have ddto sisitsky in just a moment that las fetime like happiness, love and confidence... you can't buy those. but you can invest in them. at t. rowe price, our strategic investing approach can help you build the future you imagine.

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welcome back most of the heavy hitters of the world of private equity and deal making are in berlin this week if the heavy hitters are there, you know leslie picker is there. she is she joins us now with a special guest. leslie >> brian, thank you so much. i'm here with todd sisitsky. todd, thank you very much for being here you are known for growth that sector has had a rough go recently in the rising interest rate environment

from a dealmaking perspective, that is a boon are you anticipating declines before the buying emergence? >> i think the investing is the investing growth that we are excited about. that is different from grouped with growth. the environment has been unusual. we have emphasized growth at the expense of profit. our companies are different. they performed well. in the capital franchise, they were up and it is our mature business which is up 23% in the period from our standpoint, and the profits grew more. from our standpoint, what we are focused on is excellent businesses that will grow in the secular way through different

economic environments. we have been nervous about the downturn, we have modelled recession and expectation to exit at a lower multiple than we entered for the fund cycle the short answer is we feel good about the growth we're investing in and it feels different from the more momentum growth than a lot of the companies that have crashed. we feel good and from our experience from the last many cycles, they will perform well in the environment >> you think the current multiple suggests there is a bottom in the sector >> in terms of the overall market -- the market tends to proceed the market we all lived through them before i think that what will happen is it will take time and it will be bumpy and messy for a day.

in our world, it tends to not be the first month that opportunities present the themselves the song of the ipo are no longer competitive that creates opportunities often times our experience is it takes a couple of quarters, not a couple of years, but quarters before you see resetting from sellers and see opportunities. whether it is what we signed in 2009 and some come from locations like this. you need to be patient. >> your current portfolio companies and are you experiencing what we see every day? coinbase and redfin announcing layoffs this week. in the shift away from growth at all costs to profitability are you finding there needs to be cost cutting going on >> our companies and i say this and i look at this every week. our companies continue to do

quite well they don't need a shift. they've been focused on growing sustainable business models for a while. we have been feeling very good about the durability in anticipation of the environment, we have been focused on secular growth. it may not be the best leading indi indicator. we are not immune to the challenges in the market we are invested in higher companies. input costs we can pass along. these are important companies with important relationships are com customers. it is not just economics that is part of it it is trying to find ways to make sure you can attract and retain people. we had all of the cfos and cros together three weeks ago in california to talk about best practices and learning from one another. there are certainly aspects that

affect our companies and we are making sure we do our best to navigate through overall, the performance is strong >> we appreciate your time todd sisitsky. brian, back to you >> all right leslie picker at the super return summit in berlin, germany. leslie, thank you. on deck, what is happening under the lid of the mortgage market something that has not been seen since 1985 you will hear it and it is next.

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welcome back now the federal reserve is out the way until mid-july, markets go back to normal agenda items here is what is happening today. busy morning with several pieces of economic data 8:30 with the jobless claims

number and building numbers for may. you have the read on manufacturing as well. you also have the musk twitter all-hands meeting where musk will answer questions from twitter employees. and we get earnings from kroger and adobe as well. let's talk real estate and mortgage market. you know that mortgage rates have spiked in the last few weeks. that's public information easy to find. this is not. pricing in the overall mortgage backed securities market known as mbs has collapsed it is now the lowest point since 1985 what might all this mean for the market and your ability to get a loan let's bring in walt schmidt. he was a friend during the 2008 crisis i know it is early in chicago. what is happening in the mbs market with pricing?

>> brian, good to talk to you again. what is happening with pricing is it is very low. that's the bottom line we had basically two years worth of lower rates which causes refinancing. all of the mortgage rates that are outstanding from the last two years are somewhere in the 2% range and 3% range. maybe low 4% range as you said, mortgage rates spiked they are now close to 6% for those that know fixed income, yields and prices move in opposite directions the yield on the mbs security which is lower than the rate that the borrower gets, when those yields spike, prices go down so the average dollar price of the mortgage market is now close to 90 cents on the dollar. the last time -- >> p wow.

>> -- yeah, the last time it was that low, it was the mid '80s. >> what does that tell us? it sounds like thereca dislocation. is there a liquidity issue >> there is a liquidity issue. the coupons or rates the last few years are trading on 85 cents on the dollar range. from the market value or market cap standpoint, there should not be a liquidity problem because the dollar prices are so low and investors are still uneasy or concerned about what the fed might do with their mortgage back securities, which owns those coupons, there is uncertainty on that pricing going forward. if there is uncertainty on pricing, that feeds into mortgage rates

the bottom line is we could see continued volatility 30-year rates may fall a quarter of a point in a day or two, but turn around and go back up by more than a quarter point the next few days. >> this is the kind of stuff that is so critically important. i know our audience, walt, is watching or listen and saying i don't trade mortgage back securities and i don't care. this is the stuff under the hood that does impact some people's ability on the margin to get a loan, does it not? pricing dislocation like this to your point will impact whether some big lender like wells fargo gives our viewers s a mortgage. >> exactly remember the mortgage market which is guaranteed by fannie mae and freddie mac is $8 trillion it is a huge market.

what happens in that market does filter through it is more than just the mortgage rate. people don't understand that mortgage backed securities are in the portfolios that they own. whether they he kknow it or not the general fixed income it effects not only the mortgage rate they get, but the value of the securities portfolio and retirement accounts, et cetera it has a double impact with the fed doing what it is now and the inflation with the double impact on consumers >> walt, quickly, any larger impact like 2008 or is it different now? >> it is different now 2 2008 was a credit issue. they were concerned about mortgage payments. the housing market is still strong there is a lot of equity in the housing market this is duration this is the level of interest

rates relative to the coupon it is less pernicious than 2008. >> little bit of good news i'll end on that keep us up to date walt schmidt thank you. pay attention. a lot of stuff happening with the bond market moves that are not sexy or random but interesting. they are random but important. i'm off tomorrow i'll see you next week "squawk box" is next have a great day in any business, you ride the line between numbers and people. what's right for the business and what's best for everyone who depends on it. solving today's challenges while creating future opportunities. it takes balance. cla - cpas, consultants, and wealth advisors. we'll get you there.

good morning stock futures plunging overnight. after a surprise rate hike by the swiss national bank. details ahead. and it all comes a day after the u.s. central bank's biggest

rate hike in 28 years. initially the markets were up as we saw yesterday we'll run through everything jay powell said about the economy and the fed's plans. and elon musk is expected to tell twitter he still wants to buy the company. it is thursday, june 16th, 2022. a big day here on "squawk box. mike santoli is here we'll talk about this in just a moment good morning welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm rebecca quick along with joe kernen and mike santoli. andrew is off today. we got the fed decision yesterday. it was 7