fine company and jim cramer might be right on the metaverse but when you change your name, even pivot, it's not usual ly a good sign. >> thank you do this in metaverse or in-person soon >> yeah. hear it's great. >> see you soon. ride the book. join us tomorrow "squawk on the street" starts right now. good thursday morning. welcome to "squawk on the street." i'm david faber with jim cramer. carl has the morning off a look at futures as we get ready to start trading 30 minutes from now right here at the new york stock exchange. seems to me to say a good open. >> much better than before. >> yesterday a turnaround. then in part perhaps where our road map starts with what else recession risks. fed chair powell says it's a possibility and that a soft landing is "very challenging."

then, mark zuckerberg's bet on the metaverse. the facebook founder sees a billion users by second half of this decade. plus, of course, gas price talks, oil refiners set to immediate with the biden administration just talking about how they can try to lower those prices at the pump we are, though, going to begin with the markets and fed chair powell giving his most explicit warning this year saying the central bankal battle against inflation could lead it to raise rates high enough to cause a recession. >> do you agree with respect to if interest rates go too high too fast it could drive sbus recession? >> certainly a possibility it's not our intended outcome at all but it's certainly a possibility and frankly the events of the last few months, you know, around the world, have -- have made it more difficult for us to achieve what we want. which is 2% inflation and still a strong labor market. >> we will marrhear from the fe chair again this morning

testifying before the house services financial committee take you their live beyond capitol hill and take q&a portion, not his opening statement. >> and of course -- >> time stops for no man, my friend. >> the other side of the trade here. >> other side of the trade okay. >> of this recession trade. >> oh, okay. >> i mean -- when interest rates went up dramatically, we talked about them every day. >> yes. >> they've been down when oil went up dramatically, talked about it every day. oil is virtually just, nonstoping. >> recently 3.5. oil far high per you can see it's up slightly this morning. >> told me zinc, aluminum, nickel, iron, copper, coal lumber you could argue all crushes. i go on to say that corn and wheat are down dramatically, but we don't talk about that

why? because it's what i call "good news." >> what's happening, jim >> because it's working. what powell is doing is working. the idea that they need a hard land -- we could come out of this thing very quickly, because these are all collapsing, and we haven't even had a, the cessation of the war in ukraine which you could have judging by the way the war's going right now. so i look at these and i say, well, if these were all still going up, it would be different. now, kb homes yesterday, giant home uilder, say that housing prices are going up. gross margins are way too high if you're powell but, dave, were you in every single building of the economy going down are we supposed to say it's runaway inflation anymore? just say, so far, powell's winning. only the third, fourth inning but he's winning everywhere on

every commodity. why don't we start not a hard landing's why go there say listen data tells me so far it's working. >> i don't know how much he's going to crunch demand do we? still don't know what the terminal rate is and really when we end really need -- don't know how much we're going to -- >> staunch demand. >> staunch demand? supply is the issue. up until recently. right, jim >> right. >> not a demand issue. it's a supply problem, supply problems led to higher prices, and glutton in housing in parts of country. major hot markets. good for powell. powell, by the way, i think the pump is going in his direction despite the fact that everyone keeps hammering him about the pump and it's not the federal gas holiday. here's what jeh should be saying wuchi watching me closely and does everything i said. >> hangs on your every word. >> low alarm, 9:00 a.m., got to

watch. >> the fact is he's winning in a lot of cases >> yeah. >> it would be very helpful for him to say, listen, obviously, a scenario we can still have a hard landing but i've managed to talk down a lot of the economy and i don't want to be unreasonable about recession but commodities we associated with higher inflation are coming down natural gas has come down of late so it's -- >> how does he look at those things, and does that figure into the decisions they're going to make in terms of containment of ratchet-up rates at a rapid pace >> well, he has to say that. he's winning just say it. turns out data doesn't sport the raised rates, able to say, listen, cut rates now. >> somehow seem to be behind, though >> some hedge phone call. >> no it isn't come on. >> yes did is. >> you don't think they started to raise rates too late? >> even he admitted. i can't back him -- he admitted. saying we all seem to ignore the

collapsed sale of copper i thought was a good indicator for the economy. i think that the idea of aluminum, costs auto company as fortune tells me probably not looking at ford and gm ford close add very important plant in germany yesterday, they were losing money. who cares? >> interesting copper up as well? >> right. >> auto stocks. >> look at these and say ford stock collapses 25 to 11 what's happened during that period closing plants like the one in europe big deal in germany. a huge hit badly in aluminum and steel. aluminum and steel, aluminum collapse steel's down big so i'm basically taking the other side of the trade saying that jeh may say hard landing but winning on the commodity side he is not winning on the labor side and that's a problem >> all right. >> no sign winning on the labor side. >> explain that. >> you can still job hop and get a better deal. what has to happen is silicon

valley, they have to have a diaspora of engineers calling to say, mess onic high -- going to charlotte, boston. >> there has been dispersion because of -- particularly a software engineer. ohio more about hard plants and soft plants -- >> sees mark bennyot and moving a consider amount of people to atlanta. >> are they? >> yes. >> and anybody work from anywhere >> still have to have accounting officers where the people are located. >> got benioff and taylor on tonight? >> working my butt off to get the best guests in history. >> done a pretty good job. >> you got darren woods? >> yes spent a lot of time with darren woods. for a documentary over nine months that we did. >> quite unbelievable. what happens is that i found myself thinking that these people are reasonable, and that the chemical woman when talking,

thought she represented green peace and the deboer's actually ahead of shareholders and shares need to be smacked in the face and need to see what -- palm beach? >> "under water" quoting jeff -- >> quoting you i watched that. >> viewers know, eric last night -- we'll give you -- later in -- can watch now. give you links if you want put them online. watch it on peacock. >> ten different outfits you wore. >> watch all my ridiculous outfits if you missed it. >> if anyone listened they heard, in exxon, the president should sit down with the yen exxon is trying -- never thought i'd say this, but exxon's board trying very hard to be a good citizen starting with methane. i just think the president, if he really thinks these people are anti-climate change, that's the old exxon.

and -- very right saying, watch what we do going forward. >> well, you know, many comments, and i appreciate all of them. many people said interesting not even a debate about climate change not what our documentary was about. everybody agrees everybody! some on twitter may not. >> trying to figure out how to reduce their quick print you did in a moment of, of great, i found hilarity. >> yes. >> when darren woods said they could not, doesn't worry if there's no internal combustible engines by 2040. you questioned whether that could be true and his reaction was to say, hey, in 2013 we did well i mean -- >> i know. >> would have liked to hear -- yeah it's -- >> yeah. we'll -- know what we'll show that to people later. >> and outtakes. a group -- >> i wish we could have spent more time. gone longer. always under time con straights.

runs on peacock behind the so-called pay wall, free in two weeks with a longer version. >> can you each just thank wally for a great job. >> my entire team. amazing. amazing work. >> people, having done documentary. >> did you see how beautiful that was >> no. these people are doing, extraordinary work and we don't -- mention them. >> amazing. >> a fabulous-looking documentary. >> thank you. >> that doesn't matter to a lot of people. the fact was, definitive work about how a major secretive american company that had been a fighter of everything that anyone including me in the national resource defense council believed that not only come around, trying to get leaner our president thinks they're just stuck in the stone age. i said, enough >> now move on to your big guest last night who was mr. zuckerberg took a trip into the metaverse zuckerberg telling you going to be a big thing over the next decade.

>> the metaverse, it's this broad thing. not just virtual and augmented reality, although those are some of the new major computing platforms that need invented for this also it's going to be the next kind of most emessive in rich way people want to express themselves across social media too. goes across everything go and a big theme over the next decade >> well, oop there it is. you look like a -- >> my rabbits are in the metaverse. >> much better. >> talking about a billion people talking about $100 per person. talking about market share take. simply unstoppable talking about an incredibly cool place to go. biggest issue, we didn't discuss it, why ever leave it? parental controls from the building up.

>> and deep misgivings about the metaverse. can't help it. i know i'm a dinosaur. complete misgivings. i don't want to walk around with glasses on living our better lives, and in a not real life? >> yes okay yes -- >> where you going >> player one. >> exactly yeah. >> let me just tell you that when you have a meeting, and -- you can whisper to a person. can't do that in zoom. anti-zoom thing. in other words, the office is much better. >> listen, the enterprise. >> enterprise surprisingly good. >> becomes very good remote work is never going way all argue how often people should be in the office. it's fair to say never coming back five day as week and when this becomes a reality, jim, it would seemingly enhance the ability to work with colleagues from afar. i made the argument yesterday. still not going to walk halls, bump into people you might

otherwise not. >> so much better than zoom. you have very personal -- at one point i'm talking to mark. >> you looked ridiculous n. my outtakes he's talking about something and i say, wait a second do you really have green eyes? yes. my eyes are green. i said, i look really great in the metaverse. he said the suit is well fitting's no, i'm jacked in the metaverse. decided to make you long stronger in that version one point -- >> get really old? still be our younger self. >> i felt like a million bucks, but it's not enough to get the stock movingpeople should buy the stock. why? reals is doing much better than expected and making -- >> what's the number they're going to spend on the metaverse in the next five years >> surprise you. getting the developers, creators, so to speak, free rein until 2024 to create, with no cut. to make it high. >> what are they spending?

>> not nearly as much as we thought. not in the tens of billions. >> it isn't? >> no. because they're so far ahead of everybody. >> already spent ten last year, no return. right? >> i am telling you this thing is radical i watched mark in his garden watch add garden david attenborough to my chagrin in a zen garden where i was very uncomfortable >> yeah. you and zen don't go well together. >> surprising. i don't really -- care to be zen. but eurged me to -- >> mark zuckerberg. >> he urged me to learn to be more zen-like. right there kind of a -- a pres pres -- don't mean to stall. can i say -- i'm making a bold claim. >> yes >> i can deal with survival and see it. >> by what by a -- >> 300 smackers. david, you won't believe it. you and i will be watching the doc and -- doc and say, what

happens now? does anyone fall off the platform and we'll be watching the exact same time and i will say, i actually believe in darren woods. you say watch what's coming -- i can't be with you, because -- i didn't get, no screening when on "jeopardy!." this one thing, talked to you instead of texting you i liked that part. so lame! >> i was talking about -- are we going to have more from zucker borje? and important interview. thank you for having not a zoom with zuckerberg. shot looked beautiful. refr refreshing >> a zoom. >> that wasn't a zoom. >> talk about it >> that was zoom >> talk about it. >> wait. couldn't have been you looked great. when we come back airlines are attempting to readjust what is a pilot shortage. a lot of congestion as well in the sky. plus, up in smoke.

still waiting for that fda letter juul e-cigarettes off the market a general story yesterday. talk more about that and hit the ultra stock. a look at futures. 15 minutes before we start with trading at nyse. [ "back to life" by soul ii soul ] what if you could change your surroundings with the touch of a finger? now you can. biometric id... inside the innovative, new c-class. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep,

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coming up start talking more stocks getting jim's "mad dash." look at oxyshares leading s&p. you know why buffett really likes that stock, he won't stop. >> he wot.n' 17%. a lot more "squawk on the street," after this.

all right. about 8 1/2 minutes before we get started with trading higher open after yesterday's last sort of half hour tumble. >> yeah. >> so to speak i want to talk "mad dash" now. darden. >> okay. if you want to know how the stock market's going to bottom you have to watch darden the reason why, parent of olive

garden that almost every day we got an estimate. almost every day instead what happened is they actually beat the new lower numbers, and olive gordon had terrific same-store sales restaurants and what happened, david, is if you were to cut every day estimate cut, estimate cut, estimate cut, once the estimate cuts are done and price targets cut, and the company does better with big ebitda and a lot of repurchase of shares, what it's is the analysts finally get to raise their price target that's what's going to happen with darden. so what you see here is obviously it got crushed on, when we had the pandemic. >> of course shut down. >> then opened and then started going down, because people believed, wait a second. maybe the economy is stalling.

j. powell, whatever. the fact they did -- this pattern, by the way, has not been repeated anywhere else. saw it maybe with lenard, but this is the new pattern, and they're so -- nike will be the next one, where nike numbers cut, number cut, price target cuss, prit target -- and it will win. beat it. we have to have this happen to almost every stock and it's just, you know, s&p 500. there are 500 stocks in the s&p 500. thought of that myself when i came into work although we've had people one time say, can you be the 500 stock -- that's not me, but this is the winner. this is how you, how we pull out of this morass, and few companies have done this. >> right, but -- >> preannounced. >> they have not in earnings season of course, it's a look back. we need guidance >> and nike's -- >> very difficult. some companies having a very difficult time figuring this out

and many plans for a tougher second half. pulling back, for example, on advertising. things like that you know, do it last minute if i have to. let me pull back now in anticipation of a slowdown. >> exactly a lot of companies that do not do what darden did they're going to miss -- especially the price targets being lowered. darden is textbook how to beat the bears. calling this the "beat the bears. by the way, david, long horn steak for the money, best bloody mary i've ever had. >> long horn steak really >> best bloody mary i've ever had. >> horseradish you like that in there >> you don't eve haven't to ask. >> delicious >> yes delicious. >> i don't use horseradish f enough. >> i grow horseradish. >> you do? >> yeah. >> just a few minutes away from the opening bell catch this incredible conversation anytime, anywhere listen to "squawk on the street." opening bellodst 'rba aerhis.ca

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got, what? three and a half minutes or so before we start with trading haven't done key to this market. i kind of feel it may have been darden from what you touched on. a "mad dash." >> foolishly i did not -- increased quarterly dividend i remember were they cut it. david, olive garden is america it's america like exxonexxon/mol the companies that have to start bargaining down yesterday. >> it was. >> maybe thought your documentaries would be a hit job. >> i would never do that. >> not your style. >> no. >> like to be thoughtful. >> i try to be thank you. >> i just think we're all looking for, again, situations where all expectations are wrenched now you have that -- we don't have that dependable companies just things keep going wrong. >> jim, back to the big question bottom in the market, which you get end ldsly. started off the show talking about decline and then commodities. oil being amongst them being a positive in a sense

given how much concern we have about inflation. mentioning names like darden reported better than expected numbers. kb and we know we'll hear from powell talking about possibility of recession is -- i don't know like, i mean, trying to pick a bottom is virtually impossible plenty people tell me, stop raising rates i don't want to hear about it. >> just for the -- there's a small school of thought that's in the "journal" saying, okay, listen until they start cutting rates you have to, you know, keep your -- time share empirically so wrong that it gets talk and. 180 days bear market have that. many times wait until after the recessional over you miss the really beginning of the really good move. you have to be thinking what to buy now. and -- came on in that excellent

interview with sara eisen talk about amazon being a value stock. well, i've got to tell you if you're andy jassy, fired so many getting things in line and zelensky working on -- [ opening bell ] >> and talking about that today. all is well and -- you know, essentially value. all right. there it is. opening bell ethan allen doing honors at the nasdaq and a services a.m. in brazil launching operations in brazil, in the united states. >> turned leftist. by the way -- >> colombia went leftist so -- >> the whole country is-- >> because -- >> whole country whoa i marean, think nro

>> one quarter irish people forget. people don't understand one quarter irish. >> people never remember that. >> i remember. because high to change my shirt growing up stop and -- a chonsky. >> unhappy with you now. very unhappy with you. >> yeah. he wasn't in line with me. >> no. look at broader markets. talking about them jim, listen, we started yesterday down and then we had a very nice rally. during the course of the day. >> we did. we're going to churn, david. this could be another day where people buy, adamson at 110 and then sell it because they don't know what to do a lot of people are lost and powell says one thing off message, the market will go down and we'll have to go analyze that, and it will be a big waste of time. >> talk about another name that has always been key in some ways to this market or at least the speculative market that snowflake >> how about that upgrade?

>> got an upgrade from jpmorgan. they did a cio survey. and -- they saw search in thsur in the most recent survey. >> and can i say last week, ceo, asked, what's incredible this is fastest growing to profit billionaire profit. this rival salesforce how quick they -- >> there's a graph i always talk about. mountain declines in the mountain that was -- at the -- >> many young people bought this thing. no doubt thinking it was the ice cream parlor and having no idea what they do the hell with you! i'm delivering not going to try to pump the stock up he has that model where you rent the cloud, a much better model much cheaper a lot of companies are using it. also give you the absolute best

analytics. snowflake became public around 120. finally come back to where it started. that is terrific >> well -- apparently cios who control over $100 billion of i.t. spending, surged to elite territory and jpmorgan the annual survey. you know -- >> you see what they're using? >> jim, i had -- >> it's a who's had. >> had to go to valuation. $165 price target saying based on 18 times enterprise value over a calendar year '23 revenue. >> wait. >> and ebitda on the side of that, revenue i. could be -- the only time -- >> revenue. >> okay, okay, okay. let me tell you -- >> in years. revenue. >> 100 times. >> it was. it was maybe that's an appropriate valuation. >> and 50 times, didn't work out. >> yep >> i would say this about franks slugen remember he build service now he's a genius.

very hard-driving guy. >> yes. >> and he is determined to make this company both profitable and fast growing. >> yes. >> and i think if you ask sam, marc benioff, if anyone can full off it will be swootman. >> you've had faith in swootman. >> management does matter. he didn't like the stock was at 300. not trying to disappoint people, but he just said, look i'm going to put my nose to the grind. look at the numbers. look at the fast growth. did you see the numbers? how fast it's growing? >> it is growing fast. no doubt about that. i don't know if it deserves an 18 multiple enterprise value over revenue, but maybe. >> if you and i had a company, david, rentering not the runway, but the ksnowflake. >> okay. did you want to go back to petroleum and oil? saw it leaders of the s&p. reason 9.6 million additional shares berkshire now 17

it's 16.3% by the way, maybe more than that by now. >> do you think the president -- might say, you know what this is core constituency. i've got to meet with her? can she crash the meeting with the president? >> i don't know. glad there's a meeting at all. i just don't understand why you wouldn't have constant dialogue? the only way -- >> she'll give you the list. >> figure out where we stand and -- >> how do you know it's not a president's rant oil companies want -- >> lift restrictions on federal lands in u.s. brazil designate critical infrastructure projects fix the national environment policy act good luck. nixon came up with that. accelerate lng, and the approve applications don't like that. unlock investment access to capital. allowing them to drill in a lot of places. the mail supply bottlenecks.

advance lower carbon energy tax provisions >> put a tax on carbon -- >> ridiculous. protect competition in the use of declining technologies and construction on natural gas projects advance energy work foergs of the future and then -- what we have is the present! that all happened because the president made fools of them just embarrassing the hell out of this people who have been working so hard not only darren woods to try to become better citizens worths $3 billion to $20 billion, all trying to be good president gives them the hieismn because they don't represent the base and he doesn't want to anger then i don't think any of unreasonable you can't tell a giant refinery. president says, turn it down how -- if you want to go drill on all of those federal lands what you need? you need pipes to get it to the market. >> do we want them to -- there is this thing called climate

change a need to weanous off fossil fuels over a period of time. >> have to go brown before we go green. >> okay. putting in all new wells on federal land and drilling and pipelines is not necessarily the way to do that is it? >> complaints constantly they're not -- >> a constructive way to go about this >> seem to be going just one way. saying "brown. it's the same. what it is right now. >> they do not expect the internal combustion engine to be the dominant engine in 2040. they don't want to waste a lot of money when they feel like that a refinery could be -- outed by a -- >> not a return. cost billions upon billions of dollars. >> what? just wreck their companies >> no! you're not going to wreck their companies. >> what are you trying to get at >> i'm just not necessarily reading a list of demands from the american petroleum institute. that's all. >> if you anger, poke the bear of oil, they're going to give

you some demands that the president's going to say, forget it you make a lot of money. you pay for all of this stuff. >> i want to talk more about this later but get to other. >> your documently i knew it. >> i want to talk more about other things i want to get to -- >> banks coming down again. >> get to zuckerberg also i'd like to mention yesterday's news during the show we talked about the juul fda ban. >> where's the note? >> that was a "wall street journal" story waiting for the fda letter, but obviously impacted shares of ut t altria yesterday stock down 10% not sure exactly where it closed, because they own 35% of the kpip bought it $12.8 million a couple years ago a strategy competing internationally against its old brother, pmi they separated one got to sell cigarettes internationally.

the other domestically altria has the right to use non-combustible technologies internationally. what they're going to do cool. >> and versus territory. >> right so far saying -- they were supposed to be peak competitors. maying a lot of -- perhaps much as $5 billion. unclear the future of the company. juul one of the largest privately held companies as much as $40 billion when altria made that investment a note called "down goes juul. an interesting section hard for us to believe that juul had an application with the legal regulatory power of altria behind them and acumen perhaps always out to get jewell je -- juul about-face on that front to become leader in the industry cleaning up historical margin tactics eliminating flavors should are put juul in greater favor with the fda

apparently it didn't. >> watermelon flav jer tried that, tasted like -- wow my lungs just told me this tastes so good. >> a point cleaned themselves up. not enough to satisfy the fda. by the way, they can appeal. try to -- it's not clear they're going to be banned forever if this letter comes out. >> the people who run these agencies, all i can say, print them do they not believe look at the faa and boeing boeing picked faa around all the time notice the faa giving a green light to boeing? agencies have people, and sick of these companies that run amuck. meantime, completely ignore the fact tech is reversed going down and nobody even cares. nvidia, part of the bear that's part of the bear. like, we wake up say, oh, all up now down why? they haven't had the darden problem. >> they haven't had the darden problem -- >> haven't gone through, clorox up against second day.

what's going on there, david like a -- what we nailed earlier? s seagen. >> haven't heard enormous deal were it to happen. >> clorox. >> stock's up a couple last days for no reason whatsoever none >> really? >> the justice department is waiting for something like that to happen. >> clorox? >> what would happen if the justice department says we don't like airline consolidation with all of those bankers and lawyers, would they get paid. >> don't get paid as a banker if the deal doesn't close you do get paid as a lawyer. paid by the hour albertson's. talked about this endless strategic review keeps on on and wondered whether insiders were -- agreement disclosed, those investors, now sidelined

until september 10th and can't sell this thing is going on forever going to be more than six months old by the time september rolls around really seems weird insiders are looking to sell -- >> increases the -- one of the things so weird about it a huge success yet they act like it's a loser. >> yeah. >> been a huge success since it became public. didn't need to do anything i don't understand who in that, what ownership is so greedy they have to do that >> do not have the a lockup until september 10th unclear if this copy -- >> selling, have a tesla didn't mention have a couple furnaces going. >> tesla up, i noticed, jim, when i last checked. germany and -- and the new, the new plant in austin as well. helping furnaces because of how much money they're burning as result of -- in terms of batteries, the needs, supply chain issues cost a lot of money to get a

factory up and running. >> a factory in germany wasn't making money and they closed it the other day. did not have shared -- people members invested club. a very big deal. closing a plant in europe is not just, like, hey, guys. here's your ping sk slip jim farley determined not to lose anymore money. >> got to go quick, head to break i think we are going to quickly look at bonds.

this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep,

so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay. welcome back to "squawk on the street." rick santelli here live with breaking news. s&p global pmis june preliminary read 52.4 is the headline on manufacturing and that is the lightest level, the weakest

since july of 2020 if we look at the services, 51.6 second weakest number of the year going back to january same could be said for the composite. 51.2 weakest since january, which means second weakest of the year these, of course, are preliminaries and they may change, but it certainly seems to follow the trends we're seeing in the markets. lower interest rates and stocks liking that, but quite unsure if a recession is all that bullish. "sawonhetrt"ilquk t see wl return after a short break.

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[ cheers ] are we actually going? yes!! and once in a lifetime moments. two tickets to nascar! yes! find rewards like these and so many more in the xfinity app. we did some work very early on, and let's just make the assumption that ultimately every car in the world that's sold is electric and ultimately i think we got to buy 20 to 40 that every vehicle in the world is electric frankly, we projected oil demand would be what this was in the 2013, 2014 time frame. we were pretty successful in that time frame. we thought, that's not going to make or break this business or this industry, quite frankly.

>> it seems to hard to imagine in a way, darren, that exxon mobil is not going to take a hit, so to speak from a vast reduction of the use of gasoline on the planet. >> where you look where the growth in oil is chemical products, which play an owner role in people's lives today >> over $7 billion in profit last year from chemicals we do forget i've one of the biggest chemical companies in the world, with plastics -- >> i found that -- that's what the chemical guys always say there's a real business in the manufacturing the electric vehicles that need plastic, both to reduce weight and improve soundproofing. >> dupont is the number one company in that business, and i

found that very enlightening also what was enlightening is all or none, this false dichotomy. you may change your mind. >> if you want to watch it, you can do so now on youtube, cnbc's youtube channel, the peacock streaming services cnbc.com as well so, please watch >> meantime, technology seems -- i've got to stop trading -- >> let's talk about meta >> people are skeptical. people are worried about the model now that sheryl sandberg has left. >> let's hear what he had to say. >> her role directly she was somewhat of an

irreplaceable person, crafted the role in a specific way, but the other thing is, where we are today, i don't think it makes sense anymore for us to have a product and engineers side and business side of the company i think it needs to be a lot more integrated. >> i agree with that i mean, it was kind of odd to have a product and don't know whether it's going to be sold. right now mark is making a product that's sold every sincele day that people don't seem to understand there are a lot of companies that are creating, but david, i think the sheryl sandberg loss was a little bigger. she was an inspiration for small business, and i would have loved to do what she would have done it reels. >> what about the overall slowdown of the advertising market itself.

>> acknowledged. >> has the stock already reflighted expectations? >> do a recon figure race, that doesn't matter there will be fewer buyers i think the opportunity to buy this comes on monday he did address the idea that, look, there could be -- but he also talked how reels is much better than the street realizes. they should go make calls, do what i do, but see, they're paid tens of millions, and i'm only paid, well, you know -- i'm paid okay but why don't they do their job? why don't they find out that reels is doing much better, that it's taking shares from tiktok, and why don't they do their job instead of sitting watching, i don't know what. >> on an hourly basis, you're way underpaid.

>> i think there's a 20% bers bottom line. >> to get to the profit article. >> absolutely, and much le spent getting metaverse in line people don't seem to realize that mark is very cost conscious i was wearing a pair of slacks from t.j. maxx, and heside what are you thinking about i said, i'm thinking how hot these slacks are we were talking about how he -- he played at my sister's kids' school, and then we played math.

>> all right, all right. enough >> i was so delicate and kind to you about the doc. >> you have been >> i'd say i want to know the name of that stock ened and they're going to sell that european business to the koreans actually pretty easily, and you're going to want to own that stock, because we know now kb homes and le in nar, they have plenty of homes they're building and they have whirl blood.

>> look at that, people are already buys real quick. >> i'm paid less than -- >> really, we're getting out our tiny violins i haven't even kept track if you bought another house this week. >> we're try to go shed a house. >> there's one guy that's so much richer than you. >> there's a guy just doing twitter, chairman, i think they talk about the torture that musk is. >> he's amicable >> i'm going to ask him if my daughter's cookieser selling well. we have jay pollwe testifying congress, and we'll take you there live when q&a

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including loans for small businesses in low and moderate income areas. so everyone has a chance to move forward financially. pnc bank: see how we can make a difference for you. good thursday morning. welcome. i'm david faber with leslie

picker carl has the morning off, and morgan brennan is on maternity leave. this hour, fed chair powell is back on the hill for two days of his testimony on the economy we will take you will there as soon as the question and answer period begins. we kind of gave up our lead, so to speak yesterday, but this morning we are up yesterday against after popping earnings estimates. were beginning to happen, another earnings moving to watch, with the company's earnings coming in below

expectations, impacted by the cost of this russia's exit that stock is down more than 1% right now. snowflake getting upgrade d with a high satisfaction level among customers. still down around 60% year to date. >> reporter: you can expect him to reference today, as he did yesterday, the geopolitical

dynamic. lawmakers aring likely to bring up the fact they want to ensure that those who are sort of at the bottom of the income ladder don't get hit the most guys, i think beyond the fireworks we normally see that we see sometimes during these hearings, you'll hear a deep sense of frustration from the lawmakers over things like gas prices, food prices, the war in ukraine. powell will say all of those things are things that the fed cannot control, but they're

making the fed's job a lot harder back over to you. >> ylan, thank you joining us now is citigroup's chief global economist, nathan sheets nathan, i want to start off in the here and now, right in the moment we have bond yields down from i highs, at least in the last few days, corn, soy so, copper, lumber, all down, mean anything to you or just a brief pause that should be paid any attend >> i think broadly speaking, what markets are responding is is precisely this issue of how high are are the recession risks? when you look on the there, there's a lot of shocks hitting the global economy at the moment

we still have the supply chain challenges, challenges from central and eastern europe consistent with jay powell, central banks are tightening vigorously i think that the last day or two the market is focused on some of the recession risks, and they're appreciable. >> how appreciable, and why 50%? as opposed to a different number. >> that's a great question this is kinds of probabilities are let's put it this way, very judgmental on the one hand, we do see significant stressors out there, as i described on the other hand, underneath it all, it is being driven by a series of shocks, in 2021, the central banks said they're going to go away this year, and they didn't they didn't go away sooner, but

eventually they will abate, so we have a probability on that occurring, it's also possible the growth in the economy just has more underlies vibra. in ce. so while the recession risk there's a number of scenarios and factors that causes you not to go above 50% in a moment. >> what will happen in the next six or eight weeks that could cause you to change your mind? i ask, because you are looking for some of the root causes of the inflation picture, and i'm curious if that's something

you'dly looking for in the next fuse months. to be candid, over the last couple months wove marketing these up, some of the dynamics in play could continue as you say, inflation has looked pretty stubborn. the central banks are increasingly responding to that with vigor could that kind of dynamic continue absolutely in addition, we're starting to see some evidence of slowing in global goods demand. that's concerning. on the one hand, part of it is probably a substitution, as people feel more comfortable about the health situation, away from goods back to services i think we're seeing demand destruction in the global economy as they high prices duty

into real income in principle over the next several weeks or months, that dynamic can continue for the moment, we felt this 50% was roughly a wise assessment. >> the second half of the year, as you bring up, that's one area holding up the economy definitely helping to fill the glad half full projection. do you believe the consumer picture will campen in the second half of the year? the critical question for the economy and for the consumer is how resilient the labor market is

so far, they have shown a fair amount of strength, resilience and momentum it is likely, on balance to be generating jobs it's more labor intensive, but if the labor market did start to fray, did start to soften, i think that in turn would undercut consumer confidence, and soften this kind of spending dynamic that's been keeping the economy going, particularly on the consumer side of the ledger there are risks there, as i highlighted. finally,ing in you sort of heard from powell yesterday, or

potential from today that will help focus you on some of the challenges ahead for the fed >>this is very much a high-wir act for jay powell he's got to say i'm here and i'm going to fight inflation, but if he sounds too focused and not aware of some of the broader challenges we were just discussion, then there's the probability the markets responds adseriously and start pricing in recession dynamics and recession probabilities, and kind of striking that balance between, saying, yes, i'm going to fight infl inflation, but i'm going to do it in a responsible way, where i'm cog any sand of what's happening in the broader economy. that's jay powell's challenge i

think so fab he's done a pretty good job of threading the needle, but it's an ongoing challenge. >> yes, it is indeed nathan, appreciate your time thank you. well, in the meantime mark zuckerberg joined other jim cramer, and he has big plans for the metaverse. take a listen. >> or north star is, by the end of the decade, we hope to basically get to around a billion people there's a massive economy around this. our next guest is calling on legislators to stop zuckerberg's quest to rule the internet don't always love to hear from

you you basically say zuckerberg must be stopped. why? >> really simple first, i think he's going to stop himself i think the approach is not likely to work it's not likely work for a variety of reasons zuck is really trying to -- the problem with virtual reality is that the technology is still in its early state. the notion that you want to live your entire life in an artificial environment that's completely controlled in all respects by facebook is something that i think is inherently unappealing to people, but secondly, also impossible to execute. what i'm favoring is congress, the senate specifically now, and then the house, pass the american innovation and choice act, which is a really simple bill that addresses a small part of what's wrong with internet companies, namely the ability to

run a marketplace. think about how amazon runs a marketplace for products, google runs it for ads. facebook would run it in the metaverse. you run a marketplace, but you also have products you sell in that marketplay. the bill says, listen, you cannot harm other players to advantage your own profits it's a really simple idea, one that historically was standard practice in the united states, but we have forgotten it over the last 30 years. it's time to bring it back. >> welcome, roger, we've had this conversation before, but i'll ask the same question, perhaps. you believe that america's tech industry has gone to a set up paracytic monopolies what do you have to prove that >> what they call innovation is just enough -- each industry is

structured so that one company gets all the spoils. they largely keep people from doing it when a company did it, they then close the club that's why all these companies -- zuck went on with cramer to try to stop this bill is solves is a teeny part of the problem, but it's an important part of the problem. the thing, david, engineering is about people trying different things in a marketplace. when you have a marketplace dominated by a handful of companies, it's incredibly different to create alternative issues >> they compete with themselves, don't they reels is now competing with tiktok i don't know, it seems like

there's some competition here. who if it actually treated you like a human being that can't get to market because investors won't give it money. it will know about the 'profitable surveillance capitalism is the most profitable business under earth, and congress seven even thinking about regulating that. there is a privacy bill, but it does about 1% what we need it to do congress is really asleep at the wheel on this. i'm calling on senator schumer to bring it to the senate floor. it has bipartisan support. i think it's important to have a votes on this and every other tech reform bill

senator schumer has a lot of responsibility he's going i need to protect vulnerable senators, but no, you need to protect your constituents that's the job of congress that's what they're not doing. >> have you heard from senator schumer since you published the op-ed? do you know what the appear tide actually looks like from congress for this bill >> only in my dreams i would say it's for -- i have not heard from his office, and i would be delighted to talk to them i do think this is absolutely in the country's interests, and i think it's time to show a bit of courage, and i think it's time for people to go up and say, enough is enough again, you know, to david's point, i want to see a world in which lots of alternatives exist. at the moment, that's not the case i don't presidentto just see reels going up against tiktok, i

want something going up against capitalism, alternatives to advertising-supported social media. those things are possible. >> possible, roger, we've been talking about them for years, and they haven't happened. >> that's right. monopolists will monopolize. this has been great for investors, but democracy is dangling by a thread, where an awful lot of people are operating in a world where they literally live in an alternative reality if we want to protect the country, we need to do something about that >> it's all going to be better in the metaverse, roger, i promise. it's just going to be great there. roger mcnamee, to be continued >> mea pleasure, david let's see how the markets are doing in the real-verse. green ahead of the today's house

hearing. joining us is tony, thank you so much for being here. i was reading through the producer's notes who says it's time to extend the time horizon, not shorten it for investing what does that mean exactly? does it mean buying certain stocks, holding them for years or does it mean something else >> at oakmark, we take a long-term approach, and i think the temptation in rough markets, like we're in now is to focus on the macro flair of 9 week, how are stock prices going to respond to that. we estimate business values. when you do that, you have to extend your time horizon, and focus on business value, which are much more stable than stock prices that just simplifies the world for investors. i believe it will help them make the right decisions in tough markets, not the wrong ones.

>> what do you think are the right decisions? i see that you like amazon, saying it's cheap based on the sum of its parts does that imply for recession risk or downside risk. >> we could have a recession that doesn't mean amazon is expensive. there's two businesses at amazon, the retail by and there's aws. we owned this stock roughly ten years ago, and the thesis is roughly the same they were investingin two-day delivery, a big, audacious goal at the time. they spend a boatload of money doing it ahead of enabling that capability we believe that would pay off then it did today they're enabling same today/next day delivery. you have to spend ahead of enabling this, and they're do that we believe it will pay off again. that's sort of the controversy

on the stock ten years ago, though, there's one difference awc ten years ago was like an interesting call option. aws today is effectively a backstop to the value. if you look at where microsoft trades, for instance, which as azure, and probably is the best business, microsoft doesn't look silly, right if you just valued aws on a couple years where microsoft is valued, you're paying virtually nothing to the retail business at amazon today. >> the other name we talked to you guys a lot about -- actually, tony, i have to put this on pause for a moment fed chair powell is starring to take q&a from the house financial services committee let's take a listen. >> and i quote -- it could be right. it will just also be that demand is incredibly strong, and they're raising prices because we can, end quote. we're all seeing and feeling the effects on consumers

pocketbooks. the corporate profit margins are not hurting. in 2021, the profit margins of the index surplus, 12%, the highest profit margin on record. and is expected to be even higher in 2020 corporate greed and consolidation are driving higher and higher prices for consumers above and beyond any inflationary pressures just last quarter, tyson foods, which sells one out of every five pounds of meat sold in the united states claimed that their higher prices are due to rising labor and freight costs, yet they still managed to net an additional half a billion in quarterly profits. when it comes to rents, a corporate landlord recently remarked and i quote -- we have an unprecedented opportunity to really press rents on renewals,

because the country is highly occupied where will people go they can't go anywhere we have a trend opportunity to press both on renewing leases, evictions of represents and reset market rates this kind of blatant profit tiering on the backs of hard-working families is simply outrageous could you elaborate on the road that corporations are setting prices and how it's affecting inflationary pressure pressures? would you also elaborate on what you meant when you want perhaps corporations are raising prices because they can. >> sure. >> matters of concentration on the economy represents a series of questions that they're largely not settled.

it's clear that our economy has become more concentrated, largely due to lower levels of smaller formations of businesses it's not at all clear that there's a connection between a more concentrated economy and, for example, inflation, matters of corporate concentration are outside the jurisdiction of the fed. those are for the competition authorities, and really not for us to discuss. in terms of what's -- for why prices are going up. i think a lot of it has been -- a lot of the places where -- have been situations where supply is constrained and demand is very strong, so take cars, for example, demand for cars went up a great deal during the pandemic people warranted to r50id in cars rather than public transportation, and they wanted to move to the suburbs, things like that. rates were low, economy was stronger than people expected, but the companies cooperate make more cars, because they couldn't raise their output because of the lack of semiconductors

when demand hits supply, prices go up, margins go up as the economy returns to more normal, we would expect those margins to return to more normal. >> the example i gave of tyson, who said their prices were rising pulp labor and freight costs, yet they managed to net -- >> i apologize i'm having a hard time hearing your words i'm sorry. >> okay. the example that i gave of tyson foods and the fact that they want their prices were rising due to labor and freight costs, yet they managed to net an additional half a billion in quarterly profits. how do you explain that? >> i'm not familiar with their

profit-and-loss statement, but i will say -- again, there may be particular industries where there's competition issues i don't know that. that's not our focus or authority. >> do you have an opportunity to look at rising costs and identify corporations where they are gaining substantial profits, yet they keep raising their prices do you have a way of examining that >> i think we can see that, but i think our job is to keep, you know, maximum employment and price stability. we're not in the business of regulating individual companies or determining whether their actions, for example are competitive or that sort of thing. that's more for elected people and also for the competition authorities. we do look at that, but again, i think a great deal of the price increases you saw were a matter of supply being unable to meet demand, the results was prices

moving up. in many cases. that was the story. >> thank you very much the gentleman mr. mchenry, who is now recognized. >> thank you, madam chair. on this debate about corporate profits, i would commend the committee, secretary yellen's statement where she rejects the idea of corporate greed is to blame for inflation. i concur we have a complex set of issues, the fiscal house was certainly different than monetary policy, and the extraordinary nature of 9 partisan american rescue plan, $2 trillion injected into recovering the economy, and democratic policies to keep people out of the workforce for longer than the rest of the western world also contributed to inflation so that is a political debate here on capitol hill, chairman powell, and that is on the political side

what i want to ask you about are the policy tools that you are using. now certainly you, as chair of the fed in the open markets committee, took extraordinary measures in the midst of the pandemic to ensure we didn't have further contagion, including extraordinary lending facilities, purchasing securities s. the federal funds rate at zero thinks were the right tools at the right time on the fiscal side, you had a partner with bipartisan bills to keep our economy afloat during government shutdowns well, like all good fire fighting measures we should put them amp as times change i want to talk with you, as you put these mushers away, how do you expect the economy to respond? so let's start here. what is your level of commitment to fight inflation

>> it's unconditional. the reason is that we need to -- in a particular situation, we have a labor market that's sort of unsustainably high. we're very far from our inflation target we need to restore price stability, get inflation down to 2% without that we won't have a sustained period of maximum employment, where the benefits are spread widely and the wages aren't being eaten up by inflation. it's something we need to do, we must do, in order to have that kind of labor market, we'll need to do it. >> as you pull back they emergency measures from covid, and you normalize rates to what they look like in the long run, how do you expect the economy to respond? >> well, when we raise interest rates, and also to a lesser extent, when the balance sheet shrinks, what happens is rates go up across the economy, and

financial conditions generally tighten, and you can think of it as intrasensitive spending is an important place it will be -- if rates are higher, then demand for cars will moderate, will decline a bit. the second channel would be asset prices generally we don't targets any particular asset prices, but higher interest rates to bring them down broadly that tend to mean a little less spending, because people's wealth has perhaps declined a bit. the third channel can be the exchange rate, where it also has disinflation effects overall these effects on the economy. our intend is to bring it down to 2%, while preserving a strong labor market that's become challenging with the events of the past few months, particularly the war, which is driving up gas prices and food prices and disrupting

supply chains at the same time >> so first begin with mortgage-backed security as we have a roll-off of the fed's balance sheet, mortgage-backed securities, where are expectations for on you that affects housing >> i think what will affect housing it the rate. the housing industry and market are slowing down from very, very hot pace, and that's partially because of higher mortgage rates. the effects of shrinking the balance sheet will be marginal compared to the effects that we're seeing and expect to continue to see from rates rising mortgage rates. >> what are your expectations, and any further announcement can we expect further announcements on the assets you hold, the securities you hold? are there going to be balance sheet announcements in the coming weeks >> no. i would say this we have a plan we have articulated it the markets are forward-looking,

they seeing it, and the markets are in a good place, i think, understanding what we're going to do. we'll be allowing these securities to mature and run off our balance sheet at a pace that we've said, and it will be 90 or 95 billion, i guess by november. that will be on an ongoing basis. we think the markets can handle that treasury issuance is way down. we think there will be demand. treasury will reissue them in whatever form they think is appropriate. >> thank you >> the gentleman from new york, mr. meeks, who is also the chair of the house committee on foreign affairs is in and out recognized for five minutes. >> so that we can really sundays

what inflation is. the fact of the matter is i was recently over in europe. there's inflation in europe just like there's inflation here, though as i talked to christine lagarde and orders, they say the cause of the inflation may be different. they maybe demand here but not a case of demand there, is the -- to resolve inflation in europe, for example, i was in moldova, 30% inflation rate, gas $15 a gallon, turkey 80% inflation rate, gas $13 a gallon and i could name places in europe, from europe to the united states. is it that we had -- whether -- is it the supply chain, the china shutdown, the complete shutdown, zero covid policy, um,

russia's war in ukraine, covid -- isn't it just a massive storm of everything is what contributes to inflation and causes it all over the world >> pretty much that's a pretty good -- >> so everything i'm talking to my constituents try to go explain what inflation is and what causes it. i would not single out any one thing. i would have to talk about the conglomerate of things if you take away two or three of those, we might not be in the situation here, all of it unprecedented, all of it really out of the control of anyone, whether it's out of control of the democrats or republicans, out of control of the president, out of the control of other governments. is that not correct? >> some of it is out of our control, for example, the price of oil and the price of most of the food to your point, europe is much more about energy and food prices, very difficult problems. they also have, the european

central bank has different countries, so they have to worry about the difference -- the spreads between different countries, and that's a different challenge that we don't have here h the difference here, for us, is we actually have a strong economy, and well-recovered economy so more of our inflation is from demand we do have tools to deal with demand that is the place where we actually can work, and that's where we're using our tools. >> some of that is during the crisis that we had, we had to do certain things, you know, stimulus and other things to make sure we kept our economy stable without doing those things, we would have been in trouble with corid, stimulus, trying to keep people's jobs, otherwise we would have been in worse shay or not have as strong an economy as now, compared to -- >> yes, i would say it this way. our inflation is a consequence

of very strong deplanned, in part driven by supply -- by what consequence did to support activity, but also. >> that helped stablite our economy at that time. >> it did if we had not done those things, our economy would not be as strong as it is right now. >> that's correct, our economy is strong. >> i know you testified before the senate yesterday, and what concerned a number of my constituents that i talked to, was the question about, can we resolve inflation without increasing unemployment? our folks are concerned about losing their jobs and not being ability to, you notice, it would be worse if they were unemployed my question to you is, can you speak to what the fed has seen through the last two years, with the relationship between unemployment and inflation and is it possible that we can continue to have a strong labor

market while also curbing inflation? >> it's certainly possible that we can there is a relationship between unemployment and inflation the challenge now is that inflation is at a four-decade high some of it we can deal with. some of it will be dealt with on a global market, with the price of oil, that kind of thing, but the challenge is we're tightening monetary policy that's designed to drive growth down to a level that's more sustainable, give the supply chain a chance to come up, and bring inflation down that's what we're trying to do we don't have precision tools. we raise and lower interest rates, it affects the whole economy. there's a rink that unemployment would move up from what is historically a low level in a labor market with unemployment, it's still a very strong labor market. we're going to take a break

from chairman powell's testimony and q&a gets to eamon javers we have gotten a series of supreme court decisions, including one that's very important to residents of new york. >> that's correct, the court did not make a ruling on dobbs versus jackson women's health. that case is expected to come down at some point now this month or in early july we did get rulings on a number of other cases this morning, including a case in new york state, as you say that's called new york state rifle and pistol association versus bruin, which focused on the state's concealed carry law. the court ruled in favor that limited the ability to carry concealed handguns in public it's a big victory for gun rights advocates

we got some other decisions today, including a case involving north carolina republicans seeking to defend the voter i.d. law, a case involving execution methods in georgia, a case involving me randa rights we also expect a round of decisions tomorrow as the supreme court said it was adding friday as a decision day this week no indication of when that abortion decision might be coming guys, back over to you. >> interesting juxtaposition, eamon, as congress actually moves toward the first significant piece of gun legislation, so to speak, and the supreme court obviously moving the other way >> yes, the supreme court and congress moving in opposite directions the mayor in new york has weighed in on this new york state gun case, in temples of the propropensity for crime in the city of new york that could be a challenge for law enforcement in new york, the mayor has said second amendment advocates say we need to have the right to carry guns, and it's a

fundamental schism in our society. all of these cases, david, that get to the supreme court involve these fundamental, constitutional and moral questions. fascinating to see them being decided on such a different plain in the supreme court that is what we're seeing political in congress and what we're seeing political in the city of new york. >> i think proper cause to actually get a gun that would no longer be the case, it would seem. eamon javers, thank you. let's get back to chair powell as he continues his testimony. >> so it was a matter of a few months when we were really looking at this and thinking it's going to be passing more macroeconomists thought it would be a passing thing it turned out to not have been so as far as. >> but we saw it move from 1.4 to 5.4 i wouldn't say it's declining. i'm just surprised we weren't moving more quickly at the fed

i'm going to be honest, sir. i think the fed underestimated actual inflation what do you think you missed >> well, we did miss it. with the benefit of hindsight, it's clear we missed it doesn't have anything to do with our framework. every central bank had to make the same judgment, looking at the supply chain problems, the shock to labor force participation, millions of people out of the labor force. we had to decide whether that was going to be lasting, or whether it would turn around quickly. we had high levels of participation, suddenly they're much lower, the thought was people would come back as soon as covid is over, we have these new vaccines, we'll bless done with covid, so basically the summer-side issues just didn't get better that was the judgment we had to make we knew it could by wrong. when we thought it looked to be

wrong, we pivoted. >> president biden continues to say that a recession is not inevitable as he, his government agencies, and dems in consequence continue to spend billions and trillions of taxpayer dollars, burden businesses with costly rules and regulations, and on top of it the president refuse to say unleash american energy independence i think they continue to hamstring the fed. president biden not only limits the energy production here in america, and spends trillions of our taxpayer money, but also threatens tax increases, and promises to cancel billions in debt how can you still say, sir, that the fed has a pathway to a soft landing for the economy?

>> well, our intention is to achieve inflation getting back to 2% -- >> with all i've laid out. >> i'm sorry >> with all i have laid out? the increases you're going to have to take >> so, as you mentioned, i think that path has gotten more and more challenging, thanks to the effects on oil prices and food prices, really, also the supply chains from the war in ukraine it was never -- >> not just the war in ukraine, sir. >> it's the rise in energy prices, which began in february -- the latest rise from february -- >> this has been going on for a year and a half. i appreciate the chair's indulgence, i will yield back the balance of my time thank you, chairman powell. >> the gentleman from texas, mr. grimm, also the chair on oversight and investigations is now recognized for five minutes. >> thank you, madam chair. thank you for being here, chair

powell i greatly appreciate the opportunity to have a few thoughts with you, share some shots. in february of 2021, you indicated that millions of people were out of the labor force, which is what you have said today, millions with millions of people out of the labor force, the biden administration and persons on my side of the aisle sought to do something about that, to help those who were unemployed. the inflation that my colleagues speak of has to do with unemployment, the help that we gave people who were unemployed at the time, persons who were unemployed, mr. chair, they need help they can't feed their families

small businesses were screaming for help we helped small businesses to get through a turbulent time this was a pandemic. the vaccines had to be distributed and developed. that's a part of that inflation that they're speaking of people needed rental assistance. people were literally going to be evicted by the millions, but for the assistance from the biden administration and congress we wanted people to go to work we provided some child care. if you want people to go to work, schools are closed, you've got to help people through these turbulent times. they never talk about what the inflationary cost that they speak of really did, how it

benefited american people who were suffering they overlooked that they weren't going to help now since they didn't help, they're going to -- everything they can. they didn't vote for it. they don't extend the hand of friendship to people in times of need so when they don't do that, they have to find a way to denounce the help that was given. it's really shameful it's painful, and it's sinful to hear people use a term "inflation" to indicate that people who are unemployed shouldn't receive help, the small businesses begging for help shouldn't have been helped. we're taking a backe from the back-and-forth about the

causes of inflation that continue during the hearing. chair powell is in front of the house financial services committee. you see the news at the bottom of the screen, something we discussed yesterday, because "wall street journal" broke the story that the fda was expected to halt the marketing of juul products, well known for its non-combustible products in term of tobacco we did get the letter from the fda. they say -- after reviewing the premarket applications, they determined the applications lacked sufficient testified regarding the toxicological profile of the products to demonstrate that marketing would be appropriate for the protection of public health. in particular, some of studies raised concerns due to insufficient and conflicting data, including genotoxicity and chemicals leaking from the pods.

they do point out they had not received clinical information that indicated an immediate hazard, however, the stoppage issue reflects their determination that there's insufficient evidence to assess the potential toxicological risk in the use of juul products. altria yesterday was down substantially. they paid $2.8 billion for that stake a number of years back still under ftc -- they're still looking at it at the ftc it won't matter much these days. it doesn't seem to be worth too much if they can't get their products back on the shelves we'll keep reporting this.

altria's strategy to com ped in international markets for non-combustible together bako products you see a rebound after the substantial loss yesterday when we first heard this news, now confirmed by a letter from the fda. let's get back into the hear with chair powell. >> finance freedom is american freedom. frankly merge do not have the financial freedom them need to invest in themselves, their businesses, their families unfortunately americans are too busy making ends meet to focus on anything else inflation is running rampant with consumer prices rising 8.6% in the last year, the largest increase from fuel to meat to housing, my constituents and all americans of suffering at the hands of this hidden tax, except it's not so hidden anymore it's punching americans in the face, as my friend mr. style put

it yesterday how did we get here? we gave up american energy independence, we locked down our citizens and businesses for nearly two years, pumped stimulus funds into the economy. now as we recover from the pandemic, we simply do not have the energy resources necessary to meet the increased consume are demand there's a history of democrat policies we can point to that put us in this position, from refuse to go dove in the strategy to recklessly passing $2 trillion in partisan spending, despite the fact that nearly $1 trial want was enspent. the bottom line is we need solutions notice, because inflation is beating up the american people. we have to wake up and realize we are cannot continue these policies every day inflation threatens the financial security of american families of our

constituents we need absolutes. let me return to my point. in december 2020 we had authorized nearly $4 trillion in bipartisan covid relief. three months later democrats 3ushd think another any oversit mechanism included even though a quarter, a quarter, of all covid relief remained unspent. when president biden was recently asked if the $1.9 trillion spending bill caused inflation, he said he didn't think the bill had even a minor impact and called the idea, quote, bizarre chair powell, do you agree with the president's conclusion the $1.9 trillion that was included in the american so-called rescue plan had not even a minor impact on the inflation we're seeing today? >> i'm sorry, i wouldn't comment on what any elected official said it's not up to us to score fiscal interventions >> again, sir, if you would,

respectfully, i'm not asking to you comment on what the president said i'm asking you personally, do you believe that the $1.9 trillion american rescue plan did not even have a minor impact on the inflation we're seeing today. >> we didn't comment on the tax cuts and jobs act, we didn't comment on the c.a.r.e.s. act and we won't comment on that act. >> it's interesting, sir -- it's interesting, sir, that you won't comment on this but you were more than willing a year ago to talk about inflation as some transitory something that everyone has acknowledged now will be here for a while even what seems like the president's build back better package this massive spending package is dead on arrival, certain elements might not be dead chair powell, do you have concerns that if congress injects a new round of stimulus into the current economy it could and, in fact, will add to the inflation we're seeing today? >> again, it's not our role to give you advice on what to do.

we report to congress, not the other way around we're sticking to our mandate and our mission and we have a lot of work to do on that front. not really giving you advice on what you should be doing we take fiscal policy as something that comes to us and we deal with it as part of everything else. >> i'm very disappointed, sir. you are supposed to be in charge of the monetary policy of this country. you are now embarking on raising interest rates because that's the only tool you think you have left this is not just a dog chasing its tail anymore, sir this is a dog that's starting to devour its tail and its back end because of the debt we are carrying i want to thank you. you acknowledge we're in a bad spot we're knowingly walking toward an even worse inflation, a recession, and god forbid food sources yet we're relying on old monetary policy tools to keep us falling off a cliff. we can raise interest rates over and over but the only way to curb a disaster is to raise interest rates to a catastrophic

level or as, like larry summers suggested, we allow unemployment to go to historical highs. it's not feasible. we need to put ourselves on a strict spending diet and we have to have strict oversight on the funds congress has already allocated to make sure not even one single dollar is going to waste. and we need to put control back into the hands of small businesses on main street. thank you. >> the gentleman from connecticut, mr. himes, also the chair of the subcommittee on national security, international development and monetary policy, now recognized for five minutes. >> thank you, madam chair. if you will indulge me one minute, it's important for the american people to understand what's being said here today because it's being said in other rooms in this building what the american people are seeing today is something that my republican party friends have given over to recently all too often, and that is rank

dishonesty in the service of acquiring and retaining power. a power without any resilient or discernible principle has stumbled upon inflation. there's inflation all over the world -- germany, japan, africa, south america, the united kingdom. there's inflation all over the world. but the republican party has decided that inflation is joe biden's fault. or the american recovery plan's fault. i've read the monetary policy report from start to finish. it gives the russian invasion of ukraine, supply chain bottlenecks, high fuel costs, wage growth, it does not mention joe biden or the american recovery plan. by the way, the american recovery plan is a particularly rank piece of dishonesty set aside the fact that it cut childhood poverty in half.

as mr. greene pointed out, if that isn't something to celebrate and perhaps have the slightest bit of humility as you attack it, i don't know what i can do for you the american recovery plan as was pointed out was about a third to a quarter of the fiscal efforts this congress made on a largely bipartisan effort to lift our economy to the point where it is today. the chairman said strong and well recovered, unemployment at 3.6% so many jobs out there that many of them are going unfilled did we overshoot maybe we did but the american recovery plan, this thing that cut childhood poverty in this country in half, was about a quarter to a third of the fiscal efforts. the other money was supported by president trump. by the way, it's not those dollars still sitting in americans' bank accounts, it's not c.a.r.e.s. dollars it's only those in the recovery plan that cut childhood poverty in half. energy prices, i read the

monetary policy report i'll quote it. because of the russian invasion of ukraine oil prices rose sharply. i've been around here long enough to know putting facts and truth out is like spitting into a hurricane, but it's important for the american people to understand that. mr. powell, i released yesterday -- i hope you got a copy -- white paper on a central bank digital currency offered with humility because we have a lot of issues to work out, but i hope you've had a chance to take at least a quick look at it. i wonder if you have any reflections or, original, what are the next steps now that you've gotten commentary from lots of people what's the next steps with respect to the federal reserve thinking about the cbdc? >> i printed it out and have it here i have not had a chance to read it carefully begin all that's going on so i think generally we're doing a great deal of work the president signed an executive order and the administration, parts of the administration, are working on

this i think it's something we really need to explore as a country it should not be a partisan thing. it's a very important potential innovation that will affect all americans. and our plan is to work on both the policy side and the technical side in coming years and come to congress with a recommendation at some point we don't prejudge what that would be i know your views are very positive on it and i also -- but i think one thing i did see in your report was the beginnings of thinking about how congress might authorize it and i do think that's a very, very important aspect of this that is great to have congress starting to think about it >> i think i agree with that and it has bipartisan support. i will ask you a question i ask you a lot, mr. chairman. we're seeing pretty dramatic swings in the financial markets. money is no longer free. we're seeing that in the spac market, the equity market, crypto cryptocurrency

what should we be focused on what is concerning you with respect to systemic risk that may develop in the face of rising rates and rising inflation? >> basically the financial markets have been functioning well and the banking system in particular is very strong, well capitalized, lots of liquidity, better management of its risks the place there have been issues, and we don't see them elevated at this point, has been illiquidity in some markets relative to where it had been historically >> any markets in particular where you worry about illiquidity? >> i wouldn't say that we're seeing anything that's particularly concerning but i think sort of systematically liquidity in the treasury market has come down from where it was and we've been looking for some time at ways to address that the markets are clearly functioning reasonably well. >> thank you my time has expired. >> thank you the gentleman from north carolina is now recognized for five minutes >> i thank the chair

chairman, thank you for being here according to the congressional budget office the federal government will spend an average of $545 billion per year, which was the estimate before rates went up. these are on interest payments on the $31 trillion of national debt $545 billion is more than we spend on the department of veterans affairs so given that the national debt is currently at about 125% of gdp, will the fed's commitment to tackle inflation be limited by rising interest rates, making the servicing of the national debt even more expensive >> no. absolutely not >> explain that. >> we're not in a situation where we need to consider fiscal questions like that. the u.s. is on an unsustainable fiscal path, debt is growing faster than the economy but it's not in an unsustainable position we can service our debt and the markets understand that and we can conducted our policy without

thinking about questions of fiscal sustainability and we do. >> when your colleague being secretary yellen, was before this committee, she told me federal debt, which was then about 105% of gdp, she said, quote, that's not a number that i think is fiscally irresponsible. she also went on to say, quote, if interest rates are zero, we could substantially have a higher debt burden and in the formula in the following question she alluded to japan and the fact that it could be double where we are now, meaning $60 trillion of debt if you use her math do you agree with secretary yellen that having a national debt of over 100% of gdp is fiscally responsible given that interest rates can change and that historically low interest rates condition always be expected >> i guess i would say it this way. we're not on a sustainable path and we haven't been for some time and tha