etf. now grayscale is suing. spirit airlines delaying a shareholder vote i downtoid the interview yestery we find out what happens, mel melissa. we will find out what it means for jetblue's bid. it's thursday, june 30th i think this is the last day of june 2022. "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from nasdaq site from times square. i'm melissa lee here with joe kernen equity futures are setting up as joe mentioned this is the last

day of the quarter we are set for the worst half for the s&p since the second half of 1987 we know what happened in the second half of 1987. black monday the futures with a lower open across the board dow is looking for 300 points lower. nasdaq looking to be down 184 points at the open treasury yields. 10-year treasury breaking 3.1% this morning 3.059% is the yield on the 10-year treasury the 2-year treasury is yielding 3.002% look at crude prices as opec plus meets for the final day we are looking at wti down by just a couple pennies. $109.64. breaking overnight xi jinping arriving in hong kong for the 25th anniversary of the

territory happennd over since t british rule. >> what was your '87 >> the second half of 1987. >> was what? >> black monday. >> i know. i was at ef hutton this is the worst first half since 1970 did you see those facts for the s&p. the s&p down 19.9% year to date. that is what i saw 52 years in 1970 it wasn't close to what happened in the next couple years in terms of the most wrenching bear market nifty 50 became the nifty 2. by 1974, blue chip stocks were up $3 and $4 a share hid hideous. from '78 to '82.

i don't know >> it is not equities that suffered bonds. the worst first half since 1788. 1788 >> 19.9% does not describe netflix or zoom. >> yeah. >> i feel like leaving i'm not going to i stumped you already. i like to do that to you i like to keep you on your toes when you come in here. you're groggy. you got up early >> i'm no groggier than you, joe. >> probably true you do get used to it. i said 30 days in june you weren't sure 30 >> i was sure there were 30 days you said are you sure it could be 31? it cannot be 31 for june.

>> how many months have 28 days? >> i didn't know >> all of them let me go. i'm sorry. grayscale suing the s.e.c. after regulators turned down the bid to convert the bitcoin fund into the etf. grayscale failed to answer questions with the market manipulation the regulator said it was concerned the consumers would lack protections under the propos proposal grayscale was seeking to launch the first etf based on spot bitcoin prices grayscale is suing the suit arguing the regulator failed to apply consistent treatment similar to other investment vehicles and futures and ones that allows investors to short we have the ceo michael

sonnenshein in the 8:00 hour i didn't think the spot etf was ready for primetime. they said it is not. you can do futures, but not get spot for a while. >> i didn't think it was a surprise for people watching the space that the s.e.c. rejected this this throws into question hthe asset value. the 28%. it has gone higher than that if it is not converted to etf and provide people in it that arbitrage, why are you in it it doesn't track the asset you will not get it because it will not turn to an etf. >> i don't know where bk -- what was the lowest price >> that's a good question. >> 100 >> yeah. this is way back when. nobody talked about bitcoin.

>> were you an early adopter on "fast money. i wonder where you are right now. we have seen this before 90% pull back three or four times. we saw micro strategy. >> they went in more. >> with what can you borrow against what you have and buy more? >> borrow -- what is that asset worth now? that is the problem the crypto lenders have asset backed loans. >> mega hodlers. i'm scared for him s>> brian, he short bitcoin >> to what >> it's an asset. >> exactly >> i don't think he has a firm target >> he would cover?

>> covered some. i don't know if it increased >> katie stockton said 13.5 is the next objective and then 19. then she said 13,500 pick one it's not her fault a source confirms that major crypto hedge fund three arrows capital is worth one arrow fallen into liquidation. they are handling the liquidation process. they are setting up a web site for instructions for credcredit. they are suffering from the selloff and collapsed because of the stablecoin tariff and sister token luna i have nothing to say about them it defaulted on a loan from

voyager digital on monday. >> coinbase is seeking expansion in europe. it has a presence in the uk and ireland and germany. it wants to set up operations in netherlands and they are looking to drive growth in fears of the growing crypto winter. coinbase is down80% for the year. and the spirit airlines delays the vote for shareholders to further discuss the merger with frontier. frontier and jetblue raised offers in the last week. either combination would create the fifth largest carrier in the united states at this point. coming up, futures are indicating a lower open across the board as we close out the first half of 2022

we talk strategy for the second half of the year next. and the state of new jersey is looking for property tax telief in the form of rebas. governor phil murphy will join us in the 8:00 hour. you are watching "squawk box" on cnbc 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.

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the fed was right to get aggressive 21% said the path is likely to hurt stocks than hurt the economy. joining us to talk about the fed path and how to prepare your portfolio is cameron dawson. great to have you with us. good morning >> good morning. >> powell said it is the most important thing to get back price stability and recession could be a byproduct effectively. how do you invest knowing that the ultimate objective price stability or rein in inflation? >> as long as the fed is fighting inflation and removing liquidity to fight inflation, it means each of the relief rallies we very likely fails at resistance and we rollover all of the hopes of the bottom and the worst is over or we're moving into a bull market are

premature given the fact the fed is saying and actually all send t central banks are saying they are willing to tolerate lower growth and unemployment and recession all to keep the inflation expectations in check which be means equities will be volatile >> cameron, i think of the statement from rh last night they take down the second half of the year forecast because p of rising rates. they do this 28 days after posting earnings and giving guidance this is not the only company revised the forecast quickly due to quickly deteriorating conditions how do we believe the guidance that is given with target and microsoft and all companies came out after earnings and revised

the forecast lower >> the environment is changing rather rapidly and we see the tightness come through where aggregate numbers have not come down with estimates. still at 10.5% growth this year. 9.5% for '23 and '24 as we see the weaker data, estimates have to get cut and analysts need to cut as well the end result is valuations and they have come down from 22 times to start this year to 16.5 times. that is just about average usually in tightening cycles and in recessions, you see valuations go below average. we think we have downward pressure on equities from the earnings front and multiple front from here which is why we don't see the low yet. >> what is the case to make to individual investors or investors at large out there to

be in the markets right now given all of what you said it sounds like you don't want to fight the fed. it's a terrible environment. things are changing. companies don't have a grasp on their forecast req why should investors >> you have to care about taxes and you have to care about long-term compounding growth i think the biggest mistake that investors can make and one that tends to destroy value for the long run is selling after a major correction and then being too scared to get back in and missing the start of the new cycle. timing that is really difficult. staying invested remains important. i think it also means we have to be able to shift where we have exposure within portfolios we don't want to have too much exposure to high growth or high valuation names that are the most sensitive to the fed

removing liquidity they have room for multiple compression. we need to stay in portfolios with high quality and good balance sheets those are the quality compounders you want to scoop up at lower valuations. those will be the core of the portfolio as you move through the next cycle. >> we are seeing 10-year treasury remain fairly low, cameron. the large-cap growth stocks, is this a respite for the trade or is this a signal of 3.06% right now 10-year that recession concerns are growing to fever pitch and ultimately that outlook is negative for all stocks >> that's a really good point. there is a good lesson to learn from november of 2018 when we saw yields on the shorte end and long end move lower despite the

fed signaling tighter policy and raise rates and qt the bond market was signaling growth fears and yields falling. when the fed came out and said we will stick on the path and nothing to see in the bond market, we saw equities and risk assets in total freak out. that's when we had that horrible december of 2018 20% down in a short period of time that forced the fed to pivot if we were to see yields crack and long yields and short yields more lower, we think that is a negligative sign for risk assets that means the bondmarket is clearly signaling that growth fears are real as long as it remains in an up trend, it means growth is slowing, but not some deeper recession. >> cameron, thank you. i appreciate it. coming up, home decor stock rh getting punished this

morning. we'll tell you why as we prepare to close out the first half of the year, here is the biggest s&p winners on losers year to date. huh. oil stocks i thought they would never been investable ever again. here are the losers year to da quk box" will be right back. leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

shares of rh are lower company formerly known as restoration hardware guess when they changed their name 2017 the hardware roots they didn't want that to be

prominent. slashing outlook for 2022. revenue anticipating for customer demand will continue to soften for the rest of the year. down 2% and 5% despite the sales flat to up 2%. the stock had been sliding this week ahead of the news it is down 17% year to date. it is down 5 -- no 58% year to date that's another one 58%. s&p down 20% >> this, again, is one of the stocks just 28 days ago, they reported earnings and gave the forecast it is not like this is so much time has passed and they have to revise the forecast. it has been four weeks and revising lower the forecast. they initiated $2 billion buyback program. they said in the press release last night they are not buying

back stock that is a signal to investors that the company doesn't find value in the shares right now. >> do you have a good feel for every plane is packed and every hotel room is booked and everything is sizzling we keep hearing forecasts. are we in a recession or headed for one? is it bifurcated >> we are shifting to services spending and this is mostly stuff. it doesn't reflect what is happening in the economy right now. >> i'm hoping for a slowdown quicker than we thought so the fed has its work done for it. >> and the markets have clarity. that is the fate i have been having with liesman. >> don't debate liesman. >> why >> you will get nowhere.

>> it is about the exchange of ideas. >> it is always about winning. >> the notion of recession and how we do it quickly and up front. not that anybody wants a reces recession. if we had it quickly and up front. >> we had one negative quarter already. gdp estimate ratcheted down. if we have two, it doesn't mean things are ready to get better >> right >> he changes his mind liesman. >> if we debate him enough. >> depending on the circumstances. >> like the fed. data driven. as we close out june trading, look at the semiconductor etf. nvidia down 40% in the last three months micron out with earnings tonight. that is important for smh and the sector at large.

why do you say that? >> cramer is concerned about it. he talked about micron the stock has been acting -- >> it is a cyclical caindicatin. and president biden will speak at the nato meeting. we will tell you what to expect next. and look at yesterday's winners and losers of the s&p 500. >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure need something nt. oh, we can help with that. okay, imagine this. your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, like asap! so basically i can pick

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good morning welcome back to "squawk box" live from the nasdaq market site in times square. checking the futures let's not. we have to down 364 points in the red i wore a green tie it's not helping i tried to match you

it was a coincidence that it happened >> we sigh >> the nasdaq down s&p down last day of the quarter. bitcoin is getting prepare to c first half of the year dollar index is up 10% year to date that's up. tomorrow's the first friday of the month, but it is not jobs friday because it's the 1st. there's some weird rules about how much time they need to release the actual numbers employment recport will be released next friday the adp numbers are out. adp announced the revamp of the monthly report of the high frequency robust report. they announced the stanford

digital economy lab to review repo reporting. it will debut on august 31st adp will skip reports for june and july that's interesting we have been talking about liesman. he keeps good data on the standard deviation between adp and what finally happens when the government releases a report and how close they get that just begs the question. who's standard deviation is larger than the actual facts on any given day. there is so much air in a lot of it being revised from one month to the next. it is a net number it comes out to maybe millions you are talking tens of millions added. tens of millions lost. you know that? is that an iphone watch? >> watch >> apple watch >> yes many people have them, joe

>> dick tracy. >> kill joe's mic. i wish i could do that it would be amazing. everybody would buy one. >> wait. wait >> you see how it works. all right. let's move on. president biden preparing to close out the european trip speaking at the nato meeting this morning let's get to kayla tausche in madrid with the latest >> reporter: good morning, melissa. nato leaders are waking up to an earful from vladimir putin who said russia would be forced to respond in kind it nato infrastructure expanded to sweden and finland he would pursue different tactics in ukraine where the goals remain unchanged russia leaders had had this week have been united to try to chose off the funding machine for

putin. the split screen to the unity overseas is causing sky rocketing inflation and ukraine preparing for more months of war. the solution for many of the western leaders has been to support ukraine militarily and in its own country with $5 billion budget shortfall per month and trying to cap the amount of money that buyers pay russia for oil earlier hthis morning, i had a chance to speak to the biden administration architect for the price cap. i asked what happens if vladimir putin doesn't pay the cap? >> we already have evidence that he is selling oil at extremely discounted prices. that's already there we know that he is willing to sell there have been reports out already by the buyers reporting it at $30 to $40 discount in places some places low. we know he is willing to sell at a discount rate because he needs

the revenue for his war machine. >> reporter: amos said partners large and small are just beginning now g7 leaders announced agreement to concept of the price cap later today, president biden will host a news conference to close the summit he will face many questions, especially on the nato comments yesterday that they are preparing for a long-haul war in ukraine. melissa and joe. >> kayla, i had the very question you posed and got the sound bite for maybe it gets to -- it is a game of chicken what if putin says i'll not sell that oil who is stronger at this point? they are hoping he is so desperate he will sell at any price? >> reporter: price of course, the question was what if putin doesn't sell, not putin not buy? there have been reports that russia's price per production is $10 a barrel

it is extremely low. there are reports that he is cutting off gas supply on nordstrom i to europe to choke off or withhold energy to european buyers as well. certainly he holds many cards. you heard hoch,stein that they are selling $30 lower per barrel or lower the response we got, he doesn't sound to be a willing negotiator in that arena. >> kayla tausche, thank you. coming up, planning for portfolio for the second half of the year investment trends from retail investors next. and later, we talk to new jersey governor phil murphy on his state's plan to tackle inflation. "squawk box" is coming right back p

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welcome back to squawk futures pointing to a firm lower open the s&p is down 57 appoipoints dow looking to lose 3 and nasdaq down 209points

crypto is in a tough spot. bitcoin is about to close the quarter at the worst quarter on record that brings us to the quarterly stock report 29% of investors say bitcoin would finish the year below 30,000 39% said it would finish below $20,000. we're there now. retail trading down big with many switching from individual names to funds is this a sign of the belief in the broader markets or safety? joining us is jj kinahan you got kids >> i do have kids, joe three of them. >> are they around >> they are all gainfully employed >> i have an admission to make that was crying.

i accidentally hit the nanny camera and audio was on. that was my kid on national tv i was like -- i swiped it closed. >> i thought we were checking in. >> i pretended it never happened jj >> i thought we were checking in on his audio i thought those were his kids. >> melissa, if they are making noise, that means they're healthy. >> i thought you were crying are we making progress in getting fear levels high enough to make a sustainable bottom, jj >> i don't think so, joe we will stay in the range for a long time. you are reporting every day and we have seen this elevated vix all year long. i think, you know, as your lead-in was talking about retail

investors is them going from the individual names to a lot of the index-based etfs one reason you are seeing that overall is because in the past, you had two things in the past couple years that worked in the favor of people's higher interest in the market number one, volatility would spike and it would come back off shortly after giving trading opportunities for people this is a little tougher trading environment for people where vix is in a tighter range and never much above 30 or below 26. maybe stand out on each side not significantly. the other big thing, joe, there's no individual name story that gets people really excited. if you think about one of the phenomenons of the last couple years, there were a lot of individual names with interesting news that got people excited about the stock. now there is still individual names with interesting news, but

unfortunately, a lot of it is more negative or nothing that really gets people really excited to buy those stocks. even the traditional stocks like apple, microsoft or tesla. yes, that is where people are investing their money, but maybe not in the past. apple and microsoft are where the retail investor goes the individual names are not sustaining that news and aren't sustaining the interest like last couple years. >> companies don't have to change their forecast right before they report, do they? >> they don't have to do anything. >> so, it's june 30th. the end of the quarter we are entering earnings seasons soon >> yes, we are not next week, but the week of july 11th. >> a few days. rh today

a lot of companies say business got bad quickly. we already had retailers that are not necessarily reporting on calendar quarters. we have seen scary input costs or sales this could not be a great earnings reporting season. >> i think the companies and one of the things we learned is they will talk to analysts because you want to tell your story. be it a great story or a story where here's what we have to do for the next couple quarters when things do turn around, we are in a position to do so to your point, what makes it more important is what are the ceos and cfos going to say in these meetings overall, more important really than the earnings that came out because as you said it seems as over last six weeks, a sea

changes of everything. how many times over the last six weeks have you gotten on and talked about a company laying off or not hiring in the past six weeks compared to the previous year? i'll guess it is pretty close. that is the strangest sea changes we have seen overall is that companies are tapping the brake s and some cases slamming the brakes a little bit in terms what they are planning on in the future that is significantly different than what we have seen face it, many younger people who have never seen times where we slowed down significantly. i think that the picture that's laid out in the earnings call is the most important part of what a company is going to do to keep people from the fear state of the world is ending. >> a lot of it and we were just looking at the charts. those are indicating something

the s&p and nasdaq and even the dow moving into this earnings season is enough already in the prices that we know earnings will be below expectation or did the selloff come from macro things like the fed and inflation and just general -- >> earnings at the end of the day, earnings drive the market yes, we have this macro fear the macro fear goes down to the micro as you see and as you are talking about with the war or inflation or lack of employees whatever it may be slowing down the individual companies. the individual companies and individual earnings are going to ultimately drive the market. that being said, i think a lot of that has been priced in however, this is going to be, you know, individual company story. we have seen the analysts lower

expectations as we go into the season i think retail, to me, is really probably the most interesting area because when times aren't good, that is a have and have not area the haves may be fewer than we have seen in the past than the have-nots or those hanging on will have a much tougher time. when you look around, stocks have been beaten up significantly. one thing i would say particularly to retail traders right now. you don't have to be a bottom picker the market we're in right now, the most important thing you can do is a is this a stocky w i wa to own for a period of time? you may want to play on a bounce, but the portfolio is where you look for companies and you accumulate not an all or none type here we are going into earnings season with unanswered questions

and inflation numbers coming out later today. you still have a lot going into the fourth of july holiday, joe. this is the time you see the market drift higher. you know, how often in your career have you seen the last day of the june quarter get beaten up. we will see if this lasts after the holiday and into earnings season. >> why does tastycakes >> tastytrades >> what's a crimpet? a butter scotch filled. >> i don't know what it is that sounds delicious. >> that's what i mean. you don't have anything to do with that? >> you know, joe, next time i see you, i'll bring you that. >> tastytrade. i got that straight. it's confusing

tastytrade jj kinahan regional ceo oh, that's better. >> what's wrong? >> nothing. >> did you know it was different? smarty pants >> something you eat versus an actual product i think so >> he can take it. coming up, crude prices up 45% year to date we'll talk to helima croft about the opec meeting and the prices. that is next "squawk box" will be right back.

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joining us is helima croft global head of environmental strategy >> is there any hope for president biden it that he gets saudi and/or uae to increase production >> the hope increase their prod? sdprt real hope for the pooid administration is when they make that visit to the kingdom in the middle of july that the saudis and emirateis go beyond what they are planning, we do not have a lot of additional opec oil out there. we had president macron doing his hot mic saying opec is out we think they could add an additional million barrels, but, again, we're facing the prospect

of losing significant quantities when the european sanctions kick in, in january we have libya disrupting so there's simply not a lot of additional opec oil out there. >> what does the ban on russian oil do later on, and how do the price caps work in what kind of shortage are we looking at how many barrels are going to be taken off the market >> this is the most important question for the market going forward. we've already lost problem lay million, million and a half barrels of russian oil because of self-sanctioning, companies saying "we can't touch this. but when you think of what happens on swraurn 1, europe, the largest market for russian oil, is out. russia will not be able to ship oil to germany through pipelines or poland through pipelines. then we have 2.2 million barrels searching for a home this could obviously push up prices hence a price cap plan being

pressed by the u.s. treasury would come in. that would essential le say european insurers and shippers could ship the product to places like indiana if india turns around and says to the russians we have to demand a very, very deep disskocount. how are you going to set the price target and more importantly, are the russians going to sit back and say, you know what, we're going to accept a deep discount. it runs the risk that they'll start cutting prices now >> what does china coming back online mean for this >> this is a real challenge. the real challenge for the boid administration is what has been holding back prices is fierce of recession. if those fears start to fade at all we have a tight market, not a lot of additional barrels out

there, and if china comes back as a significant buyer, that's only going to push prices higher >> so what is your forecast now for oil. >> my focus is how do we go beyond the highs that we saw earlier this year. i'm going to be watching really carefully what happens with additional sanctions on russia watch the shipping and insurance sanctions. if those sanctions take effect, that means those barrels are simply leaving the market. not going to another destination when the european sanctions kick in, in january >> there's a notion that maybe we've hit peak inflation do you she the oil commodity market >> again, we haven't had the major sanctions on russian oil take effect. to me that is correct is going to be the biggest issue in the market to watch for. hence all the discussions about price caps when i when those sanctions kick in, you could lose additional millions of barrels off the market from russia

>> what does the demand of oil, at what point do people say we're going to cut back? we're hearing from corporations that this is a real problem when it comes to margins. they can't cut back. consumers certainly can and are. >> we are already seeing some demand destruction at the margins. people are looking to go to cheaper gas stations, putting on hold some travel plans, but we have not seen yet major demand destruction. ultimately, that's what's going to balance this market it's ultimately going to be demand that brings prices lower, but we have not hit that demand destruction point yet. >> thank you >> thank you for having me futures continue to be sharply lower in the red you can see the nasdaq, s&p also we'll talk strategy for the third quarter, straight ahead, tarts tomorrow plus the ceo of gray scale is going to join us, his company

suing the sec after the spot coin was rejected squawk coming right back

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accenture let there be change. good morning welcome to the final trading day

of the month, the quarter and the first half of the year the worst performance since 1970 we'll hoe you what is moving right now, including the price of bitcoin plunging after gray scale's application was rejected for a pot etf. now gray scale is suing the regulator. and the president wrapping up his trip abroad. we'll debate the federal gas tax holiday, the president's energy policy and try to figure out when relief at the pump is coming as a second hour of "squawk box" begins right now. >> good morning, and welcome back to "squawk box" here on cnbc live from the nasdaq site

andrew will be joining us from the aspen festival the top song of 1970 >> i have no idea. >> "bridge over troubled water." there's some other ones, "abc", jackson five pre-mj i mean, he was there, but it was before we knew who he was going to be. >> right >> which, that shows you how long ago that was. and this one for us the carpenters "close to you." they long to be. u.s. equity futures down at this hour we got to try something for, to feel a little better down about 350 now in the nasdaq we're back in the soup in risk off and bitcoin. nasdaq and everything else, and i don't know what really, the market got weak and bitcoin went down, really, the risk asset

called bitcoin goes down, and then the nasdaq sometimes. we've seen that and we've heard katie stockton say that sometimes it's a little tale >> correlated. >> correlate the and even a little ahead treasuries not really the biggest feature we are looking at, although we are at 3.05. so that's clearly not higher, but that goes down, we have growth worries the minute that that starts or rush to quality worries, and oil, oil, we may get some news, i guess, this week some point on what's happening. we just heard it's not supply. it's going to be demand. demand destruction that finally brings prices down and crypto you're talking about crypto and e-sher both on the pace for worst month. >> walgreen's reporting results. >> walgreen's posting adjusted fiscal third quarter earnings of

96 cents a hair, that beat estimates, down 30% from a year ago. that quarter was when we saw the peak covid vaccine volumes $32.6 billion in revenues, also just ahead of consensus. the pharmacy chain maintaining full-year guidance during the quarter, pharmacy sales were down 9.7% with weakness in speciality pharma and no boost from those covid boosters the new walgreen's health division made up of its primary care clinics did $596 million in sales, up 65%, if you compared to the sdand-alone results for those units a year ago u.s. retail comps up 1.4%, driven by home test, cold and flu. digital sales were up 25% after having been up 95% during the comparable quarter a year ago. now $5.3 billion in sales came

above estimates. but boots uk comps were up, led by beauty. walgreen's announced it is going to hold onto boots for now, because buyers can't get financing in this environment. the company taking a charge in the quarter for the opioid settlement with florida. and labor cost, when it looks to get back to normal operating hours for all these pharmacies that's really one of the biggest issues, to try to get back to their normal hours >> bertha, thank you new results from the delivering alpha quarterly stock report, 68% of investors surveyed saying that the sector with the most upside in 2022 is energy that's followed by 58% who say health care. 34% saying financial joining us to talk more about areas of opportunity, mona

mohodgen from edward jones before we get into individual sectors like that, mona, let's talk overall just about mack yoe and recession fears and inflation worries. yesterday, quasi transitory, i'm not sure we need to throw that word out completely. i need to know is this something that's now systemic, is it secular inflation because the fed got way out over its skoost skis in terms of easing or does it have to do with reopening after the pandemic the putin price hike which president biden says like every third sentence, does it have to do with things that could be quasi transitory in or are we stuck with this for years to come in. >> yeah, thanks, joe what we've learned is this

inflation has been stickier than anyone really expected in fact, what we're seeing really is what the fed can impact is not the headline part of this inflationary issue, you know things like global commodity prices oil, food price. they're not really something that the fed or global central banks tend to be able to impact directly what really the fed is focussed on, and we know this preferred metric is core pce that's where we think they can make an impact of course raising rates aggressively can bring down the demand side of the occasion. we're looking at things like a cooling housing market, a potentially slowing labor market so our base case continues to be by year end we'll start to see inflation, particularly on the core side tart to moderate, driven not only by tougher year-on-year comparisons but also by what the fed is doing. keep in mind markets are savvy here we know the fed's history. 1 of the 14 cycles have ended in

some recessionary environment. this cycle tends to be aggressive hopefully followed by 25s. in that backdrop we're seeing markets price in downturns, instead of inflationary concerns that's the backdrop we are to be in until we see inflation moderate >> it almost does sound quasi transitory, doesn't it they got rid of the word it figures that they get rid of it when it actually may have some validity if we see things moderate by year end so the chance of a hard versus a soft landing, and does it really matter is it plus .1%, down .1% does it matter whether there's a recession or whether it's basically just no growth, flat >> you bring up a pretty good point here our view is we're rate cycle, the probability of recession is

increasing, and in fact it's probably, just as the rate hikes are, it's more front end load. they will have some sort of lag impact into the real economy but by year end we could be feeling some sort of economic down turn. the good news from our end is that we don't yet see the scope for a deep or prolonged down turn so when you look historically, the average bear market is about negative 34% on the s&p, but when you remove some of those deeper, prolonged recessions, the average is about negative 28%. with the s&p down about 20%, really, a lot of the down side is starting to get priced in here we're in a bottoming process, what we're calling a u-shaped bottoming process versus the v-shaped that we've been used to over the last couple years what would get us there to a more-sustained rally, one we have to see that inflation not only one point down but three, four before we get a trend. two, earn bes grote. somehow '22 and '23 are still

about 10% and 9.5% expected earnings growth. those numbers will have to come down the good news is markets can bottom and rebound even as earnings growth is slowing so in our rue, the risk-reward is starting to get more interesting, but we would like to see that inflation number start to moderate. that would, in fact, allow the fed to hopefully move at a more gradual pace and that would be what mount as more-sustained rally. in the near term we see markets focussed on the growth scares, not only in equities but yields, somewhat in commodity prices and ongoing strength in the dollar as well. >> what would you tell the edward jones salesforce? buy certain sectors? stay out or wait or what would you say? >> yeah, absolutely, look, first of all, downturns and even bear markets are part of the business cycle. we see them about once every five years, and over time they tend to actually provide

opportunities not only to diversefy but provide getter prices we fo would say stay defensively oriented when we talk about large cap, health care, staples, parts of industrials but more defensive overall in equity side of the ledger in fixed income, we favor investment-grade bonds. we think the big move in yields has already happened and investment grades gives you access to quality companies as well stay invested. but over time we are going to get some interesting opportunities here >> thank you >> thanks, joe >> it's kind of like id ward jones. 18,000 guys. all in hill communities sometimes, and never got too big. just mind their ps and qs. all right, see you >> thanks. >> thanks, mona. "let itten."

>> what? >> "let it be" was 1907 "let it be" is iconic. it's been around for a long, long time. we can learn from "let it be." >> it's my mantra every time i fill in on "squawk box." >> mine is, as we already said, "bridge over troubled waters." >> we all need that right now. coming up, a 300-acre plot of prime north dakota land has become the plot of an espionage scandal. gray scale ceo will join us in a bit to discuss "squawk box" will be right back.

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welcome back to "squawk box. in the headlines, the furniture and home goods retailer cut its outlook due to a slow down in the housing market that tok is down 7.25% spirit airlines have delayed a vote they were to vote today on a deal with frontier group the postponement could be a sign it doesn't feel it has enough support. pfizer has filed for

approval of paxlovid it is currently being given to patients under an emergency use authorization. pfizer says its new submission provides longer term followup data which values it as a treatment option growing concerns in america's heartland over a 300-acre plot of farmland recently bought by a u.s. company that happens to have ties to china. the company wants to build a corn milling plant but there's a us air force pace just 20 minutes away from the farmland in question the multi-million dollar investment raising eyebrows in d.c. we took a closer look. >> reporter: this is grand forks air force base in north dakota home of some of the nagts's most sensitive technology, including the r q4 global hawk event

drone, and this property sits 20 minutes down the road. more than 300 acres of prime farmland earlier this year, three north dakotaens who own parcels here sold this land for millions of dollars to a subsidiary of a chinese company that say it is wants to build a corn milling plant. now that plan has come under scrutiny here in d.c. where some in the intelligence community warn that the deal should be blocked because it could offer chinese spies unprecedented access to the american base. it's an only-in-america kind of fight. pitting the economic rights of a community against national security warnings. the chinese company is the fufung group the subsidiary says they're not a threat >> we're under u.s. laws i'm an american citizen. i group my whole life here, and i'm not going to be doing any

type of espionage activities >> reporter: the city's mayor says he just wants to do business >> it would be the largest single investment in the city's history. the fbi didn't see immediate concerns they say if you see something, say something. >> reporter: the air force hasn't taken any official position on the chinese investment, but an air force major pose add alarming memo laying out what he believes to be the intelligence threat he wrote some of the most sensitive elements of grand forks exist with the digital uplinks and downlinks and interaction with space-based assets the air force says major jeremy fox was only speaking for himself. but he's not the only one with security concerns. in a report released may 26, the u.s.-china economic and security review commission wrote the location of the land close to the base is particularly

convenient for monitoring air traffic flows in and out of the base among other security-related concerns. that's why senator kevin cramer says he opposes the project in his own state, despite the economic benefit it is might bring. >> i think we grossly underappreciate how effective they are at collecting information, collecting data, using it in nefarious ways, and so, yeah i'd just as soon not have the chinese communist party doing business in my back yard >> reporter: both the chairman and ranking member of the senate intelligence committee told cnbc they also have concerns about the chinese development. now the city won't build out infrastructure until next spring, and the mayor tells me he's moving ahead with the project in good fate but he also says he's still waiting to hear if the federal government is going to make any official objection to the project. joe? >> number one, i don't know how are you in washington next to the capitol and now you're at the nasdaq that's the first thing. >> they have airplanes now

>> at that's three seconds ago that's some incredible technology it's 300 acres i'm trying to think of how many other 300-acre plots bill gates hasn't bought all the farmland, has he there's just no way that this isn't related to its proximity to that air force, there's just no way there's no, i'm just telling these guys there's no way there's 300-acre plots everywhere, and i'm sure it's just as fertile and just as convenient for corn milling. >> yeah, when you talk to the company, what they say is the particular location here matters to them, because it has access to rail, access to water it's close to the city of grand forks, adjacent to the city, going to annex some of that. >> close to grand forks. >> so it has all the elements you need for that plant, but when you talk to national security folks they say there's no reason for the federal

government to approve this the question is whether cfius will be able to stop it or let it go through. we still don't know. >> and the mayor says what he's trying to do is present the city he wants to grow job, grow the economy. the folk whose sold the land in that area, sold it for millions of dollars, and they say look, this company is part of the global economy, and it's our right to sell farmland that we own. so you have this fascinating debate here between the private property rights of landowners in north dakota against these ephemeral security kearns. the air force hasn't said no to this deal, so the people are waiting for the u.s. government to weigh in here >> they're putting a bunch of tiktok servers there, too? >> don't think so. >> no? >> i didn't see that in the plan >> you never know. >> you never know what's going to be in a silo. >> fa oyeah, you don't. doesn't this smell to you kind of weird >> what you've got there are

sensitive drones, space-based communications, and all of those transmissions go right through that area. so the concern is passive collection of that data, and if you've got a drone out there flying, if it can be hacked, that encrypted communication can turn that drone right around too. the sensitive thing is the communication with these unmanned systems, and all half is data flying around out there. >> but the message to people who own that property is they will no longer have the right to sell when they want or who they sell to is going to be monitored. >> people are -- >> adamant, it's their property, it's their right >> anyway, all right, ayman, thank you, fascinating report. futures indicating a 1% decline in the s&p dow loornging at a decline of 360 at the open. check out the airline stocks ahead of this busy holiday week and we're seeing declines for american, united and delta

bitcoin down by 5.4% gray scale ceo michaelsonen shine will be joining us in just a bit. much more on the market this morning in just a few. time now for today's aflac trivia question. which companies are the top three employers tinhe world the answer when cnbc "squawk box" continues pre-pain show. aflac! paul is about to suffer a shelf-inflicted injury. luckily, aflac will help cover his unexpected medical bills. aflac! maybe you could use the money to buy a step stool. i have a step stool. so why are you climbing a shelf? the stool's on top of the shelf, isn't it paul... (shelf crashing) yeah... ♪ ♪ aflac!

now the answer to today's aflac trivia question. which companies are the top three employers in the world the answer, walmart, amazon and volkswagen still to come. gray scale suing the sec after the agency rejected the company's application for a spot bitcoin etf. and then later, new jersey governor phil murphy on his state's plan to single-handedly tack ilaon ilenftin the state of new jersey tay tuned. you're watching "squawk box," and this is cnn pk

vo: when times get dark, we can't see the help that's all around us. let 2-1-1 be your guiding light. for help with food, health care, and other resources. operator: 2-1-1, how can i help you? vo: call 211 or visit 211.org 2-1-1 get connected. get help. pinterest co-founder, benzyl verman is handing the ceo reins to bill ready. can pinterest, the stock soar from here. >> don't give it away.

just one side this time. >> well, joe, no it's too late for pinterest, pinterest missed its chance to break out. revenue growth down to 18% monthly active users had rank being down to 9%, and what is pinterest anyway it was supposed to be a digital scrapbook. taste makers would create trends and others would browse and buy. but because they focussed on making it less social and less fun it heft a big opening for others to catch up instagram has added commerce strategies tiktok added hopping features, too. that raises the question, what are pinterest's options? the first thing it would have to do is become a more vibrant, engaging place, which means reconsidering its ho-hum

attitude toward video and to make the experience better than on other services. it's not the best time to pitch the turn around of an e-commerce enabler. so stick a fork in pinterest it's ton >> thank you, jon fortt. >> or on the hand. >> the worse segment ever if it was just called on the hand. >> someone wrote this for me see if i can sell it is it that hard to believe a social networking company could reinvent itself? >> well, joe, this is the ideal moment to rethink pinterest with new leadership the advantage pinterest has, less baggage, because pinterest didn't try to become overly social, it doesn't have the moderate challenges the others do it doesn't spy on users to get

clues on what they might buy it helps people find things they might want to buy, refreshingly trait forward. as awkward as it feels, it's best to announce a leadership change and strategy when the tok is already down and retailers are slowing down and this person has just the right ingredients to get pinterest pointing in the right trex bill red atady can get them reay there's a good chance it will be worth 20 buck as share in a couple years >> your second one is what you always breechlt. >> it's not, though. >> do we ever really find out what you -- >> it's the second one didn't you believe him on the

second one much more >> no i thought jon was very convincing >> half the time i don't know. ki see -- >> both sides. >> it's a shakespearean torment going on inside me >> you didn't do the live golf tournament, saudi blood money, do they take it? do they not take it? what about china aren't they worse than, you're not going to do any of that, because you said it was too touchy, so i just recounted the whole thing. >> it's not just the touchiness. sometimes it's hard for me to make an argument >> on the other hand >> so then you're saying that they hud not have taken the money. >> or i'm saying -- >> of course they should have taken the money, because they're 52 years old >> you're trying to get me to do it when i said i wouldn't do it. >> it's cool that you're here. >> we should add that kramer did interview both the incoming and

outgoing ceos of pinterest >> so braintree is a company and also long before that, it's a suburb of boston did you knee >> oh, yeah. it's the end of the t line >> what kind of a name is braintree in. >> i don't know. i always wondered. boston's got a lot of ugly >> weird >> it's funny to hear people say them who are from boston. >> yeah, yeah. >> all right, jon, great to see you. and both hands coming up, president biden wrapping up his trip to madrid we'll bring you his remarks when it happens up next, gray scale suing the sec after it turned down its bid to turn into an etf. "squawk box" will be right back.

welcome back to "squawk box," let's get a check on bitcoin right now. still under pressure, 19,091 down 5%. a source confirms to cnbc that three arrows capital has fallen

into liquidation they brought ten aowe on board they have suffered in the selloff from crypto. it defaulted on a loan from voyager digital on monday. the securities and exchange commission rejecting gray scale's bid for a spot etf cnbc reached out to the sec for comment on this issue. they were not available for comment. join us is ceo michaelsonen shine. great to have you with us. >> good morning, great to be here >> is there a precedent for this sort of action to sue the sec for rejection? >> well, melissa, it's been a busy 12 hours pour the grayscale team of course last night getting the sec's decision we were very

disappointed, but as an organization we were ready regulators do get sued, and it does happen frequently last night after receiving the sec decision our attorneys almost immediately filed a petition for review with the appellate court in d.c., and that starts the litigation process, contesting the sec's decision, which we of course vehemently disagree with >> what is the core thrust of that suit, if you can give me the elevator pitch so to speak on why the sec is wrong in this decision >> well, we laid out these arguments throughout the last couple of months leading up to this decision. really looking at the fact that the sec is acting arbitrary and capricious by continuing to approve bitcoin futures based etfs while continuing to deny spot bitcoin etfst. when you look at the way regulators have to governor, they have to be treating like

issues alike, and in this case they're not. they're discriminating against issuers like gray scale who are trying to bring a product further into the u.s. regulatory perimeter right now. >> what is the perspective for gbtc investors now, you know, more recently, in hopes that this would be turned into etf and investors would capture that aush traunl, if the gbtc is not converted to an etf, what's the pitch why be in this if it doesn't pietrangelo the underlying so well >> certainly, a lot of investors are putting capital into bitcoin, even after this recent selloff. and if they can commit capital at 70 cents on the dollar versus putting assets into bitcoin and they believe that our common sense arguments underpinning

this lawsuit will prevail, we are not going to stop. we're going to put the full resources of the firm behind this lawsuit this is what investors want and quite frankly what they deserve. when we take a step back, melissa, and you and very been talking about this for years gbtc was born in the united states in 2013 we have worked to make into the largest fund so the fact that a u.s. regulator is shunning the opportunity to bring this further into the regulatory perimeter and give investors mortise closure, more protections, this is an unbelievable missed opportunity on their part. >> it sounds like the real reason is for the opportunity to invest in bitcoin at a disdon't bitcoin. so basically, it is the aush traunl hope that you're selling at this point? >> i do think that investors have a longer term horizon for

their bitcoin allocations, and if they can stomach the volatility and be patient for it, then yes, for some investors who do have that outlook, that would be an attractive opportunity. and leading into the common sense arguments underpinning this lawsuit we will continue to fight for what we know investors want and what they deserve >> is there a timeline on when this case coulden heard in i'm curious, because hundred this suit prepared. you talked about it in your blog on gray scale, that you're prepared for all outcomes, what if the outcome is no, that the sec was fair in its decision and it stands? >> well, an interesting part about this litigation is that because we are suing a federal regulator, we actually bypass the district court and go straight to the appellate court. we've been advised by our attorneys that that process could take somewhere between nine and 12 months but could be longer or shorter, and we will continue to put, again, the resources of the firm behind

this lawsuit and of course continue to do what's in the best interest of investors, which is of course converting into an etf. >> what if can you not >> we will continue to keep all options on the table investors recognize that the conversion to an etf is going to unlock billions of dollars of unrealized hair holder value the discount that you mentioned is really being held back bit sec. so conversion to an etf will cause that arbitrage mechanism, have the shares converge to their net asset value. >> if you could step aside from this particular issue, i wanted to get your view on bitcoin, liquidation, capital, some of the difficulties that a lot of crypto lenders are facing. what in your view is the biggest issue right now, problem n this space? >> well, as, you know, industry mainstay, we've seen countless

cycles around crypto over the last eight or heine years. we've seen draw downs probably five, six times greater than 50%. i think when you look at what's happening over recent weeks and seeing some of those firms either begin to default or begin to, you know, have rayoffs, what we're really seeing is probably too much leverage in the ecosystem. some folks that overextended themselves or perhaps grew too quickly. each time we do see this happen, though, the industry does consolidate. we are expecting m&a activit within the crypto space and demonstrating its resiliency as a crypto ecosystem we get stronger each time we're challenged, and this time around is no different. >> great to get your thoughts. thank you. >> thanks, melissa >> a programming note. sam bankman frooed will be joining frank holland and his warning that more crypto insolvencies are coming. that is tomorrow night on cnn

benjamin >> thanks, melissa coming up, we will discuss the president's energy policy, his upcoming trip to saudi arabia and much more all right now. as can you see, below0 on wti. we'll be right back.

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you need comcast business. technology solutions that put you ahead. get a great offer on internet and security, now with more speed and more bandwidth. plus find out how to get up to a $650 prepaid card with a qualifying bundle. president biden wrapping up his trip overseas where oil was a major topic among global leaders. joining us for more on this

president's energy policy, a former obama official, and now with the center for american progress and vivek rahm sidewalky, the chairman and executive chairman of strife. kristy, and i hate when people say "be honest with me", because that's sort of implying that you wouldn't be generally, but in your heart of hearts, or at least as far as the biden administration and the green lobby, are they disappointed when prices for hydrocarbons go up when you know that that makes the energy transition easier it makes alternative and renewable energy more competitive in terms of cost and it has been a stated intention in the past until it just went too far and started impacting inflation and people's ability to fill this gas tank, but isn't it something that the

biden administration problem was actually trying to accomplish on day one? >> no. absolutely not i mean, it makes the conversation so much more difficult when you're talking about two different crises that people are facing. not only are they dealing with the impacts to their pocket bock right now. inflation cost to groceries, gas prices, airline tickets, you name it. that is something that's incredibly painful to the american public and make it is far more difficult to talk about the transition that we need to do right now because you've got to addres this immediate crisis right now as you're talking about where we need to go with clean energy so no one would wish this situation, especially as we're talking about how we need to transition in the next ten to 15 years to a lot more clean energy where it is helpful to the discussion is that people are reminded there is no such thing as energy independence at the bottom of a well we do need to break this cycle

of really being addicted to fossil fuels and petro dictators running our lives, and that once again has reminded the american public that we need to be control of our energy and clean energy is the heart of that. >> we heard the president talk about making it very difficult for oil producers during the campaign and the early days of theadministration, and there were a series of things that were done, whether it was federal lands, no more lease, anwar, keystone, there's probably ten, 12, 15 different initiatives right at the outset, executive orders and otherwise that the president took to dry up the production and supply of oil. and here we are right now. do you at least acknowledge that, it's a putin price hike, but that's only half of the increase we've seen in the price at the pump is this. >> biden's decisions, everything

that you just laid out, leasing and the long term, any kind of drilling you would ever see in alaska, that is a much longer play whether it comes to fossil fuels. that's, you know, that will take at least five to ten years for that oil and gas to even come online so what you're talking about are two different things biden really does in the long term believe we need to get off of fossil fuels and address the climate crisis, and he was very focussed on that in the campaign, but circumstances have changed. and that is what he's focussed on right now and globally, we foe leaders are really, really trying to do interest best to manage the situation that we're seeing with russia and the war in ukraine and really what their citizens are feeling, which is pain >> vivek i guess your view there's plenty of blame to go around. the green lon lobby, they're all

marching to the same beat in trying to minimize the production of fossil fuelsing and that's why we're in this mess >> exactly to me it's pretty simple if you systematically underinvest in oil and gas production for years, then that necessarily increases your rely anse on foreign dictatorships abroad that don't care about the green energy transition. that's the map we're seeing on the table. this is not by accident. this is by design, both bit biden administration's policies as well as its parallel demands bit esg movement in the private sector this has increased our reliance on petro dictators and i do think it's sad to see the u.s. go hat in hand to places like saudi arabia, uae and indirectly on russia and i don't bite arguments about the time horizons either take the venezuela example lifting the sanctions on venezuela earlier this year, that oil from venezuela is also

not going to be coming online immediately either this is the law of supply and demand when it comes to fossil fuse and the anti-fossil fuel agenda, this is the dark side that's come back to bite us by increasing our reliance on ding taters. >> if the midterms weren't coming, vivek, do you think the biden administration would be a lot more comfortable with $115 oil? it will help the transition, and they have stated in closed rooms, you will hear the green lobby say, look, we need higher prices for hay droe carbons. that will hurt demand and hasten the transition then you got, suddenly, you have half the country that can't fill their tank up and midterms coming, and ah-oh, we better start talking a different talk >> yeah, look, i think they're going to talk the different talk the reality is there's not much they're going to be able to

change between now and november. i think he would not be making trips to places like saudi arabia if it weren't for the political backlash to the energy krys here at home. but it's sad to watch the way in which foreigndictators are playing this you saw emmanuel macron talking to biden at the g-7 about how the uae couldn't really increase production that much more, and the saudis didn't have that much more production. i don't even know if i brief them i think they're using this as leverage to extract asks from the united states, because they know biden is under a barrel not just with energy prices but with the elections later this year, which has in turn caused saudi arabia to squaep its pariah status to now becoming an accepted partner other foreign actors are exploigt biden's political weakness here at home to advance their geopolitical ends all because we refuse to implement policies that allowed us to drill for fossil fuels and produce oil and gas here at home it's as simple as that

>> kristy, do you think it's helpful to take aim at the profiteering of big oil after, you know, after bashing them for ten, ten years or whatever and, you know, trying to cut off funding and basically telling them, we're going to put you out of business now pause of things that were beyond their control, mostly now they, you know, they are responding to the global price of a barrel of oil, and certainly, they're going to make more money because of that, so now we go after them does that make sense >> i just have to correct the record vivek said that we haven't been investing in oil and gas for the past many, many year it's just not true the trump administration leased as much as they possibly co. and then we have continued at a very high rate of permitting, which is the closer action to production are permitting throughout biden administration. so this concept that everything was turned off as soon as biden came in and that's what's contributing to this is just not true

9,000 unused permits ten years of theses on the books. so to suggest that they don't have what they need right now to produce is not true. so i, i just, it not right to look at this as a very simple equation we have different types of oil and gas, different timelines, different hords, and nothing that we're talking about right now that the biden administration has ton has put us in this situation we're in right now. there are two reasons. one, putin's war in the ukraine. and the refineries that are still offline. so we got to be honest about what is causing what we're seeing right now >> joe, if i may respond to that i actually disagree. i didn't say that we weren't investing in oil and gas i said we had systematically underinvested. you take the world's largest company, e son, cheickedity business plan from increasing oil production five year to reducing it by 20% over the same period because after proxy

battle fought by the very esp movement cancellation of land lease, cancellation of a refinery project in the last month. cancellation of a million acres of land for trilling in alaska these are purposeful policy choices. and i'm not saying those are the right choices or the wrong choices if you want to make the green energy transition, but you got to be honest with the american people that there is no free lunch we can't have it both ways by implementing policies that cause underinvestment in oil and gas while saying we're doing everything we can to produce more oil and gas, especially when we're begging foreign dictators abroad to do it when as best as i can tell tonight affect global climate change >> we hear music don't use your phone, kristy we're going to call you begin and book another -- do you have call waiting that's so confusing. i'm still not very good at that.

don't say it vivek, thanks. great to have you both on. for a nice, cordial, factual, right? maybe some -- >> it was a fantastic. >> alternative facts maybe but good facts coming up, new jersey governor phil murphy joins us to talk inflation and his plan to ease pain at the pump in his tait muss the latest read on jobless claims the futures are pointed to a decidedly lower open "squawk box" will be right back.

good morning futures pointing to sizable losses on this final day of the second quarter and the final first half of 2022 the s&p tracking for its worst in more than 50 years, and bitcoin on pace for historic losses this month. cryptocurrency losing more than a third of its value since june began. to close out the month, we have a brand-new read on the economy. breaking inflation data, only 30 minutes away final hour of "squawk box" begins right now.

god morning, and welcome to "squawk box" here on cnbc, live from the nasdaq market site in times square, i'm joe kernen along with mel isla lee. andrew ross sorkin's in aspen. kayla's inma trid. becky's off. god knows where she is she's probably in paris or something. the only thing that makes it a hill bit better, sorkin, is i can't wait to see what you bring me this time because of the hops in aspen there are, just give it some thought. don't mail it in have you given it some thought >> i have given it some thought. i was taking requests. i was hoping you were giving me a little hint, though, what would really be a -- >> i have an idea. ry some ideas. >> you do in. >> number one, spoon rest. number two, a pot holder and number three, the candy fake

moose droppings? i think those are things that joe would greatly enjoy. >> i'm not opposed -- are they chocolate? >> they could be chocolate with nuts in them. >> all right, that's getting too realistic. you know, i count on you to bring things back, not take us out to some insane >> i respond >> he's not bringing you anything that's what you're mad at. u.s. equity future the on this final day of the quarter it's not fwoochltd treasury yields are indicating at least some angst about growth it appears, and bitcoin breaking below $19,000 earlier this morning. it's now down 40% just this month. if it ends there today, that would make june the asset's worst month ever i reference this next story. >> we are waiting on a news conference from president biden as he conclude as trip to the nato leader summit in spain.

kayla toushy is there and joins us energy prices a top concern among all the leaders there, especially as all those economies are facing potential recession and very high inflation. >> reporter: that's right, melissa, and all of the leaders are in concept and theoretically on board with this price cap on russian oil, but german chancellor olaf scholz earlier announce thad in practice it's going to be difficult to implement and requiring a lot of work and suggesting that it was not a sure thing at the end of the road that is something they're trying to put on the table as a possible solution. finance ministers are going to be negotiating that in the coming weeks, and we'll see what they come up with, and it is very clear that for most of these leaders, in some cases they are grasping at strauss, solutions that they can possibly agree on and put forward even as a lot of these problems are unsolvable yesterday we heard the nay toy

secretary-general suggest that allies are in this for the long haul in supporting ukraine he was asked if after expanding to include sweden and finland weather membership in nato would be something, and he suggested that allies would be providing other type of support but that member-for ukraine was not on the table and ukraine needed to negotiate its own end of the war. what's clear is the war in ukraine is not ending in a matter of weeks, in a matter of months the ukraine pred president said he wanted to see an end to the war by their winter, the winter heati heatingine season very important. the type of questions that he'll be receiving, certainly many of these leaders face cratering poll numbers at home because of the economic picture that has been darkening mitt khouw also reported that at a dinner with foreign ministers

on tuesday here in madrid that many countries' foreign ministers, at least four according to politico raise the concerns about the supreme court opinion essentially overturning roe v wade, and what that means about america's establishnd precedents and its protections for certain members of its constituency we'll see whether that comes up in the press conference today, but certainly, when we see president biden on the road, he does way more press conferences on the road than he does domestically he tends to get quite a few questions about domestic politics, and we expect today will be no different, melissa. >> you have to wonder if china will be an issue at this news conference in this strategic concepts document that nay toy released china threatens nato's interests. it's cheer as day where the group stands on china overall. >> reporter: yeah, certainly there was an overall rebuke of clinton. it's the ten-year giegd framework for the organization

and what it sees as threats worldwide. they raise the coercive economic policies of china. its opaque military ambitions, burgeoning partnership with the kremlin and warns of its growing nuclear arsenal in that document there's no shortage of concerns about china, but it's clear that to a certain extent china has opinion pushed to the back burner because of the more immediate concerns regarding russia and what russia will do next vladimir putin has warned that he'll take a different tactic in ukraine. we saw russian forces back away from make island a few hoursing a, announcing that retreat so what exactly his strategy in ukraine is next, whether he could step up the type of attacks that he's pursuing, the biden administration has been warning of the possibility of chemical, biological, possibly even nuclear attacks we haven't seen vladimir putin go in that direction yet, but one wonders what different tactics means in that context. and so we will see if we get any clarity on that, and whether

president biden, very forcefully says that vladimir putin should not attend the g-20 in indonesia this fall. >> kayla, thank you. let's get back to the markets on this final trading day on the first half of the year mierk santoli joins us with more whenever you see people sort of pulling their horns, mike, and take risks off the table treasuries go up because they're safe in quality. is that what the ten-year's telling us or is it telling us that there's growth concerns or both? >> i think it's both i think people are stepping back from risk in large part because of gathering growth concerns the message of the markets has been relatively clear lately, which is we've moved on from that real heightened inflation fear, and now it's much more about the fact that financial markets are showing some stress, defensive sectors of the market are heeding, and each of these rallies have been relatively

unconvincing we mention add week ago, unless you got up, let's say another 3%, 5% above where we did peak out it wasn't anything to convince you of a break of this downturn closing level 3666 that would be about, so i dial back to last summer, joe, when we were talking about the relentless rally every dip was bought why is the market going up same reason it went up yesterday. this is just the same thing in reverse. we're dealing with the same pressure points and got their big inflation number to digest this morning take a look at a couple of sick tors of the market a couple etfs meant to capture the higher inflation, rising rates type environment tease are baskets of stocks built to benefit from rising rates and high inflation they were great outperformers up until about april. and then they've kind of fallen

out of bid and that shows you that we've pivoted to be more concerned about grote than nation, so it's a disinflationary story but too soon for the fed to accommodate the slowing growth concerns it seems unless it has the cover of better inflation data. that's the issue take a look at a couple of outperforming sectors. pharmaceuticals versus energy. energy is up much more year-to-date fwhu is so far in the second quarter, and you see that the pharmaceuticals have actually started to moez ahead on a three-month basis. that's more pure defense they're keep it's value and reliability as opposed to being livered to global growth, fien energy is an inflationary beneficiary, joe. >> mike, things have been weak, does that moan that the earnings season is priced in already? or can it actually be worse when we see these numbers and forecasts?

>> first of all, that's the crucial question i think certainly, it's to a fair degree priced in. you can't say that the market goes down 20%, that the pe multiple, the s&p goes down from 20 muss down to 15, 16 and say that that's not the market essentially bidding in some doubt about earnings risk, but you never know if it's fully reckoned with until you get the reports. now estimates have been coming down there's this narrative out there that some of the analysts are oblivious and haven't been cutting numbers. they have been cutting numbers modestly outside of the energy and commodity sector so we'll see how it shakes out i think we are doing a lot of kind of pre-selling and worrying in advance of the earning seen, but i guess you just never know exactly what will come as a surprise >> all right, thank you. mike, mike santoli, thanks andrew >> thank, joe. meantime a developing story this morning. we're all watching gray scale now suing the sec after the

regulator rejected a proposal to list a spot bitcoin etf. the sec believes their plans aren't robust enough to protect investors from possible fraud. for its part, gray scale is saying the sec is okay with etfs based on futures, it should be okay with those that hold actual bitcoin. >> we've worked to turn this into the largest bitcoin fund. it is invested in today by millions of americans in all 50 states so the fact that a u.s. regulator is shunning the opportunity to bring this further into the regulatory perimeter and give investors mortise closure, you know, more protections, this is an unbelievably missed opportunity on their part. >> lot of folks in crypto debating this. cnbc reached out to the sec on this issue, and the agency was not available to comment outside of working hours

rejecting more than a dozen proposals now for spot bitcoin etfs over the past year. so gray scale not ahope. melissa? coming up, a new look at the fed's preferred measure of nation, that's on the way at the bottom of the hour, but next we'll talk about the toll inflation is taking on americans and pain at the pump this july 4th weekend with new jersey governor phil murphy stay tuned you're watching "squawk box" on cnbc

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break free from the big three and switch to xfinity mobile. welcome back to "squawk box" on this final day of the first half we're looking at a decidedly lower open the s&p looking to lose about 1.4% the nasdaq to lose 1.7%. and we're seeing losses, apple, meta, netflix all down by more than 1.5% right now. take a quick look at treasuries. the concerns about growth story play out in the treasury market, the ten-year yield right now at 3.033% spirit airlines delayed a hair holder vote on its proposed merger with frontier airlines until july 8th so it can further discuss options with frontier and rival bidder jetblue

that vote manned for this morning. we counting on it, sort of both frontier and jetblue raised their offers in the last week. either combination would create the fifth largest carrier in the u.s., and some people think either would also raise some eyebrows at the regulator if that were to happen. sorkin, i was counting on it, number one, because i'm getting tired of it. we thought we might get an answer today what do you say? >> i have to think that this is going to be a teal that's going to be blocked on either identify actually the more we've had headlines over the last couple weeks about all the traffic and cancellations around air travel, the constant state of complaints about the air industry, i think it's actually going to make it harder i think it would make it harder for either of these transactions to go through. and i'm not even sure the regulatory poddies are going to look at them strictly on how we've managed before

you could argue the spirit-frontier deal could be something that would go forward. the jetblue dial by the way is a lot harder, don't you think? >> if i were spirit, i'd keep trying to get the breakup fees higher, you know get something out of all this. they say they're going to take seats out. that's something i don't want to happen or, no, i do, yeah, i want them to take seats out, right because there's too many seats there now, are there not in i want bigger seats. >> yes f you could get some bigger seats, but i don't think they're going to take more than a row out, and the question is how much is that really going to help at this point the bigger issue is getting the planes in the air and making lure people don't get canceled >> take the row out that's right next to the -- >> bathroom. >> you're with me on that in. >> totally,00. >> that's small little area right there, not great ventilation? >> very close. >> i'm with you guys >> we're going to the governor

new results from cnbc's alpha stock survey most investors expect oil to end the year under $130 a barrel but above $80 a barrel as rising fuel and food prices hit new jersey, their governor is hoping to ease pressure on its residents. welcome new jersey governor phil murphy people like, i always hear i'd much rather be a governor than a senator, because you're like a chief executive. you can actually do things but what can you do in this case about inflation, fwoech? >> good to be with you guys. listen, this budget does three things at the same time, which folks have said for a long time could not be done in concert we deliver real affordability relief $2 billion in property tax relief child care tax credits waiving of licenses.

on and on and on secondly, investing in our future continuing to invest in the nation's best public education, freight health care, great quality of life. and thirdly, fiscally upon we've, we're going to have the largest surplus in our tait's history, preparing for a rainy day ahead, god forbid. debt reduction of historic levels so all three of those things are achieved in this budget. >> are you going to do anything with the gas tax >> listen, we've talked about this our gas tax is constitutionally tied to infrastructure projects. so, if we cut the gas tax, we have to stop the projects, and when you re-tart them, they cost more money for the taxpayers and when you're the most densely-populated state in america the infrastructure matters a lot. i applaud the feds cutting the gas tax, because they can print

money and we can't but the affordability strength in this budget is historic and i'm proud of that. in what do you, what are your forecasts for inflation, governor it could get worse and worse for new jersey residents it's something that you probably need to think about. i've coined a new term, quasi transitory, because i can't tell whether it's really systemic and caused by the fed and going to last for a number of years or whether it's pandemic reopening related and the war in ukraine and covid over in china hurting supply chains. all those things seem like they could turn fairly quickly, maybe not the war -- >> yeah. >> but what is your forecast for how long we're stuck with this, which is really painful for a lot of new jersey residents. >> yeah, listen, i think we were, i'll look in the mirror myself a lot of us were late to this and very much in the, it's

transitory i think it's a combination of both of your scenarios i don't think it's going away tomorrow but i don't think it's systemic, late '70s, early '80s either but goba being to tax relief in this budget. if you make $150,000 or under, it's a500 cash in your pocket. that is, that has never been seen before in new jersey's history. so we are taking this very, very seriously, whether it's directly a gas tax or indirectly at all the inflation that's so painful right now. this is a huge step in the direction of putting cash back in people's pockets. >> governor, the, it's kind of a catch-22 in that when we try to help people deal with higher prices, you're just adding to the demand side, which is what causes, you know, the tight supply, higher demand, that's the argument against the gas tax in other states on, you know, or

a federal action there, which probably isn't going to happen, obviously, but you increase demand and the supply all stays the same, you're making the problem worse. you're keeping prices high, and they're probably going to go higher you're trying to do the right thing for people, how much -- so you're cutting property taxes. i'm sure you're a democrat in new jersey i know you're spending too much money, right in you got to be. >> no, joe, that's not right that's not right >> how old, we've been around the block, not together, but we've been around the block. you sure you're not? you got this nice surplus. save it! save it for a rainy day! >> yeah, we are. on your first point, the alternative is not acceptable. you make a very good point that you're putting cash in people's possibilities. you're increasing demand, the potential for exacerbating the issue. think about the alternative. people at the kitchen table right now are really hurting

so i don't think there's any alternative than to deliver historic relief. and by the way, this rolls property taxes back to 2011 levels so we're rolling back over a decade on your second point, this is, our budget has a surplus with, that begins with a six as in billions that's never been seen before in new jersey's history we ha a have a debt avoidance fd which is $5 billion. we've been very vigilant about not increasing recurring spending there's a lot of one-off investments in this budge thaet are historic but don't okay gait us to ongoing programs while it's a historically large number, it is a very responsible budget >> we still have, we do have great schools, but not avenue where. governor, you know, and it matters you know, which

community you happen to be, i don't know how you got to worry about that, too. i don't know how you sleep you think about this such all the time but that's the key we got to get schools about thor and i'm talking about for students, not necessarily for teachers' unions >> no, listen, we have the nation's number one public education sis them in new jersey, and we're incredibly proud of that, but to your point, we need to make sure that every child can comfort bring stand beneath the banner i just said, and that's a huge focus of ours. >> thanks again, governor. you're not sleeping much, hopefully, are you you're working for all of us that live there, right what do you get, two hours two and a half >> i get more than two >> under four. all right, thank u coming up, new economic data on jobs. the consumer inflation, stay tuned, you're watching "squawk box" on cnbc

coming up next, we have breaking inflation data, and we're awaiting a news conference from president biden in spain. we'll bring you it and take you there live when thpride esent step to the mike don't go anywhere. sw "squawk box" coming right back after this

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welcome back to "squawk box. rick santoli here at hq with very important end of the half here, end of the quarter, end of the month breaking news. personal income expected up .5%.

on the spending side, half of expectations, up .2, well below the ups.9. which means real spending is down .4 of 1%. deflator, month over month, up .6. hutch much hotter than the up .2 in the rear view mirror. if he look at the year-over-year numbers, 6.3, 6.3. 6.4 was expected month over month deflator, or up .3 of 1% that equals our last look, and on the year-over-year, up 4.7%, that's eased back from up 4.9, whereas the rear year deflators what equal to 6.3. finally on initial jobless claims, 23,000, down 2,000, because it was revised from 229,

up to 233,000. and on continuing claims, 1.328 million. that's a bill, bit below the revised 33,000 we know that when it comes to claims we've seen some movement in the numbers, but all things being considered, 231,000 now is the highest since 232,000 first week of the month, 1 million 328,000. that definitely takes us up a bit, the highest read since the end of april the year-over-year numbers are definitely on the warm side, and we're going to continue to monitor interest rate, although the dynamic right now isn't on the inflation side it's what it takes to get inflation uh control that is really having its way with the markets, playing havoc with equities, and in the old days, you'd buy treasuries when the equity markets didn't look good. there is obviously some of that,

but there is more of that. there really is more of a recession-type story, and of course about three and a half weeks from today we'll find out what the advanced look on second quarter gdp is, and once again i will say it for about the thousandth time. it tonight matter what the experts are, what we will notice, if it's a negative quarter, back to back, most investors are going to trade it like it's a recession, pretty much like they're trading it right now. andrew, back to you. >> rick, thank you for that mart analysis we are looking at red arrows down about 33points. we are awaiting a news conference from president biden, that will be following his nato meeting in spain and coming out of the latest real time raid on the economy we got on taming the inflation and whether the president's economic policy up to the challenge, joining us is anthony scaramucci, co-managing partner and cnbc contributor, also tyler goodspeed is with us.

he's now with the cato institute. good morning to both of you gentlemen. anthony, i'm curious, you know, there's a view on one side that, you know, there's very little the administration can do, there's very little basically anybody can do except for the fed to slow things down. but there's also a view that there might be low-hanging fruit, things they could do on the margin that they are not where are you on this? >> i certainly think they hud change the stance on the energy, open up the trilling, explain to the people that it's better to drill in the united states than saudi arabia it's a national security thing as well, but andrew, i'm comforted by what's going on with the tips. if you look at where the tips are now, it feels like inflation is rolling over. so i think the fed moves once or twice here and then i think they start guarding and getting ready for a potential recession. so they have to change their stance >> anthony, they move at 50

basis points 75 00 where are you? >> i think it's undoubtable that they'll move 75 basis points if they move 100, the rally would certainly rally off of that, because they know they're coming to the end of the federate hikes it seems likely 75 >> do you think a soft landing is possible, it sounds like. tyler, what do you think in. >> well, i agree with anthony that there's a lot that the government could be doing on the domestic energy production front that they're not doing, and if they were really serious about tackling inflation in the near term they would be issuing join act waivers to facilitate the transit of lng we're already starting to see some signs of slack, but a lot of the inertiah components, those tend to be sticky components of cpi, and i think

it's going to take a lot more work on the part of the fed to get those back down to the 2% level, and it's hard to see that happening without a sustained period of economic slack you know, i can't put myself in the camp of those who believe in immaculate disinflation. >> anthony, what about tariffs at this point? we know we've been talking about if you could remove some of the tariffs. there's a fortune policy reason why you want to have them on, but maybe you want to take them off. >> listen, i'm not a big fan of tariffs. i understand the foreign policy reason, and i preernt it, but i'm not a big fan of that. ultimately, the more free trade we do, long term, the better diplomacy we have. so that would be an immediate step that a smart administration would take, but, you know, politics is politic, andrew. i learned it the hard way over a 11-day period of time. they're just going to do what they do. we have to operate around them, but taking the tariffs off would

be another great idea. >> by the way, anthony, it is a political question right now you hook at this polling for this administration, and it is not polling well, in large part because of the inflation we're seeing and a view that we are hid ed towards a recession. if in fact there's a soft landing, which is what you're speculating may be in the offing, does he get credit for that on the other side or no >> he definitely would what would happen in theis situations, everything is situational but they get personalized if trump were president, it would be president trump's inflation, this was inducted by the fed policy during the pandemic so we get a soft landing, it would be the president's personal benefit as well so just remember reagan in 1982. he not shellacked in the midterms he was in a recession. the unemployment in 1982 was 10.8%, antrurks different period of time of course, but things could improve after the midterm, and of course we all know, 2024

is like 100 year from now in political terms. >> tyler you agree with that? you guys are sort of on the same side of things but sort of not >> well, i mean, look, at the end rt day i think that whatever the administration is saying in terms of the inflation problem american votersing the american electorate are not buying it and the data's clear that the increase in the rate of inflation in the unite through february 2022 was just vastly greater than in any other advanced economy and in terms of the recession risk, you know, i agree with anthony that i can see a sort of shallow softish landing in that if we do enter a recession we would be entering a recession with some of the strongest household business and state and local government balance sheets that we've seen in decades if not ever but there is a real risk that if the consumer is the only thing

sort of keeping this thing going, which seems to be the case, because residential investment is going to be ticking down overall business investment is going to be ticking down as rates go up, and we already saw what happened with exports and inventory investments. so if the consumer starts to slack and little bit, those other factors could tip us into negative territory >> hey, anthony, as we await president biden's pris conference here. weigh in on this debate over bitcoin and etf and crypto we've been talking to the ceo of grayscale this morning, obviously very frustrated with the sec's decision what do you make of it >> it's a missed opportunity for the country. we've had the mantle of financial services leadership for 100-plus year, and the fact that the sec is moving in this direction where the europeans are allowing for a cash etf, just a huge missed opportunity the sec now stands for stop

economic creativity. and i think that is a terrible thing for the country. moreover, they won't get into the regulations, andrew. they hired more people in the enforcement division so the venture capital community, the crypto community's like, well, okay, we'll find out what to do if you're investigating us why don't you put down in writing what the regulations are and the rules are where all law-abiegd citizens will happily abide by the rules this vagueness and uncertainty is hurting the united states and will hurt our intellectual cal capital going forward, so i hope they stop it >> okay. anthony, tyler, want to thank you for your perspective on all of this, this morning as we await president biden's press conference it could happen in just moments. joe? >> thanks, andrew. coming up, jim cramer and his first take on the final day of the first half of the year

and, again, we're awaiting a news conference with president biden. following the nato meetings in spain. we're bringing that to you as soon as it starts. a little bit late. you're watching "squawk box" on cnbc 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.

get down to the morning stock exchange and bring in jim cramer is it a disappointing session, jim or necessary session or we're ready for anything these days, i guess. >> talking to guys, the word is, listen, if it's a stock, it goes down it just doesn't matter and that's one of those give-up days where i don't know if it can stay that way the whole day, joe. everything is recommended to hold to buy is down. everything that's downgraded is really down. and it has just an awful feeling today. just awful and that's the morning but what a quarter, worst since 1970 geez there's nothing good here. >> i know. >> you know, everything can't be bad, can it? bitcoin, holy cow. how many guys are trying to hold it at 19,000

guys like here, please, they're using like their hands as atlas. at rockefeller center. >> i think we forget what 1907 was, jim what got it for me was that the jackson five released "abc", which means, i mean, there was michael swrakson, but he wasn't even michael jackson it was the first time that the super bowl was played on astro turf someone told me, on artificial turf. >> i got my working papers, and i was able to stuff inserts into papers i was, there was no one more hip than i was >> so it was before jim cramer was even jim cramer. >> pre-jim cramer. jim loser. i was not chill, brief me. i wish i could be more, let's be more positive, just in terms of -- >> we got earnings coming, or whatever you want to call them and then the outlook with the

earnings >> outlook, shmoutlook >> i'm surprise the there's not a recession.com etf, then everyone would buy it. >> melissa brought up. >> rh. >> hi, melissa >> hey, jim. >> 28 days after posting earnings and give guidance, it comes out and lowers that guidance, and also says we're not buying a single share of that $2 billion share buyback that we just launched. >> is that not unbelievable? that was unbelievable. brits taking it's bid bath and beyond cash issue remember, they bought back a lot of stock i mine, bid bath and beyond may be a book, maybe a, you know, kind of a management, anti-management book i don't know let's come up with something positive how's cathie wood today?

>> she was on earlier. she was smiling on the sound that i saw >> that's good can we go to pamplona? >> great museum in the prado really. >> we should be the travel channel. this is not a day to be the stock channel. but thattes a just the morning in hey, jim? jim? >> is that andrew? >> it is >> in aspen. >> i wanted drn. >> put your clothes back on. >> it's funny that you mentioned that i had a coat on and i will to get serious my question is on this crazy jetblue-spirit-frontier thing, whether you think this thing gets done at all, talking about travel that's another version of it >> i don't know. i spoke to spirit. yesterday the justice department belonged this booz allen deal,

hasn't allowed simon and shuster to merge this justice department would block two meese if it came in. i don't think people realize that this canner does not want any dial done. if i were running jetblue i would fire every single lawyer today. see you later. all right. i'd rather buy ethereum than buy those guys ethereum's a cryptocurrency. >> i heard about that. >> did you >> yeah. >> ong well i love your stuff out there. put the coat back on it's got that great lining with the, i mine, that's like a -- >> i was trying to pull off an aspen look, and you know, it didn't have that gravitas that i needed to talk to you. >> i thought you looked like a million bucks. >> and it got warmer >> there was snow behind you the other ida.

that may have been a green screen i don't know the stonges doing better out there than they are here, let me tell you that. i'm disgusted. >> what's bond market saying >> bond market's saying, i think, recession the government should sell a trillion bonds right now i have to tell you everyone is so down that, you know, i find people, they're doing a shoot for me because i got this new thing hire. people are like, eh, forget him, you know know what i mean i rip stocks i am i'm a stock, you know, i'm dollar sign represented by a man. i don't know i have never seen, i haven't seen people hate stocks like this i can't remember. >> the silver lining though is that consensus is turning very negative >> that is the silver lining that's the may book. that is the playbook >> exactly >> jim, we'll see you.

>> let's cheer each other up we'll go for a modelo or corona. >> we're headed for, you know, i'm back to beer >> really in. >> yes, because it has 09 calories and 2.36 carbs. i'm hydrating. now that's m that's my story. >> i had a heineken zero the other day. didn't have any alcohol. tasted great heineken zero. >> that's not going to be me >> coke and spirit, whatever it is >> they go to the door where the dust beer is, no alcohol, and they open it and it's like a false front. nobody drinks that stuff >> by the way, futures interesting. we're paring losses. the s&p is looking at decline of 1% the action is still going on in the bond market in terms of yields the 10-year yield is at 3.016% with the 2-year yield at 2.947%. that's an interesting move there this morning back to madrid as we await

president biden's conference what should we expect? >> you're looking at a packed house for the international press corps waiting to hear from president biden coming off of at least what on the world stage would appear to be a successful week for someone who feels most in his comfort zone when he's traveling overseas he had a very substantive g-7 communique with an agreement to pursue a potential price cap on russian oil. jake sullivan, the u.s. national security adviser, said that that was historic and that by all accounts the g-7 was perhaps the most meaningful in recent decades. and then you have nato, where leaders agreed to sbweden and finland e expanding and uniting the organization you had many, many announcements about further military assistance across the transatlantic region, essentially a shot across the bow to vladimir putin who said he would be responding in kind but when you look at a room like

that, and it's not clear if president biden will be taking two questions, 20 questions, or 40 questions, oftentimes you see the hands shoot up and people wanting to get a lot of questions in because there is a lot that is bedevilling the president back at home when domestic issues have been eluding the administration we'll see how many questions he chooses to answer and whether he tries to keep it through the prism of what's happening this week in madrid >> thank you on the other side of thieas brk, we'll go to president biden and his news conference in madrid.

looking at a lower open. sylvia, what's your take on what's going on, not just the me move lower in yields on the 10-year and the 2-year >> good morning, martha. i think that, you know, it's sort of this ongoing story the market has become completely petrified of inflation, and i think that is now shifting to, while that's a major issue, what will the fed actually do about it now is the time to see if that soft land canning happen if you looked at those last reads there, it looks like pce is lighter, wages, jobs lighter, spending on gasoline and goods

is shaking off a little bit. that money has transitioned to services we're seeing some softening and some rate hikes here what the fed has done so far appears to be working, but now it's a matter of how much further do they go and does the market kind of hold up here. and i just do think that there has been a little bit of an overreaction to, you know, the inflation read in recent days. >> let's go straight to president biden in madrid. >> thank you have a seat. please sit down. let someone else walk in the room thank you very much for taking the time to be here. i think we can all agree that this has been an historic nato summit some of the folks that have been covering me for a while, about a year and a half ago when the first g-7 meeting took place in eng langd, i talked about the need for us to reconsider the makeup of nato, how it

functioned, and come up with a different strategy for nato and how we work together in addition to that, we also talked about the g-7 taking on additional responsibilities. before the war started, i told president putin that if he invaded ukraine, nato would not only get stronger but would get more united. and we would see democracies in the world stand up and oppose his aggression and defend the rules-based order. and that's exactly what we're seeing today this summit was about strengthening our alliance, meeting the challenges of our world as it is today, and the threats we're going to face in the future the last time nato drafted a new mission statement was 12 years ago. at that time, it characterized russia as a partner and it didn't even mention china.

the world has changed, changed a great deal since then. and nato is changing as well at this summit, we rallied our alliances to meet both the direct threats russia poses to europe and the systemic challenges that china poses to a rules-based world order. and we've invited two new members to join nato it was a historic act, finland and sweden, two countries with long traditions of neutrality and choosing to join nato. some of the american press will remember when i got a phone call from the leader of finland saying could he come and see me, and he came the next day and said will you support my joining -- my country joining nato we got on the telephone. suggested he call the leader of switzerland. switzerland, my goodness i'm getting really anxious here about expanding nato sweden and what happened was, got on

the phone and asked the sheikh to come the next day to talk about joining nato allies across the board are accepting up, increasing defense spending a majority of them are on track for the first time to exceed our 2% of gdp commitment that they make they agreed to spend 2% of the gdp on defense look, for example, germany, germany has committed to spending 2% going forward and announced a special fund for its military of more than $100 billion. slovakia, the czech republic, and the netherlands have announced they will also meet their 2% commitments poland, romania, estonia, latvia, lithuania, are doing more than 2.5%, some as high as 3% together deploying more assets and capabilities to bolster our alliances across all domains, land, air, sea, cyber, and

space. we reaffirmed that our article 5 commitment is sacred and an attack on one is an attack on all, and we will defend every inch of nato territory, every inch of nato territory for our part, the united states is doing exactly what i said we would do if putin invaded -- enhanced our force posture in europe we'll station more ships in spain. we're stationing more air defense in italy and germany, more f-35s in the united kingdom, and to strengthen our eastern flank, new permanent headquarters for the army 5th corps in poland. in addition, an additional brigade combat team position in romania. an additional rotational deployments in the baltic countries. things are changing to adapt to the world as we have it today. and all this is against the