2022 and "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live in the nasdaq market site in times square i'm rebecca quick along with joe kernen and andrew ross sorkin. yesterday was the second day in a row you have seen gains for the markets this comes three days of losses. so far, green arrows dow indicated up 200 points. nasdaq up 123. treasury yields have come down slightly still above where we were last friday the 10-year treasury is yielding 3.27%. the 2-year treasury at 3.28% if you watch energy prices which

have come down significantly in recent weeks, energy plerices ua little bit wti below $80. andrew let's talk about the markets. we're not going to do that for a moment, the business world reacting to the death of the queen elizabeth ii among the tributes is tim cook saying there's nothing more noble than to devote your life to the service of others we stand with the people of the uk and commonwealth and honoring the life of duty amazon ceo andy jassy saying sad day for so many. sharing our sympathies and mary barra saying on behalf of gm, i extend the condolences to the british people and royal family her leadership, grace and devotion to service touched the

lives of millions. she will be greatly missed a business story in its own way. a larger culture story >> it is on the cover of every newspaper this morning >> and the world >> every newspaper not just in the commonwealth, but here in the united states. >> so many people said the same thing. they were preparing for it, yet still shocked. it has a lot to do with the constant reign they thought she would always be there. when you are 96 and queen for 70 years. you have to be 71 or 72. everybody else, for your life, it was queen elizabeth ii. >> the pictures that came out this week showed her looking happy and healthy. looking pretty good as she welcomed liz truss and gave her her blessing as the 15th prime minister of her reign. >> the yearly photo of her from

when she was born. it goes out 96 years and changes slightly bril yliant the way they did it. it was like the queen was always there. she reached almost demi-god status very few humans do that in their lifetime she probably did i was trying to think of a corellary. the 14th dalai lama was 1940 i think he was 5 years old he has been a constant i'm not comparing it to that what else? can you think of anyone else that sort of reaches that permanent status h how many popes presidents 1 14 presidents and 15 prime ministers during her reign >> you go back to louis.

>> she was 4 when he was named king she was 25 or 26 it is, i think, something that touched all of us. >> let's go across the pond to geoff cutmore outside buckingham palace good morning, geoff. >> reporter: very good morning to you just listening in. i think you are absolutely right. it is very difficult to think of any historical figure who has had the longevity or lived through such tumultuous periods of history the queen was there always as a spine in the national character of the united kingdom. also a touch point for the world in many ways where she saw the major events pass. let me talk about buckingham palace i'm here i've been here all morning we've seen the crowds gradually

grow and as well as people have come here with flowers and with lit candles and with other offerings that they have been putting in front of the palace gates and the police effectively closed off all of the roads around the palace to make sure that those who've come to gather and pay respects are safe. it is interesting. there isn't a great deal going on here at buckingham palace the queen, obviously passed away in balmoral in scotland. she will stay in scotland for a few days before her body travels south to be laid in state at westminster abbey where people will be invited to pay their respects not a lot going on here at buckingham palace. the flag is half mast to represent the passing of the monarch. people have come here because they feel they want to come

together and get that sense of emotion that comes with the gathering on a time like this. i do know that charles, now king charles iii, will come down to london today he will meet with the prime minister and they will put in place more details as to how long a period of mourning will last and ultimately what will happen around the queen's funeral. we know there will be bells ringing today at noon. there will be a gun salute at 1:00 here in the uk and ultimately people here in a somber and respectful tone will pay their best wishes to the royal family and respects to the queen. back to you. >> geoff cutmore in london in front of buckingham palace thank you. when we come back, the futures this morning are pointing to a jump at the open we will get you ready for the trading day ahead.

later, former federal reserve vice chair rich clarida will talk about the fed's rate hike path. you are watching "squawk box" and this is cnbc >> announcer: this cnbc program is sponsored by truist wealth. where meaningful relationships matter most. what if you were a global bank who wanted to supercharge your audit system? so you tap ibm to un-silo your data. and start crunching a year's worth of transactions

against thousands of compliance controls with the help of ai. now you're making smarter decisions faster. operating costs are lower. and everyone from your auditors to your bankers feels like a million bucks. let's create smarter ways of putting your data to work. ibm. let's create my dad was a hard worker. he used to do side jobs installing windows, charging something like a hundred bucks a window when other guys were charging four to five-hundred bucks. he just didn't wanna do that. he was proud of the price he was charging. ♪♪ my dad instilled in me, always put the people before the money. be proud of offering a good product at a fair price. i think he'd be extremely proud of me, yeah. ♪♪ ♪♪ this... is the planning effect. this is how it feels to know you have a wealth plan

that covers everything that's important to you. this is what it's like to have a dedicated fidelity advisor looking at your full financial picture. making sure you have the right balance of risk and reward. and helping you plan for future generations. this is "the planning effect" from fidelity. at xfinity, we're constantly innovating. and helping you plan for future generations. and we're working 24/7 to connect you to more of what you love. we're bringing you the nation's largest gig speed network.

available to more homes than anyone else. and with xfi complete, get 10x faster upload speeds. tech upgrades for your changing wifi needs. and advanced security at home and on the go to block millions of threats. only from us... xfinity. as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network. with no line activation fees or term contracts. saving you up to $500 a year. and it's only available to comcast business internet customers. so boost your bottom line by switching today. comcast business. powering possibilities. ™

president biden will visit ohio today for the groundbreaking ceremony for the semiconductor plant. the factories will employ 3,000 workers with the average wage. it has distribute ed to ohio colleges and universities to develop semi conductor educatio and programs that is part of the research commitment we will talk about this at 7:30 a.m. when we are joibdned by inl ceo pat gelsinger. breaking news. ftx ventures taking a 30% stake in sky bridge. it is run by anthony scaramucci. it is big news in crypto and ftx

and sky bridge we will hear about it first from anthony scaramucci and ftx ceo sam bankman fried in the next hour they call sam the jp morgan of the crypto business. they gated some of the investors. will this investment allow them to be able to funnel money back to the clients we have now seen sam taking pieces of businesses throughout the sort of crypto eco atmosphere >> it is part a shark tank model. you come in and do these things. the other thing is like roy -- i don't know if you watch "ted lasso. he is here, he is there.

he is everywhere >> he is touching all parts of the space. little bit like ken griffin if you think of all of the component parts of the exchange market >> i like his house in coconut grove. have you seen his house? >> i have not. >> $104 million. beautiful. i like bankman hey, bankman >> appropriately named >> you remember we have eugene profi profitt come on. good name for the business phil dow he would talk about the dow. i like bankman tell me off camera we have been sharing too much lately stocks looking to add to the gains yesterday despite headwinds. guggenheim partner scott minerd

joined closing bell yesterday to discuss the continuing grim market outlook >> thinking between 3,000 and broadly say 3,000 and 3,400 we'll figure out the bottom when we get ther there. at that point, we'll figure out the bottom it will be supportive for risk assets and the seasonals turn around you know, seasonals turn positive november through march. actually through june. the old adage of buy in may -- you know, sell in may, go away, come again at labor day. >> joining us now is lisa erikson. lisa, you are not so bullish

with that in mind, you have a buy away from u.s. equities and cautious on risk assets. you are actually thinking about fixed income as you point out, maybe investment grade you are looking at a difficult economic period. you decide to go into corporates, you have to think about what you are saying about equities because it could affect -- you better go with quality. there could be companies that don't do well if the entire economy is not doing well. >> we are cautious on the u.s. equity market, joe if you look across the board, the indicators are sobering right now. m macroeconomicsly, growth is still in positive mode, but decelerating that is echoed in terms of the corporate front because we look at earnings and sales and they managed to hang on to some

decent absolute levels again, overall, what you see are slowing in the numbers and estimates are coming down. our biggest concern really at this time is really what's going on on the monetary policy front and the fed resolute about continuing to combat inflation and bring up interest rates and quantitative tightening, that makes for a difficult environment for stocks >> and what they're dealing with is inflation and you're worried inflation hits a couple of ways. it hits consumers, that's not good it hits margins for the corporations a lot of these things are front and center, lisa are we not negative enough about how long it lasts or how bad it gets >> we have had a tough year, obviously, here in the u.s. equity market. valuations, we think are in the zone of okay really, though, as we look forward, the question becomes is there potentially another drop

we are concerned multiples have come down and prices have come down and if the growth estimates come down even further, that could spell additional trouble for the u.s. stock market. >> we had strong job numbers and back-to-back quarters. in your view, we are not in recession right snow? >> we don't see the signs of recession immediately. it could certainly be on the horizon. that is something we will want to watch to your point, so far, the indicators are in growth positive slight territory. >> so you would only give it a probability? maybe -- whatever it is. 50/50? 70/30 if we see recession? it does matter what about fixed income? buy away from u.s. equities.

i can't imagine you go to european equities. a buy away from u.s. is it fixed income or somewhere else in the world where you buy stocks >> we are seeing fixed income and to your point earlier investment grade as particularly interesting right now. while a difficult fed environment within tightening can impact fixed income, the higher cash flows of fixed income and historically lower volatility can provide a nice balance and more difficult economic environment. >> you are talking domestic investment grade corporates. how long >> we really foresee a really cautious stance rather than risk-on stance so, moving toward more of those balance assets like u.s. bonds in our view makes sense at the current time.

>> are you talking governments or would you -- when i said how long, i said how long would you hold them or go out? 10 or 20 years on a corporate or on a government? >> we're really looking at more broadly to diversified portfolio for example of bloomberg and barclays exposure as what is making sense on the duration front, we actually stick closer to the index perhaps slightly more modest than the index in terms of length of positioning simply because in a tougher environment where there could be more volatility on that short end really provides for safety. >> you are not at 60% or 70% crypto at this point >> we are focused on that primary asset index. >> no crypto at all. >> more from stocks. >> that's way off the risk curve. you would not -- would you have any all at this point, lisa?

>> our focus really again on the currency front is focused on the dollar that will have a bigger implication for what's going on across markets generally obviously, there is risk with the dollar strength that it has shown this year. while some central banks are catching up with the fed, the fed is in the lead and higher interest rates can continue to support that trajectory of the dollar >> the crypto people out there are cheering because i said crypto and you went to currency. i don't know if we call it that yet. lisa, thank you. happy friday hope to see you soon thanks >> thank you happy friday coming up on "squawk box." stocks to watch. we'll show you what is moving right now after the break. then we will talk to robinhood's chief brokerage officers with a big announcement right here on

"squawk box. don't go anywhere. what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq

businesses have to find new ways to compete in order to thrive in an ever-changing market. the right relationship with a bank who understands your industry, as well as the local markets where you do business, can help lay a solid foundation for the future. pnc provides the resources of one of the nation's largest banks and local leaders with a focus on customized insights to help your business achieve its goals. that's how we make a difference. ♪♪

shares of docusign surging up 17% this morning. this comes after earnings beat estimates. interim ceo said the company has a strong foundation in place for the second half of the year. also shares of z scaler are jumping after a 4% gain in yesterday's session. they are up 13.5% this morning adjusted earnings and revenue beat expectations and the guidance was better than expected that stock up more than 19% this

week it is still down 50% for the year make that 45% year to date based on the gains from the last couple days. we are watching shares of rh that's the retailer formerly known as restoration hardware. they beat expectations, but trimmed the sales outlook for the year rh expect demand to ease because of the slowdown in the housing market the ceo said they risk losing market share in the short-term, but not discounting the moves by the competitors. that move is designed to protect the reputation in the long term. stock is up 29 cents so, to continue what i was saying in break. the stay at home thing is a real thing. just like zoom is real just like docusign is amazing. i'll never go back that's my favorite thing the greatest thing anything you can think of that got hot during the pandemic. think about where the stocks

went and where they are now. the businesses are the same. they are still great zoom is not going away we got out of control on what we thought was going to happen with zoom >> same with the retailers stocks ran up enormously. >> if there is a stock that represented stay at home, the whole notion we're not going back to work, i think it is $230 and headed to $30. i think -- >> the pain is not over? >> no, i think it is a real thing. it is overhyped just like the stocks that represented pandemic play i think stay at home is a pandemic play. it is not a shift in the way the world works. new york, you have subway problems and crimes problems a lot of the world still has to go to the place where they are working to tighten something or provide something or deliver something. >> people who would do online banking. that is among older people who

had been hesitant to online banking. that is growth that it brought forward. same with online groceries or delivery of things or showing up at target in the parking lot and popping your trunk. that got people who would not have adopted it to otherwise adopt it it brought forward that demand >> do you ever watch what part -- >> that is not going away. >> when you watch a recession indicator, you know how great the transportation average is? take your pick of the transportation stock and tell me who will be at home on a key keyboard some low gistics planning and stuff. a lot of the economy >> and that is the story we have not talked about is the potential strike at the railroads. deadline coming on the 16th. that is going to happen. we'll talk about that in a little bit i think you're right. >> not everybody can work

playing with the computer. there are people doing real things in the real world. >> a small portion of white collar workers, you are correct. >> the people who depend on those white collar workers to be around. >> have you seen the lines at the coffee cart? >> they're back. i'm not kevin o'leary. mr. wonderful. we like talking to him coming up, robinhood's chief brokerage officer joins us with a big announcement. and then richard clarida will join us he's here. not home where you can't hear the audio. that is 8:30 a.m. eastern. as we head to break, here is yesterday's s&p 500's winners and losers >> announcer: executive edge is sponsored by at&t business

at&t 5g is fast, reliable and secure oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.

good morning welcome back to "squawk box.

we're live from nasdaq's site in times square andrew becky, we have news this morning. robinhood launching an invest erin decks leading the top ten is tesla and apple. joining us is the chief brokerage officer. >> this is the first time we put it together. >> what was the goal >> it is twofold number one, a lot of customers at robinhood and generally in the industry like to have some validation on whatever their investing themes are whether it is individual names or thematically, they have an idea of how to construct the portfolio. they like to validate that and

like minded individuals participate in the same way. >> what do like minded individuals say at robinhood given the names we ticked off are the names everybody is focused on >> there are similarities. the similarities going back to 2020 and looking at this, the consistent names that are in the top ten are tesla, apple, amazon, microsoft. the ones that cycled in and out have been the pandemic stocks. zoom, peloton. those cycled in and cycled out mortgage companies pharmaceutical companies for vaccines they have been repliaced by thre ev companies in the top ten. those are the things our customers are gravitating to >> is the robinhood customer shifting when i say in terms of the demographic and money and age. you are trying to add new

features to the platform >> right. >> a lot of the features did not exist. retirement funds you couldn't do does that mean now a lot of folks who have been older or never looked at robinhood are looking at it and looking at stocks different >> you bring up good points. we brought 23 million people into the marketplace much more young and diverse. average age 31 we have to grow with them. part of that growth is delivering different ways to generate income whether it is security or lending. >> you say grow. is that take the 31-year-old and grow with them over the next 30 or 40 years? >> exactly. >> in the context of doing that, are you also going to shift the demographic of who also is trading on the platform which is to say somebody who is 50 or 60 thinking of retiring thinking i cannot trade on robinhood -- the 50 or 60-year-old may look at a

different portfolio allocation. >> they would look at a different portfolio allocation the similarities are there though if you think of the names in the top ten or 100 in the holding. 75% of them are large cap. i think there are similarities, but similarities, but differences. to your point, if i'm a 50-year-old person with a larger account size than what traditionally we have at robinhood, they have avenues to join. >> i have to ask about payment for order flow because it is the topic du jour. gary gensler is trying to get rid of payment for order flow. we talked about it on the air by professors really showed in stark relief be pending on which firm you use and your trade is processed and who is processing it, the

execution is all over the place. the execution is real in results. robinhood came out in the middle of the pack. >> we did. >> interestingly citadel which processes most of your trades. >> i would not say most. we have -- >> we long thought that robinhood and citadel were together >> they do process our trades. some of our trades we have, you know, a wheel of people that are processing as well. >> citadel has been criticized over and over again as somehow being a terrible processor it happens to be the best process oror and being the bestn the exchange which is fascinating. >> we have the obligation to deliver the best execution we measure that. >> what did you make of that st study? everybody says they have the best execution

clearly the distinction of trading on td and fidelity it was so different, so different and everybody saying we have an obligation. someone is not living up to the obligation, no >> i think there are nuances in there. if you think about it, different firms would focus on different things a larger firm, fidelity, might care about larger orders that's what most of their orders are. whereas a firm like td might have smaller orders. that's where they focus. robinhood has fractional orders. that's where we focus. if you look at the professors and how they routed their trades, they were in the middle. judging by the buckets, you get the best execution there i would say the variance is there. we are not stark there is execution quality you have to deliver what is in best interest of your customer.

>> that's what i was going to ask. one firm focus on the big trade. the other focused on the smaller trade. in the end, if it is supposed to be focused on me, whoever is on the other end of that trade, if they are making a big trade or small trade, to them, it doesn't matter we think we're supposed to get the best execution >> you are getting the best execution. that's the obligation. to get the best execution. that's what we deliver >> i guess what i don't understand is this idea that certain firms are better at it depending on the kind of trade it is. >> they would focus on that. they would make sure 67% of my orders are customers like you that are trading in this size, we want to make sure we deliver the best experience for you. >> before i let you go, sentiment right now, in terms of what you are seeing on the platform and obviously we're looking at the different stocks in the index more broadly, this fall given the sense of the economy and what do you extrapolate out as

the big thought? >> i would say that this is the market continues to be volatile. we have the younger client demographic. they are gnavigating it, but the are resilient. they go back to 2020 and they come out well. >> we will have anthony scaramucci on with sam bankman fried with an announcement we see the correlation with nasdaq on one end and crypto on the other. which is it? the tag wagging the dog? when you see the nasdaq go down, are your customers selling those shares to make up for crypto or selling crypto to make up for the -- can you see those flows >> we can see the flows. i don't think there's any -- there is correlation

i don't think you can say broadly that as the nasdaq is selling off people are taking funds and putting them in crypto or vice versa. >> steve, thank you for joining us i appreciate it. we have more coming up on "squawk box" this morning. a big lineup still including exclusive interview with intel ceo pat gelsinger and former fed chair rich clarida he is live on the set. "squawk box" is back with all of it >> announcer: this cnbc program is sponsored by ibm. ibm. let's create taki illions of trips every year? you aren't about to let any cyberattacks slow you down. so you partner with ibm to build a security architecture to keep your data, network, and applications protected. now you can tackle threats so they don't bring you to a grinding halt. and everyone's going places, including you. let's create cybersecurity

that keeps your business on track. ibm. let's create power e*trade's easy-to-use tools make complex trading less complicated custom scans help you find new trading opportunities while an earnings tool helps you plan your trades and stay on top of the market

welcome back u.s. equity futures up bitcoin up 9% this morning a risk on feeling. back to 21,000 18,500 quick move back to 21,000 and change what is oil today? >> almost at 85. >> what is going on with the crypto >> i don't think it takes much, maybe. >> you don't think -- what was it before the ftx deal >> yesterday, it was -- this

week it has been 18,500. it looked luike a katie stockton move it went through the lows of 12,000, she didn't say 10. way below where it is now. in the meantime, the clock is ticking on the rail strike that could cost the economy some $2 billion a day as of this morning, 5 of the 12 unions representing 21,000 workers reached agreements with the railroad ahead of the september 16th deadline, if the deals aren't reached, 115,000 workers to hit pictu picket lines this would make the ports in l.a. look like child's play compared to what would happen. fertilizer to coal and retail and consumer goods moving on this we will watch closely.

the president has been involved. the president's team has been involved we will see what happens with the deadline september 16th. in the meantime, lawyers say twitter paid a whistleblower several millions over operation issues inside the company. the settlement was completed before he i ffiled the whistleblower complaint. this disclosure comes as the tesla ceo continues to discredit twitter and the termination attempt of the $44 billion purchase >> face nscinating. >> several million to stay w quiet? >> the nondisclosure agreement, the one issue that doesn't count in the nda is whistle blowing.

the deal >> it will go to the whistleblower and complain. >> my sense is twitter knew that all along. this was part of the larger thing. in fact, the money, interestingly, that is another piece. he lost tens of millions of dollars. then the question is when they were negotiating down. i don't know lots of psychological questions of the negotiation. let's recap the news crypto land. sam bankman fried is now taking a 30% stake in sky bridge capital. sky bridge led by anthony scaramucci using the funding to deploy $40 million in crypto investments to hold on the company balance sheet. we will talk about it at 7:10 a.m. this morning. we will talk to anthony scaramucci and sam bankman fried

together. when we come back, the legacy of queen elizabeth ii and you can get the latest on our broadcast with the squawk pod podcast. you can stream and follow anytime. we'll be right back.

. welcome back the business world reacting to the death of queen elizabeth ii. alphabet ceo saying she has been a constant through many of our

lifetime another saying she will be remembered for a lifetime, dedicated to public service. jamie dimon weighing in, she has been a constant figure throughout their lifetimes many have found reassurance in the stability of her leadership and enduring sense of duty and service. joining us now to talk about the life and legacy of queen elizabeth ii, we'd like to welcome joanna coles she's current ly a board them in with snapp and sonos how would you describe the mod

mmood >> it's really sad day in britain as can you imagine most people have grown-up with the queen. it's important for business leaders to weigh in on heads of state like that. and the queen epitomized the most extraordinary leadership values, extraordinary discipline, never complained, never explained, resisted the vanity of media. and really kept her opinions to herself, so you often didn't know what she was thinking at really important times, and worked incredibly hard, not only opening fa opening factories and attending ceremonies that minor royals might find boring. you know, up until two days before her death, she was welcoming in the new prime minister liz truss >> yeah, i think that in itself is just so much change for the

uk this week, to have a new prime minister and now a new monarch. this is coming at a pretty troubling time, too. huge inflation costs, huge issues about what comes next what is the concern among britons at this point? >> great question. this is the fourth prime minister in six years, which is extraordinary for britain, but an italian-like style of change. so the brits are not really used to that. though it's fair to say that king charles, as we should now call him, has had the longest apprenticeship in history for this job so he does know what it requires there's been some criticism, oh, good goodness, he's going to be a meddle meddlesome king, an activist king

what's fascinating is that the causes that made him seem perhaps 30 years ago, 40 years ago as an eccentric are now the causes that very much resonate with people, especially young people, climate change, organic food, architecturethat's sim p threa sympathetic to the environment >> will king charles be able to unite the country in the same way? >> literally, he's had the longest apprenticeship he's taking over the job at 73, which is eight years beyond the mandatory age for retirement and i think he very much wants to be a unifier. the guardian at one point asked for all his letters that he'd ever sent to government.

i think in the hope of trying to expose him of meddling behind the scenes and what came out was a very thoughtful man, incredibly well-informed. really trying to raise questions about issues he knew were important to the british public. so, you know, as long as he stays out of real political interference, i think he'll be fine and there's no question that he wants to and unifier and interestingly, the queen did say earlier this year that she wanted camilla, who at the time was known aspiri princess conso would be known as queen consort. and you've got to imagine what a strange life that your career depends uponthe death of, in his case, his mother so the whole time he's been waiting to ascend the throne, but at the same time he knew that would come when his mother

died >> we all know about the queen's long international diplomacy skills met with 13 to 14 presidents under her reign and known the world over what would you say her economic legacy is? >> well, her economic legacy was really in being the face of britain. i'm not sure she had any specific economic legacy other than to represent britain as a fair and honest and decent place to do business and as the face of the commonwealth and the realms, she was hugely admired and i do think that's been very helpful to britain, and it's hard to see that britain will maintain that sense of relevance on the world stage that it has managed to do. i mean, it really does kick above its weight in terms of influence. it's a really very worrying time for the country, the changeover

in prime ministers lack of continuity tremendous internal strife it makes it look much harder for britain. >> joanna, our sympathies are with you and the nation. thank you for your time this morning. >> my pleasure coming up, two big hours ahead. ftx taking a big stake in sky bridge capital that interview with sam bankman fried. and rich clarida is going to join us. nasdaq up 136 points squawk coming reight back after this (vo) while you may not be closing on a business deal

while taking your mother and daughter on a once-in-a-lifetime adventure — your life is just as unique. your raymond james financial advisor gets to know you, your dreams, and the way you care for those you love. so you can live your life. that's life well planned.

this is not just laundry. this is laundry that's smarter than the dial, with ge profile smarter wash technology. more care for your cashmere. more power for your workout gear. this is smarter sensing and dispensing. fully optimized cleaning, no more guessing. getting the best out of everything that goes in. ♪♪ this is smarter cleaning. this is ge profile.

good morning intel ready to break ground in ohio we will have an exclusive interview with ceo pat gel singer ahead of today's big event. a deal in crypto land. ftx taking a stake in anthony scaramucci's sky bridge capital. we will speak about this deal and the future of bitcoin. plus senator rick scott on

inflation, the president's economic agenda and u.s.-china relations. the second hour of sk"squawk bo" begins right now good morning, and welcome back to "squawk box" right here on cnbc. we're live at the nasdaq market site in times square i'm andrew ross sorkin with becky quick and joe kernen take a look at the dow nasdaq up. treasury yields as well. right now you're looking at the ten-year note. we'll talk to clarida about this in a moment. but at 3.260 and take a look at oil you can buy a barrel of crude, wti crude. you can do it for $85.11, up

about 2% this morning. and by the way crypto up this morning after take aging a bit a dive earlier this week >> dom, i was completely hypnotized by the 5:00 to 6:00 a.m. show today did you do that this morning i laughed, i cried four stars it was amazing >> that makes me feel good, joe. that's high praise coming from you. >> two thumbs up >> i'm gradlad you enjoyed the 0 hour i'm sure when brian sullivan does t wit, we try to get up to speed. let's get you some of the headlines right now with the things that some trader will be watching a slate of analyst calls are moving some shares around in the free market, including amazon and endeavor group both stocks have been named top

picks when it comes to the advertising adjacent industries. the calls coming from morgan stanley. among other things are the retail profitability at amazon and for endeavor they like the tailwinds for the money being paid for sports right. keep an eye on amazon and endeavor then you got shares of virgin galactic, not helped at all by analysts at bernstein who've downgraded that to an underperform rating. the new target price is 4 bucks, it was 7 bucks before. they have a little less confidence in the success of the business they're watching those shares. and we'll end on sales of zscaler. this is the cloud computing security company it topped analyst forecasts for quarterly results after the bell last night

analysts at wells fargo are also calling it a top pick there with a $225 price target. they like the strong guidance, the billings guidance. zscaler up 13.5% and thank you very much for the high praise of the 5:00 a.m. show >> i wasn't thinking about brian. it's hard to pick. it's hard to believe one person can do it, the next person is better than the last and the next person comes back and it's better >> it speaks to the strength of all of us at cnbc. >> speaks to the bench >> oh, oh. >> patting yourself on the sfwhak. back? >> i hurt myself when we come back, news from crypto exchange ftx and "squawk box" regular, anthony scaramucci ftx is taking a 30% stake in sky

bridge anthony will join us with sam bankman fried. and at 7:30, pat gel singer will join us. in the next hour, former federal reserve chairman rich clarida will join us "squawk box" will be right back. would be the last thing on my mind. thankfully, voya provides comprehensive solutions and shows me how to get the most out of my workplace benefits. voya helps me feel like i've got it all under control. voya. well planned. well invested. well protected. medium latte, half-caff, no foam. quite the personalized order. i know what i like. i've been meaning to ask you, carl. does your firm offer personalized index investing? hmm? so i can remove a stock that doesn't align with my goals. i'm a broker, not a barista. what about managing gains and losses to be more tax efficient? not a wizard either. looks like schwab personalized indexing can.

schwaaab! learn more about personalized indexing at schwab today. i may be close to retirement but i'm as busy as ever. and thanks to voya, i'm confident about my future. voya provides guidance for the right investments. they make me feel like i've got it all under control. voya. be confident to and through retirement. pst. girl. you can do better.

at least with your big-name wireless carrier. with xfinity mobile you can get unlimited for $30 per month on the nation's most reliable 5g network. they can even save you hundreds a year on your wireless bill over t-mobile, at&t, and verizon. wow. i can do better! yes you can! i can do better, too! now you really can do better! switch to the fastest mobile service - xfinity mobile. now with the best price on two lines of unlimited. just $30 a line.

so mme stocks to wap this morning. stocks of docusign up. and the current quarter revenue forecast also beat expectations. the interim ceo says the company has a strong foundation and place for the second half of the year, and the stock is up by 16%. we are watching the shares of rh, formerly known as restoration hardware the company's earnings beat expectations but trimmed its sales outlook for the year it expects demand to continue to ease thanks to a slow down in the housing market the ceo says rh risks losing market share while not responding to moves by its competitors, a move tdesigned t protect its reputation

>> it's a membership type thing. if you buy the membership, you get the discount automatically the membership is usually less than the discount you would be getting for the first piece of furniture you buy, which i just found out. >> is it, try to make it look like an antique? >> it's pretty high end. not all antique, but pretty high-end stuff >> that would, if you could go just one place >> to get everything >> to get antiques, it would be a good change. >> yes >> because there are many -- >> lots and lots of -- >> far be it from me, i don't just love antiquing. >> been doing some lately on your weekends? >> doesn't matter where we are do you think you're going to find something here? and it's hikelike, you can find something anywhere >> you haven't watched the antique roadshow >> in the middle of colorado

where people don't even live you need to stop there >> that's right. get used to it >> i have been >> the spac aiming to take former president trump's media company public has adjourned its shareholder meeting until october 10th digital world's acquisition corp initiated a three-month extension with an investment company controlled by patrick orlando. that means the company will have until october to gather votes to avoid a liquidation. they need, in order to put this spac, this spac deal off, they needed something like 65% of the vote a hot olot of these are retail shareholders so they have not received enough votes yet. coming up, breaking news this morning from crypto exchange ftx and anthony

scaramucci ftx is taking a 30% stake in sky bridge and we will be joined by sam bankman fried. ground breaking in ohio, a brilliant move, people there are hardworking, salt of the earth, best people around and then later, richard clarida will be our special guest. we're coming right back. time now for today's aflac trivia question. electronics retailer, circuit city closed its last store in what yr?ea the answer when cnbc's "squawk box" continues look at the size of that- gaaaaaaaaaaaap!!! is that a goat?! you talkin' about me? gaaaaaaaaaaaap!!! i think this goat is saying “gap.” must be talking about the expenses health insurance doesn't cover. so who's talking about the money aflac pays to help close that gap? gaaaaaaaaaaaap!!! aflac! aflac! gaaaaaaaaaaaap!!! it's about to go down, baby! aflac! aflac!

stop that goat! get help with expenses health insurance doesn't cover at aflac.com your record label is taking off. but so is your sound engineer. 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

♪♪ do you want some more? wait till you see me on the downhill. see you at home. enjoy it. with the advanced safety features of a lexus es.

now the answer to today's aflac trivia question. electronics retailer, circuit city, closed its last store in what year? the answer 2009 welcome back to "squawk box. breaking news this morning from crypto exchange ftx, they're going to be taking a 30% stake if sky bridge capital.

joining us is anthony scaramucci and sam bankman fried. joining us this morning. thank you both it's nice to see you, anthony, congratulations on this investment >> well, yeah. thank you, andrew. good morning, sam. great to see sam and we're delighted about the transaction. and it's a very bright future for sky bridge and of course for ftx. >> sam, tell us how this came together, and we were talking earlier on the broadcast i don't know if you saw about their idea that you've been described as the j.p. morgan of the crypto business as i've gone in in some case and put lots of different investments in firms, saved some in some cases why this investment? >> yeah, we've gotten to know the team over the last year, starting w you know, a conference last year that we attended we've been really excited about what they've been doing, really excited, you know, about the

investment angle, from growing out the community and particularly growing out simultaneously, but traditional asset communities, bringing them together, and we want to be a part of that, and kind of the first step was working with them on this conference, the trip to bahamas earlier this year. and we see this as an exciting step here. >> in terms of the investment, there's a couple things going on one is $40 million f i undeif i understand it, is going directly onto the balance sheet >> here's thing. this is capital stock from the firm none of the partners of the firm are selling any stock. i'm certainly not selling my stock. firm will be 18 years old in

m march. i went to sam and said we have the ability to grow this in the asset management space what we're doing matches the vision that sam has for ftx in terms of its growth. there are a lot of relationship opportunity, cross-generational opportunities that we can share with each other. sbl >> speak to this -- >> i like sam a great deal look at him. >> there was a period where you had dated redemption and i only raise it because people. >> if you remember, the day i did that, i called in from l.a. and explained it to everybody. we have 2.7 billion under management less than 8% of the firm's assets are in that fund. unfortunately, there's a lot of private equity in that fund as well as liquid assets. one of the wire houses decided to put a sell on the fund. they sell these funds at the

bottom three and a half months ago it was a buy, now it's a sell they zigzag their investors, and i can't as a fiduciary let certain people out and leave other people with the private stuff. it's all there in the document i ask people to please be patient. we're a long-term investor sam is a long-term investor. you should come into these things as a long-term investor as soon as we provide more liquidity, we'll let these guys out. it's the fiduciary thing to to what this does do, we're going to expand our global footprint we've got 2.7 billion under assets, let's take it to 5.4, then 10.8. he has a long plan for ftx i want to be a part of that, and

it's exciting. >> sam, where are we in the cycle what what might be described as the crypto winter, summer, fall i don't know which season we're in at this point anymore >> the real pain, i think, came three, four months ago, when we saw a number of firms, you know, have serious liquidity issues, with obviously, there are re large, you know, quick decreases, you know, in prices, triggered obviously, by, you know, an overall selloff in market, rising interest rates. and, you know, since then, we've had a much more stable period. it's, you know, going to be macro driven to some, te extent going forward at least for the foreseeable future and, you know, it could go up, it could go down, obviously, but we don't sort of, you know, necessarily foresee more pain

from here you know, thins gs ha very much stabilized in this space. and when you look at what we're working on day to day. four months ago we were looking at, you know, some of the most troubled places in the ecosystem in trying to fick outgure out h handle that. while we're still having some of those conversations we've transitioned more of our time back you know. >> what would it take to get back to 60,000 >> one thing obviously is if you had a general recovery in equity markets, possibly by, you know, a lower interest rate, that could have a huge, huge impact on recovery in digital asset markets. but putting that aside i think there are two big things that i would expect to drive, you know, the market over the next few years in crypto. the first is new cases

in the extent in on-chain social media apps, in other things that will actually start to change, and the second is regulatory clarity. having a world where simultaneously customers are protected and there's a clean path for businesses to move their liquidity on shore >> to that point, gary agaiagagensler gave a speech where he's been looking at the 10,000 or so tokens that exist and thinks they should be regulated by the sec. do you think that would be knock >> okay >> some are in the, i think those that aren't securities, those are likely to end up

under, you know, jurisdiction. that is what the laws have said, and it's been clear. i'm obviously not regular, i'm not sure but reading what we've seen, i think you're certainly going to see some of the largest tokens, not as securities. i think you're going to see a lot of the assets, look like securities >> said very specifically, he thinks most of them. you don't think they should be moderated by the sec >> i'm not sure i disagree with chair gensler on this. if you look at his comments, and i don't remember the details, that he explicitly was not talking about bitcoin in that case and, you know, i think, i can't speak for him, but that i think that a lot of them are going to

be securities. i think that there are going to be you know, some, especially when you look at the most liquid ones that are not securities, i would guess that the sec would agree with, you know, with at least, i don't want to speak for them, but you know, i don't know for sure, exactly where each token will end up. but i'm not sure i'm in disagreement with that >> i would ask both of you a different question you mentioned ethereum earlier we have this big merge coming, which is going to effectively go from a proof of state to or proof of work to a proof of state situation. there are risks involved in this and so the question is, is this a catalyst that takes it to another place in terms of how fast it grows? or is this a, you think, a big risk to the entire valuation of it >> i want to yield that to sam, because he's obviously, you know, closer to the situation than me.

i like the merge, personally, but let's yield that to sam. >> sam, what do you think? >> yeah, i think long term's probably going to be exciting for the committee. i think it's going to allow substantially faster and cheaper processing in transactions i think that, in the first place it's going to be as all big transitions are, a little bit rocky at the beginning i think that there's going to be some messy activity around when it happens i think that's sort of inevitable but long term and probably even medium term, i think it's going to be messy. >> when you say messy, what do you mean >> i think first of all there are going to be some parts of this, pretty likely as you look at some people who want a, you know, a proof of variant on it i think everyone is expecting that the bulk of the activities in transition to the proven

steak, ethereum through this merge, obviously, there's going to be a lot of people to update software, processing the new chain. many of those are going to be promptly ready to do it. some probably not. i expect epis are going to wake in ways people didn't predict and there will have be to bug fixes. and fail to realize that the merge has happened i think you have protocols having to have developers learn some new things i don't think it's going to be, you know, a huge deal, medium term but it's a big transition. and, you know, anytime that happens, especially when it's not just one company doing it, it's an entire decentralized. >> people have called it the y 2k of crypto everybody was worried about y2k

and it ended up just fine. >> i think as you say, it will work out just fine for most places, but there will be some mess around the edges. >> what were you going to say? >> you talk about y2 k let's go back to 1998, web one billions of people are streaming. we're so early in the space. what have glitches that happen, five years from now people are going to be very happy that they were in a selection of these crypto currencies. >> given that you've been making investments in lots of different businesses including anthony's this morning, a lot of people have been focussed on the deal and your interest in robinhood long term, what's your plan in terms of your investment of robinhood? >> i'm excited

fundamentally, i think that it was, you know, possibly an underpriced asset, not investment advice, and obviously prices and markets have changed, but i think that there's, you know, big upside, given the huge amount of mind share that it has captured >> is that a company you ultimately want to own in its entirety how do you think about those two component parts? >> who knows what the future holds. as of right now i am ex-sited for them to drive it forward >> we're going to leave the conversation there sam, congratulations >> when we come back, intel ready to break ground on its chip factory on the outskirts of columbus, ohio, a culmination of billions in funding and the chips act, which put billions more into play the president will be there for the ceremony and when we come back, the ceo of intel, pat gelsinger joinis

us the futures right now indicated up by 220 points s&p up by 30, nasdaq up by 122 "squawk box" will be right back.

check the futures right now, 214 points, we were up 250 earlier on the dow the s&p indicated up 28, and the s&p closed above 4,000 yesterday. that's kind of a line in the sand >> psychological who knows whether we ever get out of that trading range. and we see the same kind of ranges in crypto and a lot of it depends on the yield curve and oil. >> everything moves in tandem. >> it does sort of i guess if rates are going up you expect oil to go down. >> obviously, stocks looking to add to yesterday's gains,

despite some ongoing macro economic headwinds scott min ard joined closing bel yesterday. >> i'm thinking 3,000 and 3400 we'll figure out the bottom when we get there i would say at that point, i'm a buyer. because if you believe everything i just say, if you believe that the fed will pause, you know, it's going to be supportive for risk assets, and the seasonals turn around. you know, seasonals turn positive in november through march. actually, through june so the old adage of buy or sell in may, go away, come again at labor day. >> weird thing is, you can look at the same headlines on one day and the market interpret it is very differently than the similar or same headlines on a

different day. s&p this morning being looking looking highe at 26 points the gainers list led by freeport then sh lumber jay a lot of commodities names in the leaders. on the down side, the lagrds led by car max >> the clock ticking on a u.s. rail strike that could cost the u.s. economy some $2 billion a day. five of the 12 unions representing 21,000 workers have reached voluntary agreement with the rails, but ahead of the september 16th deadline if the series of deals are not reached, 115,000 workers could be heading to the picket lines, straining an already-stressed supply chain. and elon musk's lawyers say

that twitter paid a whistle-blower $7 million to stay quiet after raising numerous questions around operations issues inside the company. the settlement was completed days before he filed the whistle-blower complaint it was related to his lost compensation surrounding his premature d premature departure from the company. it comes as the tesla ceo continues to discredit twitter and push to terminate his $44 billion prp of the company >> whistle-blowers are allowed -- >> you can't buy silence >> when it comes to whistle-blowering. >> was it lost compensation? >> there's some new data out on

consumer spending from the bank of america institute, and these are numbers we've been following pretty closely to get the health of the consumer. bank of america banks half of all households in this country when they see trends it seems to be something we sit up and pay attention to this time around, consumer pending continued to increase in august, despite some consumers feeling the rising childcare cost the rising cost was up 9.7% in august year other year part of that was due to higher prices an increase of 7% and inflation-adjusted spending. that tells you a number of bank of america customers are almost at pre-pandemic levels it tells you a lot of women especially between the ages of

25 and 54 are returning to the labor market card spending per household was up 5% year-over-year, down from 5.3 in july. a lot of that was eaten up by inflation. real inflation adjusted spending continues to be under pressure they also said utility prices, the average utility payment increased by 16% year-over-year in august. >> we're going to continue along the inflation topic. senator scott and richard clarida. "squawk box" will be right back. thinkorswim® by td ameritrade is more than a trading platform. it's an entire trading experience. with innovation that lets you customize interfaces, charts and orders to your style of trading. personalized education to expand your perspective. and a dedicated trade desk of expert-level support.

that will push you to be even better. and just might change how you trade—forever. because once you experience thinkorswim® by td ameritrade ♪♪♪ there's no going back.

to ensure our long-term economic stability we must keep our public finances on a firm footing and move on the inflation reduction act's tax reforms to advocate for additional reforms of our tax code and the global tax sis tetsistem, which includes closing loopholes

for high earners and corporations toward historical norms. by making everyone pay their fair share, these reforms will provide our government with additional fiscal room to make critical investments >> that was treasury secretary janet yellen sharing how the government plans to pay for the inflation reduction act, that fr freudian slip. republicans disagree, and the next guest disagrees rick scott is also the former governor of florida. senator, it's great to have you on it's friday. nothing's going to rain on our parade you are a flamethrower from your perspective. we have flamethrowers from the other perspective all the time on this show that's why we have such a great show everybody at home, when you're at home, half of our viewers are

cheering, going "go rick." the other half, their hair is bl absolutely on fire we understand how the world works. we have senator warren and others where we hear the other side inflation's bad. there have been extraneous factors, would you admit, whether it's putin or supply chain or emerging from the pandemic, even the fed, but i think you have, you blame the biden administration for some of this inflation, have i got that right? >> oh, no question i mean, this wasn't happening under the prior administration i mean, think about it this inflation happened after biden got elected. and what's he done to stop it? lock at th look at the government spending they have $800 a month average increase i grew up in public housing, born to a single mom my mom would be struggling right now. i've got people in florida going

to food banks, taking second jobs, coming out of retirement have the democrats stopped spending no avenu every month there's a new spending bill. now we have this continuing resolution and there will be new democrat spending, democrat government spending cause inflation. this inflation reduction act tell me when you raise taxes and spend more money that inflation goes, when has it ever happened that inflation goes down it's not going down. this is hurting poor families, people on fixed incomes, i'm fed up with these guys >> we have rich clarida coming on later i've made the point, senator, that a lot of times the fed, it's not a political body, obviously, but there are times when the fed is complicit with bad fiscal policy, because if you keep rates low for too long it sort of enables congress to spend too much money

would you agree that we can spread some of the blame, and maybe it was well intentioned during the pandemic, but the fed is, has been too complicit in all the spending >> absolutely. and by the way, nobody at the fed has been able ever to explain to me why they have a 4 billion, 5 billion, 6 trillion, 9, now $9 trillion balance sheet. tell me why they had to keep buying treasuries. tell me why they still haven't reduced the government-backed bonds. this has caused an unbelievable misallocation of capital it's caused asset prices to go up and so now when they start, if they ever do, but when they start reducing their balance sheet, what's going to do to our economy? and who's it going it hurt the poorest families again, the people who are struggling the most the rich will be fine. it's the poor who will be hurt again. the federal reserve's balance sheet is too big, democrats keep spending your money.

so far powell has not reduced the balance sheet. >> even after we seem to think we spent enough and we had joe manchin at one point seemed to have that view, and next thing you know we did the chips act, i don't know what you think of that, a nice big factory going up in ohio, that might be good and then we did the student debt relief i don't want to get you started on these thing i don't know why i'm -- >> rhelet's go to the chips act. $280 billion by the way, it's posed to be anti-china first, we have a glut of semi-conductor chips, and we're going to give more money to build more plants. intel made $20 billion last year they're going to get $4 billion to build a plant is it exactly what we need and by the way, they'd already committed to buy a plant they're getting a $4 billion writeoff and a tax credit. then we do the student loan, it's not a bailout, it's a

transfer it's a trans ofer of people that went to school to people who didn't go to school. a construction worker in sarasota said why am i going to pay for some rich kid to go to school he's got his nice degree, i've been working my butt off, and now i get to pay for his school. >> if you haven't done anything wrong you have nothing to worry about. i hadn't done anything wrong when i was a much younger man, and i wrote off a moving expense in california. i went through a six-month audit that i felt like a colonoscopy that was exponential i didn't do anything wrong they didn't get a dime, but they had absolute power over everything that i was going for the next six months. so it doesn't matter this is going to be an activist

irs. will they pay for themselves? $80 billion? >> we have less than 20,000 border patrol agents we're going to add 87,000 irs agents we had an amendment to say you can't target these people. guess what, every democrat voted against that they're going after you. there's not enough rich people for them to go after, and the rich people have already hired their lawyers and everything and they're trying to follow all the rules, i assume. but they're going to go after every mistake you might make and you're going to pay more taxes, more fines that's where the money is. >> here's the question though. i think we all agree that we're not collecting taxes that are you do, meaning there are folks out there for better or worse not paying their taxes

you've talked about cops on the beat in many other context, why not this one >> why don't we simplify the tax code why don't we make it easier for people to comply the irs right now doesn't answer the phone hardly at all, all right. they haven't used technology the way they should have why don't they start fixing some of their problems first. >> a lot of the money in truth is going towards those component parts. the hope is that you will be able to call the irs and they will pick up the phone the hope is that their technology will get better all of that is in this package >> well, let's, first off tell me why the democrats voted against not statargeting people makes less than $400,000 they said we're just going after the wealthy. andwhy, and every one of the democrats voted against it they're going after everybody, all our small businesses, and

think about it it's going to be exactly what you just said. you'll have some issue over moving expense or something like this, and ten or 15 people harassing the daylights out of you. this is wrong. >> if we have a law in this country which saysyou have to pay your taxes, and then you don't want to police it or enforce it, what do you do in. do >> i want to police it and enforce it, but why don't we make it simple. >> that's a fair, valid and probably very good conversation to have in this country, but give than we have laws, and given that you've talked about enforcing all sorts of laws, why is this particular law a rue that you either don't want tone forto enforce? >> why don't you solve the problem. the problem, the bailout, tuition is too high.

why not solve the problem rather than throw more government money at it. we have to tax somebody, right >> there is a problem. but part of the problem is we're not getting the money that we're due. >> i mean, first off, fo if the came to me and showed me a report that that was true, i'd be okay with that. why don't we fix the problem that we have >> dollars that are unpaid annually >> and why don't they come to me and say, i'm in this business, why don't they come to me and say if we do this, okay, if we make these changes. >> they did! that's how this bill came to be! they came and they said, look, for every dollar we invest in enforcement, we will collect several dollars on the other side that's what they told you. >> look, what the democrats want to do last year is look at every

transaction over of $600 they targeted conservative groups the american public doesn't trust in these agencies. >>in the same way police don't t think the police are the perfect enforcement tool >> both parties have laws they think absolutely should be enforced, but they pick and choose which laws they think should be enforced the immigration laws, you have heard any of the democrats say immigration l immigration laws need to be enforced >> that's my point >> hold on a second. >> when i became governor of florida, i said, when i became governor of florida, i said we're going to enforce all the laws, whether i like them or not. if you want to change, go to the legislature. enforce all the laws and if there's a problem, come

back to the legislative branch and say let's fix this >> let's enforce on immigration and enforce the laws on people paying their tax, and if that's where you land mr. >> sbkblutly. i a i'm a business guy it's throw money, throw money, throw money. they want to spend more money. that's wrong fix the problems >> let's do the irs. hire some immigration agents to patrol the border, would that work for you, andrew >> we did it >> we proposed that.

let's take that money and add more border patrol agents, and the democrats voted against that >> all right senator, thank you >> have a good day >> have a good die >> there's some cheering >> thanks a lot. coming up, the ceo of gin tell will be joining us. we'll find out what this groundbreaking means for the company and the nation that's happening today that's happening today plus power e*trade's award-winnin gp gabelly. with its customizable options chain, easy-to-use tools, and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. power e*trade's easy-to-use tools make complex trading less complicated. custom scans help you find new trading opportunities. while an earnings tool helps you plan your trades and stay on top of the market.

this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay. (driver) conventional thinking would say verizon has the largest and fastest 5g network. but, they don't. they only cover select cities with 5g. and with coverage of over 96% of interstate highway miles, they've got us covered.

at xfinity, we're constantly innovating. and we're working 24/7 to connect you to more of what you love. we're bringing you the nation's largest gig speed network. available to more homes than anyone else. and with xfi complete, get 10x faster upload speeds. tech upgrades for your changing wifi needs. and advanced security at home and on the go to block millions of threats. only from us... xfinity. in order for small businesses to thrive, they need to be smart. efficient. agile. and that's never been more important than it is right now. so for a limited time, comcast business is introducing small business savings. call now to get powerful internet for just 39 dollars a month. with no contract. and a money back guarantee. all on the largest, fastest reliable network. from the company that powers more businesses than anyone else. call and start saving today.

comcast business. powering possibilities. ga . good morning, and wielcome back to "squawk box. the dow up 200 pointing, the s&p indicated up 27 and change take a look at treasury, big interview coming up with a former fed vice chair, rich clarida, and you can see the ten-year's at 3.27 oil's down in the mid-80s or so this morning can you see it, 84, almost exactly mid-80s. 84, 88 >> intel getting ready to break ground for what president biden has called the future. and we have a special guest this

morning. kristina in. >> thank you so much this is a really, really big day, considering this is the largest single investment in ohio congratulations on that. i want to get into the timeline. right behind me uyou've got a lt of construction going on you've got to hire 7,000 workers and find the engineers, do you anticipate hitting that timeline >> it takes three-plus years to build a site like this we are pushing it, we had hoped to get started a little sooner 25, 26, that kind of timeline is what we're thinking. but i will tell you that we have seen such an enthusiastic response from the local community here as we're going through, you know, permitting processes. this is a mega site. this is one of the largest sites in the world if we build it out, i hope it

becomes the largest site on the planet for semi-conductor manufacturing. on the order of 7,000 construction workers next year every trade person in the entire midwest, okay, concrete trucks the construction worker, all of them showing up here, and we're going to build fast, and we're excited. >> and it's not going to be cheap. you're getting 2.1 billion in incentives from the state, 100% tax abatement on the buildings, and they're waiving the city permits. >> the chips act is up to $3 billion per project. obviously, we have two projects here you start to say why is that all the studies have shown that if we were building in asia, you know, and remember that, you know, the u.s. and europe used to be 80% of manufacturing

today we're 20%. this became acute throughout covid. why did we let something, every aspect of your life is becoming digital. now we've become acutely depend the ent. if there's a 30% to 40% gap in the cost of building it, what we must build is competitive in the world. and that's the nature of the chips act, about closing that competitive gap so that these buildings that we are building here, the most advanced manufacturing in the planet can compete in the world >> but competitive when you have, this is a huge feat, but it's two fabs, right >> two fabs, hopefully more over time >> i've spoken to some executives and some who say hey, it's a drop in the bucket. what do you say to that? do you believe there should be more than $52 billion for the chips act? >> this is two, we have two in

arizona and one in oregon that we just finished and the site is capable of going up to eight or ten fabs. my objective would be that we keep going this project doesn't end for the next decade or decade and a half >> do you have updates on that you said if the chips act goes through we'll spend up to $100 billion, right >> obviously, we've got to start somewhere. you're getting a little bit ahead of us. you're a little ahead of me. our objective is that we'll keep building we have some of our customers today, i want to put some of their logos on these fabs as we build them out, and obviously business conditions, but the market for semi conductors almost doubles between now and the end of the decade, we believe these are great investments, 25, 26, building the next one, the next one, the next one as we go forward in time, and yeah, we don't want

this to be a drop in the bucket. we want this to be the biggest manufacturing location in the world. >> one quick thing though, you got $30 billion in funding from brookfield management asset. that's a big thing for your corporation. does that mean you need to borrow money to expand going forward? >> we've called it the semi-conductor co-investment program or "scip" for short. this model has never been done in semi-conductor. that's what we announced with brook field, coming together to find a way to structure a deal it's a lot of capital up front by the time we build one of these modules, we're well over 10 billion and we've gotten zero revenue. that's a big, risky investment up front it's a $30 billion project in arizona, and they're doing half

of it. 51% for us, 49%, and it's equity financing, so it's a very interesting model of financing that it doesn't hit my balance sheet as a debt burden >> i know andrew has a question, but are you share the streamer revenue. >> a capped revenue stream that they see as part of it, that is much like a debt financing, but it says equity because they're carrying some of the risks soerktsed with it, but we see the majority of the margins if we achieve our objective over time in the facility, it does have a terminal model where we receive all of the assets, so it's a very interesting business model that allows us, if you think about it, between chips act, the itc provision, brook field, and i hope to have scip one, scip two and three. we want to rebalance the supply

chain, build more semi-conductors and employ more people right here in ohio. >> andrew has a question for you. >> hey, pat, it's andrew sorkin back in new york we had senator rick scott on before, but you could make this both sides of the aisle. bernie sanders on the other side, both of whom have criticized this package and say look, this is corporate socialism, this is a company that makes billions of dollars in profits what do they need the help of the taxpayers for, and if they're successful, they're going to make even more money. what do you tell those senators and those taxpayers who look at this and say i don't understand. >> the, you know, the thing is, this was a bipartisan bill you know, we had, you know, cornyn and schumer who pushed it akrot the line with matsui and mccall not everybody voted for it but we had strong bipartisan support for it and obviously, there's some people on the extremes that say

well, no, it's corporate welfare. well, you know, 80% used to be in u.s. and europe now 20%. this is a dramatic industry decline. this is the most important thing for humanity as we go forward. everything is becoming digital build the fabs where we want them this is so critical, not only to our economy but our national security i was just in washington yesterday. you know, they see the critical role that this plays this isn't like other industries this is so foundational for our future, andrew, we want it here. we want to be the leader in this -- silicon valley silicon valley as the hub of technology and the company, you know, when i came back as the ceo, the people who put silicon into silicon valley, it's in their honor, right, that we want this industry to be vibrant in america, and right here we are creating the silicon heartland

in ohio. >> more broadly, though, philosophically and maybe very specifically, when you think about quote-unquote industrial policy, which of course is a very controversial phrase among those who think about capitalism and free markets, are there other parts of business that you think should be innocentivized in a similar way >> i do think, andrew, that this is, what we did with the chips and the science act is the most important piece of industrial policy legislation since world war ii this is, you know, just so significant, and i'm so proud of our, you know, president for being here today, for the cabinet, you know, for the bipartisan role in the senate and congress we also see that this should be the beginning of supply chain rebalancing. you know, it's not just about the fabs, but some other components of the supply chain we've heard lots of discussions about rare earths and minerals and so on. those need to be looked at, but

this is the most important pieces part of it. and some senators and congressmen will talk about should we look at other sectors, we would say yes, we should. this is the most important one, and i'm so proud this is the beginning, and this is the dom mow domino that starts a more holistic look. >> nice segue to end congratulations. and the president will be here later. >> thank you so much let's get back to the broader markets. the futures this morning again are pretty positively in the green here you can see the dow futures up by close to 200 points, still up 190. s&p up by 25, the nasdaq up by 110. and joining us right now is billionaire value investor, mario gabelli, the ceo of gamco investors. first of all, welcome. it's great to he sao u.

see you >> you're somebody who looks at this with the same sort of metric all the time. you want to explain to people how you value stocks, how you try to find out if stocks are cheap right now or expensive >> yes, the 30 seconds in the top down, the three rs for powell, rates. and then more importantly, his comment about reduction in the agora a aggregate. we take a microscope to the p&l and balance sheet. companies in the manufacturing sector, they price on fifo, first in, lifo, last in of a good, first out.

but their accounting is fifo then we worry about currency and taxes. there's a lot of confusion right now about this new 15% on tax profits and book profits for u.s.-based companies not the 15% global we look at that and say what do we like? we want to buy agricultural companies. this year, $535 billion of cash up from 400 odd billion goes into the farmers, because they're working their fannies off from fence to fence. we like deere and case new holland. deere's stock is 305 this stock should follow that's an area that we like. we visit the companies

we go out and try to kick the tires, so to speak on the equipment. another area that we like, we had 28, 28 conference annually yesterday, 15 companies presented, most of them were there, several were virtual. two companies in the aerospace and defense industry, one is aerojet. aerojet was, the federal trade commission in early february, based on the data they had turned down lock hheed we bought another close to 800,000 shares within the last week or two. we just filed last night they're going to earn a couple bucks, but what i'm interested is their capabilities and hypersonics. their capabilities in the ground-based strategic defense which replaces the minute man. eileen drake is running it now and we think maybe the ftc should re-examine the data they had when they made that decision

and allowed this company to take the technology and accelerate. another company that presented yesterday which is also going through financial engineering was crane. crane has 56 million shares, stock is around 94 basically, we think they earn $7 to $8 in the next two years, and they're going to split the company in two pieces somewhere around april of 2023 so this is another sector. and then obviously, when you look at the economy, when you look at the economy, there's a million, 100,000 cars on dealer shelves, i have been following this industry for 55 year. at some point, we're going to have 203 million there's a huge replacement for those who are listening. for those who are listening if you have a car on a lease, don't turn the lease in. examine what the used car price is, exercise the lease but then you can't replace it keep it for a year or so used car prices will give you a good windfall.

and finally, i like baseball the l.a. angels put themselves up for sale, we'll know in a couple time period as to whether they get 2.5 billion, plus or minus 2.4. and that brings me to the atlanta braves the mets fans don't like me in new york, and i'm going to be in philadelphia next week so the question is, what's it worth? i think malone will be in a position, are in a position of doing it, i think they're examining the implications of this tax on corporations relative to the size and that's part of what everyone is doing from a financial engineering point of view. so that's what i'm doing, becky. >> talk about the feinancial engineering. what is everyone examining right now to figure out the new tax coming >> corporate taxes are about $400 billion they're significant. up from $200 billion several years ago. so the government then put in a bill that says if you have a book tax, effective tax rate of let's say 23%, but your cash tax

is 10, and assume for practical purposes you're strictly a doim company and basically, if you have over a billion dollars over a three-year average you may have to pay a cash tax of about 15%. so that's, then the calculation is whether you do spinoffs, financial engineering, does that add to your, and look at the average for the last three years. so that's work in progress that's an element. the bigger element is obviously private equity how are they going to pay for acquisitions what is it they believe is a terminal multiple and can they finance. n and in addition to that, corporations want to buy companies. right now with the ftc and the united states and what's going on in the rest of the world, regulations are presenting a challenge. if i were looking to make a deal, i'd wait until after the election which is about 45 days.

>> let's talk more broadly about the overall markets. the fed is something everybody is watching right now, and that has to have implication on how you value a company right now too. how long you think those last, how long they continue to raise rates. what impact that has on valuations what are you thinking just broadly? >> that is a perfect targeted focussed question. in 1982, before august, when the markets went up and volker had done his job, hundred interest rates in the low teens and you have to buy, i remember we started a fund with someone close, a private equity fund, and his role was lend your money, if you put $3 of collateral up at 600 basis points, the multiples were four, five times even at minus capex today my analysts are saying this thing is worth ten or 12 times. that headwind that powell is doing, what the ecb did, what

they're doing is putting a headwind on that terminal multiple which means that you have to look at it from a different point of view, the value that you want to pay today. strate strategics have a different dynamic. >> does that mean stocks are cheap right now or expensive >> no, on the overall aggregate market, i believe nominal earnings will do okay. when you look at inflation pass through like barclay's just had a conference on food and you could see that the demand was down in units. but prices were up significantly, so rievenues were okay so they showed better profits. i'm saying there's a head wind on multiples and earnings. we'll be okay the next three or four year. now the economy, that's for strict strictly domestic companies, and basically, we'll downgrade,

obviously, china, europe and the u.s. remains somewhat vibrant. >> okay. so you look at inflation pressures, too we just heard from bank of america. they're talking about how consumers are spending more, but the real dollars that they're spending is not going up because of inflation you want the fed to continue at this rate? >> yes, i believe that what i learned in the '70s when i was covering companies and we made lots of money on certain industries, even with inflation rising, you can't go up, down, up, down look, oil, oil is an example we hope that with the releases from the strategic petroleum reserve have gone from 650 barrels to 470 you know, you have to reduce demand, but it's not being reduced. how is the united states going to get oil prices down and keep them down? we are spending on capex in the united states, the companies, about $100 million this year

that was down from 150 four years ago, five years ago. and, you know, we've got to get money back and then at the same time, the good news about the high price is it accelerates the renewables then you have battery, wind, solar and so on. and then you have battery storage, cyber security and transmission so there's a lot of pluses all the time i'm very optimistic about the world and the u.s. economy under certain circumstances. >> with inflation, the button behind you though, blown up really large >> well, that is a memo that we blew up for, from somewhere around 1973 or four. so powell raeads history powell has got to stay with the rrr. rates, runoff of the debt and reduce aggregate demand. those are elements, always

optimistic about the allocation of capital, the rule of law with all the flaws. this is just a great place to be investing. >> mario, thank you. we always appreciate spending time with you. >> hope to he sao see you soon say hill low to joe and andrew >> jerry ford yesterday i snau one of the pictures. >> the only president that the queen did not meet with, the 14 that were there, there was only one she didn't meet with >> who >> why don't you tell us after the break. >> i will. >> i saw her with jfk, truman. i saw her with everybody, i thought. >> no, one >> jc, bc. okay >> i'll tell you right after the break. >> coming right up after this morning's -- met with roosevelt. >> father.

>> the biggest premarket winners and losers in the next half hour we'll be joined by former fed vice chair, richard clarida in his first interview since leaving the central bank you're watching "squawk box" on cnbc beep. beep. what up, barry? hey, chuck. aren't you supposed to be on the course? i was, but i need a new driver. oh. what kind? one that hits the ball better. okay... i gotcha. let's go to the hitting bay. ♪ ♪ ( golf balls and items crashing to the floor ) oops. maybe we need a new driver for the cart too. you're a funny guy.

( golf balls being hit ) oooh that's nice. that one definitely hits the ball. c'mon, get in. ehhhh, i'm good. suit yourself. oh no, no, no, no, no! ( tires screeching )

welcome back to "squawk box. i'm dominick chu the biggest gainers are tied to earnings reports after yesterday's close. we'll have docusign up first, up

16%. the electronics document signature company reporting profits and revenues above analyst estimates. maybe showing that there is still growth for docusign despite less of a focus on work from home as pandemic concerns ease then you have zscaler, around 25,000 shares of volume. it was name d a top pick share up 14% and tesla is possibly looking to put a lithium refinery in texas.

tesla share have been outperformers and helping dre iv that discretionary trade this week keep it right here we have more "squawk box" coming up right here after this commercial break your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today.

this is xfinity rewards. whose resumes on indeed ma our way of showingia. our appreciation. with rewards of all shapes and sizes. [ cheers ] are we actually going? yes!! and once in a lifetime moments. two tickets to nascar! yes! find rewards like these and so many more in the xfinity app.

all right. a lot of you have already written in the answer to this. the only president the queen did not meet with during her reign of the 14 presidents, i think it was lyndon johnson don't think there was any reason, but she did meet with most of those presidents over the course of her 73 years in

the throne when we come back, the biden administration issuing a major economic white paper aimed at proving the economisy heading in the right direction we've got the details, next. yeah. [cricket sounds] shh! shh! [light switch clicks] don't pta meetings end at nine? -it ran... late. -oh got lost. the lexus rx built for modern families. ♪ ♪ ♪♪

♪♪ ♪♪ be ready for any market with a liquid etf. get in and out with dia. ♪ ♪ ♪ ♪ ♪ ♪

welcome back to "squawk box" this morning take a look at futures right now. we are in the green. dow up about 207 points. the s&p up there by 28 points. let's get to the white house, the white house releasing an economic blueprint this hour, and kayla tausche joins us with the headlines. kayla? >> good morning, andrew, the white house is releasing what it call as economic blue print. their trajectory of the economy since president biden took office and the policies it claims to advocate for in the future the 60-page document distills the administration's strategy into five categories, policies

to grow jobs and union membership, lower cost, spur competition and continue revising the tax system. a senior official tells reporters, it believes costs will keep coming down even after some of these programs end at the end of this year and the legislative goals it still hopes to achieve include passing a $15 minimum became, lowering childcare costs and extending universal pre-k and extending the earned income tax credit many of the policies have been elusive for democrats so far but the senior white house official says the administration's aim remains structural change in the economy and this will serve as something of a foundation for democrats on the campaign trail including the president in hoeohio today

>> we were just there earlier, hearing from pat dgelsinger, the just a moment. when we come back, former florida vice chairman, richard clarida in his first interview since leaving the central bank this is cnbc charging something like a hundred bucks a window when other guys were charging four to five-hundred bucks. he just didn't wanna do that. he was proud of the price he was charging. ♪♪ my dad instilled in me, always put the people before the money. be proud of offering a good product at a fair price. i think he'd be extremely proud of me, yeah. ♪♪

bubbles bubbles bubbles bubbles there are bubbles everywhere! as an expedia member you earn points on top of your airline miles. so you can go see even more of all the world's bubbles.

online sports betting to fund real solutions to the homelessness crisis. so how will that new revenue be spent? new housing units in all 58 counties, including: permanent supportive housing, tiny homes communities, project roomkey supportive hotel units... and intensive mental health and addiction treatment. in short, 27 means getting people off the streets and into housing. yes on 27.

welcome back to "squawk box" right here on cnbc we are watching the futures this morning. we've been in the green all morning, all through the early parts of the morning dow futures indicated up just by over 200 points, the nasdaq up by 117 and a couple big nasdaq winners this morning that we should take a look at. you'll see zscaler pinduoduo rounding out the list. >> glad you got those in before we get to rich smooth smooth segue here. now to the fed, but we got him in now to the fed steve liesman joins us on set

this morning with a special guest. which i'm excited about. >> this is huge. >> we talk about it all the time, and he's going to defend these things, not that they need defending. >> that's not what's huge about this first time, we have five people around the people. first interview i believe by the former vice chairman of the federal reserve since leavings of o now are you excited? >> i was already excited >> and now it's like double excited. >> it is >> thank you for joining us. >> it's a thrill >> making cable history television there's only one thing that really matters when it comes to the investment proposition relative to the federal reserve. do you believe them or not and it seems like in days that we're in the green it's a day not to believe the fed, and days when we're in the red we believe the fed. give us guidance about whether or not to believe these guys when they say they're going to do what they're going to do. >> i think you got to believe

the fed. in particular after the chair's speech at jh, the message i got is very clear. failure's not an option to j. powell the uncertainty is how high will rates have to go and how long will they have to stay there but you've got to believe the fed now. and i've been surprised how unified the messaging is among other members of the committee on this point. >> they're speaking from the same book here when it comes to, i always said like you wake up in the morning if you're a central banker, you hate inflation you may be a dove or hawk, but you're against inflation let me turn to another question. on the one hand the fed says they're data dependent ordinary we hear numbers like 4% and they're guiding toward this number is this data dependent or are they going to 4% hell or high water in >> i think they are going to 4%

hell or high water they are data dependent, but inflation is way too high. the fed had a lot of company, and i was part of it in getting the inflation forecast one but job one, and really, i think of the fed right now, until inflation comes down right now, the fed's really a central mandate central bank if you squander price ability -- i think they're going at least to 4% >> they've already squandered it, that's the problem >> we can agree to disagree on that >> that's the thing that gets me it's almost, like we're in the soup now we're in this mess so i guess there's no reason to talk about how we got in the mess but it's just unfortunate that we need to do things that are counter intuitive or counter productive we need to raise unemployment, sloet ecoslow the economy, cut

a great recovery, make borrowingst coulds higher for entrepreneurs and people who are trying to build businesses that hire people. we're in this mess of cutting off our nose because of for some reason and what's that got to do with putin? our people have to take it on the chin to lower inflation. it's not a great way to do business >> i think if it were just putin and just energy i think your point would be 100% correct. the problem is that the shock that the economy took, globally, with the shutdown and the pandemic and the reopening was an enormous shock. it was almost like a war-like shock. so there's been a lot of dislocation, ounfortunately, chair powell is correct.

over the long haul you can't prosper with high and variable inflation. if it was just putin, you would be right but unfortunately, the fed is out of balance >> interest rates seem too low, and you can't have people taking risks because -- >> sure. >> you know, you can't spawn stupid decisions i see how we need to get back to a more normal level. would you agree that the fed enabled fiscal policy to run amok >> well, let me say about that, i was obviously in, as vice chair during '20 and '21 22 million jobs were lost in the spring of 2020 30% decline in gdp the fed was all in i have no apologies for that i think given the shock the fed needed to be all in. i was not unhappy when the c.a.r.e.s act passed at the end of march

i think what you can say is as we went through 2021 it became clear, maybe sooner to others than to others that demand in part supported by that policy was out of balance with supply >> you don't date it back to '09? other people say you've been in emergency position. >> i'm talking about the years i was there. how about that >> i kind of disagree a little bit with joe >> agree or disagree >> disagree. on a fine point. i think it matters to go back and figure out how and why they got it wrong what troubles me about it -- >> they have to do it now. but don't we need to do it next time >> was there group think in the period of 2021 you're like larry summers. he has euphemisticallly bold statements but you could say that there's

concern. w why wasn't there more dissent, why weren't there mother re peo coming forward and saying we need to put the brakes on this we were talking, march of 2022 rates were 0 how did it go wrong and what needs to be fixed on the fed that's what i care about >> let's talk about 2021 we came into the year 2021, remember in 2020, the pandemic was disinflationary, inflation fell in 2021 unemployment was high. the fed thought we had excess capacity in the economy. and i would say if you look at the real time data we got through may or june, it was consistent with that view. underlined broad inflation >> you were -- >> wage gains right along with our inflation objective. but you are correct. through the summer there was an

inflection and basically everything went hockey stick and i think they did get the potential supply of the economy wrong. i'm sure folks will go back and look at how that occurred. what i will also say, steve, in august of 2021, i know you know because i covered it, gave a speech at peterson reflecting my own views that the policy in place in 2021 was going to push inflation, average inflation, which you know is our new framework, at or above 2 so i think on the average inflation metric, we checked that box in august so i think the reality is members of the econocommittee d realize it was time to pivot but it is a fair question how long it took to do the taper and how long it took to raise rates. >> hey, rich, yesterday i listened to chairman powell's speech or the interview he was giving with a lot of interest. it was this whole idea of the

dual mandate where you want to lower inflation but you have the mandate of making sure you're dealing with full employment he was pretty pained in saying yeah, he thinks the dual mandate is right, and congress is the one who sets it, so you have to listen to what they say, but it strikes me that we could end up in an issue where congress gets more vocal where one mandate gets chosen over another we are going to have to deal with high inflation. there was a piece yesterday suggesting we could be looking at 6.5% for two years. is there a point where you have to recognize for the short to medium term that one of those mandates, inflation, is going toic at that center stage and deal with he potential push back from elected officials who aren't going to like that? >> i think you're correct. what i read like all of you at jackson hole, my interpretation

of that very crisp speech is failure's not an option, keep at it until the job is done and what i think that means, for some time the fed is in single mandate mode and the way j. and others explained that, over the long run you cannot have sustained maximum unemployment with skyrocketing inflation i think that's the way i interpret and will interpret the fed going forward. but i think the second part of your question is also accurate in the sense that it may well trigger some pushback. in my youth, i followed paul volker, and paul received a lot of push back in '80 and '81. i'm not saying the situations are comparable he inherited 14% inflation but i think the mission is going to generate pain as the chair said and that could generate pushback >> i don't want to take credit for the phrase that you used from the outside, which is you said the fed is now off of this

concept of immaculate disininflation >> i think it's the large sep which showed that inflation was going to fall. and yes, that could have happened but that would not have been my baseline and so you saw the committee pivot more hawkishly and i think we'll see more of that in the s&pep we get in two weeks. >> do i have to pick is it my choice? >> this i've been thinking about. you mentioned volker there's a new school of thought that the economy could be inherently stable if the fed somehow would stay out of things and even back then >> oh, yes >> it would have eke liberated

in england, we're going to increase the supply of the economy. we're not going to try to raise rates to lower the supply of the economy, but we're going to just try and stimulate the private sector and then the inflation kind of takes care of itself, and we don't need you raising rates when there's inflation, lowering rates when there's this there's an equilibrium does that make any sense at all that the economy could be self-correcting? >> that is a long-standing issue of discussion and research and macro economics. those debates go back to friedman and samuelsson in the 1960s. does monetary policy destabilize the economy. the broad consensus, beginning in the 1990s is there is a role to keep inflation around and

below stable level what may be concluded is this was a warren h-like shock. you shut down the economy. my hope is that we got through this, inflation came down, it was basically a spike in supply and demand but certainly, the alternative hypothesis that you put forward, monetary has been part of the problem. i don't agree with it. >> if we did nothing >> it's a supply complahain iss and you're raising rates >> let's say you're in charge of the fed. and a 30-year u.s. bond in the market and are you going to sit there and say oh, it will take care of itself you liquefy the markets. if you're ready to sit there and let it clear and 30-year u.s.

bond is not clearing in that's letting the balance sheet continue to grow or not run off as quickly versus raising rates, right if you want to make sure you have liquidity in the market >> if i could just rewind the tape a little bit i it's very easy now to say that the 20 million jobs that we lost would come back. i guess the fed and fiscal authority kos authorities could have taken the risk you have to look at the employment side and the output side and the inflation side and look at the nature of the shock and the policy >> did the growth cause this inflation? >> not reliably. s >> was this the fed's fault or not the fed's fault for printing

too much >> the supply in the economy was out of balance and prices were too high the data's pretty clear -- >> then why wouldn't you want to keep rates low so the supply goes up so can you satisfy the demand instead of cutting the demand for the lower supply >> bond yields are below inflation. the other thing friedman toaugh us is to look at that. >> i want to ask a personal question and a delicate one, because it's about the credibility of the fed in a different way. when you stepped down, one of the big issues was stock trading. >> yeah. >> and i wanted to get your sense and thoughts on that issue and talk about it and whether you think that affects the credibility of the fed and what you think what the fed is doing, that that should be applied to other parts of government if you will >> what i would simply say on that is the fed has put in place some new rules and regulation on that which i think make a lot of

sense, and i think those are fine, those are fine efforts, and i'll leave it at that. >> on a personal basis, do you say to yourself, that it affects the credibility of the fed do you think it affects the kind of people that will want to take this job that was always one of the arguments whether people should trade or not trade or this or that is that there will be people who are fabulously wealthy and want to stay fabulously wealthy >> for me it was the honor of my career to serve at the fed, and i can't imagine anyone capable of doing it would say no to doing it based upon the rules that are now in play >> so the rules are not going to impact that issue? >> i don't think so. >> you think those rules should also be applied to congress? >> i can't weigh into that don't know, don't know what they are. >> you must have a view, now that you've experienced this

whole situation. >> i think the rules in place now make a lot of sense. as i said, i don't think it will dissuade good people fro serving in the fed i'll leave it at that. >> how about overall rules, you can say oh, we greenspan fed then there was the yellin fed, well, the bernanke fed it's really the personality and the testimony perment. temperament. shouldn't there be something standardized when you have the world's biggest economy. the guy we had then was thinking this and the lady we had then was thinking this and the economy's going all over the place. is that a way to run a federal reserve? >> well, the short answer is no, if that's the way it was run the 25 year before the pandemic, inflation was slow and stable.

there were legitimate questions about whether the fed should have seen the mortgage crisis coming but i think the policy holds up pretty well. >> could you write an objective set of rules in. >> i think --i've been to several seminars by experts put on about rules there's a great expert head of the bank of cyprus he put up a list of rules and showed how they at any time work if there was a rule that was perfect i think everyone would glom onto it the fed could do more to lay out the rules that guide it. if i could get to another issue, i don't want to let you lead richard without talking about the tradeoffs that have to happen where does unemployment have to go in th

go there's this idea that becky had from furman, 6.5%. then this idea from powell, we can get rid of job openings and not necessarily get rid of jobs. where do you stand on that >> as j. and the dynamics, there is imbalance in the labor market in order to bring it into balance, three things need to happen you need to have increase in participation, reduction in vacancies, and some rise in unemployment the amount of rise in unemployment that the fed will need in order to get inflation down will depend on how much we get on participation and how much we get on reducing the numbers of vacancies and there's no crisp or definitive answer to that question i do suspect we'll need to see a rise in unemployment north of what the fed is currently marking down which is half a percentage point in mild recessions in thepast, here is the "r" word, but if we

do go into a recession, in the past the unemployment rate has risen by 2%. the last two regulations in '08 and the pandemic were the two worst in 75 years. we could have a downturn in the u.s. with a sharp slowdown in growth and modest rise in unemployment it's too soon to tell what will be required. i do think it will be more of a rise than we've seen in the projections. >> is it a recession-based case here >> it may take our friends at it mber a while to cause a recession, as we know. i think it's a coin flip right now. >> 50/50 >> yeah. >> i dramatically agree with joe on the idea of bringing back labor. we can't provide the supply that we provided before if we don't have the workers providing the work to provide the supply >> yeah. >> and the market looks at strong jobs growth as inflationary and weak jobs

growth as disinflationary. i'm missing a chip somewhere, richard. i think putting people back to work is disinflationary. >> and i think any fair reading of the speeches i gave as vice chair, i gave it repeatedly, october 2019 i said, the fed is not against wages going up, we want wages to go up, we just don't want it to be inflationary before the pandemic we had a low unemployment rate, wages were rising we adjusted rates down in 2019 to support a strong labor market i and, i believe, my former colleagues are entirely with you on that point. unfortunately, given the nature of the pandemic shock, there's a different challenge in the labor market right now but longer term, i think fed policy is entirely consistent with trying to achieve that goal >> richard, pleasure to have you join us.

thanks for joining us. >> we want people at work instead of screwing around at home with computer games while pretending to be working >> you don't think that happens in the office? >> not so much because people will come up and say, you're fired. at home, no one around, "i got to go to the bathroom. >> did you tried to sit in the cnbc newsroom and read a monetary speech on monetary equilibrium? i read a lot more at home. >> thank you >> you're more productive at home >> way more. >> hopefully you're not building homes or out in the real world doing things that matter to everyone you're at home, like, thinking that's not going to get us anywhere >> where have you been the last 20 years, joe? >> i like the real economy

>> richard, thank you. when we come back, congressional leaders want answers from the airlines on how bailout funds were used. monday on "squawk box,th" e ceo of roblox will join us 8:30 a.m. eastern time. we'll be right back.

welcome back to "squawk box. a news alert, two democrats want the treasury department's inspector general to probe if airlines used government funds for pilot buyouts and early retirements. airlines that accepted $54 billion in taxpayer aid during the covid pandemic were prohibited about laying off staff but airlines could urge employees to take furloughs and layoff packages and many did after a surprising session yesterday, after seven horrific days joining us now, victoria fernandez, chief strategist. we have our line in the sand at the s&p at 4,000 are we in a bear market or are

there signs of stability in what could be a more sustained advance inc the next couple of quarters, which is it? >> it's hard to say, which is why there's such instability in the market i think we're probably still in a bear market, we haven't seen the trends we want to see to tell us we're starting a new bull rally you look at stocks making 20-day highs, you look at the net percentage of stocks trading above their moving day averages. we were actually heading into kind of bull territory before jackson hole now that's all changed and we have a tremendous amount of volatility i think it makes sense, right? you've got the bullish camp that says, hey, brainerd came out and talked about the lag effects of hiking rates so maybe the fed isn't going to do as much as we thought they would do, but at the same time you've got the bearish camp that says, wait a minute, we've got this strong labor market that you were just

talking about with richard clarida. inflation is still high even though it's possibly coming down the fed is telling us they're going to go there higher and stay there longer. i think right now it is a coin flip clarida used that term about where investors want to position themselves >> victoria, we don't have a lot of time left so i guess i can't really ask this question we look at fundamentals and say things aren't so bad, but if the market is acting so horrifically, maybe we're too optimistic about what happens nine months from now, that's what concerns me, the fundam fundamentals you have 20 seconds to answer that >> i think growth will flow, quantitative tightening means gdp growth is coming down. earnings estimates are supposed to be lower. we don't see a recession this year, but we do think combining that with lagged effects, you'll

probably see recession probably in 2023. >> very good victoria fernandez, thank you for the brief answer, that will give us 15 minutes to say what >> 15 seconds. >> 15 seconds. >> to look at the futures this morning. or just to say, hey, it's good to have everybody back on set. >> the whole team. >> that does it for us have a great weekend, everyone see you monday right now, time for "squawk on the street." good friday morning, welcome to "squawk on the street." eight carl quintanilla with david faber and sara eisen the nasdaq is trying for three days up as we've got some cooler inflation numbers out of china, some decent tech and retail results. we begin with stocks looking to snap that loss over the last few weeks. gugge