2022 "squawk box" begins right now. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm rebecca quick along with joe kernen and andrew ross sorkin. u.s. equities this hour and after last week, a rough one where the averages were down 4% to 5%. you see the red arrows continuing this morning. no relief in sight with the dow indicated down another 2773. s&p down 36. nasdaq down 117. treasury market is looking at higher yields. 10-year treasury at 3.44%. 2-year treasury at 3.9%. getting close to the 4% level

that we've been talking about for a long time. crypto has been under pressure 18,4 for bitcoin i'll talk more about the markets in a moment. let's go live to london where the funeral for queen elizabeth ii is beginning at westminster abbey. se steve sedgwick has more. >> reporter: becky, thank you. this is the first of three ceremonies this is the state funeral. later in windsor, the commitment service for the queen and private burial service members of the guards carrying in the queen's coffin and the standard and septre and crown. it made a short journey from the westminster hall to westminster abbey. president biden and dr. jill biden paid respects yesterday.

the procession took a short journey to westminster abbey through the west gate. we see the procession followed by the king, king charles iii, followed by his sister princess anne and behind them is prince andrew and prince edward as well the four children of her majesty the queen. behind them, the prince of wales, prince william and the duke of sussex as well in that procession moving into westminster abbey. the procession and service will last just under one hour time. it will be conducted by the dean of westminster and archbishop of canterbury liz liz truss will be making a reading. huge numbers of dignitaries from

around the world are in london it is the biggest security operation since the second world war surpassing the operation that was london 2012 olympics. you can also see in the shot there prince george just behind his uncle the. walking in the two oldest children of the prince of wales. prince william and princess kate you saw charlotte and prince george the ceremony will finish with a two minutes silence. the last post will be played by a bugler and the national anthem as you see, prince harry among the key roy al dignitaries following the coffin to the point which the service will begin. after the service at midday, there will be a second procession of the day. coffin will be placed back on

the state gun carriage the carriage has been used for all monarchs and funerals since queen victoria her son, edward vii's funeral. then king george vi and george v. in 1953, the queen was crowned he was taken away at a relatively young age of course, the queen found out about her father's death when she was in kenya and flew straight back. then, of course, became the queen. we've all known for the last 70 years. huge challenge for her son, king charles iii, given the fact so many nations identified with the queen as a huge part of their dna. here in the united kingdom, we had extraordinary scenes over the last few days.

four days of mourning with hundreds of thousands of people, including president biden and dr. jill biden, paid respects to her majesty of queen over the last four days it has been one of the largest queues in history. let's tell you about the pr proceedings and order of service. 500 heads of state and dignitaries from around the world. emmanuel macron is there representatives from all kinds of royal families in europe and king phillip and king of netherlands. japanese emperor as well and other heads of state including president macron at 1:00 p.m., the service -- beg your pardon. 12:00 p.m., the service wednends and the gun carriage will take the procession to the constitution hill and make its way to windsor

which is the final resting place of the queen back to you, becky. >> steve sedgwick, thank you we will check in throughout the morning. we turn to geopolitical news president biden making comments about taiwan during a "60 minutes" interview that eraired last night. >> we agreed what we signed on to a long time ago there is a one china policy. taiwan makes their judgments about their independence we are not evncouraging them that is their decision. >> would u.s. forces defend the island >> yes, if there was an unprecedented attack >> the white house said policy toward taiwan has not changed. the u.s. has had a policy of strategic ambiguity. not saying it would interfere with the conflict between taiwan and china. president biden has made these comments several times

>> four times. >> the white house has come out with another statement to say nothing has changed. >> it didn't sound very ambiguous. >> i don't know. i'm hoping nothing is happening right now. >> i'm hoping so, too. i don't understand why he keeps saying that and it keeps getting walked back. i think the chinese are angry. >> are you a fan of joseph feller did you read the great ct for gt we have a policy called ambiguity. it is like the principle you can't measure something and decide where it is at the same time there's no way to discuss this, andrew it is beyond our comprehension >> because we purposely created something that doesn't have a straight answer. >> exactly. >> if you want to get straight

answers, that's a problem. >> perfect for the government and and the military it was to get out of service, you needed to prove that you were crazy and trying to prove you were crazy, it means you are not crazy. >> it is "mash." >> a lot like catch-22 it reminds me of that. the president said there was no ambi ambiguity. i think scott pelley said we will send american men and women to defend taiwan he said yes. then nothing has changed it is all gobbledegook >> the real question for our purposes is economic risk. to the degree you believe that this is -- >> you are right >> this is something --

>> you are not ready to send american men and women to taiwan. >> i don't think we will i don't think this is going to happen right now i think this is a 26th or 28th situation. my hope is we have enough of our chip making abilities here in the united states. i think there will be a point of which it will actually be easier for both sides to walk away. for the u.s. to say okay, i'm not going -- >> china >> china will be able to do it and know there won't be a confrontation. >> you mean take taiwan? >> china will take taiwan. 100% the question is when do they do it and when do they do it? not when we are weak, but we feel strategically we are okay we have a problem right now. four years or five years, we won't have a problem >> this would be an issue we

don't care about democracy or human rights we just care about chips >> sadly, we learned that in this crazy world, it appears when it comes to saudi and you name the country, it is about national security and everything else we have not been the greatest when it comes to other issues of the. >> you are married we're all married. there are times where i have invoked strategic ambiguity. many instances you can seize on this because it is very powerful >> the secret to a good marriage is poor hearing? >> that's what they said they looked across all cultures and that's the one thing you can see. >> successful marriage >> progressive loss of hearing in the husband and wife as they get older. they can stay together >> and television. coming up, after lots of economic data, market

speculation and speeches from fed heads, the september fmoc meeting is finally here. interested in talking to roger ferguson about this. both sides got further out on the spectrum one side wants to go up 200 points the other side wants to stop immediately. it is bizarre. the standard deviation got bigger what investors want to hear from jay powell today i bet there is strategic ambiguity there. as we head to break, check out the market's winners and losers on what might be "squawk box" on cnbc >> announcer: this cnbc program is sponsored by truist securities

for 65 years, responsibility has been central to our client relationships and long-term perspective. it's part of our heritage. and it's the foundation for our future. pursue active investment strategies at federatedhermesinc.com 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 our internet isn't ideal... my dad made the brilliant move to get us t-mobile home internet. oh... but everybody's online during the day so we lose speeds.

we've become... ...nocturnal. well... i'm up. c'mon kids. this. sucks. well if you just switch maybe you don't have to be vampires. whoa... okay, yikes. oh sorry, i wasn't thinking. we don't really use the v word. that's kind of insensitive. we prefer day-adjacent. i'll go man-pire. 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.

welcome back to "squawk box. look at futures. we are in the red on monday morning. the dow looking like it would open down 317 points the s&p 500 down 42 points nasdaq down 137 points faang stocks have gotten hit as well across the board there meta, amazon, netflix, apple and alphabet are all down. joining us to talk about it is michael katapolis and seema

shah p good good morning to you. another week another series of red arrows bitcoin is down 18,000 michael, what do you expect from the fed? if everybody expect the fed to raise 75 points, does it make sense for the market to keep coming down? is this a realization that each day is an emotional reaction shouldn't this have happened a week or two ago? >> first of all, i think bitcoin is a little bit of a red h herring. liquidity is sucked out of the system i think the big picture is not what is happening this week. the fed could go 75. they could go 100. clearly not 50 basis points.

the big picture is what maetter. they are not done and they are not close to being done tightening the markets are waking up to that not just 75. they have another 150 or 200 basis points to go that is a lot of tightening to happen when you consider the tightening that has happened hasn't hit the economy you couple a fair amount of hikes from here out and slow earnings growth and that is a terrible recipe for credit and equities >> what are the chances if we go 200 basis points that would be a lot and that actually puts us into a recession. >> i think taking up that would be a hit it would be a hit with the financial conditions tightening. especially since that is not baked into the market. we expect that to hit the economy.

i agree we will see a down turn in earnings. q2 is the time to expect the u.s. to enter recession. >> what do you want to own right now? sitting on cash under your mattress what do you do >> it is a difficult time. looking across the asset class, it is difficult to find opportunities at the moment. we do think moving into the treasuries at the moment and being ready whenever the market bottom hits and to be ready with liquidity to deploy. there will be a ton of opportunities at that point. at this stage, it is about defense. we are moving away from high yield credit and away from investment grade we have been reducing exposure and focusing on the u.s. rather than the rest of the world the u.s. is in a slightly stronger spot than many other parts of the world looking to actually add exposure is in the real asset space we are looking at the inflation

run that we think will be sustained beyond 2022 and beyond 2023 infrastructure is a decent area to ride out in this stage. >> mimichael >> you think about the global financial crisis or 2020 and covid and those were exceptional or exceptions in down draft. anytime before the gfc, the cycle played the same. you had too loose monetary conditions you had the fed that had to play catch up you had decline in earnings and tightening monetary policy the playbook is clear. there are opportunities in defensive equities and health care and utilities on the credit side, you don't want to be in high yield you want to go up in quality you want to own long-term

treasuries if you look at the 20-year point on the curve, you are getting 4% of enerincome you need to find liquidity and get tremendous amount of price appreciation when it happens you can deliver nice returns on the back end of the treasury market i don't think this is all that unknown what to do defensives as interest rate. >> michael and seema, we will leave it there see what happens still to come, what do uber and video games have in common the potential costly answer is coming up next first, a reminder to join us at the delivering alpha conference the most powerful investment event of the year. we will return to in-person in new york this is happening next wednesday, september 28th. you can scan the qr code or go

to deliveringalpha.com to register the dow dropping 4% last week. s&p down 4.7%. red arrows this morning. we'll talk more about the markets when "squawk box" comes right back

welcome to ameriprise. i'm sam morrison, my brother max recommended you. so my best friend sophie says you've been a huge help. at ameriprise financial, more than 9 out of 10 of our clients are likely to recommend us. our neighbors the garcia's, love working with you. because the advice we give is personalized. hey john reese, jr. how's your father doing? to help reach your goals with confidence. my sister told me so much about you. that's why it's more than advice worth listening to. it's advice worth talking about. ameriprise financial. shh! stealth mode? 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. ♪ ♪

new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today. welcome back to "squawk box. markets struggling again this morning. equities this morning. dow futures indicated down 300 you are talking a decline of 290. s&p off 40 nasdaq down 125. this is after big losses last

week dow down 4%. s&p down 4.75% nasdaq lost 5.5% these are losses on top of losses the red numbers continuing here. if you are watching treasury yields, it is the opposite climbing again 10-year treasury is sitting below 3.5% the 2-year treasury up in the last half hour 3.9% is where it sits right now. below 4% on that one we have been watching cryptocurrency under pressure. it was down 6.5% this morning. that is indicative of the risk-off trade the dow laggards salesforce down 1.5% apple and disney each off 1.2% nike in the red down 1.2%. honeywell up .25%. >> welcome back to "squawk box."

i don't think we can say that often enough i know it was probably left in there and was for when we came back from break. i decided to go with it anyway i don't think we thank viewers enough for sticking with us. >> we appreciate it. >> yes yes. it's time for today's executive edge du jour >> you out-did yourself. >> dozens of videos from the rock star games is grand theft auto 6 was leaked online the hacker claims to be behind the uber data breach the latest game in the franchise is still under development and said to be years from being released videos were posted online. many removed after rock star owner take-two interactive filed claims

we wonder why we have a problem in society >> an 18-year-old. >> grand theft auto 6. if you didn't learn how to steal a card and drive like a maniac >> it is worse than that. >> you hire hookers to distract the police >> hire hookers. you run them over and get your money back i saw that from my 13-year-old cousin 15 years ago and that's why we don't play it in our house. >> i agree with you. >> how do you -- >> it has been a while >> go tell that to our friends and they will tell you there are studies. i'm on the other side. >> strategically ambiguous i'm not sure >> are you not sure? i'm confident. >> i don't think that really happens. >> i think you think a lot of

things are happening in society and a lot of reasons for them, but i would add that into the stew of things that got us this far. >> general decline. coming up on the other side of the break we get you ready for the trading day ahead as the fed prepares for the fmoc meeting the dow off 280. s&p off 38 nasdaq off 121 stay tuned u are watching cnbc. >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure e to our third bark-ery. 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. go. go smaller carbon footprint. go these footprints. go saving energy. emerson technology can help heat pumps replace fossil fuel heating for a cleaner, low carbon future. go blue skies go. go boldly. emerson. this is not just laundry. this is laundry that's smarter than the dial. this is ge profile smarter wash technology. fully optimized cleaning, no more guessing. this is smarter cleaning. this is ge profile. ♪ ♪ wow, we're crunching tons of polygons here! 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

(police radio call) (sirens) (news report) (sirens) (news report)

good morning welcome back to "squawk box. live at the nasdaq market site in times square. the futures are red right now across the board you are looking at the dow jones industrial average off 280 nasdaq off 125 treasury yields right now as we get set to hear what the fed is saying 10-year treasury at 3.4%

3.923% for the 2-year treasury bitcoin in the $18,000 range talk about risk asset. that is a good indicator of how folks feel about risk. take a look at the crypto adjacent names we'll hshow you those as well c coinbase and block all down. let's get across the pond to london where the state funeral of queen elizabeth ii is under way at westminster abbey tania bryer joins us now tania. >> reporter: hello, ainnandrew yes, i'm in front of windsor castle where the kwqueen will mk her final journey. the funeral at westminster abbey right now. at approximately 1:15, british

summertime, the hearse will travel to windsor castle at 3:06, she will proceed down the long walk up to st. georges' chapel a service in the chapel wihich will be attended by 800 it is made up of the households past and present and dignitaries. close members of the royal family will proceed with her inside the chapel and the service there will be held by the dean of windsor. it will be approximately 45 minutes long just prior to the last hymn, there will be a symbolic moment when the jeweler will take the queen's crown and orb and scepter off the coffin and put it at the altar and symbolizing

the end of the 70-year reign the service will end and king charles iii and close members of the royal family will go into windsor castle at 7:30 british summertime, there will be a private burial service. it will be conducted by the dean of windsor it will be private, personal and for family only. there, the queen will be laid to rest with her father, king george vi, her mother, queen elizabeth, with her late sister princess margaret and the late duke of edinburgh prince philip. she will be laid to rest for eternity >> thank you, tania. we will be coming back to you from time to time. we are covering the markets

here we have a couple of eyes on what is happening in the uk coming up, former fed vice chair roger ferguson on the high stakes for jay powell and the markets this week. markets this week. we will talk to heather ure. go production. go faster and safer. as well. you are watching "squawk box" on cnbc get to market at warp speed. go human go. go boldly. emerson.

finding the perfect project manager isn't easy. but, at upwork, we found him. he's in adelaide between his daily lunch delivery and an 8:15 call with san francisco. and you can find him, and millions of other talented pros, right now on upwork.com ♪♪ 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. flexshares are carefully constructed. to go beyond ordinary etfs. and strengthen client confidence in you. before investing consider the fund's investment objectives,

risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

welcome back let's look at the u.s. equities. if you are waking up, there are significant red arrows this morning. dow futures off 258. s&p down 35. nasdaq down 117. no relief in sieght from the pressure in the last week. crypto is down 6% and treasury yields are picking up. big week ahead for the fed with chair jay powell expected to announce the next rate hike on wednesday joining us now is roger ferguson former fed reserve vice chairman and now vice chairman of the business council and cnbc contributor. roger, we're getting ready to come on the show and getting all fixed up with makeup you may not have heard what i

said earlier i noted a change in tone on both sides of the argument last week after the hot inflation numbers. we actually, i think the middle has gotten more elusive and jay powell's job tougher we had people talking benabout need for a full point hike we have a global guy saying we need 1% to 2% increase to get this under control conversely, barry sternlicht said we need to stop immediately. we're on the precipice of a really sharp slowdown. both sides can't be right, roger. i feel for jay powell. where are you on this? >> i'm in the position that says the fed needs to continue to execute the strategy they laid out. i think 75 points is the more

prudent move this time they have to signal the summary of economic projections and also importantly what jay powell needs to do is a in the press conference to stay on the mapath inflation is the clear and present danger here. they have to be prepared and we have to be prepared for what chair powell called pain hopefully a short recession. getting inflation under control is job one and moving up 75 basis points and more to come is a better approach. >> the hot numbers we saw, roger, were hotter by .10% of a point as far as expectation. i guess my question is if you really believe that the supply chain issues that occurred after the reopening from the pandemic and if that is primarily what's to blame here, you could still

say those might be transitory once things loosen up. i wonder whether you think that or whether you really do believe what some other people feel and that is we just lived way beyond our means in terms of fiscal spending and monetary spending and this is deeply engrained and it will take more than a few 75 basis point hikes to get it under control. what do you think? >> i think three things. one, the inflation is many causes one you didn't mention, but primary in my mind is tight labor markets. i talked to ceos and i talked to one last weekend he discussed the labor market tightens and that's driving pricing concerns and inflationary pressures we have to recognize that. secondly, obviously, geopolitical concerns. we we believe oil prices have

coming off a bit, but nothing will stop them from rising again. there is uncertainty there supply chains have loosened up china opening and closing off and on in covid in that country. the inflationary pressures have many causes and they are not clearly and consistently abating. labor markets are still tight. to your second point, we have a period of loose monetary policy. for a variety of reasons, fiscal stimulus as well time to rein that in i think some people thought the fed is a little slow and starting that process. so i think that is the other point. >> okay. >> the era of low inflation. >> we took a hit on that feed there, roger getting back to the labor market i might say, okay, in a vacuum,

the labor market is part of the issue. it didn't occur in a vacuum. the participation right. why is it so low why did we pay so many people so well to stay home through the stimulus that we're talking about and now we debate every day whether we bring back to you to work? it doesn't seem the labor problem occurred in a vacuum what do you attribute the labor shortage or the buyers market? it is great to be an employee. you don't attribute that to missteps by fiscal policymakers? >> i attribute it to a couple of things one is to your point yes, fiscal and monetary stimulus overstayed the need i understand the case because the shock of the pandemic really threw all of us off and we had a

sharp recession and anxiety getting out of that. the other thing is post-pandemic, we saw increase in demanded for services and not much reduction in demand for goods. i think there are policy issues and i think there's fundamental changes in demand. >> they are telling me we have to go. last but not least, maybe we did overdo it a little this year and we haven't started spending this money yet. you have chips you've got the inflation reduction act and the student loan forgiveness you could be talking inflationary effects in years to come in 2023 and 2024. we haven't reined in any of the spending, roger. >> look, i think we did all those for a very good geopolitical and strategic reasons. i think the challenge is for the fed to take that into consideration and raise rates enough to make sure we keep inflation under control and

hitting those other very important societal needs >> you are including student loan forgiveness the $1 trillion on that was well spent? >> i think three things. one is it is not clear how inflationary ha wthat will b there is the expectation of the loans being repaid without getting technical, we don't know the spending effect from the increase of wealth versus cutting back on the repayment. secondly, for a sector of the population getting out from that student debt is problemly the ri probably the right thing the question is the $125,000 for individual and $250,000 for family was a little too generous the issue is not the concept, but where you draw the line for

wh those who benefit from the student loan forgiveness >> roger, we will end it there thanks see ya'. >> thank you coming up, we're going to talk energy prices and troubling predictions for europe and the united states this winter. you can see right now wti actually down by close to 2% $83.47 is the last tick. you can get the best of "squawk box" with squawk pod and you can listen anytime we'll be right back.

welcome back the futures are under pressure

the dow futures off 250. s&p down 33. nasdaq down 106. check out the oil stocks as well these names, most of them under pressure exxon down 2.2%. bp off 2.1%. a lot of this happening on concerns about a recession it's moving every one of the markets. joining us now is rbc capital markets managing director and global head of commodity strategy, also a cnbc con contributor. is that the only story at this point, the idea that we could be headed into a global recession and you're not going to see oil prices come back >> recession fears are weighing on the market right now. also strong dollar because, you know, oil is priced in dollars so there's a concern that that will impact demand as well there's this other story, a pretty strong fundamental backdrop as well and everyone is

going to be watching what happens in china the potential easing of lockdown restrictions there that would be a significant story for all markets. the china story has been really, really weighing on markets everyone thought there will be lifting of the lockdown restrictions over the summer and the chinese continues to lock down millions of citizens. any opening there would be positive >> major manufacturing hub, 21 million people that now are open and you might expect that that would put a little bit of higher -- a little bit of higher numbers when it comes to wti that's not the case. we're down by 1.75%. >> absolutely. i think the story today is the recession concerns but, again, in terms of the physical story, if we see, you know, going forward any sign of a major turn in the chinese policy, i think that would be constructive also we have the u.s. spr release winding down that's another story to be paying attention to. >> we heard the administration say that if oil falls below $80,

they might consider refilling the spr. it's weird to tell people what your numbers are does that set a bit of a floor so people know, if it falls below 80 bucks, maybe it's time to buy in? >> it's a delicate balance on the one hand, they've been saying, look, we're putting oil on the market, we're concerned about u.s. consumers at the same time, though, they've been trying to tell u.s. producers ramp up production so i think that's more of a signal, actually, to u.s. producers, it's safe to continue your plans to put it back to work because we may put in some type of floor. it's the balance game that the administration is doing. >> a lot of people who we talked to who follow the energy markets closely and think that short term, or medium term, you could be back to $120 a barrel where do you think >> the key thing to watch is, what happens in december that is when the eu embargo on

russian oil takes effect you have shipping and services sanctions. it will be difficult to transport the barrels to countries. it's going to be key to see whether this plan successfully launches the treasury department is concerned about a multimillion barrel russian disruption. they want this price cap plan to work because that would allow barrels that are not going into europe to flow into india and china. albeit at a discount but that's the key offset. if that price cap plan is not successful and the sanctions fully launch, then you're looking at a significant disruption i think it's going to be very, very important to see what happens in december. >> one of the things that we keep hearing, governors from new england states have been concerned about heating oil and making sure they can get things delivered. they've been pushing jennifer

granholm to do something about the jones act. that's something that comes up every time prices go up. it's the u.s. law that requires any movement of any of these supplies going from port to port be carried by u.s. flagships that are built in the united states does that seem likely that the jones act could be suspended >> i think the natural gas story, i keep staying this, is the most important story to watch. we've seen this extraordinary run-up in prices in europe as you mentioned, we're also seeing rising prices in the united states and real concerns that particularly in places like new england which depend on natural gas, we're going to see significantly higher prices in winter yes, the jones act is something which is back on the table i think there will be efforts by the maritime industry to lobby against that but i think the other really important story to watch is, because you have lng cargoes going to europe because of really rising prices there, we potentially see some greater

calls for u.s. export restrictions come winter i think that is the sort of stalker story you need to watch potentially. does the biden administration come under pressure not only on export restrictions but potentially for natural gas as well >> that's a huge issue that would impact europe too. >> absolutely. again, i'm not saying that this is something the biden administration is looking to do, but you have heard, you know, conversations in washington about why are we exporting this product if we have rising prices at home? i do think if we have a cold winter scenario, much higher prices on the east coast, potentially that will become another issue in the conversation, export restrictions. >> what political groups are pushing for that is this the far right, the far left >> it's interesting. you've had, you know, some progressive congressmen lobbying -- ro khanna has been a big one advocating for export restrictions i think it's something again that as we move into winter, i

think you could see, you know, both on the republican and democratic side elements coming forward and saying, you have to think about american consumers that would put europe in a terrible bind, but i don't think it's something that can be written off. at least in terms of becoming much more predominant in the conversation in a rising price environment. >> thank you. >> thank you. we got a lot more coming up right here on "squawk box. futures pointing to a lower open to start the week as treasury yields continue to move higher we're going to talk about some of the losers. zoom, datadog, asml and cr crowdstrike.

at ameriprise financial, our advice is personalized. based on your goals, whatever they may be. all that planning has paid off. looks like you can make this work. we can make this work. and the feeling of confidence that comes from our advice? i can make this work. that seems to be universal. i can make this work. i can make this work. no wonder more than 9 out of 10 clients

are likely to recommend us. because advice worth listening to is advice worth talking about. ameriprise financial. power e*trade's easy-to-use tools like dynamic charting and risk-reward analysis help make trading feel effortless and its customizable scans with social sentiment help you find and unlock opportunities in the market with powerful, easy-to-use tools power e*trade makes complex trading easier

react to fast-moving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity good morning stock futures pointing to losses for the major averages as we make our way toward the opening bell on wall street. the s&p 500 coming off its worst week in three months in focus for investors this week, the fed and what by all indications should be another big interest rate hike president biden vowing to get control of inflation we're going to ask the president of the world bank what that will take and a solemn day in great britain as the nation and the

world bid farewell to queen elizabeth ii we will take you live to london for the latest the second hour of "squawk box" begins right now. good morning and welcome back to "squawk box" right here on cnbc. i'm andrew ross sorkin along with becky quick and joe kernen on this monday morning and u.s. equity futures are looking in the red show you where things stand right now. dow off about 245 points the nasdaq off about 101 points. down to 99 points. the s&p 500 looking to open off about 31 points. all of this on the back of increasing treasuries. let's show you where things stand right there. you're looking right now at the ten-year note of 3.94. the two-year closing on 4% right now. joe? >> that's right.

and funeral services continue under way in london for queen elizabeth ii steve joins us now with more hi, steve. >> yeah, hi, joe we're just at the final points of the state funeral now as i speak to you, they are playing the national anthem which, of course, for the first time in 70 years, the words have been changed from "god save the queen" to "god save the king" and king charles and the rest of the assembled great in westminster abbey, just a couple hundred yards behind me are in attendance for that now. joe biden, president biden and dr. jill biden are in attendance as indeed are members of royal families from around the world including the japanese emperor, denmark, sweden and from a variety of other places. other presidents include

president macron, we have the deputy premier of china here in london as well now we are, as i say, in the last couple of moments of the hour-long ceremony i don't know if you've got the pictures in front of you, but we have a shot of the king standing next to the queen consort, camilla, princess anne and her husband, you have prince andrew and prince edward behind them. in attendance. now the queen's coffin will be taken back to the state carriage in the next couple of moments. what we're listening to now is the queen's piper who is drawing events to conclusions within westminster abbey. thereafter the guards will be taking the queen's coffin to the state gun carriage from when it will be transported up on a

processional route with thousands of military, including the royal canadian mounted police will be leading that parade there will be representatives of the commonwealth armies and forces, the army the navy, the royal marines will be accompanying the gun carriage, as, indeed, the royal family it will take a route from westminster abbey going back out of the great west door along horse guards you may be familiar with the tao trooping of the color. and they're onto windsor for the final proceedings for the day for the state funeral. >> very good, steve. we appreciate it thanks very much steve sedgwick in london. let's get over to dominic

chu. he's got a look at this morning's premarket movers if anybody thought we were going to shake off concerns over the weekend, they better think again. >> and a lot of it has to do with interest rates. what we've seen is a weakness in futures that got exacerbated in the last hour or so before kind of stabilizing a little bit. we're still fairly deeply in the red. if you want to watch what's happening with the ten-year treasury yield, that's at the epicenter of a lot of it we had a spike at 6:00 a.m. eastern time towards now what we're going to call the cycle highs right now for the ten-year treasury note yield. the highest in over a decade at this point and the reason why it's important, that spike at that point did cause the move to the lows in equity futures that we saw that have now stabilized a little bit we were down over 300 points with that move higher in rates we're implied lower.

we're going to keep an eye on that what was driving a lot of that action in the premarket to the downside across just about every major index out there, with the more technology growth oriented trade. we're going to highlight some of the names moving to the downside in premarket zoom video is down, paypal, nvidia, apple down 1% as well. we're seeing the continuation of the sell-off over the past week. so watch those one place, though, that is bucking the trend, shares of netflix. they've been beaten up over the course of the last year. well, analysts are now joining a small group of analysts who are upgrading the shares those shares are about 1.5% now. analysts have upgraded this stock to an outperform rating.

they've attached a $325 price target they think it's underappreciated by the street and it will help grow things like average revenue per user and subscriber growth as well. the tech trade very much in focus. netflix bucking the trend right now. i'll send things back over to you. >> thank you for that. we're going to be speaking with world bank president on a new global recession warning in just a little bit. former sec chairman jay clayton is going to join us right here live on the set. so much to talk to him about including markets and more calls for scrutiny of congressional stock trading. stay tuned, you're watching squawk on cnbc >> announcer: "squawk box" is sponsored by bitwise, the world's leader in crypto index funds.

this is not just laundry. this is laundry that's smarter than the dial. this is ge profile smarter wash technology. fully optimized cleaning, no more guessing. this is smarter cleaning. this is ge profile.

welcome back to "squawk box. the futures right now, it's not even as bad as they were we're down 230 points right now on the dow nasdaq, rates headed higher, tech stocks don't like that. down another 101 bitcoin is near lows a lot of talk about maybe the s&p maybe testing its september lows we're not there yet. but there's bitcoin.

andrew, it's almost more doggy lately than tail crypto seems to tell us what the market is going to do sometimes on a monday. crypto over the weekend was -- >> it's our new indicator. maybe it's the dog and the tail or something i'm not convinced that it just moves after stocks it almost moves ahead of them. >> it still may be the tail. >> yeah, compared to market cap and everything else. but it does seem to be sort of -- it sometimes seems to lead risk assets. >> well, one of the reasons is inflation. let's talk about that right now. president biden vowing to get control of high u.s. inflation the president appearing on 60 minutes last night and here's what he had to say. >> first of all, let's put this in perspective inflation right month to month is just an inch, hardly at all. >> you're not arguing that 8.3 is good news >> i'm not saying it is good news but it was 8.2 before. it's not -- i can make it sound like all of a sudden, my god it went to 8.2%.

>> that's the highest inflation rate, mr. president, in 40 years. >> i got that. guess where we are we're in a position for the last several months it hasn't spiked. it's been even >> joining us right now is jay clayton, the former sec chairman, also a cnbc contributor. your reaction to what president biden had to say >> on the one hand, he's right, focusing on inflation is probably one of the most key things for main street america but people don't pay inflation they pay prices. and we should actually start talking in terms of prices if you look at -- let's use simple numbers if you look at inflation being 10% over one year, going from paying 100 to 110, if it comes down to 5%, you're still paying 115 and change prices are still going up. people are focused on prices look, some leading indicators on this, there's some important indicators on this

average household spending is going up 400 to $500 a month that's roughly 5 to $6,000 a year that hurts mortgages, half a million dollar mortgage is going up by a thousand dollars a thousand dollars a month that's going to have an impact on prices. i think we should -- when we communicate to the american public about economics, we should go with things they understand like prices as well as inflation. >> what would you say -- i'm going to put your political hat back on. if this was the situation that you found yourself in, what would you say? what would you say to the american public? >> i would say, look, a very positive thing as far as major economies in the world, the u.s. is the best positioned to deal with the dislocations we have in energy, in food, in logistics. even in inflation. we are the best position to deal with it. tell people that that's good news the bad news is, each one of those is substantially dislocated right now and we're seeing that play

itself out in asset prices and financial instruments. >> we're waiting to hear what the fed is going to say and in terms -- what do you think the fed is going to say, what do you think they should say. we're getting close to 4% here. >> yeah, look, what -- what jay powell, chairman powell said in his last speech was actually important. he was communicating with the american people saying, look, runaway inflation, we know from history that that's really bad you can't plan, can't plan at the household, the business. everybody pulls back okay so we need to get it under control. but he also said that the causes of inflation that we're facing are not just monetary policy there's a lot else going on which to him means you're going to feel some pain. i thought it was a very responsible statement. we're going to play our role to get inflation under control but you have to understand that it's not a surgical instrument. interest rates are not a

surgical instrument. they're a blunt instrument you're going to feel pain in a bunch of places. >> part of the cure adds to the pain too, though you talked about a $500,000 mortgage going up by a thousand dollars a month, that's because of higher interest rates that's because of exactly what the fed is doing that's kind of difficult to explain to people too. we're helping you by hurting you. >> you're actually showing how it's not a surgical instrument everybody who has a mortgage and a home, their payments aren't changing it's people who are new entrants to the market. >> it also means that people aren't going to move it makes it much more expensive to move which means the builders aren't building, there's not going to be new homes coming up because people are moving in different places. >> i also like listening to barry. what he was saying in essence is, the demand destruction is not uniform. it's going to be acute in some spaces and we need to watch

whether the acute demand destruction is going to have -- >> it's already here you're on the board of apollo. do you guys see demand disruption across your businesses >> if everybody knew what the ripple effects were doing to be -- >> are we seeding inflation for 2023 and 2024. we spent trillions during the pandemic people said we needed to spend it that was part of the dollars chasing the supply chain closed economy that we have prices go up they said stop spending. stop spending right now. and even the fed enables spending by keeping rates low and they're sort of in cahoots with fiscal -- since then, we did the chips act, the inflation reduction act and we're doing the student loan for a trillion. are we now paving the way for higher prices in 2023 and 2024 when this filters through? >> if you're saying in some cases do we have one foot on the gas and one foot on the brake, yes. >> that's not smart, is it

why isn't anyone talking about it >> they say these are worthy things they're worthy, but 10% inflation is going to be front and center for people that can't afford 10% inflation. >> which is worse, right you go to that or send the economy into some kind of recession and it gets so deep that we have to start sending out checks to everybody. and everybody goes, what did we just do? >> let's kind of be clear on this, that, you know, fiscal spending, we've always thought of as targeted while we've always thought of monetary policy across the board. but what we saw was fiscal spending drive a huge change from services to goods during the response to the pandemic and we're still recovering from that that shift was huge and it rippled through the labor market >> well, we're trying to figure out -- radiwhy is the inflationt

so low >> one of the things we thought about in 2020 -- you can color me guilty because i was all for keeping people in their jobs, keeping consumers in the economy. if people asked me, i said go. one of the things we did was we got people off the rolls when they're off the employment rolls for a number of reasons, including covid, getting them back on the rolls takes a lot. >> how long does that stay ingrained in the -- how systemic is that because, you know -- >> i think that's a huge question when we look at the tight labor market, the question is, can you get the participation rate up? how do we do >> how much of that is a participation rate, how much of that is an immigration story that's the other piece of this. >> how much of it is more bank accounts that have been more flush that we're running doubt. >> and the leading indicators, bank accounts are now starting to rundown which i think is --

you know, leading indicator. >> before we let you go, i want to get another topic in here which is house speaker nancy pelosi signaled on the floor a vote possible later this month -- i don't know if you saw this -- legislation that would ri restrict lawmakers from trading stocks while in office they wrote an editorial quote saying the following congress tends to oversee others more zealously than it oversees itself which is why an effort to prevent lawmakers from conducting insider trading is as welcome as it is overdo. we've talked about this issue forever, i talked about whether the sec could do it. >> would it keep their spouses from doing it? >> this issue has been around a long time. i'm going to go back to the fed. the fed had this issue come up they came out with their proposals which are fairly rigorous one of the things embedded in the fed policy is a delay between the time you order the

trade and a time the trade is executed and the price you get they have a 45-day delay if you're worried about people market timing and using information, it's usually very short term if i have to put my order in on january 1st to buy and it doesn't get executed until february 14th, the chances that i'm using information of the moment go way down -- >> we haven't seen it yet. >> what about spouses? their spouses are trading very frequently some of the biggest ones that come through and they're beneficiaries of that. >> look, i think that we have had spouses who have had jobs in the financial markets while people have been in government for a long time. one of the ways to deal with that is if they're in a professional position, if they're in a regulated financial institution, there are controls that you can put in place to make sure that information isn't shared and checkings and like. i'm less sympathetic for the person who is the spouse -- the spouse who is sit at home day trade who are has a spouse who

has sensitive information. there's a difference there i just feel that way look, when i went into government, my spouse was working in the markets gave up her job because we thought that that was right. but that's not the right thing for everybody. if you're sec chair, you got to -- you got to do things like that. >> what if you're the head of the defense committee or if you're the head of appropriations or something that's a highly sensitive -- >> i think congress -- one of the things about congress is it can be a two-year job. are we going to make people turn their lives upside down? spouses quit jobs for a job that may be a two-year job? i get it, if you have sensitive information. i think the 45-day delay for members themselves is a good place to start. >> what would you do for the rest of the family nothing? >> i think you can do it with an ethics officers who gives exceptions if you're just trading for your own account and it's not part of

your profession, i'm less sympathetic. you could abide by the same rules. if you have a professional -- >> you're nancy pelosi's husband, what do you do? >> like i said, is he in a professional position or is that -- >> here's the conundrum. i imagine he would tell you this is what he does. he manages money for the family, right? you could say that's his job or you could say that he's doing that as a -- this is why it's such a hard thing to sort of decipher in terms -- is he employed by goldman sachs? no, he's not employed by goldman sachs. somebody who is quite wealthy, you know what i do for a living, i manage our family's fund or foundation or whatever it is. >> nothing is perfect. what i'm doing is putting something out there. if you can manage it and -- does it have to be a 45 delay, it could be longer, it could be shorter. you can imagine -- >> is anybody at the federal reserve now buying or selling

stock? i imagine the 45-day delay vauvaas a result -- >> they have a window. i imagine people say, we're not doing this at all. which is what the goal, in a weird way is. >> if you look through it, it's a very well thought out process because you can do dividend reinvestments, automatic things like that. what it really does is prevent any kind of market timing with respect to fixed income instruments or, you know, with respect to purchasing of stocks. >> let me just ask, following up on the nancy pelosi question, people were asking this because of her trip to taiwan and the massive moves that could have on the semiconductor stocks those are worthy areas that at least give the appearance of impropriety. >> okay. we have a couple of things here. we have the ballot box on a check on all this and disclosure that's an important part of anything we can improve the disclosure process here we have the technology so that

we can -- >> it's not easy to find the dl disclosures. >> it's decades behind the capabilities we can improve that easily, transparency that's one thing another thing is, look, these are jobs where it's very difficult to discern from day to day and in the future what the market impact might be let's start with some improvement and let's not get -- let's not get people -- let's say this, let's not make you ineligible for congress if you or your spouse have holdings in the market we actually want people in government who understand business -- >> but you can have holdings that are broader holdings that are harder to manipulate rather than single stocks. >> no one in my family can, my children can't -- >> we know that. we live with it and make due >> do i love it? no but i get it. >> how are we going to deal with these issues

>> what if you're there 30 years. if you're the head of the committee, you're not two years in. >> that is true. that is true i do think the late execution is a good place to start. let's make it better, let's not go for the perfect >> fair enough >> appreciate it nice to see you, sir thanks >> when we come back, world bank president is going to join us to talk about inflation, global growth and much more he's got concerns about what's happening with central banks right now. he'll lay out those concerns when he joins us take another look at the 10-year treasury right now it's above 3.5%. that's the highest level we've seen sincepr ail 2011. stay tuned, we'll be right back. y to connect to everything from your wrist. [watch: speakers connected.] but to connect to all your clouds, you need more than technology. [watch: 50 feet to pin.] well that's not fair. you need cdw to implement vmware cross cloud services. a portfolio of multicloud solutions. it'll simplify workflows, speed innovation,

and secure all of your applications. how did you get here?! [watch: the backdoor is open.] vmware makes connected multicloud possible. cdw makes it powerful.

welcome back to "squawk box," everybody. the futures this morning under pressure dow futures down by 250. s&p 500 off by 33. the nasdaq down by 115 joe? >> we're watching the shares of volkswagen the carmaker says it's targeting a valuation of up to 75 billion euros for portsche we're expecting more details

today. shares are going to start trading in ten days. you can look at the shares of porsche. you can see up $1.44 this morning. still to come this hour, world bank president david malpass will join us next, though, we're going to take you back to the uk for more on the funeral of queen elizabeth ii "squawk box" is coming right back i may be close to retirement but i'm as busy as ever. careful now. nice! you got it. and thanks to voya, i'm confident about my future. oh dad, the twins are now... ...vegan. i know, i got 'em some of those plant burgers. nice! nice! yeah. voya provides guidance for the right investments and helps me be prepared for unexpected events. they make me feel like i've got it all under control. because i do. ok, that was awesome. voya. be confident to and through retirement.

♪♪ i don't accept this. i can't do this anymore. impossible odds, save the world. i'm done. what do you have for me? a new way to transform our agency. strategy to execution. oh, looks my laces have come undone. a business card? yes, for ey. tech expertise? $2.5 billion invested. impressive. okay, you've convinced me, i'm back. just gonna... get this...

(police radio call) (sirens) (news report) (sirens) (news report)

welcome back to "squawk box. the uk saying good-bye to queen elizabeth ii we'll go across the pond now good morning >> yes, good morning, andrew the queen's coffin is now being taken through london in a procession to wellington arch. there it will be transported to state hearse and driven here to windsor castle where she will have her final resting place

she will arrive here at approximately 3:06 british summertime and at 3:10, the hearse will proceed up the long walk which is approximately 2.64 miles and where king charles and close members of the royal family at 3:40 will join the procession and enter windsor castle to go to the chapel there will be a committal service which will run for 45 minutes. it will be conducted by the dean of windsor and there will be about 800 people in the congregation it will be made up of the queen's household past and present. also members of the commonwealth and prime ministers. there will be a very significant moment when just before the last hymn the crown jeweler will go and take the crown, the orb and the spep to sceptor from the qu

coffin this will symbolize the end of her 70-year reign. then king charles iii and close members of the royal family will enter into windsor castle and the queen's coffin will be lowered into the royal vault and there will be a private burial service for very close members of the royal family to pay their final respects and say farewell to queen elizabeth ii. she will be laid to rest in king george vi memorial chapel along with her late father, her late mother, the queen elizabeth queen mother, her late sister princess margaret and her beloved late husband prince philip, the buiduke of edinburg.

and that's where the queen will lay for eternity. >> thanks for that we're going to be coming back to you, i'm sure, throughout the day. coming up, world bank president, david malpass think about that the world bank that's hard enough he's going to join us live on set for a wide-ranging conversation on the global economy. that figures inflation, the strong dollar and more as we head to break, a reminder, join the most powerful investment event of the year as cnbc's delivering alpha returns in person on september 28th. nice that they don't have druckenmiller on there scan the code to register. stay tuned, you're watching "squawk box" on cnbc this is ge profile smarter wash technology. fully optimized cleaning, no more guessing. this is smarter cleaning. this is ge profile.

welcome to ameriprise. i'm sam morrison, my brother max recommended you. so my best friend sophie says you've been a huge help. at ameriprise financial, more than 9 out of 10 of our clients are likely to recommend us. our neighbors the garcia's, love working with you. because the advice we give is personalized. hey john reese, jr. how's your father doing? to help reach your goals with confidence. my sister told me so much about you. that's why it's more than advice worth listening to. it's advice worth talking about. ameriprise financial. ♪ ♪ wow, we're crunching tons of polygons here! 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

she was supposed to be the one. i used to believe in the one. and then i realized, there's plenty of savings in the sea. what? amazon has daily deals, so every day is a chance to meet the deal that catches your eye, that shakes your soul, that changes your destiny. i'm gonna go check on those tater tots. learn all the ways to save with amazon.

take a look at futures, we are in the red this morning. you're looking at the dow down about 234 points nasdaq off 107 points. s&p 500 off about 32 points. people worry about potential inflation. >> that is the story it's something we've been following all morning long central banks try to stave off inflation, there's a new study

by the world bank that says the globe may be headed toward a recession next year along with a string of financial crises in emerging markets joining us right now to talk about it is world bank president david malpass. it's good to see you. >> very good to see all of you. >> let's talk about this global recession. how severe is that recession what's it look like? >> it's sharp right now. if we think of the second and third quarters of this year, part of that is cheina, but mos of the world, maybe the u.s. is having a softer feel for it. my concern is that it goes into next year, a lot of the factors are persistent, the inflation problem is one of them, low productivity and for developing countries this is a really harmful environment especially as you look at their investment prospects out into the future. i think policy changes are really important, course corrections in order to get more growth, more investment, more

production going, that pulls down inflation. >> global central banks are coordinating these hikes we haven't seen in a very long time for a long time, they were coordinated bringing rates down. what needs to happen you're somebody who is concerned about inflation. if you don't have banks raising rates, how do you handle that inflation? >> we've been used to thinking of macro policies, fiscal and monetary as to stimulate demand or to slow -- they call it tightening in many ways, fiscal and monetary policy have huge impact on output, on people's investment choices on production i think that's where the -- where the opportunity is going forward. to make a shuift so that the whole world knows that your intention is to produce a lot more so far it's all been about restraint. we're going to try to slow -- you know, stop the overheating of the economy but on a global basis there's not overheating. lots of people are really

already in a deep recession. >> so you're talking about supply side, supply more rather than try and damp down the economic growth? >> yes and the tools are there. the fed has a lot of tools and the fiscal side has a lot of tools to be aimed at producing more the u.s. is the biggest economy and so it's the one most stable to add if what you need to add is any measure of output, your biggest economy can do that, china, number two, can do that through policies that actually produce -- >> but the policies that you've seen in the last year have been opposed to what you're talking about. >> the policies are all aimed at restraint on demand -- >> fiscally, we're -- we're not cutting regulations. we're not drilling more, we're not adding to supply we're raising rates. we're not lowering rates which allow people to start companies and invest with -- in capital is more valuable.

we're doing -- >> yeah. >> do you see promise in the uk and the new prime minister there? the prime minister said i'm going to get a lot of the restraints on fracking and oil and gas. we're not seeing anything there. there may not be any until november of 2024. >> energy is an important part of the problem including in the uk if you can make some changes there, that will help. europe is drawing in the natural gas from around the world. it's a critical part of the supply chain because of fertilizer and feeding into yields and so there needs to be changes there to produce a lot more energy. 800 million people in the world don't have electricity at all. the focus there -- and on the regulatory side, that's -- that can -- that's both fiscal and monetary turning to the fed and other central banks, they have a lot of tools that can add to supply.

they have the regulatory tool and they're also right now, they buy bonds. so think of where all the world's capital went over the last ten years it went into bond issuers. and that specifically is not the sector of the global economy that can add production. so there's got to be a change in that and say, look, our future monetary policy is going to be supportive of small business lending. >> the problem with this is they are longer-term solutions. it takes a while for the money to get there, for this to happen you're talking about years of that going out people would look at central banks and say, okay, it's a br broad thing, but works immediately. >> i'll take the other side of that markets respond fast and people respond fast if they see light at the end of the tunnel in terms of there being more production, then prices will go down. right now oil prices are going down which is welcome, except

that's most -- >> because of demand. >> the demand is going down. and so if you -- if you say that you're going to produce more, markets will respond overnight and so this idea of there being a long and variable lag time, i just don't buy -- >> you want the fed -- >> you're primarily doing regulatory policy. >> you want the fed to keep hiking sharply >> i think they -- the rates were too low so they're going to a more neutral level of interest rates. so that's probably helpful but the bigger issue is how do they shift and not just the fed, you know, it's the ecb and the bank of japan that are buying huge amounts of bonds. that channels capital from bank deposits and mutual funds through this reverse repo operations that channels the capital of the world into government and into big corporations and so that's the inequality that we're seeing, the median income growth -- asset prices

went up but not median income. >> you do blame the fed, though, for inequality, effectively? >> the -- the choice to buy bonds is a specific choice of who -- of winners and losers >> when they say that the fed was not responsible for the inequality over the last decade, you take other the side of that. >> he was clear in 2009 and 2010 that the purpose of qe was to stimulate demand so people would buy more, but that was through the asset price mechanism. i think that had its place now there's got to be a way for the central banks to get back to monetary policy that's neutral, that means not holding bonds but all of the central bank -- the major central banks intend to buy more, the fed's got outyear forecasts of them expanding bank reserves at the fed, meaning borrowing from the banks more and more and buying

more bonds that's their -- it's buried in their details. but if you look in 2027, the fed's projection of what it's going to be doing, it will be owning bonds which means that small business loans are rechannelled into government bonds. >> you saw last week the ceo of fedex told jim cramer global -- deep global recession. you're saying the same thing yet, you still want to kill demand, hurt demand even more by -- you think we need to do supply on the one hand, increase supply, but you're okay with trying to hurt demand. that's the only tool the fed has so they need to keep raising rates? >> i think even interest rate hikes can be phrased as part of creating a neutral environment in the world that grows faster and so, look, the interest rates are still very low here and, look, europe is still at zero or even negative and japan has a

cap of 0.25 on its bond yields. >> we're doing it to hurt demand if we're already headed into a global recession, you're just piling on, aren't you? >> i'm not -- you know, i'm not a monetary policymaker on interest rates what i observe is the regulatory policies are massively powerful. you see some of the big -- some of the big ceos also talking about the that, that the regulation is guiding capital toward riskless assets and so for developing countries, i want to come back to that. we have poverty going up and the prospect is that these trends will continue for maybe some years with -- and i'm not so much talking about the fed as all of the major central banks are buying the bonds of their governments. and so that's -- that's got to be viewed as a fundamental change in monetary policy that guides -- >> if they don't, will we see interest rates go up even more

on those treasuries? >> so right now there seems to be a trade-off between, you know -- as you hike rates and you don't get production, of course the rate hikes discourage both consumption and business investment that's where we see one of the big hits bank deposits were down some $370 billion in the second quarter. so -- >> if they're not buying -- >> that's money that's not going to small businesses. >> again, we talk about as interest rates go up, what that means for servicing our own debt as a nation. they're not buyers of government debt what does that do? >> well, the prospects for the fiscal conditions in the advanced economies is pretty bleak. lots more national debt and that means the government has to borrow money from capital markets so there's only "x" amount of savings in the world so we need to have a lot more of it going to people in the bottom half of the income scale than what's happening now

but the policies are set up to still guide it toward asset prices >> wow david, we've got a lot more we would like to discuss with you if you don't mind sticking with us through this bank >> okay. >> i would like to get your thoughts on plenty of things including president biden's new comments on taiwan overnight that we saw on "60 minutes." check out the futures this morning because it's monday and we're back to some concerning red arrows dow futures down by 250. s&p 500 futures off. as a reminder, we want to tell you about getting the best of "squawk box," you can do that in our daily podcast. just follow squawk pod on your favorite podcast app and you can listen to us any time. stay tuned we'll be right back. this is not just laundry. this is laundry that's smarter than the dial. this is ge profile smarter wash technology. fully optimized cleaning, no more guessing. this is smarter cleaning.

this is ge profile. shh! stealth mode? 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. ♪ ♪ striving to reach the ultimate goal of zero poverty takes more than everyone's hopes and dreams. at citi, it takes a financial commitment to companies who empower people to lift themselves up.

it takes funding and building on our know-how to help communities grow. that's how citi is helping create a better future by committing one trillion dollars in sustainable finance by 2030. because it takes everything to reach zero poverty. ♪ ♪

bank president david malpass i want to get your take on china and taiwan this is what president biden said on "60 minutes" last night. >> we agree with what we signed on to. a long time ago. and there's a one china policy, and taiwan makes their own judgments about their independence, we are not moving -- not encouraging their being independent. we're not -- that's their decision >> but would u.s. forces defend the island >> yes, if in fact there was an unprecedented attack >> do you spend time thinking about taiwan, at the world bank?

>> i do spend time on supply chains this is a really important part of getting inflation down. china's giant producer, and they're an exporter. they run a current trade surplus, so those are powerful issues i met last week with their supply chains are diversified, and i'm in favor of diversification of supply chains as people look for efficiencies globally >> as a supply side guy, i have known you for a long time, were you in favor of the chips act? can that be done in a way that isn't corporatism? >> industrial policy, you know, we work in lots of countries around the world and try to get them to have targeted subsidies, not untargeted and not to do industrial policy. as we think about a government struggling with how to create an environment that makes better chips, smarter chips, we need

more engineers in the u.s. china is producing this -- >> you don't like -- is that a yes or no, you don't like the policy you don't like industrial policy >> very hard for governments to choose a way to innovate so i'm troubled by that, and also, you have to recognize that the money comes from global capital markets so you're borrowing heavily in order to put money into specific things for developing countries, that leaves them in very trying, desperate circumstances. it's a crisis in development that we're facing right now. where billions of people really are left without capital as the advanced economies channel capital. >> that's always been the case the developing economies suffer far more greatly than we do. >> not to this size. the magnitude of the national debts of the advanced economies is way beyond, so it's uncharted

territory on that. and central banks prior to 2009 didn't buy bonds and so they weren't the capital channeler they are now now they're the major regulator and the major picker of winners and losers within the global economy. and right now, they're picking the winners are people in advanced economies that have lots of assets >> let's talk about that the world bank's mission is to try to reduce poverty, reduce inequality what do you see happening now in those developing nations >> they're struggling because their fiscal deficits have gone up because of the high energy prices natural gas is not available to them so the fertilizer production in developing countries has gone down a lot. that means farmers don't plant for next season. it's -- i guess one of my themes is my worry that the trends we're in right now are persistent because there's still not an address of this

electricity rates, the energy prices >> one of the difficult things for you -- needle for you to thread at the world bank because we have discussed esg and maybe rushing the transition to renewables that put europe into this position. and we have talked about developing countries and if you were to go hydrocarbon free or get to net zero, that's going to be very, very difficult for developing countries to heat their homes and to continue to have the quality of life that the rest of the world has. at the same time, you've got the s.e.c., the fed, climate -- the green lobby is all over these guys to look at risks that are ten and 20 years down the road and base current policy on that. what do you do >> you're telling me i'm too diplomatic, but let me try it again. you can integrate climate and

development. have greener energy, that means cleaner. right now, people are backtracking into coal europe's burning a lot more coal and so are the developing countries and it's worse than that they burn diesel and fuel oil for their electricity in order to try to keep the lights on you know, another big setback is on education the world leaders are in from around the world we're going to have an education seminar or summit today because the learning poverty is up literacy as the schools closed, not only did kids not get a year worth of learning but the data shows they backslid by a year. we have kids around the world with two years less education, less ability to read, and we're trying to get the school systems to adjust so that they teach to the new level of the kids, which oftentimes is lower. that's a big challenge

food production is going to be a big challenge into next year, but the biggest bottom line is we're looking at the risk of a world recession and the policies, the answers are to get capital to go to where it can be productive and that's not the current policies >> a lot to do my head is spinning. i'm glad i'm not you good luck, david carry on thank you. >> good to see you >> coming up, we're going to talk to white house economist heather boushey to talk about the latest on inflation, the fed, and more. plus, interactive brokers founder thomas peterffy is going to be here to talk about the markets and the state of the retail investor as we look at red on the screen this morning you're watching "squawk box. this is cnbc

oh, that's wrong. what's wrong? your swing. that's terrible... you gotta put your knees into it, put your knees into it. that's too smooth. too smooth? watch this. ♪♪ you try it. ♪♪ better. ♪♪ oh, you gotta move your feet. charles. alright, alright, i'm going. i'm going.

power e*trade's award-winning trading app makes trading easier. 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. good morning treasury yields rising stocks falling we're going to get you up to speed on the trading week ahead. >> and inflation in focus. we're going to talk to white house economic adviser heather boucher. >> plus, the united kingdom and the world saying good-bye to queen elizabeth ii final hour of "squawk box" begins right now.

good morning, and welcome to "squawk box" on cnbc live from the nasdaq market site in times square. i'm joe kernen along with becky quick and andrew ross sorkin u.s. equity futures kind of in the midrange of what we have seen this morning. 200 to over 300 down on the dow. continuing a really abysmal week that we're coming off of after the hot inflation numbers. and lots of talk now about whether the averages test the lows we saw in june, as much of the yield curve tests its highs. talkiing about rates, not principle, not the bonds themselves rates are getting close to some of these numbers 4%, close to it on the two-year,

3.93, and well above 3, in fact, above 3.5 on the ten-year. united kingdom saying a final good-bye to queen elizabeth ii steve sedge wick joins us live from london. >> we have seen a lot of pageantry over the years in the united kingdom, but i don't think we have seen anything like the funeral that we are seeing at the moment for her majesty queen elizabeth. we're looking at pictures now of the procession up to constitution hill, up to the wellington arch now, where the queen's coffin accompanied by a huge array of armed forces, not only from the united kingdom but also from around the comm commonwealth, led by the royal canadian mounted police is making its way around the back of buckingham palace to the arch there at high park corner from where the queen's coffin will be transferred from the royal gun carriage to the royal hearse as

well we have seen extraordinary pictures today from westminster abbey earlier on where a huge number of dignitaries, up to 500 world leaders and dignitaries including, of course, president joe biden and dr. jill biden in attendance, along with others such as the japanese emperor, such as president macron of france, a whole array of european royalty the king of the netherlands, the king of sweden amongst others and a whole array of former prime ministers including boris johnson, gordon brown, tony blair, theresa may, and others besides, including john major. the picture on the screen are showing various regiments of the british army and the royal air force and marines marching up past buckingham palace to the right and green park to the left we can see some of the guards regiments making their way up to constitution hill. the actual gun carriage itself which has been used for the state funerals of all british

monarchs from queen victoria, her son, edward vii, and the queen's father beforehand is being trailed by the queen, prince william, and prince harry. you can see the king flanked by the prince of wales and to the right is the duke of sussex. let me hand it back to you, becky. >> thank you very much steve sedgwick let's get back to the markets. mike santoli joins us live from the nyse more red arrows. anyone looking for relief over the weekend not getting it yet >> no, and market back on its heels again. largely because yields continue to march higher. we're colliding with the fed that has surprised the market with its aggressiveness at times. although i will say after a big options expiration on friday, sometimes you get the hangover on monday and it ends up being sometimes a bit of an

inflection one reason folks have been concerned. this is the s&p 500 spider index fund late last week, it went below the 3900 level you sort of fell away from that, a little up trend from the june lows we were pointing that out all last week. there's not a lot between here and where we were in june. things are starting to look oversold again you're starting to get some of that technical extremes develop the way we had in june, but that alone is not necessarily enough to say we're going to turn around, although it is part of the sort of helpful backdrop as we go through september. take a look at the two-year note, close to 4%. if this were a stock, you would probably say this is a pretty unassailable uptrend yes, it's getting a bit overdone, but you wouldn't get in the way of it translate that to what it means, the 2-year yield is doing that, and it tells you we're in the run away central bank tightening

mode the fed funds rate is seen peaking around 4.4% some time early next week. now, some of the big tech stocks, the big nasdaq stocks, continue to be the main drag on valuations, rationizing what happened in the last two years alphabet is below its june lows. but if you put it up against apple on a two-year basis, they're basically to the same spot but with a different formation. you can look at apple and say it's held up pretty well it's not far off its highs it's doing fine. over a two-year basis, it's more about alphabet having outperformed in the early part it doesn't change the overall story that most of the excess in terms of trailing performance and valuation remains in the cluster of mega cap stocks that have not yet quite given back what they put together in the pandemic >> mike, you're watching yields pick up because the fomc's meeting this week and people are

thinking about what the fed is going to do. it could be no surprise if they raised by 75 basis points. it is les about the meeting and more about the longer term impact and how far they'll go? >> yeah, i think the bond market has been forced to essentially look to what the destination point is, not really what's going to happen this week. clearly, it will not be a surprise at this point if we get the .75% it's about maybe what the color is from fed chair powell about what's to come after that. whether they feel like they're almost at the destination or not. i will point out, too, last time in july, in late july, the market had rallied up into that fed meeting, and you tacked on a little more up side after it on the hope of a pause or a pivot and then gave it all back. in june, market was on its lows at the fed meeting and then it rallied. my point is sometimes the market kind of has a sort of the move happens before the meeting and then after that, you get an unwind >> mike, thank you mike santoli

>> coming up, a lot more on squawk ahead president biden says inflation will be controlled we're going to talk to one of his top economic advisers. >> first, as we head to break, check out this morning's biggest premarket winners and losers you're looking at p&g and mcdonald's and honeywell all up this morning on what otherwise is a down morning. you're looking at chevron, merck, and 3m down 1%, in chevron's case over 2% you're watching "squawk box" on cnbc [watch: speakers connected.] but to connect to all your clouds, you need more than technology. [watch: 50 feet to pin.] well that's not fair. you need cdw to implement vmware cross cloud services. a portfolio of multicloud solutions. it'll simplify workflows, speed innovation, and secure all of your applications. how did you get here?! [watch: the backdoor is open.] vmware makes connected multicloud possible. cdw makes it powerful.

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 good luck. td ameritrade, this is anna. hi anna, this position is all over the place, help! hey professor, subscriptions are down but that's only an estimated 15% of their valuation. do you think the market is overreacting? how'd you know that? the company profile tool, in thinkorswim®. yes, i love you!! please ignore that. td ameritrade. award-winning customer service that has your back.

our internet isn't ideal... td ameritrade. my dad made the brilliant move to get us t-mobile home internet. oh... but everybody's online during the day so we lose speeds. we've become... ...nocturnal. well... i'm up. c'mon kids. this. sucks. well if you just switch maybe you don't have to be vampires. whoa... okay, yikes. oh sorry, i wasn't thinking. we don't really use the v word. that's kind of insensitive. we prefer day-adjacent. i'll go man-pire.

box. the futures right now down 230 on the dow nasdaq down over 100 triple digits in the s&p, down 31 and change. oil prices, as you might examine, tough to get traction when you have individuals like the ceo of fedex saying that he's expecting perhaps a global recession. so oil is down $2.30 almost 3% this morning >> meanwhile, inflation data continues to be in focus for the markets as we wait for tomorrow's fed meeting president biden has been vowing to, quote, get control of high

inflation. here's what high said on "60 minutes" last night. >> first of all, let's put this in perspective inflation rate month to month is up just an incherse hardly at all. >> you're not arguing 8.3% is good news. >> no, but it was 8.2% before. i could make it sound like all of a sudden it went to 8.2%. it's the highest inflation rate, mr. president, in 40 years >> i got that, but dwguess wher we are for the last several months, it hasn't spiked. it's been basically even >> joining us right now is white house economist heather boushey, a member of the president's council of economic advisers heather, good morning to you help us with this. the president is saying that he thinks that inflation is under control, and yet at the same time, the market doesn't seem to think that or the market thinks to get it under control, we're going to be sending our economy into a recession which is worst >> i believe what the president

said was that he is working to get inflation under control, and it is good news that the monthly numbers have not been increasing at a rapid rate over the past couple months. it's good to see that slowing. recently, but we have a lot more work to do, and the president is very aware of that he talked about that last night. i mean, certainly, his focus has been on giving the fed the independence and the room to do their job. they will be doing that, of course but then doing what he can to give families a little bit of breathing room through things like putting in place the inflation reduction act and a host of things he has done over the past year to bring gas prices down, to focus on making sure the supply chains are effective so that goods can get to market in an efficient way. and also making sure to do what he could to lower the deficit. the strong growth that we have seen in jobs and the overall economy is the reason why we have the largest nominal decline in the deficit this year on record so the president has had a

three-pronged approach he's been executing on it, and it's good to see some slowing in the pace in the past couple months >> the market seems to be suggesting a recession is in the offing we heard from federal express last week suggesting a global recession is already here. what is the white house's reaction when they hear a major multi-national company like fedex saying recession is upon us >> so, we get up every day makingsure that doing what we can do to make sure that this economy works for families all across these united states that's why the president has focused so much attention in putting in place the kinds of policies to grow jobs over the long term, that are going to address energy costs in the medium to long term and to keep prices down in the here and now. here's the thing, we are at this moment in our economy where we still have continued strong job growth and continued low unemployment, and households are in a fairly good situation heading into this moment

so we believe that families and businesses have what they need to be able to weather the challenges, but certainly, we're all coming out dploebally of a global pandemic on top of that, this war in the ukraine that has upended global energy markets, these are very challenging times. then you add to it disasters like what just happened in puerto rico where they had no electricity because of a storm these kinds of climate challenges also are in front of us, and that's why the president has focused his agenda so much on shoring up our economy. >> we keep hearing bank accounts, we're starting to get to that point where the amount of cash sitting there just isn't the same we also heard from barry sternlic last week who suggested he thinks things are much wursh and than actually what the fed has already done has effectively made things, you know, has -- he doesn't think we should increase rates at all given where things stand. i know you want the fed to be

independent, but how many rate hikes do you think -- how many rate hikes does the white house want privately or publicly >> so, we will not comment on fed policy that's what fed independence means. certainly, the president and his team are doing what they can to focus on the fiscal side and making sure that we are executing well on the agenda in front of us. but these are all the reasons why the tripar tide of bills, the infrastructure law, the chips and science act and the inflation act are so important these are about making sure we're shoring up our economy we're already seeing positive results from these both announcements and the laws in place, with new factories being announced, and that meaning good jobs for people across the country. so the president is focused on using the tools he has in front of him and the fed has to use their tools. >> heather, glad i get to ask you this i see this bandied about a lot so i'm excited to hear your

answer the administration, biden administration, usually rejects any blame for the highest inflation that we were just talking about in 40 years, blaming it on supply chain issues from the pandemic yet at the same time, again, you take credit for creating 10 million jobs, which was a direct result of reopening after the pandemic you also take credit for reducing the deficit by $1.7 trillion, never acknowledging it was simply from not spending those emergency sums we spent dealing with that pandemic, which you're admitting caused the inflation, i guess, but had nothing to do with these other two factors. it seems like you want it both ways >> we had this conversation last week here's the thing, when the president came into office, the economy was not doing well we were creating jobs to the tune of just 60,000 a month over the three month before he took office and this president put in place a set of policies that fixed the

economy, put it on a better path, got jobs back. we created over 10 million jobs under the president's watch. that is an historic and impressive accomplishment delivering for people around the country. we are not the only country that has struggled to recover from this pandemic. we're not the only country that struggled with supply chains inflation is a global phenomena, as are the high oil prices but here's the thing, this president has done what he could to bring down gas prices as fast as he can. i believe today is day 97 or maybe yesterday was day 97 of straight declines in gas prices nationwide they're down by 27% now. that means real money in people's pockets the typical driver is saving over $60, $65 a month relative to the peak back in june these are real accomplishments let's be very, very clear. had the economy not grown in the way that it did over the past year and a half since joe biden took office, we would not see the kinds of ability of tax

revenues to go up so that we could reduce the deficit nat was not an accident. that was a policy choice it was a choice to get america back to work, get the economy back on track. and as we are, the president has made very clear in a variety of forms, including last night, that he understands the challenge of inflation he knows what it's like when the price of goods that you really need, goods and services, go up. he's been doing everything he can to lower those costs releasing oil from the strategic petroleum reserve, doing what he can to reduce food prices by allowing farmers to do multiple crops. there's a lot of steps he's taken to make sure we're keeping the economy on track >> i want to ask you, it's a geopolitical question but also an economic risk question given we have put the chips act in place. the president yesterday said quite, i think, directly to the american public that if china were to invade taiwan, that u.s.

would send troops. right after that, almost as usual, because we now had this situation happen several times, the white house puts out a statement saying that's not exactly what he meant. there's this idea of strategic ambiguity. what is the american public supposed to think about that, the global world supposed to think about that in terms of how they assess the economic risk of something happening? >> well, i think the american people understand now the economic risk of global supply chains and the challenges facing our country. let's point back to what we already know has happened. an unprovoked war in ukraine has upended global oil prices but that's meant challenges for people here in the united states and the pandemic, which meant that when countries overseas had to shut down a factory because people were sick, and american factories couldn't get the parts they needed, that meant americans couldn't go to the store and buy the thing they wanted it meant maybe they couldn't get

a new car when they wanted it. we understand the fragility of the supply chains. >> therefore, we're sending in troops or not if there is an invasion >> i'm not going to speak to the geopolitical issues. let's keep to the economics this morning. >> but the geopolitical issue creates the economic risk issue. >> and we know that there's always risk. it's why this administration for the past year and a half, the economic agenda has been focused on addressing those risks and making sure that we're mitigating for the american people the chips and science act is about that it's about saying we understand there's still going to be global supply chains but we need to make sure we have that capacity here in the united states. so that when things get tough, when geopolitical challenges happen, americans are not left in the lurch it's about making sure that we're focused on an economy that can deliver for the american people, and that has been the focus of the bipartisan infrastructure law, making sure we have that infrastructure, making sure we have access to the technologies we have through the chips and science act and making sure we're addressing our need for clean energy, which is

as we know, energy powers everything, and making sure that we're putting america on the path, giving industry that little bit of help it needs so those markets can function well for people that has been our focus. that's how you deal with the risk >> the stock market obviously has all these things wrong that's a pretty picture you have painted, but it seems like mortgage rates have doubled in the last year, gas prices are still up probably 60 or 70% from where they were before the president took office. inflation is running at 8.3% 40-year highs. it just -- >> gas prices have come down phenomenally, joe. you cannot deny that that is a -- >> they were $2 and change when he came in they were $2 and change when he came into office >> and we have had a global -- we had a geopolitical crisis that has upended oil markets which is why the president is so focused on moving us toward electric vehicles. >> if you're going to blame everything on the pandemic for inflation, you have to

acknowledge that reopening after the pandemic is why we just got back to basically the job we had before the pandemic, the 10 million just got us back to even >> but we're putting ourselves on a better path now you look over the kinds of things we have done. we have been focused on all of the different kinds of risks you just mentioned and recovering from a pandemic is hard. what we have seen, you know, for businesses is that even a short shutdown can upend their processes, their ability to produce, and you're behind and so what we want to do is put in place the kind of economy -- make sure we're facilitating the kind of economy where these kinds -- that has more resilience so when these challenges happen, you have a little bit more breathing room, a little more room so you don't have to shut everything down so that you don't have these kinds of crises in the future. but certainly, you know, it is true that inflation is higher now than it was before but it is also true that we have seen some signs of abatement in the past couple months and that we're doing everything we can to get that back down and again, that is why the fed will

be doing its job >> heather, quick final question there have been some rumblings about this tentative agreement to keep the railroads from going on strike. it has to still be passed by the members. have you heard anything about where the members are feeling with this, whether those will actually become pacts that get signed off on by the membership? >> i think what is important here is this was a fragile moment for the u.s. economy. the president's involvement, the involvement of secretary walsh was very important for helping to bring the sides together, to get to a resolution. and hopefully we will see the workers take their -- we'll see the workers talk their next step and hopefully there will be progress an important week for us here at the white house. >> okay, heather, thank you for joining us this morning from the white house. look forward to talking to you again soon >> thank you >> and coming up, record high auto prices, higher interest prices, interest rates and lower consumer confidence. what the combo of the three mean in this case for the car

business that's next. first, a reminder, join us at this year's delivering alpha among the special guests, join us next wednesday. back in person it's been a while. september 28th, scan the qr code it's magic or go to deliveringalpha.com to register stay tuned to "squawk box" on cnbc all that planning has paid off. looks like you can make this work. we can make this work. and the feeling of confidence that comes from our advice? i can make this work. that seems to be universal. i can make this work. i can make this work. no wonder more than 9 out of 10 clients are likely to recommend us. because advice worth listening to is advice worth talking about. ameriprise financial.

(woman vo) sailing a great river past extraordinary landscapes into the heart of iconic cities is a journey for the curious traveler, one that many have yet to discover. exploring with viking brings you closer to the world, to the history, the culture, the flavors, a serene river voyage on an elegant viking longship. learn more at viking.com

this is not just laundry. this is laundry that's smarter than the dial. this is ge profile smarter wash technology. fully optimized cleaning, no more guessing. this is smarter cleaning. this is ge profile.

welcome back to "squawk box," everybody. we have been watching the futures and right now you do see the dow futures off by 253 points s&p futures coun by 33 the nasdaq down by 101 of course, this adds to the losses from last week when you had all of the major averages down by 4% the nasdaq was the biggest loser. it was down by 5.5%. those technology stocks are coming under pressure again today. if you want to look at the faang stocks, a lot of this has to do with interest rates picking up we have seen higher interest rates with the ten-year passing 3.5% the highest level since april 2011 that continues to put pressure on these faang stocks as well. most of them down by about 1% with the exception of netflix, which is up by 2.3%. >> now to the auto industry, and why sales could be in trouble. phil lebeau joins us now with that story

hey, phil. >> hey, joe. we have talked for some time about demand erosion, and when we might see that within the overall market and now you're starting to hear more people say, yeah, we're seeing it, or the industry is seeing it. on the lower end of the market lmc automotive out with a new prediction in terms of annual auto sales this year dropping the forecast from 14.1 million down to 13.8 million and they say look, it is on the lower end of the market where you're seeing demand erosion, and it's easy to see why look at the three factors slowing down auto sales to a certain extent obviously, production is the driver right now there's not enough to meet the demand that's out there. but for some people, the record high prices, now the average transaction price over $48,000 that's slowing down their demand rising interest rates adds to the monthly cost, and you have low inscentives now there are very few automakers putting out rebates that

incentivize people to come in and make a deal because they don't have to. they have enough demand in order to meet their supply at this point. their production plans, i should say. so the annual sales rate is expected to come in at 13.7 million. that's the pace right now. most believe that it might end the year a little higher, but you're increasingly hearing people say we're not going to get to 14 million this year. if you look at gm, ford, the new vehicle inventory, currently 28-day supply. in a mnormal market, it would be a 60, 70-day supply. that 28-day supply just a little higher than the low point in terms osupply of vehicles, and you have tesla, take a look at shares of tesla. remember, their sales right now are actually increasing for a couple reasons one, they're increasing production at the gigafactory in texas, in addition to what they're doing in california. and those new ira incentives when they go into effect, they'll still apply for some people or they will apply now

for the first time for some people looking to buy a model y. so that is in tesla's favor at this point, guys >> interesting piece today, phil we're at 6%, i didn't realize. 6% of new vehicles, that's tr tripled. remember, it was 2%. but no one can get any of the domestics, it seems like people are in line, they're not sure they're ever going to get one produced the demand seems to be there to transition, but it's just really hard to get the supply >> the demand is there you're talking about evs right now, joe >> yeah. >> the demand is there, but the limiting factor is production. more than anything else, it is production and it will be that way for at least the next couple years. and at some point, it is price the average ev right now is selling for $66,000. now, it will come down, as you see more mass market models coming out but does it come down to the point where you have people saying, i'm ready to spend

$40,000 or $45,000 on a new vehicle? i have choices when i go electric, or am i still looking at probably going with an internal combeustion engine vehicle. >> i started counting the cars that go by and trying to figure out the number of teslas because it might not be 1 out of 3, but it's pretty darn close actually, i saw, phil -- >> they dominate the market, joe. they have two-thirds of the sales in the u.s. right now. >> dominating the car market, not just the ev market they're everywhere just so many they're very distinctive i also saw my first rivian, phil, on the road. on my life, he smiled at me. he smiled. this truck coming -- it was like gordon from thomas the tank. he like winked at me and smiled. it's a person. >> i know. you're not alone i have had other people say that >> that the car -- it's nice to have a car smile at you. it made me feel good

>> someone is smiling at you >> exactly i hope rivian is a big success because it's a feel-good automaker. have you seen one? >> yeah. >> on the turnpike about a week or two ago >> rivian has a lot of things going in their favor, but they're at low production. they're starting to get some momentum if they can hit the production target, a lot of people look at them and say interesting future. >> what's their production target >> 20,000. >> yeah. >> 20,000. >> lucids are cool, too. they look like james bond or something. the front, right have you seen those? >> yep >> do you notice them? >> of course i do. >> do you walk around if one is parked >> i drove in a lucid. we did that on the air >> driving one that they bring specifically here is different than seeing one.

>> i have seen them in the wild. >> spotting one in the wild. >> seen a bunch in the wild. >> didn't smile. just acted like it was a bad ass, but the rivian is very friendly >> thanks, phil. >> see you, phil >> when we come back, we'll get the inside scoop on the retail investor interactive brokers founder and chairman thomas peterffy will be our special guest. the markets still under pressure dow down65 p 2oints. "squawk box" will be right back. discover sound that can truly move you in the 2022 grand wagoneer. awarded best driver appeal by j.d. power. 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. this is not just laundry. this is laundry that's smarter than the dial. this is ge profile smarter wash technology. fully optimized cleaning, no more guessing. this is smarter cleaning. this is ge profile.

welcome back to "squawk box" on cnbc. checking the futures, down about 350 on the dow similar percentage of losses in the others the s&p and the nasdaq the yield curve, the two-year, 3.934% now as we inch steadily closer to 4%, and you can see the ten-year just below 3.5% and crypto, bitcoin was below 19,000 for much of the session right now, you can see 18,699. you can see some of the crypto

adjacent names that we're calling them excuse me. got a frog in my throat. that was scary it's hard on tv when you get a frog in your throat. >> tickle. >> it is i hope it's nothing serious. anyway >> all right, joining us right now to talk about what's been happening, individual retail investors, is thomas peterffy, interactive brokers founder and chairman, and thomas, looking at what we're seeing with equities coming down in the last several weeks, the market getting rougher, how does that play out on individual retail investors >> well, retail investors -- our interactive brokers customers have been hedging their portfolios ever since the spring, basically. most of them, not all of them. but you know, so they have taken

short positions in futures or have written options against stock holdings and ugenerally cash holdings are at all-time highs at this moment but otherwise, this is a very exciting day for us because today's the first day that you can trade with the event trader, a very simple and easy to use concept introduced today by the cme. it expires each day, and the payout is fixed at $20 a contract the s&p index close about 3850 today. you can buy a yes or a no contract if you are right, you get $20. if you're not, you are losing what you paid forthe contract. there are contracts listed on

the spx, dow jones, nasdaq 100, oil and natural gas, gold, silver, copper and euro/u.s. dollar of course, the whole piece that we will attract people who will become interested in being investors but so far haven't because they would be worried it may be too expensive or complicated or risky so this is a simple way to get your feet wet and try the market without risking much it's just $5 a contract. sorry? >> thomas, let me ask again, trying to get back to the broader markets and what you have seen with customers, what they're doing. if their cash balances are at near all-time highs, that tells us - >> they are all-time highs >> if they're at all-time highs,

it eltells us people aren't getting sucked in to buy the dip. they still think there's more pain to come >> definitely, and i think there is more pain to come, definitely, yes. you know, i expect the market to bottom out around 3300 you know, as interest rates, today, the fed still has quite a bit of work to do, yes and as the rising rates go through the market, there will definitely be slowdowns in consumer spending, especially in discretionary items. and that is the reason why the growth stocks, the tech stocks, have been coming down more than the spx. so definitely, yes >> 3300 is quite a ways from here i mean, we're just below 3900 right now on the s&p

what gets us those next 600 points down, and is that a situation where you think it happens quickly or is this a gradual death by 1,000 cuts? >> i would have thought it would have happened by now but it hasn't. yes, we have to wait for the interest rates to work, the high interest rates to work their way through the economy, because people are not as -- the market is not really predicting yet what is coming it seems to me so yes, if you had just earnings accordingly, and put say a higher interest rates, you could use a pe ratio of about 15, then you get about 3300 dollars >> what could prevent us from hitting that

is there anything, any policymakers could do to ease this landing >> basically, i don't see anything they can do i mean, it's just too late they should have done things a year ago, yes. >> in terms of raising rates >> absolutely. should have raised rates much earlier. they should have relaxed regulations. they should have allowed the production of fossil fuels and all those things, yes. >> so we spoke with david malpass earlier today, the head of the world bank. his big concern is about what happens to emerging markets in all of this. the world bank is focused on inequality and poverty and they think things are going to get quite a bit worse as he also sees a global recession coming what happens in that scenario? is there anything that can be done to help those developing markets or is this going to be

painful for everybody, but especially those at the bottom of the economic ladder >> you know, it's always more painful for the people on the bottom and that's very unfortunate. i don't think that there is something that can be done about it it's too late. we have to work our way through it add to this the fact that the esg considerations, they're just making it more and more difficult. and people who do believe in the climate crisis tell us that we have to really tighten our belts. and that's exactly what we're doing. they tell us that we have to reduce consumption of goods. we have to reduce the garbage we produce, and in a way i agree with that, and we have to cut down on fossil fuels and put

more money into renewable energy >> thomas, thank you for being with us today and talking us through your concerns. it is a pretty bleak picture, but we have seen some bad days recently we'll see where we head from there. thank you, thomas peterffy >> thank you very much >> coming up right after the break, we're going to get down to jim cramer and talk to him about his take on this trading day ahead, as we sit in the red. first, as we head to break, take a look at this morning's biggest premarket winners and losers you're watching "squawk box" right here on cnbc

this is not just laundry. this is laundry that's smarter than the dial. this is ge profile smarter wash technology. fully optimized cleaning, no more guessing. this is smarter cleaning. this is ge profile.

want to get out to the west coast this morning where jim cramer has a great view. he's in san francisco. jim, nice to see you, sir. >> so good to see you, andrew. i miss you >> we do, too. we're trying to understand what to think, though, of another morning with a lot of red on the screen, and we're going to be hearing from the fed later >> i think it's just completely an adjustment again versus the two-year if the two-year goes over 4%, people sell tech it's interesting because the only news we have today is auto zone, and it's good. it would seem to believe there are more say used cars, which would therefore kee pressure off the fed, but it just doesn't matter. we rare in a moment where stocks

are going lower and they're going lower maybe through this month simply because we're trying to adjust for what a stock is worth versus a very simple terrific piece of paper, 4% over the next two years >> does that mean this is a buying opportunity we heard from thomas peterffy, he thinks this is going to continue he thinks it's going to go lower. in which case, maybe that's a good time to do the opposite, or no >> you have to hear from the fed first. i do believe that there is a slowing everywhere i think our fedex interview last week showed it's a little dangerous to keep taking rates up the sternlic interview, a little danger in taking everything up but the fed said there has to be pain if they do 75 and then 50 and 50, we will get to 4, we'll get to more pain, and i think we can't really be as bullish as we would like until that happens. then we will but you can't send tech stocks down every single day on the same piece of information.

however, there's obviously some weakness we need to see more price target cuts maybe we need to see some shortfalls, andrew >> is there anyplace to hide that you think is worthy >> i think there are a lot of places you can hide in health care. i think health care is very good i think th i actually think the banks are good because let's forget about how some of the regionals have to raise money that's a good portion of the market i think some of retail is very >> jim, we're going to see you in just a little bit on "squawk on the street" and i know you've got a lot coming up from the west coast this week, including this you don't want to miss jim's interviews with the ceos of dutch bros on "mad money." throughout hispanic heritage month, we are separating our cnbc teammates and contributors. here is sid wilson >> we know that corporate america has a lot of work to do to make sure that we are fully

inclusive of latinos, particularly on corporate boards, in the c-suites, as well as that tpipeline development fr making sure that latinos are included, especially for latinas. latinas, by himthemselves, woule a g20 country if you just took latina gdp alone, and together, all of us, allies, as well as those of us within our community, can continue toe atosivforce that america needs.

welcome back to "squawk box. oil prices are taking it on the chin almost a 3% move the futures right now indicate another tough opening anyway we'll see what the day brings, down 200 points. we saw jason trener, chairman and ceo of strategus research partners where are you, jason, on the big debate are we really close to a horrific slowdown or really close to a horrific series of

rate increases i don't know whether jason -- i wondered why he was -- it looked like he was, like, distracted with my question he was, like, looking around what is this >> he's been watching some of the things that have been happening with the markets this morning. >> what is this idiot saying but he wasn't hearing, obviously, which -- 8:55, we don't have a lot of time to check him in is he back >> i was just looking. market watch has a story today about how some of the heaviest volume you've seen over the last three years has been seen at the 3,900 level. >> i saw that article. we're ready to test our lows >> the june lows again, just based on the volume we've seen around 3,900 too if you're watching this morning, we are looking at some weaker futures once again dow's been down about 250 for most of the morning. right now it's indicated down by about 204 points below fair value. it's all coming with the s&p down by about 25, the nasdaq

down by 75, and of course you have to add this to losses from last week. >> jason, you didn't hear what i said what's more horrific, horrible recession or horrible series of rate increases >> well, listen, i think there's been very few instances in which inflation got to something like 8% or 9% where the fed was able to bring it down without causing a recession. 1994 is often used as kind of the soft landing scenario, but inflation only got to 3%, so it seems to me the operating assumption should be that you're likely to get a recession in 2023 in a typical recession, earnings fall about 30% and maybe it will be a little bit different this time if -- because of higher inflation, but still, that's not a particularly great development for stocks >> well, it's just that last week, both sides got more stride

and i don't know whether you noticed. we had mark mobius saying we may need a series of 1 to 2-point interest rate hikes and then the ceo of fedex talking about a global recession those two things are diametrically opposed or at least, you know, if we did have a series of rate increases like that, can you imagine that -- the severity or depth of the recession? is it somewhere in the middle? do you think we need a couple of 75-basis-point increases and then we orchestrate what could be construed as a medium soft landing? >> maybe we'll get lucky, joe, but i think, listen, i think once the decision -- you have to go back to the root causes, in my opinion, so once we made the decision to close down the entire global economy, and we fixed that, quote, unquote, with $5 trillion in fiscal spending we didn't have, and an increase in $5 trillion on the fed's

balance sheet, the chances of sticking the landing, i think, went out the window. i think this is the -- the chances of a graceful exit from the amount of, in my opinion, excessive stimulus that we provided for the economy after we closed the economy down, i think, are very low, and so, you know, maybe. there are good things that can happen, certainly. i think peace between russia and ukraine would help i also think it would help if we stopped spending money we didn't have in the united states. i'm not sure the fiscal response over the last year has been particularly helpful, and so i have to say, i'm not particularly optimistic we can nuance this, and i think the fed is in a very difficult position because its primary role is to provide for price stability, and in this instance, i think it's going to be very, very hard to achieve without a recession. hopefully, again, we can get lucky, we could have good policies that can soften the

blow but i also think that we have some bad policies here, particularly on energy policy that are going to make the situation much worse globally. so, i want to be optimistic, but i'm finding it increasingly hard to do so >> so, you mentioned $5 trillion. what is your price tag for what we've done just since we did the $5 trillion, just in the last three bills we've gotten, at least another trillion dollars, don't you think? >> at least. i mean, the last big bill was march -- well, over trillion dollar billf was march of 2021, as we know, and that was $1.3 trillion. now you're looking at between student loan forgiveness and the inflation reduction act, i've seen estimates on student loan forgiveness that range from $200 billion to a trillion dollars and you're looking to 400 or 500 so it's a lot of money. >> maybe that trickles through down the road. some of it might be helpful, but some of it -- >> it helps people, you know

it helps individual people, and i understand that, but -- >> we got to go. >> whether it's the right prescription now, i don't know >> jason, sorry for the slow start, but we got it in. good to have you on this morning. thanks >> thank you >> all right, folks, that does it for us today. we want to make sure you join us tomorrow and by the way, you've got "squawk on the street" coming up next they're going to carry you right there. see you later. ♪ thanks, becky. good monday morning, welcome to sq"squawk on the street," i'm cl quintanilla. cramer is at 1 market in san francisco. central bank meetings, including the fed, investor days, flash pmis, yields continue to climb, ten-year passes 3.5 and that's a fresh decade high. futures pointing to further losses following the worst week for stocks since june. >> treasury yields