ukraine. it's wednesday, september 21st is it fall it might be. it's autumn. "squawk box" begins right now. ♪ good morning welcome to "squawk box" here on cnbc we're live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin and joe kernen it's really the language that we hear from jay powell after all of this. on this morning ahead of that, you see the futures are indicated up by triple digits from the dow you're looking at a gain of 3. s&p up by 12 the nasdaq up by 20. of course, we've already seen the pain to this point you've seen all the major

averages down by 4% or 5% last week those losses have continued this week right now you are seeing some green arrows if you're watching treasury yields, those yields have actually moderated ever so slightly today after, again, being on a tear. right now the two-year is yielding 3.48% the ten-year at 3.35%. but they've yelleded higher steadily over the last couple of weeks. >> let's talk about the fed. as becky said, today is decision day. they want to increase it 3/4 of a point. it will be at 2:00 p.m. followed by jay powell's news conference that will happen 30 minutes later. beyond that, we'll be watching the 2:00 p.m. quarterly forecast for inflation t economy, and the future path of interest rates. fed fupts show the interest markets are stretching toward a

terminal rate by april i think we're going to focus on what he says unless the number's under -- i think it's going to be all in the words, don't you think >> yeah, and we went down yesterday. so i'm hoping once he does that, we'll go up. i mean not that i -- i don't care, but, you know, it's been rough. it's been rough. >> you don't care until you look at your -- >> yes, i do care. i don't have any gold at least check out some jewelry. >> fillings. >> yeah, fillings. check out gold prices. 16 1682 there's a big piece about what exactly is happening there i think it is pretty simple. like mike novavax -- nova graetz said that. you're in tightening mode. maybe gold should have gone up when the fed was printing hand over fist and it stayed at 1800, 1900, but once they get into a position of taking the punch bowl away, maybe that's why it

goes down. maybe more important, what else besides gold crypto below 19,000 now ahead, and just barely above. oil prices, i want to look at the yield curve too most importantly. >> we did already. >> you did okay are we at 4% >> it's slightly -- >> yields are slightly lower you're looking at 4% and just above 3.5%. >> you've got the good boards to look at. there you are. oil's up a little bit. now i'm worried about oil. how much of it are we depleating >> they say they're going to build it up. they're considering it if it falls below $80 a barrel we'll see. >> there it is it's up a little 86 there's a build in inventory like anything else, any build in inventory means the economy is bad. >> what do you want to see >> i don't know anymore what i want to see.

i want to see something good on netflix, and it's been a while that's all i'm asking for. >> energy concerns here nothing compared to what you're seeing in europe. we want to get to that unfolding crisis in europe germany saying it will nationalize one of its largest utilities, uniper. uniper is the country's largest importer of gassing, and it's been hurt by gas inflows from russia it's expected to be a very rough winter for comic-con supers there. in the meantime, the uk, the british government is announcing a multi-billion-pound bailout plan to help companies with soaring energy bills the uk says it will cap wholesale energy prices for businessing for six months those levels would represent a discount of about 50% for the winter contract on electricity and 25% on the gas contract. we're going to be talking much more about these stories in the next hour with jeff currie

but, guy, this is incredible on both fronts. if you're germany, you're saying, we will have to bail them out why not nationalize it because then how do you justify what happens later? you're talking about massive amounts pouring in where does the money come from >> it's pretty desperate at this point. they're looking ahead and saying this is all i can do liz truss will be talking about pubs, businesses that will have to shut down because they can't handle this. they're look eight as almost the equivalent of the global shutdown with the pandemic, the bailout of so many businesses that are going to be in trouble. >> we take a lot for granted our life is pretty cushy plugget in and your tesla is on the way. you have to make sure the people sending it over the cables has something to send you. >> especially compared to this we have a developing story we want to tell you about this morning. russia's president vladimir putin announcing a partial

global mobilization of its mil military it's calling up reservists in what is a serious escalation after serious setbacks and calling for the first mobilization since world war ii, now saying if the west continues its, quote, nuclear blackmail, moscow would respond with the might of its vast arsenal. fed stocks trading higher on those comments and we're in a more precarious place than we were yesterday. >> isn't it crazy to hear this story with the militarization of putin, calling it up for the first time since world war ii, hearing of the extreme measures they have to take with gas in europe and knowing the fed is going to hike rates and you're looking at the dow up about 91 i guess that tells you how far we've fallen. >> how high we've fallen or -- i mean i would put this at a high risk, but maybe the markets are saying clearly not a high risk on a relative basis to all the

other issues we're contending with. >> i think it's hard to read exactly what putin's thinking or planning on doing. >> i'm trying to figure this out. i don't know if you guys saw it. adults under the age of 65 should be screened for anxiety disorders, and all adults checked for depression i just -- once you hit 65, either they don't care that you have anxiety after that or they just figure you're already so -- it's like you're so gone it doesn't much really matter they say under 65 we're going to check you. after 65, we don't care. >> no. i think -- >> what are they saying? >> look. this is the result of the extreme anxiety so many people felt during the pandemic, especially among women, and i think it's especially among women who had school-aged kids who were dealing with some of these things too. >> that's what you're attributing the age cut-off to. >> i thought you were so much

happier, joe i'd say you're so happy -- >> honestly, i think that's it. >> you feel good in your own skin. >> look at the anxiety level in general between us. >> unbelievable. >> it makes a lot of sense but they aren't basing it just on us. >> on you. >> are they? >> no, no. >> look at it. it tends to be people -- >> what am i chopped liver? i think i'm anxious today. >> anxious that you don't matter. >> i'm anxious that they don't really think that -- they don't give a crap about my anxiety. >> you know what the eskimos do with people over the age of 65 they ship them on out. >> did zeke emanuel come up with that he's getting close to 70 he's like, what did i say? yikes. just to make obamacare work >> i think people who have school-aged kids probably had much higher levels of anxiety in the lockdowns. they saw it skyrocket. 25% of men will at some point in

their leaves deal with anxiety, but it's much higher levels for women. >> what time are we supposed to be out of this block 6:08 do we have to be out by 6:10 anxious. i can't do it. i can't even face it. coming up, what the feds want to -- we've never lost a patient. if you're in the operating room, there you can be a little ans she. nothing has ever happened here we'll hear from fed chair jay powell this afternoon. first as we head to break, check out the biggest winners and losers stay tuned you're watching "squawk box" very clammily on this very calm wednesday u'ating cnbc we'll be right back. >> announcer: this cnbc program is sponsored by truist wealth where meaningful relationships matter most. rk.

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all right. welcome back to "squawk box," everybody. you're looking on this fed decision day at green arrows in the futures. dow futures are up by 86 s&p futures up by 9. the nasdaq up by 11. and, by the way, this follows some moderating from the yields in the treasury market those yields have come back down ever so slyly. you're looking at the ten-year at 3.54, the 2-year at 3.4%.

this is all due as the fed meets at 2:00 p.m. eastern today jay powell says we're likely due for a bounce in risk assets. let's brick in megan graper. megan, this is not you making a positive call about the markets for the year you just think we've seen so much pain recently maybe we're do for a bounce, right >> that's exactly right, becky fed days have been overwhelmingly positive for markets over the course of the year if we look at the data, the market has typically rallied on the meetings with the exception of jackson hole. we've been four basis points tighter.

you look at how sharply the markets have priced heading into this meeting not only have you seen this, but this relentless rise in rates that has really defined us for the better part of the last several weeks. 2-year treasury is headed for the biggest since 194. treasury, the highest levels since 2011 in my eyes, we are due for a bounce i think we get another one of these relief rallies that react toward reinforcing that work we're headed in the right direction. but i also think it's likely to be short-lived as the market sort of reawakens to the reality we aren't anywhere close to the 2% endgame, and the long game is where the market resides for most of the market. >> that sounds like a pretty reasonable expectation if this meeting goes as plan we're expecting 75 basis points. what if the fed tries to shock the markets and throws in a

100-basis-point hike or if powell just comes out -- fed chairman powell comes out and says something that catches the markets off guard. i don't know what he could possibly say but what about those what-if scenarios if there's some sort of surprise? how do you think the market reactses >> we've had a global reality check if you look at how it's played out over the last couple of weeks i think you have to look at how quickly the market unwound that soft landing narrative we saw post-cpi, to have a lens in terms of how they're positioned heading into today's meetings, and while there's some probability of 104.5%, i think that's quite aggressive in our view relative to where we stand. we're still calling it 75. we're in the 410 camp for the terminal rate. but i think the central banks have been nothing if not resolute powell has remained firmly on message. i think we saw that galvanized by some of the others as well.

i think they're going to be loathe to repeat some of the mistakes of july having now regained some credibility. i think it might be challenging, but i think they're going to be hard-pressed with the jackson hole script. i think 100 is likely to be perceived as a bit of an overreach mostly because, you know, that monthly data is backward looking and it's in the context of policy that also lags i think we've seen that in the discounting of expectations which are still well off the peak i think inflation break evens have been echoing similar sentiments i think the chances are remote it's a step too far. that's despite the fed's overarching intent i think it would be a negative catalyst and create some misfortunes if they were to proceed down that path again, it's not a base lynn

expectation. >> we've been talking in the last couple of weeks how the stocks are down by 207 from its highs and you've got the nasdaq down about 30% from its highs. the two-year note starts looking pretty attractive at 4%. at least you can hold onto your money and maybe make a little, and it's guaranteed at that. what's it look like in the investment grade credit markets these days how much do companies have to pay in order to entice people to come into it and is it a better bargain than the equity market at this point? >> the good news is it's lightened up risk. they were likely to generate some volatility. in talking to investors over the course of the last several days, i think what's pretty clear to us, they're positioning to buy a pullback and as you suggest, the yield component looking at underlying treasury moves is contributing

to usa the credit index. we've seen signs of investors stepping back in it's clear in the secondary market we've seen net buying over the course of the last week as investors step in to some of that weakness, and i think it's been evidenced by the primary market where we've had supply since labor day. average over subscriptions are higher than we've seen since march givetown context of these added valuations you know, barclay has led a deal for walmart just out of the gate it because $20 million order book for a $5 billion deal and we're seeing that play out on both sides of the pond we did a deal that made 14 euro

book. >> what were the yields? >> sorry >> what was the offer? what were investors getting for walmart and medtronic? >> sort of safe haven places you've got a three-handle on your coupon. you could hide out on the front ends and you'll get yelleds and on the long end, a pickup of closer to the 4%-type level. compelling opportunities if you're trying to preserve gas and looking for down trasd on the global bid for investment grade. >> meghan, thank you meghan graper of barclays. we appreciate it. another major u.s. company facing a union push. we're going to bring in the details zbleect alpha, the most powerful event of the year in person in new york city, wednesday, september 28th. you can check it out by going to

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no wonder more than 9 out of 10 of our clients are likely to recommend us. ameriprise financial. advice worth talking about. welcome back to "squawk box. time for today's executive edge. home depot workers at a store in philadelphia have filed papers to hold a union election it would be the first time in an entire home depot location what started at amazon and we've now seen at starbucks and traveling to other places. >> it started with the model t,

the autoworkers. >> sorry the latest big push. in the meantime e-cigarette maker juul is suing for the support of the ban on the products from the u.s. market. juul wants to see scientific justification for that ban, but i think a lot of what happened at the time was the marketing around it. they were marketing these flavors to children behaving badly, and part of that ban, a huge part of it, the reason it started, is kids were picking up vaping or juul at such high levels. >> do you guys see it around >> who >> do you see smoke rising from people that you don't even know where it's coming from >> i think they're smoking pot. >> that's a lie. oh, you can smell that it smell like it might be really good i don't know a lot about it. but it smells like it might be really powerful stuff. no, the juul, all of a sudden i'll look at someone and it's like they're a drag snoon is

that different than vaping >> i don't know. >> i'm showing my own ignorance, because i don't know. >> boomer. boomer wannabe when i see it, i'm wondering don't start. don't start. a big nate here at cnbc. it's the season premiere of "jay leno's garage" with a special guest, elon freakin' musk. >> it's cool. >> it's so cool. >> this is our starship. this sit on top of the booster the ship is about 165 feet tall. >> i don't think anybody has any idea how big this is. >> yeah. 30 foot in diameter on the inside. >> when you see it on tv, you're watching it from half a mile away you're sending the empire state building into outer space basically. >> yes exactly. the payload area has more volume than a 747 we can get closer if you want. >> yes, can we get a little

closer >> the new all-star season kicks off tonight at 10:00 p.m. eastern only on cnbc. >> i heard him talking he was on with shep smith and he was talking about it and said the thing that blew him away was while they were sitting there talking, you'd have engineers come walking up and say, excuse me, elon, we're a little off with this, and he was doing the calculations in his head and saying fix it this much, adjust it that much, as he's talking to leno with the cameras and things going at things. >> i've got agents who hose him down in the mediterranean and are like this with him where's my interview with -- i don't -- do i need to pay you more is itpossible to pay you more per month and get nothing. >> but you digress. all right. when we come back, patagonia's founder grabbing headlines in recent days for his decision to give away his company. we'll talk to patagonia's ceo

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back to "squawk box" live from the nasdaq market site in times square we're up a little. tough day yesterday. very tough fed we'll find out 75 most likely that will be a shocker does he want to show us that he's tough that he's got the nerve to do 100 basis points i guess that's a possibility what do you think? >> i think that's why he ripped up the speech. >> 10% what's the possibility of 100 basis points 110? >> probably. that's not bad. >> what do you think >> higher.

>> the market's gauge at 20%. >> i'm closer to 20%. >> even though we heard very strnly and the ceo of fedex say the world is ending. >> i city think it's a likelihood of 75. >> there's the treasury yelled can we just get to 4% on a 2-year when's the last time we saw the yield curve? >> 2011. >> thank you rhetorical, but thank you. then the treasuree yield, 3 president 54. let's talk about what's turned into a zeitgeist story. patagonia's founder transferring all of the ownership of the company to a trust which will help fight climate change. joining us in the studio is pat ghosny's ceoing ryan gellert nice to see you. this is a story that's almost taken over the country by staor. here's family who says we never intended to be billionaires.

tell us the story behind the story and to the point we were talking about even during the break, the idea that the whole country seems to be somewhat mesmerized by this in terms of the number of headlines about it. >> as we were talking during break, i am as shocked as anyone people need good news, and when i've read comments online and on social media, some people don't seem to have a close relationship with patagonia said i just got emotional reading this this morning. it's pretty shocking >> how did this happen >> a couple of years ago we had conversations, a couple of years ago, and yvon and his family made it clear after thinking for decades, what are we going to do with this company we built sth we need to find a solution for that. >> what do you think of the company itself yvon has run it as a private company. almost perverts the managing of

a business like. this some worry when you're not a private company out to make money necessarily, that that might, kwoes/unclose, change the dynamics around it. >> i think what people fail to understand about patagonia is we're unapologetically a for-profit business. we're skpleemly competitive about the business we focus on making high-quality products, standing by the product for the use of the life of it, and we compete with every other company in our space aggressively i don't think we've lot that instinct. >> do you think that's changed your shiftal all even compensation, pay over time do you think that's going to become an issue? >> no, i don't the fundamental position -- you mentioned the chouinards have given it away two a trust. there are two trusts the first is a full trust to

make sure we continue to run the company according to the values and the other is the holdfast collective i think this whole thing fails if we don't continue to run a competitive business, and included is that is taking care of our people. >> i think the question is who sits on the boards of each of the trusts, especially the one looking over the profits that matters. >> that will evolve. right now it's the family and some of their closest advisers. >> i even got a question around ta taxes. whether they should be taxed or not taxed. sometimes they're taxed because of us. the bayis structured and there's been confusion on how it was rolled out, this issue to some degree, it means there are no capital gains taxes paid

built on the empire. how do you think the country should feel about that, and how does the founder feel about that >> it's been discussed quite widely over the last week. it's something we have antic anticipated. the founders paid 2% on it. >> that was about $2.5 million. >> correct i said two things number one, we've got a history of always paying our taxes we're very much a company that believes in that, and we're v sidestepped that >> was the tax calculation at all part of the -- >> never. >> -- thinking in terms of the structure of this vehicle? i have to assume at some level there has to have been some contemplation of it. >> never a conversation in two

years. with us as we explored options and ultimately zeroed in on this combination of things, absolutely, we were not. it was not lost on us, the tax benefit, via the 501(c)(4), but for the family it was clear from the beginning there were two goals they were focused on, create a structure that would affirm the integrity after cash flows. >> i thought yvon said in "the new york times" that part of this was they looked at other structures and couldn't do it the way they wanted with other strung turs, partly in large part because of what it would have done. >> we looked seriously at taking the company public. >> you would have lost control of the company. >> no. we would have lost control of the company by selling it publicly had we taken it pub look or sold a minority that wu going to transfer more into it, we felt like we had little confidence

that the integrity of the company would be different. >> your company stands for something in a very meaningful way, i think i'm curious, how pinmany peopleu the company versus what they think it stands for. i ask because i think there's a consumer shift we had a guy on yesterday who said companies have too much purpose and shouldn't take social purpose into consideration at all i'm sort of curious about what you think about what's going on here. >> the way i think about that -- amd wand was running our

business people come to the brand through sport and product. great. we're prout of what we make and what we stand if if i think one of the thing i found interesting is in the axios brand reputation poshlgs we do well on both sides of the political divide that's encouraging, a little bit surprising, because we take positions with the environmental consistently and vocally i think what i take away that. do. >> do you think all companies can do that or spechlg the patagonia. we had letters yesterday. >> they didn't go public. >> no, no. and then the question is can you do it? by the way, do you think public companies can do it, should do it >> two things.

in this world it's increasingly difficult to fake it, so i think companies that don't have a deep commitment to thinks they espouse, i think it falls apart pretty quickly that's the should you fake it? i think people see through it. >> is the implication that most of these companies are faking it >> i think a lot of them are, yeah, i do. >> you don't have a problem with a company that has a deep commitment to earning profits for shareholders, employees, people that pay taxes, all those things we know capitalism has provided us with the incredible life that we have. >> norj almost i do have a problem when it comes at the end expense. >> we could get into a much

longer concentrations. you will see pain across the planet that you would along no to see we're starting to really live with the visit impacts of the climatological crisis. >> when do you think india and china, ramping up coal, when do you expect to see the efforts of your founder actually start to impact the weather, bad weather we're seeing >> i think it's a bit of ridiculous question, so i'll sidestep it. >> all right. >> thank you for joining us. it's a great story thanks again, we appreciate it. when we come back, the ceos of the biggest banks heading to the hill today we're going to talk about their expect testimonies next. a reminder you can get our daily podcast. you can put your camera right on

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all right. welcome back, everybody. u.s. equity futures this morning are still higher, a little lower than we'd seen earlier dow was up by triple digits. now by 22 point. the nasdaq up by 2.5

the fed is going to be making its decision today on interest rates. that's just one of many things we're watching this morning. joe? >> all right top executives from seven of the nation's largest banks are going to testify before congress today. among the ceos, jamie dimon, citibank's jane fraser, bank of america's brian moynihan and wells fargo's charles scharf will appear. according to the testimony, dimon will warn congress of economic storm clouds including high inflation, supply chain disruptions, and declining consumer confidence, financial services committee services representative jake auchincloss will join us to talk about it at 8:00 a.m. eastern. checking on the crypto ahead of today's fed meeting, a remre reminder to join the conference. among our special guests, aisle

sit down with stan druckenmiller. stay tuned, you're watching "squawk box" on cnbc

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welcome back to "squawk box. in corporate news, stitch fix sliding in the shares. take a look at this. they just reported a larger than expected quarterly loss. the company forecasting a weaker forecast they expect sales to continue to fall over the short term, it says, as the number of active customers declines it's important to note its market capital southbound $500 million, off by about 7% this morning. talk about cryptos, yeah. >> crypto's been -- it was below -- i'm talking about bin ccoin

i joining us now is dan morehead, panettiere ya capital founder. d dan, can you -- are you using fundamentals to explain the action in crypto >> well, i do think crypto did get caught up in the global macro sell-off and there was a bit of excess leverage in the system through may and june. i think most of that has been worked out and in the next few months, crypto can start trading independently. >> both gold and crypto -- the scarcity worries, where we were during the financial crisis and some would say continued all the way through the pandemic, that all that dollar printing is bullish for things like bitcoin and gold

when the fed is in tightening mode, we're headed the other way. just by definition, people start -- dan, it's down -- bitcoin is down from over 60,000 to 18,000 -- or 19,000 you need to be prepared. some stocks do that too. i think zoom is down more than that obviously, it's hard to just assign a clear value to crypto >> yeah, i think the important thing to keep in mind here is crypto is such a disruptive thing that's going to change so many aspects of our lives over the next couple of decades it's in a secular bull market and it does get caught up in these cyclical downdrafts of risk assets. but i can see a world from now where risk assets might be struggling and that story is hundreds of million dollars of people use block chain today. i think in four or five years, it's going to be billions of people and the way to value thing is supply and demand

if you have a billion people who want to buy a fixed number of coins, the price probably goes up in the meantime, what do you hear in terms of the regulatory landscape in the united states, for example, and how do you prepare for that gensler is not going to be there forever. neither the makeup of the senate and the house, who knows but what do you expect down the road is it positive that we get some -- we finally understand exactly what regulation looks like, or is it going to be detrimental to crypto when it finally comes? >> you have to view it as a glass seven eighths full some agencies already ruled on crypto, and all of those rulings are the best possible rulings. the only one left is the s.e.c it would be helpful if they gave more guidance on what is a security and not a security and hopefully within the next year or so that will come out. >> do you foresee any -- if we

were to test more lows, are we going to see a systemic issue with some companies? are they on the edge right now i won't mention any names. there's a lot of people who are leveraged to crypto, a lot of companies. >> my sense from having traded cycles for 35 years, we were pretty much through the worst of it that was four months ago that some of the companies hit the wall when you have a market down 75, 80%, you add any leverage on that, it's going to be tough i think most of that has already washed out and a really important point is, we all are used to using bitcoin as a poxroxy for block chain there are a lot of interesting projects and a lot of them have done well. and a cool stat is the percentage of our entire market hit a record of 43%. and over the last five years, the average of that was 20 that's really the story is what

bitcoin and ethereum are just a bit off their lows, there are a lot of cool projects that are way above their lows >> interesting so you would buy a basket and which ones would you include >> i think that's the most important thing. when the internet came out, you didn't buy one internet company, you bought 20 or 30 interesting things there are very important projects, but there are a hundred other really important projects to get exposure to the space, it's best to have a basket of assets in the space. >> dan, thanks appreciate it. we're all watching what finally happens with crypto. i don't know -- it's either worth $500, bitcoin or 65,000. it's somewhere in between -- would you agree with that? somewhere in there. >> i think in the long run -- >> 100,000 >> billions of people are going to use it, it's going to reduce

all the friction, all these very, very valuable financial services will be replaced by web three versions it's going to be very valuable. >> all right we shall see >> thanks. >> thank you. coming up, we have two big hours ahead. breaking news on the mortgage market, plus this morning's top stock movers defense stocks getting a big boost on exhcomments from vladir putin. right now things would open up a little bit higher. nasdaq looking to open 14, 15 points, and the s&p 500 looking to open about 11 1/2 points higher stay tuned you're watching "squawk box" and this is cnbc

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no wonder more than 9 out of 10 of our clients are likely to recommend us. ameriprise financial. advice worth talking about. good morning, stocks under pressure yet again as treasury yields continue their climb higher futures, this morning, pointing higher too of course, it is decision day. the fed set to announce its

latest policy decision followed by a news conference with jay powell. the uk unveils a bailout for higher winter bills. the second hour of "squawk box" begins right now. ♪ good morning welcome back to "squawk box" right here on cnbc we're live in time square. i'm andrew ross sorkin along with becky quick and joe kernen. take a look at u.s. equity futures. we have green on the screen this morning slightly we'll see where the fed winds up today as we all arwait that 2:00 meeting. the dow up 94 points, nasdaq up about 11 points, s&p 500 up about 9 1/2 points

all of that after we have taken some wild dips ahead of those comments take a look at treasuries right now. we're going to show you the ten-year note as we speak. you're looking at 3.3544 and let's look at oil given the energy complex and what's taking place there. we're at $86.41 when it comes to wti crude. we've been looking all the time now, i guess it's a regular thing, we do it regularly. crypto, bitcoin sitting at 19,109 dollars the fed expected to hike rates by three quarters of a point today. that would be the third such move in a row. the decision is due at 2:00 eastern time it's followed by a jay powell news conference 30 minutes later. investors are going to be closely watching the 2:00 p.m. release of the fed's quarterly forecast for inflation, the

economy and the future path of interest rates, perhaps more than whatever number we get. unless that number is wildly higher or lower. the markets are pricing in a terminal rate of 4.5% by april >> individual names, we go to dom chu for this morning's premarket movers. >> the stocks we're watching right now have a lot to do with some of the activity we saw overnight given the comments from vladimir putin, the president of russia, in his efforts to perhaps escalate the war in ukraine for that reason, many of the biggest defense contractors in the united states, those stocks were on the move higher and right now in the premarket, you're seeing that markedly play out in the biggest names out there. raytheon technologies up 1.5%, lockheed martin up 2.5%. l3 harris among those stocks catching a bit of a bid right now. will they lead to more arms

manufacturing, arms sales? watch those defense stocks andrew mentioned the big watch on the fed this afternoon for the 2:00 p.m. eastern time rate decision maybe a foregone conclusion, maybe not. many of the bank stocks are in a little bit of a holding pattern. relatively to the downside right now, interest rates are a key focus right now. jp morgan shares down. similar percentage declines for bank of america, citigroup, goldman sachs and morgan stanley. watch that as we head towards 2:00 p.m. eastern time and one analyst note that is catching a little bit of attention this morning is on the fintech side of thing. it's paypal shares those shares right now higher, just about two-thirds of 1%. paypal holdings is getting put on the u.s. one list that's the equivalent of their conviction buy list. they've removed visa

both stocks remain buy rated but there's a little bit more conviction in that trade you're seeing a little bit of a bid there. watch paypal because, of course, it's lost about two-thirds of its value since the highs that we saw this year it's interestingly enough, from june to where we are right now, rallied by 35% we'll keep an eye on those stocks, joe. i'll send things back over to you. >> paypal was a pandemic stock, dom. >> you know how much stuff you were buying online -- >> it's got a great future when you're locked at home, it's a good future. it's not a great future. >> i would like to see a longer term stock, go back three years. >> longer term chart >> probably goes up and down >> it's below where it was prepandemic. >> but it is below to becky's point. >> i guess more competition too. >> that just shows you there's stocks and then there's, what,

inherent value the tweem may never meet. >> all right the weekly numbers on mortgage demand out just moments ago. i'm almost afraid to ask diana olick, but what's the damage >> i'm going to blow your mind mortgage application volume actually increased last week for the first time in six weeks. that according to the mortgage bankers association. instead, it may be these abrupt swings in rates and uncertainty in the overall direction of the housing market the average rate on the 30-year fixed for conforming loans increased to 6.25% from 6.01% for loans with 20% down and that rate was 3% one year ago despite that, though, refinance applications rose 10% for the week at they were still 83% lower than the same week one year ago. part of that may have been due to the holiday adjustment the previous week for labor day. it also may have been that the

very few borrowers remaining who could benefit from a refi finally got off the fence seeing that rates aren't coming down any time soon. mortgage applications rose 1% for the week but they were 30% lower than the same week a year ago. i couldn't read too much into that week bump higher. buyers are seeing one of the least affordable market in history. >> diana, this sounds like capitulation, i better lock it in now, it's not getting better. >> exactly >> wow >> right i mean i think because mortgage rates came back down in august towards 5%, people thought, oh, they'll come back again. but now the writing is on the wall. >> capitulation at least in one market, i guess that's good to see. diana, thank you. coming up, we have president biden addressing the united nations general assembly it's happening later today russia and inflation will be in focus. we're going to preview his

comments after the break let's get a check on the markets. looking at some green. dow up about 80 points "squawk box" coming right back after this >> announcer: this is cnbc program is sponsored by baird.

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morning, in a rare national address and his first since the start of the war in ukraine, vladimir putin announcing a partial mobilization of his country's military this morning calling up reservists in what's seen as a significant escalation after a series of military setbacks and calling for the first mobilization since world war ii putin says if the west continues its quote nuclear blackmail, moscow would respond with the might of its vast arsenal. we have a lot more on this story as it develops from an economic perspective, defense stocks moving on this news this morning. >> and the president will be addressing the united nations general assembly later today here in new york city. joining us now with a look at what to watch is mike allen. co-founder of "axios" and coauthor of "smart brevity". we will talk about -- here is -- here's what i'll say, and i'll bet you you identify with me on this because this is -- it looks

like a great read. the first book i read about journalism was shorter, sharper, faster >> too bad nobody listened. >> nobody did listen when i write i try to. subject, verb, no commas, no dangling -- right? and if someone is at home doing the dishes, they can understand what you're saying so i understand at least for broadcasting but you think across all media it should be short. >> absolutely. and if you're -- >> that was my question. it was four minutes long >> you nailed it, joe, as always if you're running a company and you're not thinking about the cadence and tone of your communication, you're doing it wrong. if you have one person working remote, you have to rewire how

you communicate. the book, it captures what we learned in 16 years of leading media companies. and what we found is that if you can say something sharply, that means that you have a sharp strategy and sharp thinking. the other way around, the person who just talks, just goes on, like, that's usually foggy thinking, foggy strategy. >> we introed this i'm glad we talked about that. we got the book out of the way how do you think president biden is going to do in terms of following the -- what's he going to talk about at the united nations? >> we're going to hear a full-throated defense of the west's approach to ukraine but here's what i would watch for is i think you can expect to see president biden go after putin on attacking the rules-based order, a systemic

global argument. and what's fascinating about that is it connects with what i think we're going to hear more and more from president biden domestically president biden, i think the -- our reporting shows that the independence hall speech is the beginning, not the end and i think that you can hear -- expect to hear him talk a lot about what they -- internally, their euphemism is illiberal enforcers. you're going to hear the president calling that out more and more my reporting shows that he's very aware of the sort of dark tone of the trump speech in youngstown, ohio, and i think we're going to hear more about that >> who was darker? his or -- they're competing for darkness, are they not >> you can argue that rematch has begun. they both clearly are engaging the other and more and more, for

years, right, president biden rarely said trump's name i think he's going to become increasingly clear about what he sees -- >> is that because he wants to run against trump again. is he choosing him as his opponent >> always a mistake, right that never seems to work out i don't think he has any choice. i don't think they recognize the gravity of the fact that at the moment if president trump wins -- runs, president biden is going to be the republican nominee. if you look at his most recent -- >> what do you think the chances are that he really runs and what do you think the chances are that something happens legally or otherwise i know that everybody is on twitter about whatever you think letitia games is going to be saying today -- >> it's very possible that that announcement is even bigger than decision day that we've been talking about around this table. but the twist on that is, it's

been true for a long time, the more legal trouble, the more financial trouble, i think the more likely he is to run and the sooner he is to announce because, of course, he sees it as protection. he sees it as a way to say, oh, it's all political >> do you think that the president prefers to talk about this rather than maybe some of the -- the fed's meeting today have you -- i'm going to list them a little bit later. have you looked around you want me to mention a couple things that are happening economically -- >> in keeping with anxiety theme of the first hour -- >> it's really pretty staggering inflation, 40-year highs two straight quarter of negative gdp growth mortgage rates have doubled. stock market is in a brutal bear market no rise in household income -- >> you're saying that in a calm

way. >> what would you point to that, wow, i'm doing a bang-up job domestically. >> they're going to point to heading off the rail strike. what i would say about that list and what i'm going to be watching for this afternoon, a phenomenon in polling, people think that the country is headed off a cliff. but you ask them how they are, people just say, i'm doing okay, or people think their personal situation is good. i think the headlines like, your team is expecting from this afternoon, that could help change that. if i'm in the white house, if i'm democrats seeing the red wave, which it turned into the rip ripple, but it's heading back towards a red wave, i worry about the psychology of that announcement, even people who don't understand it, don't internalize it, they're like, that's not good. that could lead to trouble for

me and my family down the road. >> biden was pretty defensive about that when he was interviewed by 60 minutes this week just that pushback it's not that bad. it's slowing down. >> never want to be explaining, never want to be saying it's not that bad any time you catch yourself saying that, even if you're saying it shortly, sharply and efficiently, that is not -- that's a problem. >> i asked you about trump running. what do you think about biden? if not biden, then who >> you look at the -- president biden's string of wins, i think he's clearly warming to a fight and my reporting shows that he was exactly right when he said on "60 minutes" he's not decided for sure i think people close to him would tell you he's warming more to it and i think we're going to see that with this increasing willingness to take on the fight for small “d” democracy if it's not him, i would look

outside washington, governor granholm of michigan i would look at, senator warnock in georgia wins and the atlanta journal constitutional poll had him tied with republican hershel walker which was a surprise because hershel walker is an awesome football player. he's turned out not to be as awesome as a candidate >> surprise he's tied. surprised he's tied, right it's got something to do with economic issues as well. he's got -- there's some baggage there. he says he doesn't want to debate senator warnock because he says i'm not smart enough to debate a smart guy he cops to that. maybe he's lowering expectations so what happens with the house the house goes but not to the extent that people thought 70% they keep it or we don't know >> no, no.

that's a change. one at a time, the house -- there was a time that we saw red tsunami coming, right, 40 seats. now it's more like 25 seats. but that's a remarkable change they only need five to flip and we're already seeing house republicans are to move on that, they're going to use that -- we were just chatting out here about the fact that something that is new is house republicans have already told biden cabinet departments keep your documents, investigations, hearings are coming, and then on the senate side, that's when there's been a change "axios" had great reporting about that this weekend where democrats had been much more optimistic about keeping the senate, things have been moving, fund-raising, polls, the conversation, and even now you have mitch mcconnell more optimistic -- >> what are the numbers.

i thought it was still 70. some critic did or nate silver, 70 they keep it. is it50? >> or something? that's your source of truth. >> you want me to find it? >> i'm just telling you that that's moving and that's why you have reporters and not models. but real quick -- >> you're saying they might take the senate, the republicans. i want to hear you say that. >> the reporting shows that republicans have a much better chance of taking the senate than they did shortly and you just heard mitch mcconnell say this behind the scenes to the u.s. chamber of commerce this week, they found that leader mcconnell had been talking down -- >> 6239 today predicted. >> down from 70. >> down from 70. >> you act surprised >> i am surprised. >> somehow the phrase or name desantis has not come up at this

table. what do you think of both the flights to massachusetts but also what you think the implication is if he really is running? >> there's been a real move in his polling away from him which i think is going to be -- people -- >> you think it's a losing s strategy. >> we don't know so far it's not had the effect that he's expected and there's polling this morning moving away from desantis. either way, what we know is with his re-election race in november, that's a re-election race like none we've ever seen if you look at the stack, the spending, why is that? it's a trial run for a presidential race. >> you still think he's going to win in florida >> there's no sign otherwise clear favorite >> mike, thank you. >> thank you for having me run your company better, be

heard. sm smartbrevity.com when we come back, investors gearing up for the federal reserve's latest policy decision and expectations of another rate hike will the central bank take a bite out of inflation? that's the question. the head of some of the biggest banks kicking off two days of testimony, getting grilled by lawmakers. we'll have a preview of that hearing. it's time for today's aflac trivia question. who is the top ice cream manufacturer in the united states we will have that answer when we come back. n'lo iupeat. dot okt on google we'll be right back. look at the size of that- gaaaaaaaaaaaap!!! is that a goat?! you talkin' about me? gaaaaaaaaaaaap!!! i think this goat is saying “gap.” must be talking about the expenses health insurance doesn't cover. so who's talking about the money aflac pays to help close that gap? gaaaaaaaaaaaap!!! aflac! aflac! gaaaaaaaaaaaap!!! it's about to go down, baby! aflac! aflac!

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>> welcome back to "squawk box." now to the answer to today's aflac trivia question. who is the top ice cream manufacturer in the u.s. blue bell creameries the company was founded in texas in 1907. >> stocks on the move this morning. general mills out with quarterly results. the food producer earned an adjusted $1.11 share compared to the consensus estimate of a

dollar general mills also raised its full-year forecast it remains strong despite higher prices and shares of coty are higher they announced a plan to double sales of skin care products by fiscal 2025. it came ahead of an investor event planned for this morning i really like the -- i think of cootie when i think of coty. we're going to talk energy as oil prices over and former td ameritrade ceo joe moglia will be here to talk to us here's andre garcia. >> i came from the united states to columbia when i was 12 years

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♪ welcome back to "squawk box," everybody. it is fed decision day and you can see how the markets are posturing ahead of that. a lot of the move has already come over the last week and a half and the significant pressure you've seen on equity prices and the significant boost we've seen in yields in the treasury market. right now, the dow futures are indicated up by about 70 points. s&p futures indicated by seven check out the treasury market, you're going to see that yields have been a little bit lower, except for the two-year. it's now at 3.965% the two-year -- i'm sorry, that

is the two-year. the ten-year is at 3.546%. >> despite growing interest in sales in evs, the big drop in gas prices has lowered the percentage of car buyers interested in going electric f phil joins us now. >> people might hear it and say, of course, if it's lower gas prices, who wants to buy an ev it shows that gas prices remain a primary driver of interest in buying an electric vehicle this is new data from jd power and it's pretty clear that when the gas came from its high point in june, down to where it was in august, you saw the number of people, the percentage of people surveyed by jd power who were very likely to buy an ev, that percentage dropped on. we're in the midst of a ramp up in ev sales in this country. we're about 5.2% of all sales

being evs and it's expected to ramp to more than 2 million models by 2025 when that happens, it will be 12 or 13% of the market the growth in the evs, by the way, yes, it's in california we've talked about that at length but it's expanding from california to the east essentially everybody -- all the states that touch california, that's where you're seeing the greatest growth in ev market share. california, washington, oregon, nevada, right after that is colorado not a surprise given the fact that you have a number of californians who have moved to those states or have business or are in those states quite a bit that you would see greater adoption of electric vehicles. tesla, the model y is ramping at the factory in texas that's why their market share remains where it is, where they sell two out of every three

electric vehicles in this country and the company has indicated that they're looking at potential locations for a third plant in north america will it be in the united states? possibly canada. possibly mexico. don't be surprised if we hear news on that within the next 9 to 12 months finally, the question becomes, what does this mean for the pure electric vehicle companies like rivian and lucid they're in a far different position than tesla. tesla with the model y and 3 and get a much bigger part of the market, guys, than if you look at rivian or lucid lucid is clearly a high-end luxury ev maker at this point. rivian still higher-priced vehicles than what you're getting with the model 3 and the model y. >> interesting, phil we'll see with gas prices. the streak ended, i guess. >> yes but it is interesting that just a little bit of a pull back, they're still well above last

year and that dampened ev demand that's very weird. >> just the number of people, know, when you get to record highs, that's when you see people say, okay, now i'm interested in potentially buying an ev. keep in mind, there's limited supply and limited availability. if you want a mass market ev at this point, you could go to the chevy bolt, but that's really a vehicle that's not going to appeal to the same people who are looking at a model 3 or a model y. you really need that middle part of the market to fill in once that happens, then you're going to see ev interest really shoot higher >> phil, thanks. tonight, it's the season premiere of "jay "jay leno' premiere of "jay "jay garage" with elon musk. germany says it will utilize

one of the largest utilities it's been hurt badly by reduced gas flows from russia. germany is dealing with soaring energy costs ahead of what is expected to be a rough winter for consumers. in the uk, the british government is outlining a multibillion pound bailout to help companies with soaring energy bills the energy will cap energy prices for businesses for the next six months. those levels would represent a discount of about 50% on the winter contract for electricity and about 25% on the gas on contracts. goldman sachs head of global commodities research and there's so much to run through here. but first is the idea of these two realities that are kind of crashing into each other right now. the first is limited supplies and russia shutting down things, making the energy market so tight. the other, though, is this looming global recession because t central banks are tightening so quickly. how is this playing out?

>> let's start with the european energy crisis. i like to point out, i've been doing this 30 years. i've never seen a forecasted energy crisis materialize. you don't get hit by the train you see coming at you. you've got inventories quite high at this point in time, you've done a lot of demand destruction on the industrial side we see it in the aluminum and metal side of the business our target for european gas, you know, by first quarter is going to be 100 euros per megawatt per hour gas went up to 10 and round trip right back down to $2 because you lost so much industrial demand guess where all that industrial demand went? europe now it's likely going to come back to the u.s. but that aside, i think, you know, really what's going on in the oil market more broadly is you have the market having created slack with the weakness

around the energy crisis in europe and the lockdown policy in china and when you have that slack in the system, the markets essentially trading off the dollar kind of which brings you into that, you know, what the fed is doing and how the dollar is reacting when you think about, when did it disconnect from the dollars, when you had really tight markets earlier this year. so we would think, as you move into the winter, oil begins to get tighter and i think the big event with oil is, you know, the price cap in the eu ban as you get towards the end of this year, and you're likely to lose significant amounts of russian supplies going into the west i like to point out, when you transition, redirect that supply, it's not frictionless. you're going to lose 30% of the supplies that get redirected we think at that point, oil

starts to get tight. recounts are going down in the u.s., no iranian deal, and we look at saudi arabia it's operating at 11 million barrels per day. not a lot of spare capacity in the system. >> let's go back to the uk idea of price caps. they're not price caps they're price caps on what businesses and consumers will pay in the uk, but they're going to have to find some way to pay for it because they can't control the cost does that mean they're going to be printing money? are they going to be raising taxes on somebody other than businesses and consumers >> that's why the pound sterling is at 1.14, 1.13 you're at 37-year lows on the pound sterling because people don't know where that financing is likely to come from the numbers are very large covid-esque style type of stimulus right now it's being priced into the pound sterling as we go through, we'll find out how they're actually going to

try to finance this. but i think it's adding to the dollar strength in both the you are o-- euro. if you don't have the physical tightness in oil that's grinding into a physical market, the marginal buyers, the financial player and they're trading off that dollar which is creating that weakness. >> but i think it's been surprising to have watched energy prices climb so rapidly for so long. we know that we're now very concerned about a global recession. you see the pressure that comes back down. has it changed your forecast at all? you've been very bullish over the next two to five years >> we're still very bullish. in terms of looking at, you know, where are those recessionary risks, right now the real big one that's media is europe and -- coming out of one with the lockdowns and in china.

those are your two wavelengths the u.s., the probability really hasn't changed that much and if anything, they might say, it's a lower baseline in the u.s. the big risk is europe which at this point they made so much adjustments, if anything the surprise could be in the upside going into the winter. but the big question mark for oil and commodities is zero covid policy in china. but even that, we don't have a recovery there from zero covid policy until you get to the second quarter next year and we're still bullish. the long-term structural story has not changed. if anything, it's stronger today than when it was two or three months ago given the lack of investment on the supply side. the demand, think about, supply is structural in trend the volatility is coming from demand and with commodity prices off, real incomes are likely to start rising again and it's going to key you up for the next spike

when we call for a supercycle, it's not that prices trend up over time, it's spike after spike after spike because as prices come down, real incomes begin to rise, then you start to tee up the next demand increase that hits the wall on resource supply constraints and that creates the next price spike. >> which means you don't think if there's a global recession, it's going to be a long and deep recession? >> that's our economist-based case everyone has it in their heads that recessions are like '08 or '09 or 2020. let's remember that 2020 was a pandemic that hit demand for oil specifically '08, '09 was a credit crisis that shut everything down and 2011 was 9/11 and everybody quit flying let's take out those last three recessions let's go back to a

run-of-the-mill fed-induced recession, oil was not phased during that recession. i think it would take a real big shock and you don't have those create type of imbalance in the system to be able to create something similar to '08, '09 right now. >> jeff, we've had this argument about the intelligence of really orchestrating a recession. we know how bad inflation can be so in your view as a one-year run of the mill recession worth enduring to prevent five or ten years of hyperinflation? is that definitely one is much worse than the other would you urge the fed to nip this in the bud unequivocally and not worry about --

>> let's go talk about what's going to nip this in the bud and kill it off. rate hikes cure the symptom, which is inflation, but they don't cure the illness which is under investment we need to cure the illness and the phillies -- or the disease is the under investment. that's what we need to fix at this point right now -- >> now you sound like truss. less regulation and lower taxes. that's how you increase supply. >> but let's even just look, in the u.s., you don't have any regulations or anything like that it's the investors who do not believe in the sustainability in this story that are not putting the money to work in this. you could go buy -- you can buy the pioneers and the eogs and all of them freely right now they don't because they don't believe in the sustainability and part of it is they're too worried about a recession that's going to create a huge pullback in prices a la 2008 and 2009

>> thanks for having me. coming up on the other side of this break, we're going to talk about the fate of today's trading session. you're looking at the dow up 88 points what is chairman powell going to say about future rate hikes. we're going to break it all down the best of "squawk box," our daily podcast, follow squawk body and listen any time precisely orchestrate nearlyatew 600,000 vehicles passing through their uk port every year. don't just connect your business. (dock worker) right on time. (vo) make it even smarter. we call this enterprise intelligence.

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♪ coming up, what investors need to know ahead of today's fed rate decision. and later, former td ameritrade chairman on the markets, the fed and the retail investor. busy wedneaysd morning and "squawk box" will be back after a quick break. and your family first. i promise to serve, not sell. i promise our relationship will be one of partnership and trust. i am a fiduciary, not just some of the time,

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welcome back to "squawk box. after two days of deliberation and likely debate, the fed is going to be delivering its decision on rates coming this afternoon. ahead of that decision, we're going to have our own debate on the path of rates and with that we have seth carpenter, rick santelli and our own steve liesman. i'm going to start from first to last or last to first in this case what do you really expect not just the number, but what do you think mr. powell is going to say? >> i think that to understand what powell is going to say, you only have to spend three minutes

and we read his very short and pointed speech from jackson hole that is rates are going to go up, they're going to stay there for a time there's going to be pain in the economy. and that that pain is necessary to vanquish inflation from the economy.vanish inflation from the economy the market is priced for a 4.5% peak funds rate. i think that might be a little higher than the fed is thinking right now although i think the fed has flexibility to go higher if it needs it what the fed is thinking is this idea of somewhere around 4% before they stop and look around, but they may go higher than that. right now our fed survey has 4.25, the market has 4.25. i think the fed might give the rate hike some time to see how they work but i don't think that he's going to let on about that. >> rick, do you agree? if he's right, what do you think the markets think? >> well, first of all, real

quick. viewers and listeners understand, the reason steve's picking a 4.5% terminal rate because if you follow all the fed fund futures contracts, what you'll find is that price keeps going down until you hit may april's the last contract in '23 that goes down in price, then they start to go back up april just made a new contract low at ninety-five and that gives you 4 1/2. does the fed know where the terminal rate is no does the fed have any idea where inflation will be in two years no does anybody around the globe have any idea where the inflation is going to be in two years? yes, europe, asia, china most people in california. they're going to know. the biggest driver in inflation that's going to outlast all the stuff that was covid sort of related is going to be energy.

think about it, pre-covid, 2% as far as the eye could see post covid, wow, we have all of these problems, because it's based on what we did to address covid. it's so easy it didn't pop up inflation isn't organic and growing. so we should be able to control it the problem is that while we were all off on a different axis, the new policies are even worse than the policies we enacted during covid so i just don't see how the fed can fix any of this. it's not fixable will it be a soft landing? i think so because the globe's going to go into a recession that's my pretty much say on what's going to happen today. >> seth, jump into this. i'm curious your reaction both now to two sides -- i think rick and steve are actually relatively close on this, they just sort of come at it in a different way. >> yeah, i think that's right. i don't think i can be as animated as rick was

the fed is pricing 4 1/26789 we are below where the market is pricing but a key point is going to be powell's message has been consistent here. i completely agree with steve that his jackson hole speech was short, sweet, to the point the economy has to slow if inflation two years from now is going to be below where it is now. no two ways about it the economy has to slow down that's what they're aiming for he's going to stick to that message. the notion that there will be pain in the economy from that slowing goes back to some of chair powell's testimony months ago in congress. so i think he's been trying to be as consistent as possible and as humble as possible. they don't know just how far they're going to have to go. >> it may be short-term thinking, but if it's 100 basis points today, how does the market react does the market say that's good because it's getting something out of the way does that say, oh, my goodness, this is going to be much harsher

than we thought? >> that's great question the market is pricing in some probability of 100 it would resonate to at least the clients that i talk to that the fed is giving up on any sort of near-term slowing in the economy. i think it would lead people to believe that even more hiking is in the offing in the near term i think what will be interesting then is the inference might also be, gosh, they're also giving up on the soft landing. they're just hiking so much to break the back of the economy in order to bring down inflation and so what happens in the front end of the curve could well be different in the long end. >> steve, do you agree with that >> i do. it is interesting this morning i need rick to check me on this. did we reach the 4 on the 2-year, rick i think we did it's a little bit clear if you look at the tick on it what did you see, rick did we get over 4? >> i saw that we did briefly and i saw it on several screens and i saw one screen take it away.

>> that's what i saw. >> i'd not like to weigh in on an answer i'm not entirely sure. >> i agree the 2-year is settling where i believe the fed is going to go here i think, andrew, when it comes to what the market would like to see, they would like to see a little certainty about where things are going when i talk to businesses, cfos, stuff like that, what i hear is, yeah, we'll have to deal with what the fed gives us. we have to plan. we may be at a point, i think this is important from our fed survey yesterday, where the average respondent thought that the fed was going to hike to a peak rate of 426 and stay there for 11 months. the idea of backing out of the expected cuts -- >> how do you do that saying you're not data dependent? meaning this idea of incertainty. >> there's an inherent hypocrisy in the fed. >> there sure is.

>> i'll tell you what that is. they're data dependent meeting to meeting yet they have inherent in their thinking this idea of getting to a place where they have to to get to the back to break inflation i think there's some subtle forward guidance about that 4% range, whereas, the meeting to meeting is 50, 75, 25. whether or not they sort of back up they do have this idea in their heads. you can see there, i just put up a chart, which is where the fed was in june and where the markets is now you don't see that 450 peak rate on there you see in the projections the fed has some work to do in order to pick it zblup what could the fed say today that would actually make the markets move higher >> that they are going to watch and see how their current hikes, 225 to 250, or 3 to 3.25 will

filter through the economy it doesn't happen instantaneously. this whole thing is like a bad b movie. it takes a while for it to get into the economy this isn't the same argument, we're going to keep tightening until we go into a recession the point is, their tightenings haven't impacted the economy to stay on this course makes no sense. data dependent is a good idea but it's not being played on. >> we'll be watching it. 2 p.m. our eyes are on the prize. thanks, guys >> thank you still to come this morning, big bank ceos set to nef front of the house finance committee we'll talk with jake auchincloss about what to expect and joe moglia on the state of retail investing, the fed and much more.

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welcome to fed day

super sized rate interest hike new long-term economic projections. ahead of the fed decision stock futures are up and treasury yields are down. we'll talk with former t.d. ameritrade chairman and ceo joe moglia what should investors be looking for today when ceos get grilled on the capitol hill. we have a preview of the vice chair of the house financial services committee the final hour of "squawk box" begins right now. good morning and welcome to "squawk box" here on cnbc. live from the nasdaq market site in times square. i'm joe concern kernen along wi quick and andrew ross sorkin

124 points of upward momentum reversing some of yesterday's pretty significant losses. just didn't feel good really yesterday or the day before. nasdaq -- today, today's wednesday. >> wednesday the day before -- the day before monday it turned around and last week you were down 4% or 5%. >> a week ago monday, was it tuesday? yeah, it was tuesday, i think. horrific inflation number, almost 1300 points treasury yield, we did have a 4 handle briefly on one of these and that was the 2-year, 3.95. 10-year, 3.534. it is just after 8 au.m investors are widely expecting a 75 basis point hike in the fed

funds rate some think they could go a full point. so 100 basis points. with this rate decision we'll also get the first statement of economic projections we've seen since june that will lay out the fed member's forecast for inflation. unemployment, gdp and interest rates. fed powell will be answering questions at 2:30 p.m. eastern time andrew let's get to some of the other stories. defense stocks rising after russian president vad mir putin mobilizing more troops. it's an escalation and the first time russia has taken an action like this since world war ii russia said he could use nuclear weapons to defend. crude oil jumping after he made the comments. there could be tighter supplies of oil and gas

wti at 85.77 in other news, an update to a story we brought you yesterday beyond meat suspending the chief operating officer after a physical altercation in which he allegedly punch a man and hit his nose the senior vice president of manufacturing will oversee beyond's operations. doug ramsey has been charged with terroristic threatening and third degree battery maybe not a surprise that a temporary sus specs was -- >> have you heard of terroristic threatening? >> i have not. me neither. >> a formal term >> involve the nose? it could be -- >> i don't know. >> like an ear that was evander holifield. >> yeah. >> back to the broader markets senior markets commentator, heard from santelli. i think it's time to hear from santoli. what's going on, mike? >> yeah, joe

pretty familiar spot we find ourselves in with the stock market ahead of the fed today. s&p 500 been pretty sloppy as you were mentioning but has sort of slowed its decline. at the lower end of this range i say lower end of the rage, about 3800 that's where we spent most of the past four to five months right there. the low of the day the past three trading sessions has been between 3827 or 3838 essentially that one zone is where the selling has driven it up does it matter are we just pausing to wait for the fed? it's unclear it shows you we have a few percent down for the june lows which looks like a down side over shoot the up side is only 4200 this is where we've been sloshing around for months we talked about what's going on with nominal rates 4% on the 2-year significant thresholds here's what the real 10-year yield looks like this is the market's best guess for 10-year inflation subtracted

from the nominal yield of the 10-year. this is from the tips, treasury inflation. obviously we were negative for big chunks of time post global financial crisis and post pandemic crisis. we shot above 1% 1.14 this is about as high as it's gotten since the global financial crisis that was a level in 2018 gave the market trouble. also here, that was the taper tantrum of 2013 as well. the market has had a tough time when we've gotten to this level of 1% real rates but it does get us into the zone of rates starting to be somewhat restrictive on the economy that's what the fed wants to see. powell has said rates have to stay restricted for some period of time. this also when real yields have raced up have sometimes meant nominal yields are close to topping out. apple versus the world basically. yesterday apple was the one thing that was keeping the market from falling a lot more and this is in the last year apple against the equal weighted technology sector as well as the

nasdaq 100 this right here, november 19th, was the peak of the overall nasdaq apple has been a different stock. it's basically been a haven, treated not as a tech stock, not as a cap growth but just as a place that, you know, sends money back to shareholders through buy backs and dividends. is reliable. right or wrong, this is the way the market is treating it right now, joe. >> mike, if you're under 65 and still prone to anxiety, which we know now in the wall street journal, we know 75 basis points most likely. we know the fed is resolved to trying to be hawkish on this what is the next big point that could throw us for a loop do you think? a lot is in it already we're scared we've got a lot of concerns. would it be really bad earnings? would it be a really bad cpi number coming in what do you think the next thing

is because to me it seems like the market has already dealt with a lot of things and maybe we could move forward >> yes. >> maybe start rebounding. >> i think it's probably more on the growth and earnings side that that could be the next threat -- potential threat out there. i don't know that it has to happen that way, but if you get a message from the fed that increasingly seems as if they want unemployment to go higher, they want the economy to struggle for a longer period of time because they think that's the only way to get rates down, then of course the earnings environment is not going to be friendly i don't think the fedex and ford news mean it's on some kind of steady slide that you have to brace for. that's where we are. i think valuations have come into the fair zone and the question is after an eight-month bear market is fair where these stop and where they can start to get traction again >> because we thought we knew a lot until last tuesday. >> that's right. >> we thought we had a lot of bad news in there and somehow one little tenth here, tenth

there cost 1300 points and we're still dealing with it today. i'm wondering what the next thing is >> i mean -- >> go ahead. >> i think it's exact -- well, look obviously if inflation doesn't cause down and all leading indicators suggest it should soon, then that's clearly a threat that means the fed's not stopping at 4, 4.5%. absent that it's the lagged effect of the tightening, what it has meant for growth in the next six months or so and what that translates into in terms of corporate earnings. >> mike, thank you. coming up, we're going to talk more about what to watch in the markets before and after today's fed decision former td ameritrade and ceo joe moglia will join us. next, top bank ceos are set to be grilled this morning on capitol hill we'll tell you the issues that are front and center we're going to be speaking with massachusetts congressman jake

auchincloss. he's the vice chair of the house financial seicrves committee stay tuned you're watching "squawk box" and this is cnbc do i just focus on when things don't work, and not appreciate when they do? [dog groans] so whatever is at work to pull all this off, it's working. as are those earrings. ♪ ♪ even work works! i just booked this parking spot... this desk... and this conference room! i am filing status reports on an app that i made! i'm not even a coder! and it works!... i like your bag! [people cheer at concert] real-time ticket upgrade! meaning....i get to meet my childhood idol. that works. i named my dog joey fatone. co2 levels-- if i may! all this technology is helping the world work, so you can focus on making the world work better! so i say...lets work! ...or i think that's what we're both saying. when your digital solutions work, the world works.

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of the biggest banks will face questions from the house financial services committee leslie picker joins us with what we can expect. leslie, i would if he is a lot of pretty tough questions. >> oh, i would suspect a lot of tough questions as well, becky the witnesses today will include ceos from the seven largest consumer facing banks. those include jpmorgan's jamie diamond, brian moynihan, citigroup's jane frazier and charlie sharp among those that will be grilled by congress on a whole host of issues the committee convened this group to discuss consumer-related topics, things like overdraft fees, emerging technologies like crypto and zell and privacy protection, but it's likely during the q&a lawmakers will venture into other areas including the polarizing world of esg, the regulatory environment of financials in prepared testimony dimon and

sharp plan to tout how they've kept the economy afloat. sharp also plans to talk about how wells fargo is responding to a variety of regulatory reactions in his remarks saying the firm has, quote, made progress in strengthening their risk and infrastructure while noting they have several years of work to do. diamond's remarks include a mention of the u.s. economy which he calls a tale of two cities with a strong consumer, vibrant jobs market and healthy business environment while noting headwinds like inflation, supply chain issues and the fed's hawkish policy he will say even the brightest economists are divided as to whether these forces will evolve into a, quote, major economic storm or something less severe echoing what we've heard from him before but perhaps not on capitol hill. >> leslie. thank you. joining us now, the vice

chair of the house financial services committee, massachusetts senator jake auchincloss. we're all talking about chairman powell and the fed and what we can expect today i think you'd agree chairman powell is facing major challenges i decided to list a few and got to a half dozen. i stopped there and bear with me inflation at a 40-year high. gas prices 60% higher than a year ago, although they've come down a little. two consecutive quarters of negative gdp growth with a third possible stocks, as we report every day, brutal bear market americans two years in a row flat or declining household income mortgage rates have doubled. we may have regained 10 million jobs but that barely gets us back to where we were before the pandemic what positives do you see in the

economy right now? what do we need to do to make things better? >> good morning. thanks for having me on. the u.s. economy has grown faster than china's in last year for the first time in my lifetime what i want to ask today in our hearings with the mega banks is how does america together continue to outcompete the chinese communist party. xi jinping has made a series of grave mistakes zero covid policy is failing his property markets are collapsing the united states has the initiative how do we out compete the chinese communist party in the global south as we build alliances and promote economic development and how do we ensure american workers and american businesses have access to higher productivity and bigger markets? >> it's certainly something we would like to do obviously it's a global economy, but if we just did focus on some of the issues i brought up facing us domestically, what do

you think chairman powell should do what should congress do? there are serious issues -- >> yes. >> -- that we need to address. i'm wondering if you have any great ideas to help? >> i'll take that in three parts because that's a big question. first of all, the fed is independent. it has its own mandate mostly on the demand side of the policy. i'm not going to prescribe what fed powell chair should do that's inappropriate for congress he needs to enhance his credi credibility. i expect and i know that he understands that and will continue to operate that way but what we really need to do to get prices under control is expand the productive capacity of our economy that means increasing labor force participation rates. that means building housing and reducing tariffs all three of which i have been promoting as a member of congress we need to continue to make

progress under the biden administration. >> congressman, are you of the notion that the fed needs to really maybe put off worries about employment and the economy to get inflation under control everybody wants to increase production like you just said. we're raising rates. that's not the way you make it fertile ground for small business and everything else seems like we're almost doing things that hamper our ability it's a very difficult fine line to walk for the federal reserve. >> it certainly is i think everyone agrees chairman powell has a hard job right now. we are coming out of an era of historically low interest rates. he clearly needs to grab the bull by the horns and make clear that he is committed to stable and low expected inflation for the long term but i do not accept this idea that the only lever that we have to keep our economy from over heating is on

the demand side of the equation. we've got to expand the productive capacity for the economy. the best cure for persistently high prices is to expand the productive capacity of our economy. we're seeing persistently low labor participation rates in some cohorts which is worrisome and which we need to address, particularly by expanding options for child care and the care economy more broadly. we've got to build more housing. i represent massachusetts. housing costs are the number one challenge. we have got to build more housing in this economy. >> interesting backdrop to have all of the bank ceos there, congressman. i'm wondering, will it be less confrontational? are we all in this together? don't we need them to try to help in all these things that we're dealing with right now what do you think that they're doing right? what do you think they're doing wrong in terms of helping the country in this very difficult period >> the bank ceos are going to be

held to high standards and strict scrutiny by members of congress from both parties, as they should be these are systemically important institutions how they operate, the standards by which they operate, the ethics by which they operate are critical they have been a source of stability during the pandemic. deep and liquid markets are a strength to the united states globally as we look to continue to out compete the chinese communist party in the world economy. so we want to reward work not wealth that means we are going to enact policies, as we have already under the biden administration, that helps working americans sometimes at the expense of wall street we also recognize that main street and wall street together are going to be the most powerful force on the world stage to further u.s. economic interests and to advance our alliances, particularly in the global south where the chinese communist party has had to jump on us for the last decade. >> are there particular bones to pick, do you think, with ceos?

overdraft fees what do you think in terms of getting in the weeds what are some of the questions that you want to answer that might be unpleasant for some of the ceos >> you'll hear myriad concerns, again, from members of both parties about esg, i'm sure, from my republican colleagues potentially about hiring practices or about their investment portfolios from the democratic side of the aisle i'll let my colleagues ask their questions. won't speak for them again, what i'm going to be pushing on though is what do we need to do to seize the initiative advice a have i china that we've had for the first time in 30 years we are in a relatively stronger position in the world economy. we are the ones who have the initiative behind us because of a series of mistakes xi jinping has made and because we've weathered the covid storm relatively better than other countries in the world. >> how should we view china now,

congressman? it's evolving. friend, enemy, frenemy, competitor, someone we need to do business, someone we shouldn't be doing business for a myriad of issues it's difficult. >> it's a nation of 1.4 billion people it would be simplistic or obtuse to say they are all or one thing. we want access to their markets. we want to import chinese inputs especially in the clean energy supply chains where they have critical inputs for us we welcome chinese economic development. it's good for the economy. we're going to fiercely compete. we do not accept their state dominated authoritarian view of how civil society should operate. we do not accept their extractive approach to building alliances in the global south. we want to be partners not extractors of other country's wealth and we do not accept their behavior in the indoe

pacific or with russia we are going to uphold the liberal post war rules based order and we're not going to allow the chinese based regime that might makes right. >> there is the whole taiwan issue. there's a lot to grapple with. congressman, thank you vice chair we always say all eyes maybe we've got to look one eye on the fed and then the other eye on the committee and what happens with the ceos today. >> good to be with you. taking on tesla's model y in china. eunice yoon is going to join us from china. >> thanks, andrew. i'm at the store for xpang they say it ars icchgetwe as fast as a tesla. more on the new car when we come back

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rockets. it needed to be a remote location it also needed to be on the ocean and the sea south ward and facing east. when you launch eastward you take advantage of earth's rotation and you want to launch over the water and something goes wrong and you don't land rocket debris on people. >> of course that's elon musk. he's showing jay leno around spacex you can see more of it in "jay leno's garage. you can catch tonight's episode at 10 p.m. eastern time right here on cnbc. and to some news affecting other -- another of musk's companies. in china local ev maker trying to challenge the dominance of tesla. eunice yoon has that story >> that's one of the if not the fastest charging vehicle in the world. >> brian gu hopes this new suv will drive up the largest ev

market in august xpeng sold 10,000 cars, tesla, 77,000. >> very competitive. we need to come up with better and cooler products to resume that growth. we're launching the g9. >> reporter: the g9's selling it can charge 129 miles in under 5 minutes. it accelerates at a similar speed, zero to 60 in less than 4 seconds. other features, imax entertainment with vibrating chairs and advanced driver assistance system in the cities that he says edges out tesla's full self driving or fsd >> tesla's fsd is not available in chinese city. now we are only player that's able to do that in china >> the g9 is cheaper than its rivals though maxes out at five seats. >> reporter: some of your competitors like auto and

neohave six or seven see theers. >> 5 seat is very large in chinese auto market. we also have plans to design larger format vehicles. >> reporter: gu says that xpeng's 6 or 7 seater is going to be coming out next year as for the g9 it's priced between 44 to $67,000. so competitive with the model y. guys. >> two questions in terms of the way the government works in china, is this company, do you think, at all going to be advantaged over tesla in any way given that it's -- i mean, i know tesla now has factories there, but this is a china china company? >> i think that's really difficult to say because tesla has been in such favor of the chinese government you could see that with its relationship with the shanghai authorities and recently when there was trouble in the southwest with the power

shortages, the fact that the shanghai authorities were leaning on the authorities out southwest to try to make sure that the suppliers there were going to be able to prioritize tesla if they can. so tesla does have a really good relationship, but at the same time one of the big complaints of a lot of foreign companies here has been that china does at the end of the day favor its own companies and that it does want chinese rivals to be able to perhaps compete if not supplant some of the foreign companies. >> eunice yoon in beijing, thank you for bringing us that story this morning thanks. coming up, former td ameritrade chairman joe moglia is going to join us in the surge, bond yields and the impact it's having on retail investors in the broader market. as we head to break, a programming note cnbc's delivering alpha flurns person a week from today among the conversations, i'll be sitting down withstandly druckenmiller. scan the code on the scrn eeto

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take a look at the futures s&p 500 up about 23 points, all of this comes ahead of the big fed decision >> that is our top story today the countdown to the fed interest rate decision and what the next hike will mean for your money. joining us on set is joe moglia. he's the former head coach with coastal carolina university. joe, this is our game day. here we go we're getting ready for this decision what do you think? 75 basis points and then -- >> i'm chuckling a little bit but somebody talks about the fed 30 times a day on cnbc there were too many people spending too much time thinking about too many things that don't matter that much relative to what's going on. i think powell has never been clearer. he spoke for five minutes. we're going to 2%, not fooling around the reason why we can't play around is because if inflation

lasts too long, then it gets embedded in the economy on a long-term basis that's a real problem. >> although the market didn't seem to take heed of that message. it was a clear message that was coming out the market has moved pretty precipitously since then it seems that maybe they were expecting the fed would lose its resolve. >> i don't know how anybody could think that. >> i don't either. >> i'm never going to challenge the market the market's not wrong, but the guy could not have been clearer and then even after, how do you interpret this the guy said, we're going to go 2% on inflation. we're going to continue to raise rates until we get there if we don't do that, the problems we'll have will be longer term much more significant. 75 basis points obviously is what everybody expects i think they have a little bit more concern about what the terminal rate is going to be long term. if the terminal rate is going to 4.75, 5% the market is probably not going to respond positively. regardless what they do, 75

basis points, whatever his comments are afterwards is what supreme to pay attention to. >> the economy is scary, joe sternlicht talking about it, fedex guy talking about it the fed is saying this stuff on the one hand you worry they don't have the nerve to go through with it. we get back in the 70s, stop/start on the other hand you worry they have the nerve and they may miss data dependency and not take the cue from what they should do >> joe, again, i appreciate that i appreciate the remarks but the guy said point blank we're going to 2%. >> that might be wrong. >> if he's wrong, he's looking at data. he's going to adjust and he's going to change. you adapt and adjust everything you're saying is accurate all those things could happen but he's pretty -- you know what, when the rates are low or the rates are going down, everybody says, don't fight the fed. well, now rates are going up don't fight the fed. >> the one thing barry sternlicht said is the fed is looking at outdated data

if you are looking at the number he sees every day as a ceo, that other ceos see every day, his concern is they're reacting to outdate dad at that. as a result it's far more likely they will over shoot and push us into a deeper recession. >> that's a legitimate recession. i thought always my entire career on wall street, i always thought the fed's data was probably as good as anybody's in the planet and it was probably abated that's not the case. looking at outdated data, how outdated can it be a month. still, that could be an issue. i wouldn't worry about that either. >> there's more cash sitting on the sidelines than there has been in a very long time. >> yeah. >> people aren't getting drawn in by any of the drops thinking, okay, there's more room to come down what do you see from the retail investor side, from the day trader side? >> i think people are on the sideline other than the day when the cpi number, market down 4.3% that was the second largest

inflow to equities that we had all year other than that, it's not that the retail seller is selling, they're just not buying. they're not putting money to work for the most part i think they're looking at what's going on. don't fight the fed. if rates are going up and there are a million other problems going on in the world, you know, things don't look good as far as the marketplace goes i think the retail investor is as wise as they've ever been in terms of how they play that. >> in terms of the numbers that you're watching next, obviously we listen for the tone in this conversation with jay powell, the question/answer period that comes out. what else do you watch is it snorts is it the jobs picture? is it inflation? >> you have to watch jobs. you want to have a good understanding what's going on with housing the biggest thing when you said the big play today is the fed, i certainly understand that. i think the big play today is what putin's saying, the first time he has spoken in over a year publicly and the guy's got an ego the size of this building

an he's not following around he's really unhappy with the west so he's going to mobilize more troops now, number one. when he talks about, you know, there is no limit that they won't go to to be able to support what they're trying to do, the threat of a nuclear issue starts to come up. i think that's one of the bigger issues that's going on in the world. >> i will admit i'm surprised you see the dow futures up 165 points this morning with walking into that news i don't know if that's an example of how far the market's fallen in the last two weeks or if that's kind of something people saying, look, we've gotten so used to her saber-rattling. >> you had said before the market didn't -- the market hasn't responded the way we think the market would be responding but if you look at it over time, it wasn't that long ago we were 4300 in the s&p, now we're 3830, something along those lines. that's about a 10% drop. i'll be interested to see what happens today. you look at what's going on in the world. god, we've got issues with russia

we've got issues with china, we've got a war going on poor europe is going through the most significant impact they've had in their economy in decades. none of that stuff is good. >> let's tap into your knowledge of sports, football in particular we've seen amazon come up with the best numbers they've ever seen after having the nfl hosted on amazon. got prime numbers like nobody else it reminds me of the shift when fox took over some of the football rights, stole it from cbs. i mean, it made more sense for fox at that point. it makes more sense for amazon to pay up the traditional cable players or broadcast zwlaers have fwln in the past. this is all stuff that people are now talking about gambling playing much more into it and you can pay more as a result how does that impact collegiate sports how does it impact pros? >> significant impact on the pros and college the numbers are bigger than they

ever have been if you have a new entry into the market like amazon and the business is successful, have you to pay up for it you have to pay up for it when everything's going well. the amount of money that exists in the nfl and power 5 conferences now is extraordinary. you've got more people making over $200 million a year than you've ever had in the nfl you have over the past year every team, whether you're rutgers or whether you're ohio state got a check for football alone from the tv revenue before $70 million. they just -- just for football once a year. they renegotiated that contract and numbers going forward are going to be between 85 and 100 million just for football and the five conferences are going to have that i want to put that in perspective. we're not bad at coast carolina and we compete but our entire athletic budget for 17 sports is $33 million. have you to work pretty hard to catch up with that

you haven't even mentioned n.i.l. now players can get a significant amount of money for the name image alliance. in fact, i think right now, right now i think there are probably 50 players, n.i.l. has been around a year and a half, 50 players probably making a million dollars a year or more, 20-year-old kids and i bet you 5 to 10 there are 3 or 4 million later you'll have 150 kids making $1 million or more and 5 players 23459 to $10 million this is an extraordinary amount of money as gambling becomes more legalized, the amount of money is so big i think you increase the probability, not the possibility, the probability of cheating it's too easy, too easy to be able to be a little bit off on a pass or make a call on a particular point in the game so much money. history probably tells us that people are going to take advantage of that.

>> you think these kids are going to make mother money by staying in college at this point than by going pro? >> some will the reason is you have kids coming out of high school. they'll get the best n.i.l. deal, number one number two, you're not going to make a decision whether they go to college for two or three years. they may or may not be going to the pros there is an example, i don't know the name of the kid and i don't know what school he went to, but i'm aware of a transfer recently in basketball where the kid is getting $3 million. the rookie minimum in the nba is about 980. he's already making three times as much as what a rookie would in the nfl now if you're a good player, well, eventually n.i.l. goes away because you're going to leave college and you're going to the nfl it's a pretty nice succession of being able to make a reasonable amount of money. >> joe, it's not a coincidence that online legal gambling is coinciding with all of these

great times? >> 100%. >> i have last place major league baseball teams that i watch because i have $5 on them. >> no, because you love cincinnati >> i mentioned last place. i bet on coastal carolina. would you have ever bet -- would you have ever thought that i would have bet on -- and i watch that game. i watch -- that's why espn plus, there's colleges i've never heard of i'm watching the zblam carolina is not last though. >> no, they've done really well. basketball, too. it's a great program. >> by the way, i've always thought you were a brilliant guy. the fact that you bet on coastal carolina i also bet you made money. >> they usually cover the spread as you've noticed. >> yes yes. yes. is that -- >> not easily but we're 3-0. we haven't covered the spread recently. >> it's not in every state, not

even close i go to states where i can't do it twitching. going through withdrawal. >> i find it mind boggling that it's almost like prohibition not like people weren't drinking everybody gambles and that's increasing >> but you also said that the odds of cheating goes up. >> yes >> the probability of cheating is up, and it's going to continue to go up as long as the money is as significant as it is >> is there nothing you can do about that >> too easy for somebody to take advantage of it. >> if you find out somebody is cheating, fair and accurately they ought to go to jail you've got to find it out. it's not that difficult -- it's not that you're trying to lose the game, you want to make sure you don't necessarily cover your spread by the way, i'm not suggesting that we've got a lot of people that are going to cheat. i'm not suggesting that. whether in the professional ranks or in college ranks, but the number is so significant, human nature, it's going to happen if we make believe it's not going to happen, we've got our

head -- we've got our heads in the clouds someplace >> joe, always love having you here. >> great to be here. >> becky, good to see you, andrew, good to see you. joe, good to see you >> sorry >> what? >> i wasn't paying attention joe, so great having you here. that's nice. >> thought she was talking to you? >> i did for a second. >> oh, my god. you weren't paying attention fooling around with your phone. >> making a bet. >> great to see you guys. coming up, jim cramer's first take on the market on this critical fed decision day and a reminder that the best of "squawk box" on our daily podcast, check it out. the bottom of the screen you can put your phone on it or go over to cnbc.com to check it out and listen at any time we're back after this.

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let's get out to the cnbc bureau in san francisco, and jim cramer joins us now. big fed day, jim i asked santoli, you know how things -- we already know things are scary and bad and, you know, we wonder whether everything is already in some stock prices is there something in the next six weeks, jim, that could totally make us say, wow, we didn't realize how bad this actually was or is there something in the next six weeks that says, wow, we were overdoing our negativity i just don't know which is which. >> there are actual securities where you can figure out what people are thinking in terms of inflation expectations, and

those did peak about a month ago. we also know that labor, i've done a lot of work with this at gforce, but there are many ceos who told me they couldn't hire people before, couldn't find people are now deluged people are coming back into the workforce. i some aces up his sleeve if he just does 0.75 because wage inflation may be peaking and expectations for inflation are peaking, judging by the security i'm looking at, so i'm actually kind of -- i think that he could be a winner here i know nobody else thinks that way and i know it's hard to see a rally when putin's talking about nuclear weapons but i think there's some things coming down when it comes to wage inflation. >> we were in the spot before last tuesday and then reality hit, supposedly, last tuesday, but now, we know now we know. that's why i'm wondering, seems like there has to be another data point that's really bad to shake us from us already being,

you know, pretty pessimistic about it >> you are spot on you are spot on. if you wanted to know what i thought hope could be, i think the next data points you're going to start hearing a lot of ceos saying, you know what we are having no problem hiring people it hasn't been like this it's better than it's been in a year, 18 months, people coming back to work people are still dying every day in this country with covid, but it tends to be people who are elderly. younger people no longer seem to be fearful, and they're coming back to work and it really is covid and the fed's been right to take this in a measured way i'm beginning to hear a lot of positive things about powell and i know that sounds strange because a lot of people think he's really screwed up but the measured way he's taking this and the fact that it's easier to hire for almost every executive. i haven't found one who says it's hard to hire anymore. i think it's a rather amazing phenomenon >> good. all right, jim

very good. yeah it's almost as if, yeah, powell is going to do what he needs to do until he doesn't need to do it >> right you and i are right. okay there, i'm saying it we're right. >> all right, jim. hope so. see u yoin a few minutes meanwhile, we'll be right back "squawk box. yle and skill. he won eleven majors. it's said he'd show up in a limo after partying all night. on the first tee, he'd ask, “what's the course record?” then he'd hoist the trophy on eighteen. the golf course was his stage. and now, it's yours. walter hagen apparel. available at dick's and golf galaxy. 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.

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welcome back we are just o over 30 minutes to the opening bell on wall street. take a look at futures, dow up about 151 points, nasdaq up about 56 points, s&p 500 up about 21 points after what has been a wild/tough couple of weeks/months harry nap is with us, cameron dawson, chief investment officer at new edge wealth, ahead of this number, folks, what do you think we're going to get but maybe more importantly, how do you even try to position yourself at this point, barry? >> well, i think you want to be long going into fed -- powell's press conference today i think he's going to be hard-pressed to deliver a hawkish surprise we've moved the terminal fund

rate up some 75 basis points ten-year real rates, what i call the soft underbelly of the real or tips yield part of the yield curve has moved up a hundred-plus basis points since the last meeting so i think you want to be long, but the real reason i think you want to be long is not so much related to today's press conference it's because the path from 8% cpi to 4% cpi is pretty clear. over the next couple of quarters, the comparisons are such that it will come down almost organically as well as food prices, energy prices, and core goods prices are all headed lower. now, longer term, i think we're going to get stuck at 4 next year and any hopes of the fed reversing the tightening that they do between now and when they end, presumably at the end of the year from my perspective, i think is a bad bet i think a lot of tightening again in the second half of next year, but that's a story for another day. that fall from 8 to 4 that's

highly probable in my view will be a good period for risk assets for equities and perhaps even bonds. >> cameron, you want to be long into what mr. powell has to say today, and do you think 8 to 4 is the easy piece of this? >> well, for the first question, i think we probably shouldn't read too much into a one-day reaction to the fed meeting, because we've seen big one-day reactions, be they up or down, and have them completely reverse the next day and the following days after, and i would agree that the path from 8 to 4 is the easy part, and that's what's really driven by goods inflation, by energy inflation, but then the fed has a sticky inflation problem, because sticky inflation measures, those that go high and stay high, don't move around a lot, they remain at 30-year highs, and a lot of that is because of services inflation, and that's what's really driving the month over month inflation increase

that we saw in august, and that's all because of the labo market the labor market remains really tight, and the fed knows that, and that's why they're talking about a willingness to see higher unemployment in order to cool wage inflation and in order to cool services inflation the challenge is, the labor market is a lagging indicator, and it will take time for that to work its way through. >> hey barry, did you have a chance to hear what jim cramer had to say this morning? >> >> i did i'm a little less concerned about the labor market than cameron and probably closer to jim's point of view. from a labor market, slack starting to loosen perspective labor force participation is back to pre-pandemic trends but i think productivity is much stronger than -- on an underlying basis than most people think and that will ultimately create some relief there. what i'm particularly concerned about, from a sticky inflation

perspective is healthcare inflation, education inflation, all the policy-related stuff for those that didn't see the fourth paper presented at jackson hole, skip the math, but go read it it basically asserts that without debt sustainability, without the fiscal authorities pushing in the same direction as the fed, they're unlikely to be successful or the costs of the fed resolving the problem will be too high or prohibitive so -- but i agree with jim and from a sentiment perspective, i just spent a couple days in boston you can use your imagination on who i might have been talking to, and people are decidedly negative people in new york are negative. everyone i talk to is decidedly negative, and you can see it in sentiment surveys. so, i think the market's positioned so defensively that it wouldn't take much to get a decent rally going >> barry and cameron, we got a hard break we want to thank you both for

your perspective we'll all be watch be ing todayt 2:00 to see what the rate ultimately turns out to be and what jay powell has to say about all of it. you've been seeing green on the screen we've still got half an hour ahead of the market. we will see where we end at the end of the day we should take bets. that's what people do every day. make sure you join us tomorrow, sq "squawk on the street" begins right now. good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with david faber here. jim cramer's at 1 market in san francisco. big day. fed decision at 2:00 eastern, big bank ceos at house financial services, potus at the u.n. as putin begins this partial mobilization futures taking all to in a road map this morning begins with fed watch 75 basis point rate hike is expected, but it is the outlook for future rate hikes that investors will watch more

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