first time in years. and head back to capitol hill for another grilling. it is thursday, september 22nd, 2022 "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm rebecca quick along with andrew ross sorkin joe is on assignment at a conference in california he'll be joining us later this morning. in the meantime, here we go. the first day after the big fed decision and hawkish talk coming from jay powell. you see right now after a huge decline yesterday, another 550 points for the dow we are indicated up by 58. s&p futures now up 1.5

the nasdaq is in negative territory. down close to 5 points right at the flat line for the s&p and nasdaq again, the losses yesterday adding up to what we have been seeing with steep losses that began last tuesday with the decline of 1,200 points of the dow after the hotter than expected inflation number. check out the swings amid the fed rate and the news conference you can see really hit rock bottom at 2:30 or so you can see by the end of the session, down 522 points treasury yields on the move as the markets try to catch up with the fed. at this point, the expectation is another 75 basis hike in november that is what the fed official said the 30-year is 3.49% 2-year is up 4.1%.

10-year at 3.54% >> continuing this morning let's talk about breaking news japan intervening to prop up the currency for the first time since 1998 this after the boj wanted to commit to low rates which pressured the yen. dropped 22% in value this year heading into today in europe, the swiss national bank raising its rate by 75 points the second hike in 15 years. snb saying it can't rule out more hikes you are seeing this in a broad based way. do the central banks have control about this >> you are watching the globe tightening this is not just a u.s. story. the u.s. has been first and in

the forefront which is why the dollar is stronger joining us now to talk about this theme of rising global rates is roger ferguson. he is former fed vice chairman and former president of tiaa he is with the council of foreign relations. roger, it seems the market is getting the message when jay powell says he is moving rates until they are restrictive has the market caught up with the fed or is there more of a reckoning to come? >> i think the market has caught up with the fed as of today. i think the challenge as the fed may find itself going faster than it currently expects. i think that is the dilemma here they were clear yesterday about the message of higher and more quickly and for longer i think the market heard that.

the incoming data will drive whether the fedex cute executes plan >> watching the other central banks, roger, the fed's actions -- this is not coordinated. they have not sat down and said we will be doing these things. what the fed has done tightening, it doesn't leave much room for the other banks to do anything else >> that is right the other banks are in a bit of a dilemma. we should recognize this inflatio inflationary challenge exists globally it is not just responding to the fed if they weren't confronting inflation in their countries or fear of inflation in their countries, they won't necessarily have to follow we have inflation global and all of them moving the same direction. >> i was a little surprised. bank of japan taking steps to

shore up the yen since 1998, bu not doing anything to raise rates. inflation shocks japan that comes in at prsurprising levels 2.8% that is nothing compared to the globe. north of 13% in germany. that is when you strip out other forces >> exactly right the japanese have been struggling with inflation and disinflation and deinflation for several decades now. for them, getting to 2.8% is a sign of success. you are worried about the export side of the economy which is why managing the yen properly is going to be important for them i think they are in a slightly different place where they are welcoming the inflation which is, as you pointed out, relatively low compared to the

eye-popping numbers in other parts of the world >> we started to hear the pushback from people in consequcongress and senate who are concerned about what will happen to the economy and other business leaders raising concerns about this the federal reserve expectations, if you ask those who sit on the board, is that they will raise another 75 basis points come november there will be political pushback pushback will they withstand it >> i think they have no choice i think jay powell was clear using words like resolve he recognized and put back into the conversation as the mandate is given by congress to respond to inflation that is why you have an independent central bank the overall long-term goal is more balanced with sustainable growth i think he lined up his arguments as well as he can and now a question of executeing on

the word resolve he used >> that is correct you have political pushback that says you have two mandates from congress one to protect the jobs market and how can he pushback? how can he insulate himself? will he receive protection from the biden administration as they get closer to the election >> i observe the biden administration has taken a change from other administrations saying we respect the independence of the fed full stop and making few comments i think what we heard from powell yesterday is he sees this as a way to protect the long-term labor market so i think he is trying to protect himself on the labor market by saying when you have inflation, the path to the successful dual mandate is the focus on bringing inflation down he will point out that inflation

is a very visible tax on low and moderate income people that many are worried about. he will have a dual defense on that part of the mandate the labor market part of the mandate. >> no question inflation is so insidiary once it gets in the economy will they send other people to talk about that? it is true inflation is horrible. it hurts people more than just about anything getting that message out there, especially in the crazy campaign season who is out there educating people and talking about that? >> i think the answer is all of them it is a message reserved by the presidents of the districts. jay powell is repeating the message he has given several

times. you expect to hear the others doing the same at the end of the day, it is the powell voice that is the loudest one. he has been consistent i know as he started to answer the questions, the first thing he said, i'm repeating what i said in jackson hole for him, it is a consistent theme. >> roger, how much of this is jaw boning as opposed to continue to raise rates? obviously he will to some extent going forward, but how much is he hoping by talking tough he can shift the narrative and shift the economy unto itself? >> i think he is and i think he might believe that by definition hope is not a strategy why do i say that?

you heard him talk about financial conditions, he was talking about the market anticipating the fixed income market and anticipate ing what likely to come i believe that will add because of the goal of transparency is to get the market to do some of your work for you. that is one of the things he is hoping on the other hand, if he doesn' deliver or as soon as he gets to the pause or take a breath moment, the market will get ahead and start to reverse it is a delicate dance to communicate and get the markets to stay with him and also having to deliver so the markets don't quickly move ahead to a pause or easing that he does not want built into the markets at this stage. >> roger, we had barry sternlicht on last week. he made the case that raising rates thus far worked in ways we

don't understand or fully appreciate that actually the market, not just the market, but the economy has already turned and it is starting to get easier to hire people you are starting to see some of the effects in the marketplace do you believe that? if so, do you think it will change any of the dynamic as we look toward the next fall and winter months? >> i think jay powell yesterday pointed to a number of places where we are starting to see some weaknesses. the housing market was one of them he talked a little bit about perhaps a slight increase in labor force participation. he came back to the main thing labor market is out of balance we still have roughly two jobs for every unemployed individual. i think for him, it is the labor market themethat is paramount. i think that's the one that has not moved nearly as far as

they're hoping having said that, there is always a risk they will stay too long. >> the nod to the housing market and the damage there was his acknowledgment was yes, i hear you, but it will not sway me roger, what do you think the terminal rate is that is what the market is still trying to figure out >> first, they think the term thet terminal rate is 4.6% to frankly, they will have to get to a higher terminal rate than expected i think that's really the dilemma for the markets. as far as 4. if they don't see what they are

expecting, we may find a terminal rate higher than that, becky. that's a little bit of the challenge confronting everybody with future surprises. >> roger, thank you. we always appreciate talking to you. >> thank you >> helping us understand coming up when we return, the top corporate stories and target holiday hiring planning first, as we head to break, check out the biggest pre-market winners and losers stay tuned you are watching "squawk box" only on cnbc >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

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welcome back to "squawk box. take a look at futures hanging in there to some extent. no rebound that you anticipate after the decline yesterday. the dow was down 522 points yesterday. this morning, it is indicated up by 31 points the s&p and nasdaq which were also down sharply yesterday are indicated lower. nasdaq down 13 points. s&p down 2 if you look at the treasury market, the yields are crazy yesterday at this time, we had not crossed 4% for the 2-year treasury this morning 4.015%.

the 10-year treasury at 3.544% 30-year lower at 3.483%. let's talk headlines ftx in talks with investors to raise up to $1 billion in funding. potential infusion of the crypto firm is $32 billion. that is in line to be flat with the prior financing earlier this year >> shoring it up >> yes this is an increase in the valuation. it is just putting more money at that valuation sources telling cnbc negotiations are ongoing and the terms could change ftx has been on a buying spree using that money to buy stuff at a discount we'll see. ftx spokesperson declining to comment. >> he has been open to the idea not all of the deals he made will payoff. he thinks some will. >> a venture capital model get one or two to kill it and

the rest strikeout, he will survive. interesting way to do it he's a private company we also have other news this morning. you have not heard news like this in a while. retailer target out with the holiday forecast planning to hire 100,000 seasonal workworkers starting wage range was $15 to $24 an hour. seasonal workers will have access to benefits and discounts. this is the news you have not heard in a while target deal days discount events begin in october. the holiday season will have a price match guarantee through december 24th. if a customer buys an item and the price is lower, target will match the item consumers have not seen things like this in a long time discounts coming in. retailers are stocked for the holidays they have inventory that is here and they want to move that and

they will battle to see who comes into the store grab the traffic brian has talked about how consumers are showing up for special events >> the door buster i think that is overdue to safety thanksgiving door buster that's over? >> yeah. the discount and in days of inflation and tight inventory. you have not seen that in a long time. >> in terms of hiring, it may be easier for them to hire than they thought. >> what is what jim cramer said. he spoken with 24 executives recently and said every one of them had an easier time. it is a huge concern for jay powell and the fed >> that's the crack. you are seeing it from ceos. new york in the last 48 hours. same narrative >> layoffs you heaare hearing wh

banks and ford when we come back, the big headlines from the capitol hill hearings with the ceos of the nation's biggest banks. first, reminder. you can join us at the delivering alpha the powerful investment event of the year will return in-person in new york. next wednesday, september 28th if you like to attend, scan the qr code that we will show you at the bottom of the screen in just a moment or go to deli deliver deliveringalpha.com to register. stay tuned this is cnbc

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box. it's time for "executive edge. ceos of banks testified on capitol hill yesterday one question was how they would handle gun transactions after the iso group approved a merchant gun code for retailers. >> i canbank we do not plan to limit sales. >> you do not? >> we do not intend to limit the purchase of firearms by our individual card holders as a result of the code >> i don't know what they use it for. we don't want to be in the business telling americans what to do with their money we understand your concerns over the issue. >> it is interesting the goal of creating that code was never to limit the banks from actually blocking the transactions

two people talking to two sides of the aisle the goal with the code was always so effectively if you did it right, you could monitor the transactions if you saw suspicious patterns, it could be identified and reported the goal was never to get people not to -- >> the goal with the liability becomes down the road. you understand the banks' thinking wait. >> the reason when i say they are talking past each other. we do this and if the banks were asked directly when it comes to human trafficking and folks who are working -- sex workers -- all sorts of people working in all industries anti-fraud money laundering if you ask jamie dimon or anybody. do you block transactions on p pornpub, but if you saw the pat

p earn where it was trafficked, do you report that back? >> that is for most illegal activity money laundering trafficking. >> they don't block. >> aren't they using crypto at this point i would think credit card is not the best way to pull off the transactions because it is so closely monitored than the crypto >> the issue is around credit. we talked about this before. >> you are talking about the guns in particular not credit for human trafficking. >> i think some of it has moved into the crypto world. i don't think the entirety has moved to the crypto world. you see money flows back and worth from traditional banks to crypto that money -- >> i'm trying to differentiate legitimate purchases >> that money is reported every single day

you move $10,000 from one bank to another, that is reported that is reported to the u.s. government they are looking for suspicious. >> they are regulating more and more there is the larger burgeoning area >> the larger economic section there is a whole debate how that will work. this usissue specifically the only point i was going to make when they say we don't want to use the code to block purchases. they don't want to use the code to block purchases the point was never to block the purchase, but to use the code to identify suspicious behavior so if there was a problem, they could get at it earlier. >> the problem should be should they use credit cards to be used for any retailer you can understand why they are concerned about what is to come

based on the discussions of where this stuff started. >> sure. i understand what you are saying when you hear what jamie is saying and jane frazier saying -- there is a separation. >> there was crazy talk yesterday. not this issue should you finance that to me was it. every congressional person is saying here is my wish list. will you promise you will never loan money for additional fossil fuel production. jamie's answer to that >> no. we should show that. >> that's the road to hell everybody comes with the wish list the ceos have to hit and say we want you to do this. will you promise you will never charge an overdraft fee or you will make sure you loan money to everyone at half the rate of the going mortgage costs so people can buy this again the list of problems they want fixed is enormous.

>> some are worthy and some are less worthy. >> depending who you are first-time americans to be first-time home buyers i think for the most part, they had decent answers to the question questions. >> it was pretty fair. coming up, triggering wild swings and corporate america turning to the flash point in the mid-term elections we head to d.c and hispanic heritage month and we celebrate our contribute er sandra campos. >> it is proud to be my heritage we are uniquely strong and showcase our strengths in the workplace and at home. from my upbringing, working in

my father's factory and learning about warehouse and production i have taken that and applied a lot of those lessons learned throughout my own career >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business. go. go green. go wind turbines. go gorgeous reliable grid. go emerson software. go science people. go breakthrough meds and safe science. go space age welds for super silent cars.

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well come back to "squawk box. we have ylan mui here on the set. not in d.c >> there is a fight over capitalism and what to do about it it is creating ia rift in the business community reid hoffman is claiming the 2020 election is rigged and recruiting others to the cause we is recruiting jeff lawson and barack obama saying they are under estimating the threat of the maga movement.

>> their arecentral mission is anti-business. they will go after disney and major league baseball the question is do we fight? >> this has races up and down the ballot supporting stacey be an braham abrams. there is big money on the other side, too. peter thiel bank rolled candidates in ohio and arizona both said there was fraud in the 2020 election. thiel is hosting a fund-raiser to support the nominee the mid terms are a test if the new anti-woke attack on businesses will work for republicans. if they win in november, expect to hear more of the message heading into 2024. >> how much does this mix with other messaging?

we have seen the polls democrats have picked up for a while and it came back down and now republicans on the up swing. everybody will say it was because of what i did and trying to claim victory for this. there are so many moving pieces from roe v. wade to the inflation picture. how can you point to it and say this was responsible for this? >> i think that's interesting question because part of what the challenge is defining what goes into woke capitalism. a difference do you believe that the 2020 election was rigged versus do you believe the supreme court overreached on the decision or do you believe in esg? all of throws getting mushed together the republicans are trying out attacks on businesses on those fronts and seeing if it sticks i think the danger for businesses and for corporate america is that as a ceo, you have to navigate that and you

are damned if you do and damned if you don't you have compassionate constituencies >> if you are not on my side -- >> absolutely. >> tough to navigate >> we talked about this before the i issue that some companies nike for instance, they leaned into the idea they will go with whatever the athlete they will support whatever the athlete decision is. they don't sit around and say 50% of my audience is this i'm not sure 50% of their audience is this or that they just made their way there are companies that have figured this out better than others there are companies that sit right in the middle the. >> by the way, don't want to get dragged into the fights. they don't want to alienate any customer >> you had a really good segment on a couple of days ago around the stride etf

the question of a movement toward stake holder capitalism versus shareholder capitalism. you know, who are the constituents that matter to the business and ceo how many should you take into account or maximize on financial returns? >> ylan, thank you when we come back, growing political risks. russia arresting anti-war protesters after vladimir putin's partial military callup. stay tuned you are watching "squawk box" and this is cnbc >> announcer: currency check is sponsored by interactive brokers. the professionals gateway to the world's markets.

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a developing story this morning in the wake of vladimir putin's decision to initiate russia's first military mobilization since world war ii. g7 foreign ministers will pursue more sanctions against moscow following the order. joining us right now is michael o'hanlon at the brookings institute. michael, what we're hearing right now, the saber rattling, i'm surprised the markets have not reacted more to it it was the fed that sent the mark markets lower, not this news how important are the latest moves from putin >> it indicates that putin is in no mood to concede the markets are showing smart calm this is probably as much rhetoric as anything obviously mobilization means

something in physical terms. i don't see a couple hundred thousand reservists who are not training or well equipped as making a fundamental difference in the war it signals that putin is not going to find a way to ease out of the conflict and concede much of the territory he's gained in the last few months. we still have a path forward that is very uncertain in that sense, this war could go on and could resemble world war i and you build more arrtillery shells and strength offensive. maybe the markets should be more worried. i don't see this as a threatening escalation putin has the myth of the threat to the territory to justify the nuclear threat maybe he was not being serious or literal, maybe he was stating there is no telling what is

next. >> are we on the edge of nuclear war or is he speaking hypothetically or metaphorically >> we are not on the edge of it. we shouldn't entirely dismiss it i think the west is doing well to support ukraine, but we have to get thoughtful of what peace could emerge from this so we don't get a world war i pieace i was in poland and ukraine last week i saw the nato supply lines and logistical effort to get supplies into ukraine. putin could decide to attack that supply link he could take a risk against nato territory it could shock us that he can

use to get some concessions or compromise or justify the war and claim partial success. those kinds of possibilities have to be allowed for again, he is not in the mood to concede right now. >> i have seen clips this morning of families saying good-bye to people who have been drafted in small russian towns how much support does he have inside russia at this point? >> it is fascinating, becky. there are 20,000 troops killed in action. 20,000 russian moms lost a kid that will translate into an oppressive dictatorship like putin. it will come to political unrest at some juncture putin has most of the russians behind him and poll numbers are still not bad. pretty good privby western standards. i'm not sure that means he will

back down. if you read his essay from last summer, he justifies the war in sweeping terms in ukraine's proper place in europe and russia's millennia strong against the west he translates this into a crusade. i do think he will keep at it. he has to keep an eye on his domestic support which is eroding. >> which makes you wonder what he does to shore up domestic support if you do something like attack a nato supply chain line, would you then have nato retaliate and that bolsters support from the people. wait they are now attacking snus. >> us. >> that is the game he is playing. he is just getting people to think through. you and me and others to talk through this scenario and have it shock us into a mood where we are willing to do negotiation.

i don't think there will be peace talks this fall. as we look into the winter and spring, maybe that plus the referendum he is every c encouraging in eastern donbas region it is possible where he tries to hold on to crimea and the east and make sure nato doesn't bring ukraine as a member and compromise on some of the territory. by then he may have lost anyway on the battle field. that is one way to look at what he is doing. he is showing resoluteness, but creating the beginnings of the sketch of the outline of the possible compromise. i have no idea i'm sure he is thinking in these terms of psychology as much as military preparation >> michael, thank you. and taking on disney on the

company her grandfather founded with payee equality. >> how many people do you know that works at disney that's on food stamps? >> she will join us live when "squawk box" comes back. okay season 6! aw... this'll take forev—or not. 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!

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futures. they are in the green but after a red day yesterday. meantime let's talk about a new film titled the american dream and other fairy tales that takes aim at disney and the wage gap between employees and executives joining us is abigail disney, the granddaughter of one of the founders of the walt disney company. it's very nice to see you. >> good to see you. >> we haven't seen each other in a very, very long time and the genesis of this film in a very strange and unexpected way may have come from a question that we asked you right here on "squawk box.

>> that's true i came on here to talk about taxing the wealthy and you just threw this little hand grenade at me. >> what the hand grenade. >> what do you think about bob iger's compensation. are ceos paid too much that's what you asked me i thought, oh, wait, i haven't thought this through should i say what i think here on live television i'm not sure i've run this through my strategic brain yet my policy is just to tell the truth so i went ahead and said what i thought which is jesus christ himself wasn't worth that much money and it went crazy. >> it went a little viral. >> because it went a little viral, i put out this twitter thread a year before you asked me that question i had been to anaheim for the first time to visit the workers and hear directly from them about what was happening in the park i thought there was something i had to do. i can't walk away from this and pretend that this has nothing to do with me but i was just paralyzed

and when you asked me that question and i clearly struck a nerve, it seemed like it was possible to talk about the wangz at the bottom and the wages at the top as though they were a single issue because they are. >> how much of this film is about disney specifically and how much is a microcosm or representation of what you think is happening in the economy at large? >> well, you just basically named the whole point of the film who needs just a film about one company. this is the story of the american corporate culture and how it's changed very radically over the last 50 years more radically i think than any of us really appreciates i lived through it, i watched it change and i watched it through the people i knew, which were my grandfather and the people that we would encounter when we would go to the park, and then through my open encounters with the workers there 50 years later so it seemed important because

disney really is -- if everything about it is a reflection of american history. >> and i'm very sympathetic -- well, i'm sympathetic to workers and executives on all sides of this there is cross currents of pressure. >> yes. >> even in the past couple of weeks you've seen the activist investor, dan lobe, attacking those -- moved aside temporarily at least around disney because there is pressure from investors on one side saying you're not doing enough, both on costs or just revenue opportunities. >> right. >> and the other side, there's you. >> right. >> and so the question is if you're leading a company like disney today, who are you supposed to listen to? and do you give credit at all to the growth of disney meaning there is something fabulous about what disney has done over the years. it employs 200,000 some odd people. >> right. >> so how do you think about that versus -- and i don't know how -- what you think of the wage issue and how large an issue it is or how small an

issue it is specifically at disney >> well, here, the growth is extraordinary. goodness knows as a shareholder i'm delighted by it, i'm grateful but i think there's an overemphasis on shareholders and overemphasis on empty. i may get the number wrong but i think it was something in the region of $8 billion in share buybacks in the years leading into the pandemic. well, first of all, did the shareholders need all $8 billion in that or did some of it belong to the people who produced those profits through the sweat of their daily work that's one question. so do we -- can we really say that pay workers better comes at the expense of shareholders or does it come at the expense of shareholders not necessarily getting all that much growth so what is the proper division of these things? it's a really important question. >> another thing is very hard to grapple with which is the

market one of the thing most companies do is they pay what the market allows for, right? >> right. >> it's very rare where somebody in the hiring position sits around and says can i pay you more -- can i pay you a premium above market. >> right. >> so how much of this is about the price tag that disney pays versus the price tag that people are paying for better or worse in orlando, for example? >> the problem with relying on the market too heavily for figuring out what you should be p paying people, the market is in a near state of collusion around the idea of what you pay hourly workers. in the sense that if i go to mcdonald's, wendy's, amazon, if i go to a lot of places, i'm going to get something in the same range. >> isn't that because that's what the market? >> that's what the market decided. but the market has also decided that there has to be these huge rewards for shareholders, huge

rewards for management we're not -- there's so much cash floating around in american businesses today they are so, so profitable and we're not using that cash to reward workers why should they live at the very bottom of what is tolerable or acceptable in the public eye i just don't understand. i know and i get it about costs. but labor isn't a cost these are human beings that work as your partners in creating those profits. and if they're your partners, how are they different from management and why are we not thinking differently about keeping them with you and giving them livelihoods >> to enlarge the conversation, it's actually a documentary. >> it's a documentary. >> and it's a fascinating one. we encourage to go check it out. thank you for coming in. >> it starts streaming friday. >> on? >> on amazon, vudu, all the places you go, american dream and other fairy tales.

>> and not on disney plus. >> not on disney or hulu. >> we should say that we got a statement from disney after your tweet that you were going to be coming on the broadcast. they say the following our amazing cast members, story tellers and employees are the heart and soul of disney and we work hard to ensure that our team is supported in ways that enable them to grow and it all starts with competitive pay and leading entry waejz and also affordable medical coverage, access to tuition-free higher education, subsidized child care and they go on just to give all sides of the debate. coming up when we return, a growing number of central banks he canning rates what investors need to know 'rcot all of it. wee ming right back with two big hours. alized. based on your goals, whatever they may be. all that planning has paid off. looks like you can make this work.

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that country intervening in its currency market for the first time since before the millennium but not doing anything with interest rates fortunately, we have the perfect guest to talk about awe all of this and what it means for investors around the world, david rubenstein will join us live as the second hour of "squawk box" begins right now. good morning, everybody. welcome back to "squawk box" right here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin joe will be joining us in the next hour with a special interview from the latitude conference in san diego. in the meantime we are keeping an eye on what's happening with the futures market you see equity futures are

mixed, relatively flat the dow is up 35, s&p is down by 1 and nasdaq is down by 7. if you were looking for the losses that have been building up over the last week and a half, not getting it just yet. the treasury market has been the one to watch that's where we have seen these extreme moves. yesterday at this time we had not just crossed the 4% time for the 2-year note. this morning it's at 4.103%. the 10-year is 3.542%. by the way, the 10-year is now inverted with the 30-year too. it's the first time we've seen the 10 year/30 year in a very long time. it's just been happening two or three times for more than a decade and it's all happened in the last week or so. right now the 30 year is 3.483%. then if you want to take a look at oil prices, the demand picture getting skewed by what's been happening with concerns about a recession but this morning there is a higher bid for wti. up by 65 cents to 83.59.

andrew. let's kick off this hour by getting over to dom chu. he has a look at the premarket movers. >> let's start off with a couple of analyst actions, one on a dow component. we're talking shares of nike up by half a percent or so. just about 11,000 shares of premarket volume after dropping 2.5% yesterday it's getting some help from analysts at rbc. they have initiated kucoverage with a buy raeting and a $125 price target they say better investor sentiment as the china business starts to recover so watch nike shares next a fintech mover in block, formerly known as square down 2%, 85,000 shares of volume of the it fell 3% yesterday. analysts have downgraded that stock to a neutral rating from a prior buy. the target price gets cut to 57

bucks. it was 125 they think slowing user growth and adoption, fewer inflows into its network and what it calls misexecution in its buy now, pay later strategy we'll ending with a check with economically sensitive stocks that got hit hard yesterday in the fed's rate decision and the revisions to its economic outlook diamondback, freeportmcmoran, las vegas sands, united airlines, measuamerican if we can put up a chart of accenture, down 2% premarket volumes are starting to pick up but revenues and earnings come out better than expectations, becky, but its first quarter revenue forecast did fall shy of expectations amid a slowdown in i.t. tech spending some inflationary headwinds, currency headwinds so watch those shares, down 2%.

back to you. in the meantime some breaking news. the very latest central bank move this morning. the bank of england as expected raising its benchmark rate by 50 basis points this comes after what we've heard from so many other central banks this morning steve liesman joins us with what's already been a pretty busy day for monetary policy on the heels of what the fed did yesterday. >> no sleep for central bank reporters today because it's moving around the world, becky the bank of england was a close call here. it was 5-4, all nine voting to rate rates but three of them wanted to go by 75 there was a lot of talk in the market about the possibility of 75 the base case was 50 the bank of england did deliver on that but also talked about asset sales and their concern with the government's energy police guarantee over fueling and inflation. this is a potential issue where governments may come in and try to subsidize energy prices there. that creates an inflationary problem for central banks.

we do have this move around the world in response to the fed's big move yesterday and also in part a result of their own inflation problems take a look, the swiss national bank up by 75 basis points, indonesia as well. japan unchanged. the first currency intervention since 1998 all this coming after the fed's third 75 basis point increase and signals of more to come. remember, markets had already previously ratcheted up their outlook but the fed outhawked the hawks on this one. 4.6% next year topping market expectations significantly fed chair powell says he thinks it's likely the fed actually hits that forecast >> we've written down what we think is a plausible path for the federal funds rate the path that we actually execute will be enough it will be enough to restore price stability so this is something that as you see has

moved up we'll continue to watch in the coming days and ask ourselves whether our policy is in the receipt place as we go >> in response to my question, which came off of some of the comments that barry made on our hour, powell said there may come a time when the fed stops and waits to see what impact it's having on the real economy, but he said that time is not now, becky. >> steve, we spoke with roger ferguson this morning. he made a lot of interesting points on this just the idea that the market is waiting for the fed to pivot as soon as they do, it's going to try and take advantage of it. powell is in this position where he has to not just talk tough but continue to do the tough things because some investors weren't believing what he's been saying for a while. >> yeah, i think that's right. roger is 100% correct. if you put blinders on or draw a ring fence around the idea that there's any possibility of the fed wavering in its rate hikes,

so it comes forward with this very, very hawkish outlook and powell puts a stamp on that by saying, yeah, we're probably going to hit that. sometimes the fed chair says oh, those are not what we mean, but he really has embraced these forecasts now and using them as a tool of policy to convince the market how much conviction, how much dedication the fed has to raising rates and stamping out inflation, despite what could be that negative fallout. so he is not going to stop his answer to my question, not going to stop to look around and look for those things barry was talking about on our air. >> steve, we were talking about jaw boning as a tool and how much you can actually move markets and move the economy just by speaking however, in this specific case he's put real specific numbers on things. i wonder whether that is actually going to tie him to those numbers even if you think

data dependency shifts, if you will >> i don't think he's going to be strictly tied to those numbers, andrew. it's sort of interesting to go back and look at my twitter feed when raetes were zero, people said the fed is not going to raise rates. look at where we are between 3 and 3.25 the fed has followed through on the question of credibility, i think the chair is clawing that back in terms of providing the rate hikes that he said he was going to do. but look, if the situation changes. let's say the bottom drops out of inflation here. let's say some of all the things that we know are causing this inflation were to go away and the numbers come in over a period of time in aconvincing way, the fed might stop to look around i don't think it's going to cut right away i think what it's doing, guys, is taking a fire hose to the fire here and it's going to keep dousing it until it's sure that fire is out. you'll note that powell talks about the 1970s experience with

the stop and start in terms of the boosting of rates to combat inflation. they're not going to do that of the they're aware of that history. they're more likely to do what volcker did, which is to hike and to hold for a while. >> steve, the only point is if the market is not believing them look, they may not be tied to these levels, it may not be a hard geiven, but that should bea concern for the market too as roger pointed out this morning they may look around and say we're not tied to these numbers because we may go higher. >> that's a risk but look at the 2-year, becky. it's a sign of conviction and belief in the fed. remember what the 2-year is to a central banker the 2-year is the average of the one day overnight rate of the fed over two years so if you think about what a 4 spoken 1% 2-year is, that's

pretty dramatic in terms of the market's move. remember we were talking yesterday about whether it had reached 4% that seems like kind of quaint, our discussion now that we're solidly over 4%. and there is conviction out there, becky, as you can see that the fed is going to move and move pretty solidly up to that at least over 4% for a period of time, which is important to note the fed still has work to do this year it is not over by a long shot. >> that seems to be the case steve liesman, thank you for helping us through this this morning. >> sure. >> and thanks for those important questions you were asking to jay powell yesterday coming up, david rubenstein will weigh in on the fed's latest rate hike and other central bank moves around the world. next, big bank ceos getting grilled by house lawmakers today and will be back for more in the senate. after the break we'll speak with pennsylvania republican pat toomey, the senate banking committee's ranking member before we head to the break, let's get a check on the

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welcome back to "squawk box. with inflation, the leaders of america's largest banks are getting grilled on capitol hill this week. yesterday it was house members doing the questioning. today it's the senate's turn i'll show you what jpmorgan jamie dimon told lawmakers yesterday. >> we're paying the price of too much fiscal monetary stimulus. i don't want to second guess all the people doing that, that might have been predictable at the time, taking the right action to reverse it but i don't think you can spend $6 trillion and not expect inflation. we've got to move forward and grow the economy, which is the best way to reduce inflation and help all of our citizens. >> with what to expect from today's senate banking hearing, senator pat toomey good morning to you. >> good morning, andrew. >> we did hear from some of the ceos yesterday what are you looking to up pack today that we might not have heard yesterday?

>> well, we don't always plow a whole lot of new territory, andrew we'll see how it goes today. there will certainly be some more discussion about inflation, it's such a big deal and it's so important to all of our constituents i think there will be some discussion about regulation, especially maybe capital requirements, and then some of us, myself included, will be urging these banks to remember that it's not really necessary for them to weigh in on every social and cultural issue that divides americans. they actually could focus on their business and do the really important work of banking. so, you know, we'll cover all that ground. >> can we talk about that for second and that came up in yesterday's session, perhaps the most sort of hot, viral moment actually was when jamie dimon was asked whether he would effectively say that they wouldn't -- that they wouldn't finance fossil fuels. he said absolutely not i think that would be a road to

hell for america basically. >> yeah. >> you have these sort of interesting cross currents right now where these companies are being pressed on both sides. in fact i would argue to you interestingly, you know, for a long time it was a very sort of -- you'd see blue state pension funds and treasurers and things like that try to use their influence and you would hear from red states and the republican side say, you know what, those are terrible tactics. you should not be using those tactics and not use your influence on those ways. now you're seeing some of those same tactics being used on the other side so if you're in the middle or if you're a c eeo in the middle beg the target of this, it's a hard place to be. >> well, it can be a hard place to be, but obviously some of the republican state treasurers and others have noticed that every single time that big bank leadership weighs in on these cultural and political and social issues, it's always on the left

and after a while, that starts to get kind of annoying, not to mention the fact that, you know, roughly half of all americans are not on the left of the political spectrum so look, my advice is stay in your lane. i mean we have democratic processes for addressing and trying to resolve as best we can and, yeah, it can be sloppy and it's not usually elegant, but that's how we resolve these issues the idea of having a handful of senior executives somewhere make these decisions for the rest of americans certainly undemocratic and probably in the long run not great for business because at some point, you know, they'll ending up being treated like a public utility if they go too far down this road >> senator toomey, i know what you're talking about with some of these decisions i don't know that the bank ceos have been front and center for a lot of this. the bank ceos have gotten pressure to do things like get rid of any overdraft fees, make sure that they are lending to

people who might not have qualified in the past. i don't know that that's woke politics as much as, look, some of them think it has made sense. you've had frazier at citi say it's good sense for their business you've heard moynihan at bank of america saying they're doing some of these things i don't think a lot of these ceos have been front and center. jamie dimon has spoken out pretty vociferously. >> i'm not talking about those things i'm talking about when they weigh in on the merits of the georgia election law or weigh in on whether abortion should be readily available. >> but i don't think the bank ceos have weighed in on a lot of those issues. >> oh, absolutely they have. absolutely they have not all of them but many have. they put out statements and they are the ceos and chairman at the time they have done that but many of them have weighed in on those kinds of issues that are clearly have nothing to do with their core business no, your point about having a

debate about, you know, overdraft fees, okay, that's a business decision that you've got to make. i think it's actually kind of ridiculous if there's an overdraft, that's an extension of credit and of course there's going to be a fee attached one way or another, but that's different. >> senator, let me ask you a different question do you think that businesses should be involved in politics at all i live in new york city. we're here in new york city right now. there is a lots of questions about crime in new york city, safety in new york city, all of which, by the way, is not just a policing matter but has to do with the laws in new york state frankly. >> yeah. >> and the question is should business leaders decide, because they think it's good for their business or their employees have a position which is that they care about their safety that they should speak out on those issues and how does that differ from employees calling up their leaders at their businesses saying, you know what, this voting issue to me is actually

something that's very, very important if i'm going to actually live in this state and work at your company >> yeah. so i think the dividing line that i would think about is the extent to which it directly affects the company. if crime is rampant around your company's headquarters, that's a really big deal. it matters you've got to do something about it or you're going to have to leave, right but, you know, when you're a company that's headquartered in san francisco or new york city and georgia changes its election law. and by the way, it ends up with a more liberal voting regime than new york or delaware has, the idea that you need to weigh in on that and somehow criticize that, i think that is clearly outside of what's necessary. but hey, it's a free country. >> but is it about the statements that these companies are making that you find troubling? is it after roe v. wade and a lot of companies around america said, you know what, we will pay

for employees who are in states that are affected to be able to get health care services in other states, in many cases without making statements but they put those policies in place. do you have problems with those policies and how much do you want the government to be hands on telling companies they can't do that versus on >> no, i'm not introducing legislation, andrew, to forbid this they are private entities. they have their own governance, they can decide what to do i'm simply suggesting that they ought to be really careful here. when they become advocates for policy that is not central to their business and that is a very divisive issue, they ought to be careful. there will be a backlash some will come from their customers. some will come from future congresses probably if this goes too far. that's my point. >> senator, just overall your biggest question today that you're going to have in terms of like the actual banking that's taking place, what concerns you?

what do you think you want to make sure they get the message on >> well, you know, one of the things i think we need to underscore is we have this bubbling notion among some of the big regulators that the larger regional banks can't be resolved and, therefore, we need to hit them with big, new capital requirements similar to what the others are subject to that is a direct contradiction to the fact that they have to submit resolution plans to those regulators the reg letters sign off on the plans and now they're saying somehow despite the fact they approved your resolution plan, we don't think you can be resolved that's a contradiction and there is a price to be paid for continuing to layer on more capital. our banks are more capitalized now probably than in my lifetime, they have tremendous liquidity. i don't think anybody believes the next big financial problem will come from our banking sector, at least not any time soon and the cost of adding those new

capital requirements when they're not necessary means less ability for them to do the business that they do. so i think that's an important issue that we ought to discuss today. >> senator pat toomey, it's great to see you good luck with the hearing and we look forward to seeing the outcome. >> thank you. when we come back, we have much more on the markets on this day after yet another interest rate hike. and then in the next hour, our news maker of the morning, alex karp will join us for an exclusive interview. what he says governments and investors need to know about russia's nuclear threat. "squawk box" will be right back. time now for today's aflac trivia question. meat year was "the new york tis" founded the answer when cnbc's "squawk box" continues look at the size of that- gaaaaaaaaaaaap!!! is that a goat?! you talkin' about me? gaaaaaaaaaaaap!!! i think this goat is saying “gap.” must be talking about the expenses health insurance doesn't cover. so who's talking about the money aflac pays to help close that gap?

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now the answer to today's aflac trivia question. what year was "the new york times" founded the answer, 1851 still to come this hour, david rubenstein will join us for a wide-ranging conversation on the interest rate hike. plus the first japanese intervention in the fx market in more than two decades. you don't want to miss it.

as we head to a break, a reminder, you can get the best of "squawk box" on our daily podcast. there's a code at the bottom of the screen scan it and listen any time. we're back after this.

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what we hear from people when we meet with them is that they really are suffering from inflation. if we want to set ourselves up, really light the way to another period of a very strong labor market, we have got to get inflation behind us. i wish there were a painless way to do that there isn't. so what we need to do is get rates up to the point where we're putting meaningful downward pressure on inflation. >> that was federal reserve chair jay powell speaking with reporters after the fed's latest interest rate hike as we've been telling you, other countries are following suit this morning, including central banks in england, switzerland and norway in japan, the government just intervened in the foreign exchange market for the first time since 1998. we have the perfect guest to talk about all of this this morning. joining us right now is billionaire investor and

philanthropist david rubenstein. he has a new book out, "how to investor, masters on the craft." several heavy hitters were interviewed for the book david, we've spoken with you about the book but let's talk about the news this morning. a lot of people caught off guard by what the fed did yesterday, not in terms of raising 75 basis points but jay powell saying that, look, we're going to be looking at a longer time of higher rates the terminal rate now 4.6%, maybe 4.7% it surprised a lot of people on wall street, but did it surprise you? >> well, not really. but i think what the fed has is three powers they can increase interest rates, they can telegraph what they're going to do and explain what they have done and are about to do in the future. yesterday it was not so much the surprise about the 75 basis points i think that was telegraphed in advance. what jay powell is saying is they're very serious about getting the inflation rate down to roughly 2%. and to do that, what he's saying

in fed speak is that the unemployment rate is going to have to go up much higher than it is. it's about 3.7% now. he didn't say this but it will probably have to go 5 or 6% before inflation can get down to 2% that's the message that the market received. the fed is very serious about getting it down to 2% in the foreseeable future >> we've had a running debate about whether the economy is really starting to suffer from these higher rates or not. the answer to that depends on where you sit. we've gotten various answers anybody involved in housing and real estate said yes, the pain is here and it's here pretty deeply, we're feeling it other places say no, he's got to keep raising interest rates. you've got a lot of different businesses that you see through carlyle. what are your thoughts on how the economy is faring and whether we need to see more interest rates to bring down inflation? >> well, i think interest rates will have to get higher to get inflation down i don't think we're in a technical recession right now, which is to say another quarter of negative growth

i do think that the third quarter will be positive growth. we're in very low growth range, let's say 1.5%, something like that europe is not in as good shape i think europe will more likely tip into recession before the united states does because of the higher energy prices they have to deal with compared to what we're dealing with now. but i do think that jay powell's main message yesterday was we're going to be coming back and get you again with higher interest rates. and the market had before yesterday thought that maybe next year the fed would stop increasing interest rates. the big change is the market now is fairly confident that the fed will increase interest rates early next year as well and not just pause for a while or even lower interest rates, which is what some people in the market thought would happen early next year it's clear from jay powell's statements that's not going to happen of the they're going to have to increase interest raets the rates the first quarter of next year. >> why do you think rates have

to go a lot higher to shut that off? >> the only way to deal with inflation is increasing interest rates. it's clear when you increase interest rates, inflation will come down over a period of time. when i worked in the government, paul volcker showed that very clear low. that produced a great recession in the early '80s and i don't think anybody wants anything like that again. whether the fed can engineer a so-called soft landing, which means avoiding recession, nobody really knows most people on wall street today think it's very difficult to avoid a soft landing if the fed is going to get inflation to 2%. >> let's just talk about specifics in business, though, and i'm asking this just because we're trying to gauge as many economic data points as we can we had barry stern on with us and he was talking about how things are starting to roll over you see the pain in the housing market you see pain in places like airline prices that are already starting to come down of the he said hotel rates, you can see

them starting to roll over too things are happening much more quickly than the fed may realize. i wonder what data points you're watching if you come down on the side of inflation, where do you see that inflation where are the real numbers is it labor, yinput costs? >> labor prices are going up because there's a labor shortage and prices are going up to get good labor there's no doubt that the supply chain is not as strong as we'd like it to be or as efficient as we'd like it to be and as a result you're paying higher prices generally there's a lag factor it takes a while for the market to catch up to the reality we've had inflation for a while but now that prices are going up a bit reflecting what's happened three or four months ago at our firm we take several hundred companies that we have and extrapolate their quarterly sales, their earnings and their performance and extrapolate it and compare it to what the u.s. government is doing or the u.s. economy is doing over a period of many, many years we have found there's some

correlation between how certain companies perform and the u.s. economy is performing. right now i'd say we don't see a recession right now but i can't say it won't happen in the future i think it's likely that the fed will not say they want a recession. they don't say that and they never say that, but they know the only way to really get inflation out of the system is to jack up interest rates, and that inevitably will produce probably a hard landing. they won't say that but probably something between a hard landing and modestly hard landing is what they would like to get. if they could engineer a soft landing, that would be wonderful. but nobody theinks anybody is that good on how to get interest rates up and inflation down without having some type of recession. that would be a very difficult task to do. >> jay powell keeps warning that we are going to see pain and that pain is going to come in the labor market you are going to see the unemployment pick up jim cramer has talked to a couple of dozen ceos over the last couple of weeks on the west coast and all of them are

telling them that they are having an easier time finding workers now. that's a very good sign of what's happening in the economy. that's what you'd like to see, companies having an easier time luring people back to work have you seen that in your companies? >> it's difficult to get people back to work physically in offices that's for sure, but getting them back to on the payroll is not easy either one of the challenges we have is that historically about 66% of the american adult population was in the workforce now it's about 62% so you have fewer people actually available to work for a number of reasons. people decide they want to drop out of the workforce or drop out temporarily and are not working. so employers have a fewer number of people to work with to try to get them to work >> but you haven't seen movement on that front, let's say, in the last couple of months? >> people are not rushing back to work, that's for sure i think the unemployment rate -- the rate of the workforce of 62% is staying fairly steady the unemployment rate is very

low by normal standards. if you look at college textbooks on economics, when i went to college, they said the full employment rate is roughly 4 to 5% now we've been dealing with 3 sp .5% or so. so we've been redefining full employment and now we expect full employment to be 3.5% or something like that. something closer to 4 or 5% is more normal. we'll probably have to go a little above 5% to get inflation out of the system. >> david, when you talk to pension funds and others that are your limited partners and you talk about what kind of rate of return you can expect, has that shifted and changed given where we are both in terms of the inflation picture but also where we are in terms of returns in the public market and how that's going to affect the private market over the next several years? >> u.s. public pension funds generally overall are trying to get a 5 to 6% rate of return, maybe 7% in some cases that's very unlikely now

i would say that the kind of products that we have alternative investments, private equity kinds of things, are trying to get rates of return in the mid-teens. and that's probably what most pension funds are expecting from private equity, venture capital, people like that from the traditional equities and traditional bonds, much lower rates of return. but overall public pension funds need to pay their pensioneers and to do that they need to have roughly a 5 to 6% annual rate of return on everything that they have under management. >> david, one final question with all of these moves that you're seeing from other central banks this morning trying to play catchup with what the u.s. is already doing, trying to shore up their currencies at home, what does that do to change your investment thesis? what's the best place to be investing these days >> well, the best lesson that came out of my book is that when markets are going down, that's not when you rush out of the markets. what warren buffett and others have done historically is buy when the markets are cheap or

when there's blood in the streets so-called. so right now is not a time to panic and rush out of the markets in my view and so it's clear that many people are nervous and people are overextended on some of their loans, but generally it's not a time to panic. the best returns probably come from times when you have markets depressed like this, if you go in or stay in now, you're probably going to do pretty well markets always come back, it's just a question of how long it takes. i suspect we could be down for an extended period of time before we see the markets more b boy anxiety. but i think it's going to be a little pain for six months to a year. >> david, one of the masters and interviewed a lot of other masters. david, thank you it's good to see you. >> my pleasure, thank you. we want to reminrmind you t join us coming up next year as delivering alpha returns in person it's next wednesday at, guess what, i get to speak with david

there. you can meet with economic leaders, policy makers and the world's best investors as they share their insights on risk, opportunity and navigating the new market dynamic very important timing on this. everything is changing markets are re-evaluating everything, and you get the chance to speak with all of them anyway, hadgo ahead and check i out. go to cnbcevents.com/deliveringalpha. check out shares of brokerage stocks they're mostly higher. the s.e.c. will let wall street continue payment for order flow transactions, something the s.e.c. has been talking about banning for quite some time. we've debated it on this program many a team. but it appears at least based on this headline and we have to get confirmation that perhaps payment order flow will continue that had weighed on the stocks of rob inhood and so many other. coming up, teiktok trying t side step an issue that's landed facebook in hot water.

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welcome back as of yesterday tiktok says it is no longer allowing political accounts to raise money on its platform and more changes are coming is this a sign that the popular social app is getting safer in avoiding the kinds of problems that plagued phobia? well, jon fortt is here to weigh in on one side or another. >> or both. >> what do you think >> andrew, this is an important

move by tiktok ahead of a midterm home stretch where young people, tiktok's core audience, will be decisive in a lot of cases. blake chandley says tiktok's political party accounts to be verified and is preventing them from accepting payments on the platform this is a big deal they have an estimated 1.6 billion monthly active users and intensely engaged user base. campbell snacks did a tiktok challenge to see how many gold fish crackers people could hold in one hand. it had 2.9 billion video views the record was 301, by the way you get the idea. gen z is using tiktok as a search nengine to find restaurants and purchases. a lot of it are using it to form political prospects and even direct donations so yes, it's significant that tiktok is taking the concrete step of making sure the

political economy on its platform doesn't get out of hand despite all the concerns about tiktok, its leaders are taking responsible steps to prevent abuse, andrew. >> but then there's the question, is the biggest concern about tiktok in your mind through the verified political campaigns would raise money there? is that the issue? >> well, on the other hand, real american political campaigns raising money through tiktok isn't the problem, is it you know what's more interesting, who's clamping down on tiktok? t tiktok has access to a trove of data of what young people are thinking about every day it's all on tiktok short videos and reactionsare like an apple watch on the body pc politic. if you want it to swing an election, what you'd want is that data and an app that pushes messages out to a massive audience in a completely customized unauditable way

it's owned boy a chinese company. tiktok would have us believe it's led by a singaporean c eo the top officer said the company isn't headquartered in china because as a global company it doesn't have headquarters. as the kids on tiktok say, that's cap. >> or crap. >> no, no, cap. >> i know. >> what do you think u.s. regulators should do has it reached the velocity to even if you wanted to shut it down you can't and do you actually believe that china is taking that data and using it in some nefarious way >> well, first of all -- >> that's three questions in one. >> i'm going to forget at least one of those questions, if not

two. it's disturbing to me that there's been so much focus on just china, right? there has to be policy overall on what's done with americans' data by american companies by new zealand companies you know, threats can come from anywhere an i think there are nefarious actors out there that will be smart enough to make sure that it doesn't appear to be coming from a country that the u.s. is primarily concerned about. what was the second question >> maybe they hide hey, we're just here doing fun videos >> could they even shut it down now if they want >> no. >> politically if you tried to shut it down, every 13 to 22-year-old in america would actually start voting for the first time. >> that was the issue a year or so ago but now there's so much economic activity on the platform, it's become a part of how companies do business, that you actually would cause economic issues by trying to shut the platform down. >> where do they keep the servers? if they're not headquartered in china, where are the servers

>> they're supposed to be migrating to oracle having control of u.s. data somehow that hasn't happened yet. it's not supposed to be in china, but they're saying china doesn't have access to all the data then we heard actually some people in china do have access to the public data on tiktok but only a on tiktok but only few. it doesn't take a lot. >> of course >> okay. a longer conversation at some point, by the way, i want to talk to you about -- i don't maine if you saw nick cleg wrote a fabulously fascinating piece about privacy and the data if you haven't read it, you should i'll get it for you during the break. jon, thank you >> new beats, sarah malik is here next hour the c of palantir alex karp on how seriously we should take nuclear threats from russian president vladimir

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yesterday aetsz fmoc meeting is a tough pill. they're talking about higher inflation, higher unemployment they talk about unemployment going up by .7%. shelter prices are a huge component of it. that's much higher and then of course interest rates. 125 basis points before the end of this year and then again throughout 2023. higher rates all of that i think is challenging for the market. >> sarah, can i ask you, it's a hard question. you're not supposed to do anything about it and then i think you are. if you are convinced the market is going down, which sounds like everybody seems to be but unfortunately that also is like the conventional wisdom which

often seems to turn the opposite way on you, you would say -- and you were owning indexes you would say i shouldn't be owning these things right now and you'd say, sell. typically we say don't do that hang tight what would you do? >> it's challenging because people who try to market lose. we're looking for things that are more resilient even in equities where we're not bullish. relatively cheap more resilient also side effects. higher on the risk spectrum. companies look higher qualities than they used to. we think they're survivors outside of public markets, areas leverage inflation like farm land and private real estate where they have inflation escalators within their contract we're about, how do you position

and win this this environment and moving to cash and timing your way back in but it can be a challenge. >> it sounds like you're relatively negative on equities. we had this conversation a year ago and i think you would have been pretty heavy. >> a year ago i think we were looking to see how sticky will inflation be the demand issues. now you go forward i think what we've realized is that inflation is going to be here for a while and the fed has to continue on interest rates. that isn't headwind for equity markets. there's other areas that are going to drop. earnings are declining by 5% it's a challenge to the markets along with the strong dollar i think it's just more challenging now even than it was a year ago. >> if you have to be in equities beyond dividends, is there anywhere to hide >> i think the other areas are pretty challenging

i'd look for the companies that are challenging. we like a company called lindo it has pricing written into their contracts to overcome inflation about a percent and a half dividend yield. strong acklog. they beat the second quarter companies like that continue to beat earnings. if you don't have pricing power, you're going to struggle. >> okay. sarah, it's great to see you this morning appreciate it. >> thanks for having me. >> coming up, we are live with palantir ceo alex karp what does he hear in those nuclear threats from russia's vladimir putin don't miss this conversation we will be right back.

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now you can. biometric id... inside the innovative, new c-class. good morning global rate hikes dominating the market conversation. stocks swinging as investors try to make sense of what's going on a developing geopolitical story, too palantir ceo alex karp joins us live with a warning to the world about russia's nuclear threat. plus, breaking economic news we'll get the latest read on the nation's labor market as the time hour of "squawk box" begins right now. good morning welcome back to cnbc

i'm andrew ross sorkin along with becky quick and joe will be joining us later with a very special guest. we're going to be going to the west coast with him in just a little bit a long-time test. >> we're going to talk with him from latitude 2022 u.s. equity futures at this hour, they've been bumping around all morning after what was a down day yesterday i think our audience probably knows that already dow up by 61 points. s&p 500 up about a point point or two nasdaq up 10 points. not making up for what we've been seeing in the red so many weeks now. the 10-year treasury yield sitting at 3.50. everyone on the 2-year, i think that's become the new data point to watch right now we are sitting at 4.079. we are over 4% meantime, want to get down to the new york stock exchange this

morning where mike santoli joins us, our senior markets commentator on what is happening. mike >> yeah, andrew. you know, sometimes the day after a fed meeting when you do get that post decision volatility there's a bit of a rethink the next day we assess what really the message was. today doesn't seem like there was that dramatic a reversal a quiet opening. it's unclear if that's what you want if you are bullish. if you look at the chart of the s&p 500 index funds, there's not a whole lot of room or really levels to lash on to between where we are now and the mid june lows. certainly the market's getting a little bit stretched to the down side yesterday was pretty pronounced, volume to the down side. people wondering if that's going to be enough to feel a little bit of a counter trend move right here definitely not inspiring too much confidence, but i have to say, the actual substance of the fed meeting was marginally like a half a turn more hawkish than expected

it's not necessarily pushing out in time the moment when we get to the destination we're heading for. you were talking about the 2-year and 10-year treasury yields very significant that's very much inverted almost to the max of where it goes, but this is an interesting one, too. 3-month treasury bills versus the 10-year treasury yield this is the one that has a more consistent record. when it goes negative when essentially the 3-month yield is above the 10-year yield, that is the one that has more frequently been a precursor to a direct recession. what does this mean? the 3-month bill after november's expected fed rate hike is likely to be a good deal higher and probably would invert this unless the 10-year yield continues to march higher. this is the game we're playing here looking at the kind of tea leaves for what used to be precursors to an outright recession which is somewhat implicit in the fed's economic forecast that was out yesterday. take a look at the volatility

index. it's causal some puzzlement. it's not near the highs where it was in june. you've seen these higher peaks that we've reached before. i don't think it outright means complacency. we've not made new lows. it's doubled it's where the action is the volatility and upset ld acts is in currencies and fixed income. >> pointing out the 10-year, 3-month spread what about the 10-year, 30-month spread >> yeah, absolutely. it says a couple of things one, you could look on the glass half full. market is saying inflation is going to be under control in the medium to long term. also it does tend to mean

weakness in growth likely struggle to stay positive in gdp maybe recession within some relatively near-term window. from two years on out pretty much all the curves are in inverted that means the 2 is where it peaks out and goes down from there, 5s, 0s. people look at all of the different splits that's sending a consistent message. yeah, we got inflation problem and a fed attacking it right now in the near term you get beyond let's say the first quarter of next year and it's going to be a different story. >> mike, thanks. would ela he see you later. the fed one of the central banks making headlines since then we have the boj holding its benchmark rate unchanged. japan going ahead and intervening in the currency market for the first time since 1998 england, switzerland, norway, indonesia all hiking today as well joining us to talk about all of these moves is liz young, the head of investment strategy at sofi liz, the reaction we saw

yesterday in the u.s. equities market and the u.s. treasury market, was that warranted based on what we heard from jay powell >> it was correct and then we got kind of backwards as we moved forward in the trading day. everyone got excited again that powell committed himself again to fighting inflation but then i think ending the day down again was warranted. and when you look at what the market expected, it had priced in a 4.2% fed funds rate by the end of this year there needed to be an adjustment to allow for a higher fed funds rate now what we're looking at is really the best case scenario. the prior lows are only 3.2% away from here if we get down to that level, which is not far, that could only take a couple of days, if we have big moves. if we get down to that level and test it, that's where the market needs to decide, are we headed into a deep recession and do we deserve to be 30% down from highs? i think that actually the bull

case in this scenario is that we do that quickly and we can make a bottom and then start to find more up side as inflation falls for the rest of the year. >> oh, my gosh the bull side -- the bull case scenario here that we crash but crash quickly? >> we get it over with fast. i mean, we're pretty close, becky. like i said, only about 3.2% away from those prior lows and that's where the market is going to have a decision time. what usually happens is you get down to those prior lows if we blow through it and that prior low interday is 36.40. 36.66 for a closing low, if we blow through that, you could see another 5% down pretty quickly if people are still negative then you make those bottom numbers. looking at what happened previously, we never really hit extremes on the bottom where a lot of technicians would say, okay, this is it we're at the extremes. now we can really make this bottom that didn't happen yet so that needs to happen and then we can

start to make up side. >> basically if we get to 3500 you buy pretty rapidly >> you know, honestly, i would be buying all the way down i think you can drip in and this is a time where you try to do it methodically rather than try to put all of your money in and call the bottom. this is really going to be tough for markets to work through and digest we're in a time where the fed funds rate hasn't been above 4% since 2007 now we're expecting it to go above 4% and stay above 4% for the remainder of 2023. this is going to be tough for markets to digest. i think this is a time when we look back 5 to 10 years from now, we will look at this period and wish we bought right about now and for the next few months. >> there is a bullish statement. it's not just above 4% you're talking about the fed ex pekting that it's going to be 4.6, 4.7 for a terminal rate people raising questions like

roger ferguson who used to sit on the fmoc raising questions whether that's going to be enough, whether next year we will realize when they stop and look around that they're going to have to hike further. what's the i guess bear case scenario in that situation >> the bear case scenario is if you look at inflation expectations, it's not happening yet but if inflation expectations get out of hand and we completely lose control of that side of it, that's when inflation gets entrenched in the economy, it raises prices across the board,wages elevated that's a situation where we almost have to throw ourselves into a deep recession in order to fix it. that hasn't happened we still have 2-year and 10-year break even inflation expectations at 2.73%. the 5-year goes up slightly. those have stayed anchored and that is jerome powell's goal at this point it's still working. i don't know that they're going to have to get higher than about 4.5% in the fed funds rate i'm not sure they're going to be

able to get higher than that because the economy may not be able to withstand it what i think is more likely is they get above 4% and they pause. right now by definition we are at restrictive territory, which is where the fed funds rate is above the neutral rate if the neutral rate is 2.5%, we're at restrictive right now the goal had been to get to restrictive and stay there for a certain amount of time until inflation gets more under control. >> all right, liz. thank you. i'm going to stick with your bull case scenario for now that one's pretty lousy, too thank you. coming up in just a moment, palantir ceo alex karp has a warning for the world and on the threat of russia he's going to join you in a "squawk box" exclusive when we come right back.

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now you really can do better! switch to the fastest mobile service - xfinity mobile. now with the best price on two lines of unlimited. just $30 a line. welcome back to "squawk box. russian president vladimir putin raising the stakes and he says he's not bluffing when he says he will use all means including potentially using nuclear weapons. alex karp, ceo and co-founder of palantir we saw you in aspen and davos. in some ways you called this in terms of this potential threat where are we really at this point? >> well, you know, it was a pleasure talking to you then and a pleasure talking to both of you now. when we were talking about the reality that nuclear weapons are on the table three and two months ago, of course, that was

derided, the general belief i had just comes from building a software business and seeing software in action in war where software plus heroism can really sleigh the giant i think -- i know the russians just underestimated the power of kinetic plus software plus heroism. i believe it's a zero sum game in russia. there is no ability for putin to lose he can't just fail at war and then retire, which is what we're used to in democracy politicians fail, then we have another politician and so the reason why i was sounding the alarm at davos and then again when we talked to much derision was this combination of american software, the way we built software plus a kind of heroism would outperform the giant of spend and that leads to just

this jarring reaction. and we don't want to believe in the west that people would be zero sum we're not that zero sum in the west. >> so basically he's been backed into an on ner he's a caged animal? >> you're backed into the corner where the corner is if you are backed into a corner you will be killed, your family will be killed, your friends will be zblild how do you handicap what his options are and what the real possibility of him using weapons is >> what i believe we should do is continue to support ukraine and begin to engage in a dialogue where we figure out what it looks like for him to fail without him having to say at home he failed. >> what does that look like to you? >> ukrainians have to decide -- i believe, i know having gone there, that they very much believe that their territory should be respected. i think we in the west should stick by the line that every country should be able to have its own sovereignty over its own territory.

i don't know it's very -- the thing -- the things that we discussed and predicted that ukraine would massively outperform them happened the danger scenario of massive outperformance is that your adversary is backed into a corner. >> if he's failing and we need to find a way for him to look like he hasn't failed to his own people, what is that >> well, we're very good at that in the u.s we're failing in a lot of stuff and we convince our self we're not. somebody has got to be -- somebody who's very good at this -- what does a politician do for a living? i happen to be more on the left. some people are more on the right. the job of a politician is to convince you they haven't failed and say they haven't failed. >> you sound like henry kissinger. >> i discussed this with him he believed that -- my belief is the ukrainians decide, but you need someone who's not me. like i'm not adept my job is to actually deliver something that works and win there are people whose whole

professions are to help you explain to your people why it wasn't a failure i don't do that for a living i do know somebody who does that needs to be very engaged right now. look, if you've won something against all odds, whether it's a less importantly a tech company or you've defended your -- no one, i don't actually believe most people in the west, america, england really believed ukraine could win. the fact i know they didn't believe it, our clients hear what the assessments were. if you've won against all odds family members have died there's no way you're going to compromise unless it's on your terms. >> exactly that's why i think it's gotten so much more complicated. >> then you have to roll in people that are specialized at that they're called politicians that's what they do for a living they need to figure out how do you explain to the russian people that although you failed it's not a failure there is a way to do that. first you have to begin and the beginning part is, look, if you've won something in a negotiation against all odds, both parties have to accept

you've won. >> first of all, let's just talk about that some people would argue ukraine has not won yet and we're going to have a very difficult winter, right? >> yeah. >> things may sort of calm down or temporarily slow down because of the weather and then we have to see what happens in the spring. >> i'm not -- winning isn't won until you've won obviously, but you have a perception based on expectations if i go out on to a football court and i'm like halfway surviving linebacker, i've won and like this -- nobody -- we just -- when we talked at davos and we -- you asked me what i thought would happen, it looked like, oh, there it goes, batshit crazy karp again ukraine could win and it could be dangerous because they're going to win that looked batshit crazy. in fact, that is the reality we're in you have to begin with the facts. the facts are they have massively outperformed this is going to change the way

war is fought. here you have a tiny country with very little assets. the use of software and heroism. you can push off and win against a goliath. >> you keep saying use of software. >> this is the palantir of the story. >> the parts we're not allowed to talk about. you just -- in classic warfare it just comes down to -- post world war ii america spends $800 billion, russia spends 65 billion they're willing to do things on the human rights front they think it's parity, right? however, when you use information technology, who's moving what's moving? under what conditions? can you identify people from space? can you unmask people who are trying to mask themselves? what is the action of the battlefield? where do you put your assets where are their assets that plays into quick, quick, quick, attack. you have to know where to

attack america has been fighting wars, most of which i've been against for 20, 30 years we've learned a lot about how to fight wars the thing is that -- and so we have this great knowledge of what it means and part of that is something that is interestingly very cheap to produce but it really is best produced in the west why is software best produced in the west would you want to run a software company in russia and china? >> you just mentioned china. is there a lesson you think the chinese are learning about war and about to the extent that they're thinking about the future of taiwan and how that may relate to ukraine? >> every country in the world, including china, they're like we should never under estimate our adversaries. they are some of the most interesting, formidable, intelligent, creative, wise cultures in the world. they are very much looking at what their expectation was and reality. the expectation was this was going to last a month, maximal, and then reality we're spending gazillions.

they're spending a lot less. what is special about what they're doing that's allowing them to massively outperform in a much less relevant context. why is tech dominated by americans? well, there are all of these reasons. you have to understand with 100% certainty every country in the world that is big is saying, holy shit, we thought we could just win because we're big. if the people are willing to fight to die and if they have very specialized, not very costly software and other products and kinetic weapweapon, tanks, not really the big ones, they can outperform us and grind us into the dust and that changes the way the world actually works today. >> here's a software question. how do you think about the chinese in terms of their talents, abilities >> well, this is again we tend to think we are at a massive disadvantage in the west because we won't violate human rights. we have a massive -- >> just explain that because we won't violate human

rights and because of civil liberties, we don't have access to the same kind of data stream -- >> for example, we would not support something that tracks everyone walking by here and tells us what they're doing during the work hour i don't support that i don't think everyone supports it you have debate. on international standards on a very narrow spectrum you get into debates who's a terrorist, who's not no one supports that like the chinese. most people look of it as a disadvantage we've focused all of our efforts for the area that matters, fighting wars. by the way, if you're going to build software for that, you need the best of the best of the best of the best those people don't want to build companies in countries where you could lose your company. they don't want to build by and large -- certainly in my company, we don't want to build technologies that stop us from having a normal social life. that means things we're not

willing to discuss in public. >> alex, if all of this gives us such an advantage, why have we seen such a hit to so many software companies i think you guys are down 58% this year in your stock price. >> well, you know, look, bad times are incredibly good for palantir you sort out -- there's this thing where you've been involved in things for a long time, palantir is 20 years old, 18 years old. the bad times uncover the durable companies. tech is going through bad times. there are lots of reasons, interest rates, other reasons, but you will see that the durable companies that come out of this in three, four years, two years, however long it takes are largely going to be from america, largely from the west coast and they're going to be very focused on producing things that actually matter will this -- will this like deadly tidal wave wipe out some companies? yes, it will. >> what are you seeing, we were talking about employment and labor, in terms of your employment and being able to hire talent, what are you seeing right now? how easy, how hard it is

plus i would imagine there are a lot of employees looking at the stock price saying i'm underwater, i have half of what i thought i had. >> we built palantir, we were private for almost 16 years and our share price on the nonprivate market was going down so like these times -- in the end, bad times help us also because the alternatives end up being like -- our main competition is i want to be a cockroach holder.com who recruits our people. that's our competition, two days away from failing but engineers don't know it. those companies aren't getting funded instead of going to my cockroach trap.com, yeah, the stock can stay down. we're doing crazy, important things and the alternatives suck. >> do you see in terms of clients though right now, spending, i mean, on the corporate side and even on the government side given what's happening in the economy >> we see a big difference between u.s. and to be frank, probably too frank the u.s. is just completely

different than everywhere else our u.s. business has grown 67% a year from 233 million to just over a billion the rest of the world, they're -- yeah. people react -- americans, for all of our foibles, we react to bad times by rolling up our sleeves and adapting the rest of the world has trouble with adapting at the pace we adapt. yes, our business is being negatively inflicted by the inability to -- in other countries to adapt the way they adapt -- we adapt in america on the other hand, you know, we're an 18-year-old business. the last three years our largest -- the american segment is growing 67% despite me as a front man. so it's like, you know, maybe if -- maybe we have a more successful front man -- i'm not planning to go anywhere, but it's like despite of or because of our various disabilities we're growing 67% a year in the most important, most interesting market in the world. yes, we are not growing that way in germany, france, other ways

i don't expect to grow that way. i do think there will be a handoff. i think we'll have a couple years of terrible times. those companies that are most robust will survive and thrive you'll get credit for it in a couple of years and the rest of the world will do what they do deride us. >> do you see a recession coming around the globe do you see a recession coming here >> i don't know. a lot of this is definitional. what i do see is that people are scared shitless about energy outside of america they're so scared about the macro political conditions that no one wants to talk about them. their enterprises are built for a static, unified world of peace. and the balance sheets obviously are not often prepared for what's going to happen, which i think is going to be pretty bad the next couple years politically, economically. and then also, you know, that's actually the real problem you have in tech if you've been raised in an

orgiastic environment where you go from high grades in high school, high grades in college to being a billionaire, you've never seen bad times the worse time you've seen is you can't get a date in high school that's your bad times. >> alex karp, never one to hold back so glad we're on cable rather than broadcast this morning. we appreciate you being here. >> i appreciate being here. >> always being candid with us it's something so we look forward to seeing you again soon. >> take care. >> you can hang out. you don't need to get off -- >> we're going break. >> i'm used to getting thrown out. >> instinct. >> as soon as -- oh, time to go! >> you can stay. you can stay when we come back though, you all have to leave. breaking news on the nation's labor market so stay tuned you are watching "squawk box." this is cnbc and the futures have picked up dow futures now up by almost triple digits. nasdaq's actually in positive territory for the first time in 2 1/4 hours.

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welcome back to "squawk box. rick santelli here breaking news live from cme hq our initial jobless claims for the week of september 17th, 213,000. 213,000. and thus far that equals last

week at 213,000 until we get a revision and 213,000 continues to represent the lowest level since the end of may if we look at continuing claims, always a week in arrears from september 10th, 1,379,000. much lower than expected much lower than the 1.4 million in the rear-view mirror. that is the lightest level going back to -- well, july 15th the week of july 15th. that is good news on both fronts i'm going to throw one more out there. our second quarter current account balance. this is the bigger cousin to the trade balance and it includes overseas production, domestically owned the reason i bring it up is it's minus 251 billion. not a small number but it's coming off of 282 billion, which was the biggest ever going back to 1960. that's a long time ago and as we look at the 10s to 2s, at minus 52, it's the most

inverted since 1982. we'll call it 40 years and of course we continue to look at the bank of japan who intervened first time in 20 years. let's all remember, when they lock in and over manage the rates, their interest rates even more than the rest of the world, this is the issue. the interest rate differential is coming back to haunt them in the form of a currency that's dropping like a stone. becky, back to you >> rick, thank you joining us right now for more on this and the post-fed market and economic picture is our very own steve liesman steve, what do you think about the job number >> i have to disagree with rick on a semantic point. he called it good news i'm afraid, becky, we're in an environment here where if you want to hope for the idea that the fed will not hike, not cause a recession, you have to hope for bad job news you know me, i've never subscribed to that i hate the idea that you have to

get -- that bad economic news is good, but in this case, the fed is so focused right now, becky, on the labor market with powell saying it's too tight. they need to see softening these numbers, it's only an increase because they revised down the last week at 213 with a continuing claims falling tells you that the job market remains tight and it may remain tight for a while i'm not sure there's a way out of this, but right now if you're hoping for less fed, you have to hope for fewer jobs. >> it's the anti-goldilocks scenario. >> yeah. >> all right, steve. thank you. coming up, joe kernen is going to join us from the west coast. he's up and at 'em live at the latitude conference to talk about the critical and growing influence of the.s u. latino community stay tuned coming right back.

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welcome back to "squawk box. want to head out to san diego this morning where the one and only joe kernen joins us

a very special guest from the latitude conference. nice to see you, joe it's 5:35 in the morning on the west coast >> yeah. that's okay. that's okay. it's about the same as home. we have -- talking about solve, we have solved a lot of problems just leading up to this interview. the total economic of the latino community was $2.8 trillion according to the most reeccent data that was from 2020 that was the covid year. that, still, equivalent to the fifth largest economy in the world, larger than the gdps of the u.k., of india or even france talking about more on the economic influence of latinos in the u.s., let's welcome saul trujillio.

we're in san diego thanks for joining us. first let's just talk. -- >> let me say good morning welcome to the west coast, joe. >> welcome to both of us, joe. >> the numbers you would have thought could have been impacted negatively which was a covid year not the case latino moved from eighth to fifth since 2015. >> yes yes. the engine of growth in the united states, there's a cohort driving 70% of most of the growth in the united states. it's the u.s. latino cohort. leap frogging france, u.k., and india, it's huge fifth largest economy right here within our borders and it's a conservative set of numbers but the punch line to your question is that with covid, the true patriots that were on the front line during the covid period, you know, working, serving all of us in various sectors were

the latino they were affected with illnesses, death. >> number one in death. >> really sad. we were anxious to see the data how resilient the cohort would be the data shows even in a covid period of time you go out and work, you serve everybody that's out there needing help, needing services, whatever, and, you know, it's a story of true patriotism of helping an economy like ours continue to grow. >> most staggering thing when you look at the report that you do, in terms of just growth and percentage of what we're talking about, latinos are a majority. usually growing faster, attaining higher education more quickly than non-latino. wages going up more quickly and most of the population growth over the past five years, how much has been latino. >> 70%. >> 70%

you keep saying 70%. this is the number for a lot of these statistics >> there are some driver variables here this is the driver variable that's enabling us i think steve forbes said it at an event we had recently, he doesn't call them latinos. hispanics are like the calvary already coming over the hill to save our economy because we're aging. we have the baby boomers. >> right >> what's the average age of latino cohort? >> i'll give you a slightly different number if you look at 0 to 100 in terms of age grouping, the most populated age is 11. if you look at the anglo american, the most populated is 58 you can see the difference in terms of a fresh economy that's why india is growing,

malaysia, nigeria, other countries growing economies. you need the youth cohort and in volume and in size so we have that. the key here is they're entrepreneurs. they're creating businesses at 52% of all net new businesses that are created that employ people are being built by latino/latina. >> 52% >> 52% 52% of all new home sales, new home mortgages are being taken out by this latino cohort, but what's interesting about it to your point, joe, is that sometimes family members are going together to buy a home they believe in the american dream and it's coming to life with this cohort that we used to talk about, i was a little kid, but in the '50s and '60s where we always talked about the american dream it's still alive and it's alive in this cohort because they're risking capital, they're risking their livelihoods, they're doing all the right things to help our country grow. >> think if they actually had

some help, which is why you're highlighting things. basically it's been doing this with really no help from the vc community. very difficult to get capital. what is the percentage of capital that flows into latino businesses from venture capital? >> that's a great question and i think, joe, you know i'm a capitalist i believe in capitalism. one of the things we did last year is we asked bank consulting to see how much capital was flowing into this massive growth cohort and they found that less than 1%. >> less than 1 >> less than 1% of all vc and pe invested capital of the top 25 firms in each category was going to this cohort, which makes no sense if you're a capitalist so one of the -- i'm glad you asked the question i'm really on the mission now of trying to encourage everybody, anybody that manages assets, collects other people's money, tax revenues, state treasurers,

et cetera, they give it to the blackrock, blackstones, kkrs or whoever it might be, is we need new 21st century methods of structures that will flow capital into this cohort because we're going to stimulate more gdp growth more gdp growth. 2/3 of the growth now is coming out of this. almost 1/3 of the gdp volume growth year on year now is tied to this cohort and it's only going to get bigger as a percentage of total. >> you are not just talking about it, you're doing it, too you would say it's a prototype, and i'm talking about latitude ventures it flows last month, $100 million. >> yes. >> you've put out only 20 million so far the companies that you told me about, these are pretty -- these are high tech companies, these are companies that could one day be unicorns. >> yes so one of the things is the pipeline is huge out there

nobody's figured out how to reach it so after our last latitude event we had a bunch of, you know, financial sector leaders and we were talking about this and finally i said, look, i'm tired of everybody giving great esg speeches we need to do this. >> i'm tired of that, too. >> no, no, no, it's the same reason let's make this conversation productive, right? >> yeah. >> and we need to flow capital there and so if i'm managing one of these big funds as asset manager, i should be thinking about how do i create structures or how do i invest in structures so we can catalyze more growth then that makes the pie bigger for everybody. >> right >> more jobs out there more spending out there. so the latino cohort is also growing consumption at more than 2x the rate of the rest. >> wow that's why we're here, to highlight this and what you're doing. that will be a great model just getting started with that we've got to go already. you cleaned up the language.

we didn't have any problems there. >> oh, shit. >> oh, god all right. sol, thank you thank you. it's been a fun morning watching from out here, you guys. was that three three for one. >> that's absolutely zbliet thank you to sol for playing and jumping in right along -- >> we're three of five it's a drinking game going on with this. >> there was a crap earlier with jon fortt so there you go. >> that doesn't count. that doesn't count >> thank you, joe. thank you, sol great to see both of you when we come back though, we're going to check in with jim cramer as we make our way towards the opening bell by the way, a reminder for you to join the most powerful investment of the career this is cnbc's delivering alpha. it returns in person next wednesday. it's really great space. going to be aglass door on the west side highway. if you would like to join us you can go to delivering alpha.com to register. you're going to get to hear from

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let's get out to the cnbc bureau in san francisco where our good friend jim cramer joins us now so much to digest in morning, jim, in terms of what we heard from jay powell and what we're hearing from the central banks this morning and all of the ceos and others you've been spending time with out on the west coast. >> look, andrew, everybody i speak to says pretty much the same thing, short term we are concerned. long term we're not. and a lot of that stems from the fact you can't delay a lot of the things people offer out

here the short term is i don't want to say it's scaring people the short term is there will be a pause because of what jay powell's doing >> and, therefore, you do what though in terms of -- if you're waking up this morning, you're either in this market, either you own the faangs, you keep holding steady do you buy more? do you say this is going to get even worse for a while >> i think it is going to get worse but i think you do have to pick stocks, absolutely. i say that because even though we hear the rate could be 4.6, 4.7, we after we see the data have to be concerned maybe it only goes to 4.5, 4.4, 4.3. i point that out, andrew, there are so many things like what barry sternlicht said on your show, things are just rolling over they're not rolling over fast enough for powell but they are rolling over. >> you think that's not appreciated by powell yet, is that -- that's -- >> i think he -- he wants to win. he doesn't want to tie

when i listened to alex k karp ex the expletives, when you heard what he said about ukraine is very similar what you hear from powell. it's highly unlikely he's going to because the inflation is so bad everywhere, but i will say this. he does have a very, very big weapon, and obviously, yesterday, he said, i'm going to use it so, those who think he's going to lose, i'll take the other side it just won't happen fast enough >> jim cramer, we're going to see you in just a couple minutes and tonight on "mad money," he's got the ceos of slack and splunk but we're going to talk to eric cantor about rising global rates rks,what the tend means for maet deal-making, policy, so much more. coming right back.

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we don't know. no one knows whether this process will lead to a recession or if so, how significant that recession would be that's going to depend on how quickly rage and price inflation pressures come down, whether expectations remain anchored and also do we get more labor supply, which would help as well >> that was fed chairman jay powell yesterday right now, let's bring in former house majority leader eric cantor, who is now vice chairman and managing director at molis and company. let's start talking about the market reaction to this.

we just heard from jim cramer about whether or not we're going to get to what the fed know anticipates being a terminal rate, 4.6% we had roger ferguson on early this morning he took the other side of this, thinks we might go past it this is what's playing out in the market right now where do you come down >> listen, these are really extraordinary times. i think we saw that yesterday in the market reaction after chairman powell's press conference, and i think the market reaction was certainly indicative of the fact that there's just a lot of opposing views out there and there were questions about whether asset valuation was going, and so for us here, these kinds of times, when you are facing all of these questions, this is when we are most engaged with our clients. you can imagine, when you're a big company and you're around and you've got decisions to make, whether it's your balance sheet, liability management, or how to grow and keep growing in such times, that's when a firm like moelis & company can

actually do its job and that's deliver advice so, yes, it's more challenging now for sure, but i do think that the fed has taken a position it's been very clear, and i think things will settle down, and, yes, i mean, interest rates are going to go up credit's going to be more expensive, which is going to impact the ability right now, at least, to have a quicker completion of deals, but it's really that elongated process that we are seeing right now >> okay, so, what's your advice? where do we hide if that's the case, if the fed's going to make things much more complicated >> well, you know, i do think that -- it's not as -- as you know, it's not as sort of a unipolar situation in the economy. i just came back from europe last week. they obviously have huge energy challenges i just heard alex carp talk about the freakout in terms of the energy securities situation in europe and it is true, they're very worried about it, but if you go to the middle

east, obviously, they have an entirely different view and it's nothing but growth and focusing on deploying capital right now because of their being so intertwined with the commodities and the energy industry. so, you know, there is just -- we are in a time now where i do think that there is going to be continued activity i think dialogue in our business is very, very high, and whether we're going to complete a deal this week or next month or the month after, what we focus on, frankly, is making sure that we're there for our clients, single focused so we can navigate these very choppy waters >> eric, let's go back to your expertise as the former house majority leader. taking a look at what we can expect in terms of pressure on the fed at this point. to this point, there has been a lot of support from the administration, from many other politicians, saying they need to be able to do what they need to do to arrest inflation now, it looks like that is going

to cause some significant pain jay powell keeps saying that very specifically, that this will cause pain, and you can already see that, you know, political support dwindling, especially as we get closer to an election. what happens they're there with the mandate from congress. what is congress going to do >> you know what's amazing, becky, is it's almost like, yes, the fed has precipitated some of what you're going through with inflation because of the monetary policy, and chairman powell certainly stepping in to correct that however, you've got an administration and a congress that continues to spend extraordinary amounts of money i mean, just in the last couple months, you saw them do the student loan bill, which some are saying could result in a trillion dollars of additional disposable income, you know, deployed in the economy, and if jay powell is so concerned, saying this inflation is so ferocious, how in the world does that make sense when you've got

this kind of fiscal policy unfolding? so, you know, there are a lot of mixed messages coming from washington, and jay powell's got the extinguisher, that fire extinguisher, trying to put out the fire that is being caused, going forward, by this tremendous issuance of transfer payments >> okay. but again, back to jay powell, are they going to let him -- i mean, i hear your point, and this is the result of spending $6 trillion, trying to come back and -- >> but they're continuing to do it, right. i mean -- >> but that -- that's what i mean is jay powell -- are jay powell and company going to be allowed to continue this, or is it going to get hairier and hairier and you're right, they're countering what they're doing by spending more. >> right, they're making it more difficult for jay powell, the democratic majority is just insistent on trying to continue to push out checks to people i mean, that's really what

they're doing. i mean, you look at all the things that they've done, the most impactful to inflation are these transfer payments, like the rescue act, which was $2 trillion, and now this student loan money that's on top of the infrastructure bill, the c.h.i.p.s. bill, and the other things so, again, there's some counter, sort of, activity going on there, and as you know, the federal reserve is supposed to be independent, and yes, there's going to be political rhetoric that's coming out, trying to blame the fed, but the administration's always said it is up to the fed to try and tame this inflation so, you know, i think, look, the -- sort of the table is set as far as the upcoming midterms are concerned, and i think obviously my side's got a great -- there's picking up some more tailwinds now and it's looking like it's going to be a pretty good night on election night for my party >> eric, i want to thank you for your time. we'll see you again soon >> thanks, becky >> we got about 30 seconds to our program being over but about

half an hour before the market's set to open. right now, they're going to up about 109 points higher but after a big down day yesterday, nasdaq looking like it would open about 13 points higher, s&p 500, up about 8 points, all of this sort of comes back around, but we really got to see what's happening at 4:00 today. make sure you join us tomorrow, a lot more to talk about sq "squawk on the street" begins right now. ♪ good thursday morning, welcome to "squawk on the street." i'm carl quintanilla with david faber here, cramer's at 1 market in san francisco stocks trying to recover from the fed hangover as other central banks around the world hike rates, bank of england, the swiss, indonesia, japan propping up the yen for the first time in a quarter century, two years still above, the curve still deeply inverted. the fed updating its plans to slow inflation but the fed