sam bankman-fried arrested in the bahamas after the collapse of ftx. we will tell you what happens next and what we know so far. and taylor swift spfans are getting a second shot at ti tickets. it is tuesday, december 13th, 2022 and "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site on times square. i'm rebecca quick along with joe kernen and andrew ross sorkin. we have a big day. the futures ahead of the cpi number sharp numbers. dow indicated up by 150 points nasdaq up 65 the s&p up 20.

this comes after stocks jumped in yesterday's session clawing back from the losses last week dow up 529 points yesterday. a gain of 1.6% s&p up 1.4%. the nasdaq up 1.3% then if you look at treasury yields this morning, the 10-year treasury is yielding 3.59% this is coming ahead of the cpi. if that number is softer than expected, you could see the rally continue if it is hotter, we will see what happens. big news overnight sam bankman-fried in custody in the bahamas. the founder of the now bankrupt ftx arrested monday evening after the attorney in the united states filed criminal charges against sam bankman-fried. the charges include wire fraud, wire fraud conspiracy, securities fraud, other forms of securities fraud and possible

money laundering we will talk about that in a bit. in a statement, the bahamian prime minister saying the bahamas and united states have a shared interest in holding all individuals associated with ftx who may have betrayed the trust of the public and broken the law. now filing charges by the sdny the agency has authorized separate charges related to the violations of securities fraud we will watch for that and we should mention he was supposed to testify today in washington maxine waters out with a statement last night she was frustrated he should be held accountable, but hoping that congress would question him under oath first. there are questions why from a timing perspective you won't want him to testify first. >> he could not be on with us today because he is sick, jay,

but he thinks it is a timing issue. making sure this happened before the congressional testimony. i think he would want the testimony. >> a lot of people thought he was walking into a trap of his own making of sorts. unc unclear. there are other views he might have been having success in terms of turning public opinion. i heard that last night. i don't know if that is the case i want to show you the video last month at the conference, i asked sam bankman-fried about criminal liability this is what he said >> that's not what i'm focusing on there's going to be a time and place for me to sort of thinking about myself and my own future i don't think this is it like right now -- look, i had a bad month. this is not a good time for me

that's not what matters here what matters here is the millions of customers. what matters here is all of the stake holders in ftx who got hurt >> i can say in terms of the time going of this, it was unexpected from the sam bankman-fried side of it i think the expectation among the legal community was this was something that might take another month or two to nail down we talked about it yesterday i was surprised myself, in part, because we discussed on the broadcast yesterday, when you pursue an extradition you have to have most of the charges lined up you can't slap somebody with a parking ticket and not have all of your ducks in a row and later charge with 100 other things you have to have most of it pretty much lined up the question becomes have they been able to collect every email and message? have they found somebody who has

turned on him? the speculation has been about caroline who was video taped >> caroline ellison. his ex-girlfriend running ala alameda. >> she hired wilmer hale the questions does she have a deal it appears they moved very fast. i imagine they must think they have already built a very strong case we will get the charges later today and we will hear from the s.e.c. and what those charges will look like and how quickly he would be extradited he can contest the extradition that could become its own case >> if the bahamian authorities say they will not fight it >> legally, he could try we will see. >> we should say this is fast

because you see people saying why is he giving all of these interviews out when it should be from a jail cell >> the other thing is jack pointed out is he admitted in the interviews he has done is criminal negligence. he is trying to say he did not have intent. >> it's been less than a month. >> andrew, when you asked him what are your lawyers telling you. he said they are telling me not to do this that would be the reason why admitting all of these things basically. >> it has been less than a month. >> it all really happened -- november 7th was the key date. within the construct of these things, that's pretty quick. it is hard to say this didn't happen pretty fast of course, the big question is is this a case of what you

described as negligence? that's a civil crime >> criminal negligence >> could there be a criminal negligence claim or something much worse that is the question i will say over the last two weeks as he has now conducted or participated in conversations, it is clear to me of the $8 billion hole, what really happened and he sounds like he admitted it straight up. >> stole the funds >> lost them >> at least $5 billion of the $8 billion from alameda and set to go from alameda to ftx they are crediting over here on ftx. people are trading on the money as if the money is here. the money never left here and he is taking the money over here and effectively making investments and doing all sorts of things.

if they moved $1,000 here, they need to debit $1,000 here. there was a double count on the whole thing. some people, we'll see what the courts say, would describe that as stealing. >> that is stealing. there are so many complicated things the marks on thewere coming up with and the coins you were selling to other people and you gave them the money to buy it back. a lot of layers. i read something that internally they had a chat group called wire fraud >> that's the reporting. that was the name of their signal group >> if the fed -- let's say we didn't spend all that money last year, the government, and didn't have inflation and the fed didn't raise rates would there still be ftx stadiums everywhere? >> it was sort of an illusion to

begin with hard to know >> hard to know where the money went. >> right >> from were ser there were sers >> let's not worry about it. it is not about losses it is isn't about gains. there is weird valuation. >> from 6,000 to 16,000 and all crypto collapsing has something to do with this? >> if somebody gives you $5 billion and you effectively take it, it almost doesn't matter what else happens. >> when the tide moves out -- >> it exposes what you have done. >> he was using that as the opportunity and be a kingmaker where he stepped in and -- stolen money or allegedly stolen money and propped up all of these other places. >> what if he made money on all of the trading of the stolen money? >> then it would have taken longer to uncover. when the tide goes out, you see

who is swimming naked. >> you may have a few more stadiums >> it doesn't change if he was still swimming naked we may not know. >> i'm not sure how much of this is ultimately about triading. i think it may have exposed it to happen. what it really was if -- >> a scam. >> the $8 billion is gone. it's justgone. lost in trading. >> yes he then p went and traded that money away >> or spent it to buy expensive condos. >> those still exist >> by the way, the creditors will get that. that's real money. >> it is more than that, i think. if it wasn't $1 billion. this is going to be interesting. >> binance is still otherwise the world's largest crypto

exchange is pausing withdrawals of the stable coin usdc while it carries out a swap from one currency for another without the need for currency. cz tweeted -- another guy with initials i don't know what that means the exchange has seen an increase in withdrawals of the stable coin and had to wait for banks to open in new york for channels to swap it is a situation to be restored when the banks reopen. >> we should add to this right now that we get news securities and exchange commission charged sam bankman-fried. they have come out with a release literally moments ago if i look at this properly. what they are suggesting is the s.e.c. complaint since may of 2019, they say, they raised $1.8 billion from equity investors and 90 u.s. based investors.

clearly complaining that sbf orchestrated a years long scam to alameda research. the undisclosed of treatment afforded alameda on the ftx platform we will look through all of this it is a wide ranging release. >> that gets to your point, andrew this is not just trading losses. same with bernie madoff. he could have continued the fraud for longer if trades did not go against him >> he could not have made everyone whole ponzi schemes changed how this works. the madoff scheme. we had a couple of cool cpi numbers and ppi numbers, but hot wage gains it was a positive feeling

yesterday to sentiment and you would feel if the market was all knowing, it would forecast a cool number. the ppi number last week was hot. >> the ppi number and wage component and jobs was hot >> it is all reverse never mind >> you will look at heavy trading. brian sullivan was talking early about jpmorgan chase trading team coming up with the note that suggested if the cpi is ab above, the report will be below. if it is 4%, the s&p is up 2%. if it is 7.2%, you talk gains of 4% under 6.9%, the s&p will soar 8% to 10% >> people were getting ready for a good number. >> and this morning, too people are anticipating any news that is not too hot, market will take positive, right

>> i'm going through this complaint which is fascinating this is the s.e.c. piece of it interestingly, they are going after him not for what he did to the customers because they can't. >> why not regulated? >> not regulated the complaint focuses almost exclusively on investors who invested in the company. meaning the underlining company. this is now effectively a venture capitalist and private equity who invested in the underlining business that is ftx, not on behalf of the customers, if you will, that are the public folks out there who might have tried to use it as an exchange fascinating. it goes to the regulatories. >> you need regulations so people can feel safe the s.e.c. can't go after them on this. congress needs to act. they need to open the s.e.c. scope. >> this is interesting focused effectively on somewhere

between $1.8 billion that went into the company okay >> we will bring you updates on all of these things. when we come back, we will talk about the countdown it is on for the big inflation data coming out at 8:30 a.m. eastern time we will tell you what to expect with those inflation numbers plus, former fed vice chair roger ferguson will tell us how to react to the data you are watching "squawk box" and this is cnbc >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

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we are now recapping the news that just broke s.e.c. charging sam bankman-fried that he misled investors, not investors in ftx, the exchange, per se meaning customers of the exchange this is the case brought effectively to protect those that invested, the venture capitalists and those that put money into the company, that may very well be the limit of u.s. regulators, or the s.e.c.'s ability to bring a case in this regard we are expected to hear the justice department later today with their criminal case the s.e.c. saying unbeknown to

the investors, sam bankman-fried was orchestrating a years long fraud diverting billions of dollars from the customer funds for his personal benefit and help grow his crypto em the -- empire within the context of the lawsuit, they talk about the account called fiat at ftx where lots of money appeared to come into ftx that they realized should have been brought to one side from the alameda and it wasn't at some point, actually, it appears he knew about it, but knew there was $8 billion in the said account and the way it was moved to the account, the account would charge him interest he had them move it to a different account so the interest would not be charged. >> this is clear. >> a whole series of allegations

throughout this complaint. it goes on the order -- i got to get to the bottom of it -- we're about 28 pages of reading. >> this lays out clearly they think he was like madoff. he was using customer funds for real estate purchases and large political donations. that is where the money went basically, alameda had an unlimited line of credit that was funded by the platform's customers. he lied to the customers about that he lied to the investors about that all along, he said alameda would not have any different -- no special privileges that was a lie they were taking customer funds and doing what he wants with it. remember, at the time people were calling him the jpmorgan chase of his era by spending billions of dollars to buy all

of these cryptocurrencies. >> alameda was able to maintain a negative balance in its customer account in ftx. software code to be written in august of 2019 updated may of 20 20 to allow th untether from collateral requirements no other customer account was permitted to maintain a negative balance. >> based on what he told you >> he didn't know this was happening? >> he didn't know. he said he didn't know >> he wrote the software code in his sleep. maybe he was sleepwalking. how do you write software code when i do it, i know what i'm doing. i use a high performance pascal. think back on all those things what me

i can't believe what happened. no way. >> sam bankman-fried remained the ultimate decision maker after the co-ceos in october of 2021 sam bankman-fried directed investment decisions frequently communicated with alameda and had access to the records and datdatabases of alameda. >> ftx began trying to separate alameda portion of the liability in the fiat at ftx account from the portion attributed to ftx. this is when they know there is a problem. alameda's $8 billion in customer assets into the bank accounts. this is the co-mingling. it was initially moved to a different account in the ftx database it caused the systems to charge alameda interest in the $8

billion liability. sam bankman-fried said it would be moved to an account not charged interest this was associated with an individual with no connection to alameda. this change -- i would argue that paragraph more than any other in the complaint -- when it comes to the criminal allegation, if it is true, the undoing. >> the idea he didn't know it was happening. he used alameda as a piggybank to purchase real estate and other political donations and other gains. he was using the funds himself >> there is not another person is there another name? you mentioned caroline >> anyone else in the position to orchestrate this? thinking about on your interview and subsequent interviews. becky may have been right

looking at that guy saying there's no way >> the way the government laid this out it is madoff >> all of the people who said i believe him. >> well, i don't believe if you go back and look at what ackman said he didn't believe him he went back on twitter and -- >> the first comment he made was shocking >> he said he thought people misunderstood what he was saying >> i would say that, too >> o'leary is a different story. this goes to the question. i'm not going to take o'leary and put him in a different category where do you put seqouia and others there were 90 investors in the company. >> do you think it took hold

with the first firm and then every subsequent one said -- >> yeah. you were right when you said group. >> you talked about this before. venture capital business, in large part, that's what it is. a hot deal this is not the defense of venture capital. you have 12 hours. if you want to get in, it's hot. you do it. if you don't, you don't. you make 30 investments. you go to zero nobody cares. >> do you case it and follow-up and keep tabs on it? is there any point with -- remember we had other people saying i wonder where he was getting the money. it occurred to me that was a weird thing. if you are somebody who is actually got a fiduciary responsibility to follow-up on

inve investments, you think you would continue to follow-up. >> there was no board in this case >> or cfo. >> the ability to follow-up was limited especially if you have a guy moving money around and potentially lying about it it is -- look, it is not a defense. the reality of the way the world works. >> the reputation of a lot of people is down the drain you think the venture capitalists are really good at what they do that's why they get so much money doing this it takes a lot of people's reputations. taking a hit firms and people if you didn't look any deeper than he's got gisele on the side if that is as far as your due diligence? >> we will keep talking about it. >> i want to know -- once we found -- you see, spokes people. we talked about this what do you think 400 grand?

lucrative fee. $15 million? what do you think tom and gisele's fee was >> i imagine more. >> how much more >> this is a game i play with my wife or kids they ask a question and i have no idea the answer >> $100 million? would it sbrurprise you? >> it won't surprise me. >> jointly >> i have no idea. what do you think of taylor swift with $100 million >> and taylor gets 100 and katy perry gets 50. >> come on katy perry write her songs >> i think she does. >> kissed a girl i don't know taylor is a bona fide songwriter >> she has a good song

>> why not i'm talking about the relative amount that sbf -- 20. >> it might come out it might come out. we might know. consumer inflation probably cooled in november, but prices continue to rise at a high rate. economists expect the cpi data to show increase of 0.3% for the month of november on the annual pace of 7.3%. the fed kicks off a two-day policy meeting today that is one that investors are watching closely joining us now is former chairman roger ferguson. he is a cnbc contributor roger, this number has people thinking this is it. this is the biggie it will determine if the fed will start to slow its pace. if it comes in, let's say, at

7.5%, or what happens if it comes in at 7.1% what is the take away? >> first, i think the number has a longer term impact than the next meeting the next day or two is a 50 basis point tightening it has been signalled. the number will not change anything in that regard. in that part, it starts with a seven handle they talk about inflation getting down to two, there is a long way to go having said that, i think what is at play is what are the next two or three or four meetings look like? 25 basis points at the next one or two 25 basis points at the next three or four? i think the inflation picture is starting to shape up and we will have aim pact on those meetings further out which is important to market expectation. >> the market is not anticipating anything other than

50 basis points. if the number is 7% or 6.9% on year over year basis, that is a hot number, but the market will look at that and say inflation is finally breaking. you are finally going to get relief the market always is looking far down the road and that is their sign that it is off to the races because the fed is not going to continue at this pace. >> right exactly. that, as we talked about a few times, is a double-edged sword, from the fed they are talking about financial conditions if the market is off to the races, the fed will remind them with the disconnect. the market is hot and they want to ease up and we are in the cycle the of fed officials sayie have a way to go there is the usual diff dilemma

the fed is looking and forward looking and hoping for good news and betting on that news is a reason to rally and looking at the challenging session. >> roger, you are almost warning investors don't take this as a sign to run things up. it is like the fed has to look at the backseat of the car and say don't make me come back there. >> you know, it's an analogy that is apt. i'm not saying they are petulant kids they are not there are two forces here. actual inflation and the inflation that the fed as it expects to unfold. they have a job to get that under control. at the same time, investors are projecting into the future and bringing that back into the

present and saying if interest rates are going to be lower because inflation is cooling, that means that every dollar of profit is worth more i think that's the dilemma that is confronting the fed is looking at one set of numbers and thinking of their job and investors are saying, that is good news for us if there is any sense that interest rates are going to slow. i think the investors are in some sense ignoring the big picture. interest rates are still going to rise even if it is at a slower pace. the final point i make, becky, in the market, the disconnect with the market and fed and when the fed is likely to ease. the market is expecting easing in the back half of 2023 i don't think the fed is ready to contemplate that at this stage. there is a disconnect with the market and fed. >> those are very good words of warning. i hope people are listening.

roger, thank you >> thank you, becky. >> in the 8:00 hour, we will talk to former treasury secretary jack lew we will have his take on inflation and the fed. and breaking news. united airlines and boeing phil lebeau has more >> reporter: this is the massive order. a minute month of 200 airplanes are orderorders 100 have been ordered with an option to order another 100 of them they will be ordering 56 737 maxs and exercising delivery of another 44 maxs of the those will be delivered between 2024 and 2028 big increase in the number of maxs in the fleet. as for the 787s, delivered in

2024 and 2032. as you look at shares of boeing, the 787s are part of the increase in production rates it is currently one. they will bring it up to four and five starting early next year as they increase the proper dec production -- production of 787 how important will these delivers be? they get two every week. two new airplanes next year. you don't want to miss our interview with scott kirby we'll talk about this order and also the question of what happens with their order for the 737 max 10 we will talk to scott kirby

about that coming up in 40 minutes. guys, back to you. >> thank you, phil. when we come back, more on the story of sam bankman-fried arrested in the bahamas the day before he was supposed to testify in front of congress that was spoupsed to happen today actually we'll break it all down and give you the latest >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.

our top story. sam bankman-fried arrested in the bahamas last night he had been scheduled to testify before the house financial services committee today kate rooney has more >> reporter: sam bankman-fried's arrest and bahamas police said he was taken into custody and will appear in court in nassau the southern district of new york notified bahamas it filed criminal charges you mentioned the s.e.c. is charging sam bankman-fried with orchestrating a scheme to defraud investors. he used customer funds to make inn disclosed convinvestments.

we are still waiting for that. all of this sets the stage for extradition to the u.s lawyers for sam bankman-fried declined to comment. he will not be testifying as planned before the house financial services committee chairman of the committee maxine waters questions why he was arrested ahead of the testimony. the public had been waiting eagerly to get answers under oath this arrest denies the public of the opportunity. we will still hear from the current ceo john wray later today at 10:00 back to you. >> kate, thanks. joining us to talk about the impact on cryptocurrencies is kristen smith, blockchain

executive director i watched this closely this morning. bitcoin is up a little that has more to do with risk-on trades and yesterday's move and stocks and what happens with the cpi today and fed talk and everything else. are you surprised that something like a bitcoin or ethereum has held up well given the back drop >> i think it is an important point, joe what happened with ftx is a failure of a centralized institution and the management of that institution not having proper values and care for customer funds it has nothing to do with crypto networks and cryptocurrencies that fuel that network and at the end of the day, what happened with ftx is separate. as we distance ourselves from the event and as justice is

served and sam goes through the process, i think we will see that the crypto markets do recover and do return to being based on what the value of the underlining network is and not the value of the infrastructure surrounding those networks >> there has been calls for increase regulation for years now and some people want to go soft and let the innovation breathe. others say we need stricter regulation what does the collapse of ftx mean when washington gets involved >> i think it is important to remember that in the united states crypto exchange do have some level of regulation it is mostly a patch work of state money transmitting licenses there are federal regulations around money services businesses that are in effect as well i do think we could be better served by having a more

comprehensive federal regulatory framework over the crypto markets and crypto exchanges i think if we had better relation with stable coins, and enact into law, that would fill the majority of the gaps that have been identified on the crypto regulatory landscape. i think the good news is there are multiple bipartisan policy proposals in congress introduced this past congress i think when the new congress is sworn in on january 3rd and commences legislative activity, we will see additional ideas put forward. i don't think the answer is no regu regulation, but the answer is not so much regulation that we drive the companies to headquarters overseas instead of the united states. i think we need to find the right balance. i'm hopeful with the split and bipartisan congress next year, we will have the right kinds of conversations to strike that balance.

>> blockchain association. how much does blockchain play into how this draws out? they have a record of every transaction, we will see what happens in the bahamas or ftx. a lot of it wasn't based on blockchain >> that is an interesting question i know you were talking about this with clayton yesterday. there are some transactions on the blockchain when you deal with centralized entities, they will take those funds and use them internally with their own system. this is different than just operating on a peer-to-peer basis. i think we have a lot of fl information we can see on the blockchain and transfers within it's ftx companies we can see transfers with alameda and ftx. there are some things we won't

be able to see the good news is there are specialized firms that are experts in helping trace transactions i know in the bankruptcy proceeding, the new ceo of ftx will testify before the house today. they are working with chain analysis to do the tracking. i do think we will be able to see part of the picture. perhaps not the entire picture >> all right kristin, congress will fix things you wonder -- when lobbyists or people like sbf, you know, contribute so much and i wonder what they expect in return i don't know, we'll see. >> when you are giving at the leavings that sam bankman-fried were giving and not just sam, but those working with sam, i think they probably were expecting something in return. i think that's a very different philosophy when an individual

like me or somebody within the crypto community or blockchain association pac, we do that to build relationships and get to know policy icypolicymakers when you give tens of millions of dollars, you expect something in return. >> you do it this way. they did it this way kristin, thank you >> buying influence. >> he just lhad more money >> k street. kristin, thanks. taylor swift fans getting a second chance to buy tickets after the public sale was can canceled we have the latest coming up. and follow the squawk pod on your favorite podcast app and listen any time. we're right back to adapt in a ft changing world, you could hire a professional pit crew. go, go, go. sorry. nope. okay. fresh donuts - hot coffee! they deliver real time data and business forecasts when you need it.

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we're just an hour and a half away from the release of november's consumer price index, which could determine the price of the fed rate hikes. great to see you this morning,

sir. help us with this. what do we think the fed will do tomorrow >> i think the fed will stay on its trajectory, andrew they said they are going to raise rates and they are going to raise rates the market says they are going to stop raising rates or cutting rates, but rates are going to be higher for longer and it doesn't mean rates will get cut in the next two quarters if things slow down there are other alternatives out there, and investors can buy bonds and income-producing assets, so look at companies that have less volatility in earnings and earnings where you can figure out what their trajectory is going to be a lot more in.

>> any chance it's 75 bases points >> i don't think so. he hinted it was goingto be 50 if the data is stronger, you will see strong language and you will say, hey, 50 now and probably more coming down the road that will surprise the market. >> let's say it's 50, but strong language do you want to be in the market when that happens? >> well, i do think that it depends onwhere you are. the areas that we favor is health care and staples, but what you avoid are companies who don't have a lot of earnings and are very cyclical in nature and could get hurt in a recession that could be a lot worse than what people expect >> give us ideas we have two minutes before we have to hand it over what should you be positioning

yourself ahead of tomorrow's market >> well, in the consumer space, trading at a multiple of an ability to grow margins, and so some companies are going to do well when the consumer is focused on branded goods and et cetera, and bristol-myers, they have a great product line and nobody is giving them a benefit of the doubt there and j&j, you have some trading there, and here are a bunch of stocks that can do well in an area, if there's a lot of sraul

till tease >> what do you tell the folks out there that own the faang stocks and never let them go >> well, i wouldn't go in there and become that largest -- you have to be careful just like technology and consumer services were the bulk for a lot of people, and you are not going to get huge upside returns, going back to the 2000s. >> it's always good to see you we will see what mr. powell says tomorrow and will see what happens on the other side.

thanks >> you got it. when we come back, unite airlines ceo, scott kirby, will join us to talk about the big boeing order that was ordered this morning and jack lew will give us key er aers for the inflation numbs,nd that's just an hour and a half from now. we'll be right back.

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good morning sam bankman-fried arrested in the bahamas following the collapse of ftx, and then civil charges against sam bankman-fried. we will tell you what we know so far and what might happen next united airlines placing an order with boeing. a read on the consumer stock futures planning for more gains. we will get you ready for the cpi report the second hour of "squawk box" begins right now

good morning welcome back to "squawk box" here on cnbc we are live in times square. i am andrew ross sorkin along with joe kernen and becky quick. right now it looks like we will open up in the green, close to 200 points on the dow higher and the s&p 500 up about 20 points treasuries as well as what we are going to be hearing ahead from jay powell tomorrow let's show you the energy complex when you think about oil, the price right there, wti crude inching up just a bit. the break ing news this morning, sam bankman-fried, quote, built a house of cards. the sec alleging ftx had poor

controls that were insufficient distinctions between the signs of credits and debts, and this r reality a sharp contrast of what sam bankman-fried portrayed. bankman-fried was scheduled to testify. what we are going to learn about the criminal charges in addition to the civil charges made public this morning, and those charges

will include wire fraud and securities fraud, and we will get the details later. we will hear about the hearing and the arrest and the complaints by the sec, and more. we will hear from the former sec chair, jay clayton, who will walk us through what he has seen >> the sec says the same thing again and again in different ways what jumps off was on page 10. in essence, sam bankman-fried placed billions of dollars of ftx customer funds into alameda, and then he used alameda as his personal piggy bank to buy luxury condominiums. this was to the tune of billions

of dollars of those investments where he was trying to be king maker, and he was using customer funds to do this and it caught up to them they say for years he was running a fraud. >> that's one of the problems with being so smart and knowing how to right software code to hide your tracks, where red flags would have gone up based on some of the moves he was making, and to hide that or disguise it, he wrote software code that's like a smoking -- >> yeah, he told people to write a software code -- >> oh, so he told somebody -- i don' don't either -- >> this reads as if they have somebody that flipped, and it reads as if we know what he did

when he directed people to do this. he told people at this point to hide this and he was taking funds from it, and he told somebody to move it to this account, and he told them to move it somewhere else sounds like somebody that came in who was ticked off saying i didn't know what happened, i was not paying attention, and you took it and spend it on yourself >> i am sure somebody flipped. i don't want to say it -- if they had more details -- typically, if they have all the e-mails, and i think they might, and it depends, and some lawyers like to put a lot in the complaint and some don't in this case, there's a lot of certain paraphrasing of things but not the exact details of what happened. i thought the paragraph about this fiat at ftx.com account was

the most specific thing that explained how the money spent to alameda was supposed to be sent to ftx, and he knew $8 billion was there, and their account system was going to charge interest on it and he moved it again because he didn't want to have that interest charged, and that in terms of intent and a kreu criminal liability charge, that's the one piece that stands out more than anything else, at least for my eyes, that would be suggestive of intent >> i think you are right that's page 11, for anybody playing along. >> it's all a depressing story there's the possibility of fusion do you ever worry about

identifying a freckle and saying where did that come -- and it's melanoma and that happened >> moderna was one of our first disrupters the results of the trial were not in, and there's a phase ii trial of a personalized mrna cancer vaccine, and the reports demonstrated a significantly meaningful reduction in the risk of disease compared to just cuesing key traouda alone it goes to your organs and your

brain and bones, and it's just horrific and quick moving. this combination of these two drugs reduce the risk of recurrence or death by 44% and shares of moderna are up 2% right now. and we will hear from the moderna ceo. it's really cool the way it works. you take a biopsy of a person's tumor and then identify where the mutations are in the person's dna, and then use the messenger -- >> yeah, it's personalized >> yeah, they can identify as many as 34 of those, and design what is called a vaccine --

>> yeah, a vaccine >> you put the mrna in, and it's not cancer, but it shows the mutated part of the genome, and your cells get all ramped up -- >> yeah, it teaches your immune system what to attack. you are not introducing tumor cells, but you are just introducing the messenger mrna to -- >> yeah, that's like the holy grail -- yeah, if you can personalize it and do it in an affordable way, and that's the question, too, how much does this cost. if you are talking medicine -- >> i have red-headed kids, and i have had basil, and melanoma can be very scary, and you worry

i got things that i have never seen before, and most things are horrific looking, hairs growing out -- >> enough, enough. i get scraped down every six months, sttoo, and fair skin, yeah >> let's start testing this with this >> yeah. we will talk more about this >> that's great news a lot going on this morning. dom chu has been chasing what is going on in the market >> let's start off oracle up roughly 3% or so and it reports quarterly results after yesterday's closing bell, and it was helped along by the

additional revenue it got from its purchase of sernor among other things oracle shares up despite that miss on the forecast and then each of these tech or tech-related companies being named top picks for 2023 by analysts over at goldman sachs and amazon's potential for profit margin gains, and meta's platforms being priced in. we're going to end with a check on crypto in the weighed of sam bankman-fried's arrest, and bitcoin prices are a bid, up about 2%

2.5% gains we're watching those and some places people trade them, down 1%. back over to you, becky. >> dom, thank you. a remarkable day for the markets yesterday, and then we have the cpi coming out at 8:30 eastern time, and then steve liesman joins us now if i didn't know from experience, how fickle the markets are, i would read into yesterday. there's no reason to think of us sniffing out a cool number, is there? >> i don't think so joe. but you are right, the market does want to go higher and the

market wants to see inflation come down so it can get back to the business of buying and selling stocks right now all the uncertainty is something that is difficult for the market core inflation expected to moderate for a second straight month, and that should pave the way for the fed. labor for powell is a key source of inflation this number alone is not going to be decisive in determining the fed's path the year over year decline, it's going in the right direction because you are taking out older higher numbers, the core rate declines to 6.1 to 6.3 whatever remains with inflation today will be too high for the fed's taste. and on the headline, lower gas

prices probably offset a surge in food prizes the fed broke down core inflation into three parts one, core goods and inflation, it's declining as well as easing supply chain problems. housing services, that's expected to fall but only gradually into next year and it's tied to the labor market, so from powell's point of view, this inflation report is important he's almost more focused on labor as a indicator, as he indicates tightness in the labor market a good inflation number, critical today, but it's not going to be enough for the fed to get comfortable on inflation. that's where we will get 50 tomorrow and probably another 75 or even 100 from there

joe. >> facts of life facts of life. i don't like them a lot of times, steve i wish -- i don't know i guess i understand why supply siders are so you know,they ar so certain that they have got the answers. we would like -- wouldn't it be great if you could solve inflation with growth instead of solving it with trying to hurt growth so we expand this and expand that and keep interest rates low so small businesses start up and hire people so the jobs market, so you can keep things percolating. it's not the right way to do it. hurting demand, it would be better to increase supply than to hurt demand why can't we do that >> joe, we can do that but if you go back to powell's paper, while i had an opposite

attitude towards the market, and he said the early retirement is increasing we are not bringing people in through immigration. as far as i know, women are incapable of birthing people over 21 years old, and the fertility rate in the united states is declining, so you could grow, joe. >> what about making it too attractive to not work some of the pandemic-related, you know, support programs that are now -- you never buy into that, but there's lot of people that do, if you can make 50 grand sitting at home with all the different programs, it's hard to get the par teusticipatn rate up. >> aren't those gone, joe? >> remember, back in '96,

bipartisan welfare reform, it all creeped back in and more, much more. >> joe, i mean, look, i don't know that that's the primary source of our labor shortage i didn't see the editorial i don't know how many folks you will bring back in if you get rid of or eliminate unemployment insurance. that's the primary means by which people get -- >> all kinds of things have exploded in the last five years. >> how many people is it, joe? how many people is it? >> it's lots, steve. millions -- billions why talk about billions when you talk about millions -- no, it's millions >> okay. >> let's just open up the borders and pay everybody to stay home, steve, is that your answer when we come back, united air announcing a big order

scott kirby is with us right after this break we'll be right back. any with a goal of achieving mid-tier gold producer status with the company's advanced-stage projects located in north america, headlined by the cariboo gold project in bc and the tintic project in utah. osisko development the first time you connected your website and your store was also the first time you realized... we can do anything. cheesecake cookies? [together] the chookie! manage all your sales from one place with a partner that always puts you first. godaddy. tools and support for every small business first. power e*trade's award-winning trading app makes trading easier. with its customizable options chain, easy-to-use tools,

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commercial aircraft, here in the united states. this is massive. this is huge we are talking 200 aircraft and an option for another hundred, right? >> yeah, it's a big deal it's another step in what united did during the pandemic in preparing, and really a unique moment coming out of covid to set the future for united. >> you are scheduled to take delivery of two new aircraft, and how important was it for you to say we have a stake planted in the ground. anybody else wants to start ordering aircraft, they will have to figure out where they are getting them from. >> this goes back to the summer of 2020, when we thought covid would be deep and last a long time, and we thought the recovery would be robust we realized early there would be huge constraints on supplies, and all that was going to limit

the total industry capacity, and supply is going to be below trend for years to come and we wanted to get ahead of that curve and we have, and it will be hard for anybody to catch up with us now, and try to order airplanes today, the manufacturer will tell you it's 2027 >> and the max-10 has not gone through certification. do you think it gets the waiver? >> i do think the max 10 and 7 will get the waiver in congress. you don't want to have a different cockpit for the same airplane, and that's a bad outcome. and high-tech manufacturing jobs, the great kinds of careers we are trying to bring back to

the contruntry, and it's where l the large bodies be built? in europe and china, and i think it will be getting done next year >> you have 100 more dreamliners on the way, and a lot of people are looking at the inability of boeing and airbus to ramp up production the way they would like what is the issue? supply base? manpower it will get fixed. >> they can give you a better answer it's all of the above. i think it's going to take longer to fix some of the supply chain challenges they are so deep so much. it's one part out of a million can put it behind, and it's not just the frames but the engines are way behind and that will be the bigger constraint is engine capacity

they will eventually come, but they will probably be significant delays in the next few years. >> when you were with the squawk crew last week in washington, we were talking about demand, and yet investors, there seems to be a hesitancyabout buying into the airline recovery right now what does it take to get investors past that? >> good question i don't know what the catalyst will be. you look at united for next year, and just at the current forward curve, and just for illustrative purposes, we have a 10% margin compared to 9% in 2019 everybody thinks we are going to have an easy comp to start next year because it was covid last year it seems straightforward for aviation investors have a hard time with two things the recession has to be bad for airlines they don't realize we are coming

from such a depressed level. and investors are worried about total industry capacity. the reality is that the constraints means supply is going to be challenged >> on the dreamliners, these are so crucial for expanding you have done a massive expansion. trans-atlantic how many of the smaller but lucrative markets -- >> the growth part of this order is interest international. and every airliner around the world except for united retired huge chunks of their wide-bodies, and it takes years to build that back we have great hubs, our coastal

gateways and interior hubs, they are the biggest destinations and origin points for international travel to and from the united states there's a lot of places we can fly. everything we got is going well. >> they announce the largest commercial aircraft order ever in the u.s 200 firm air phrplane orders win option for more. >> thank you when we come back, sam bankman-fried arrested in the bahamas. he was set to testify today in front of the house financier sr sr services committee and then the battle against melanoma moderna's ceo will join us in a t to talk about these results and what comes next.

"squawk box" will be right back. i love to help people understand the world through their lens and invest accordingly. you can call us christmas eve at four o'clock in the morning. we're gonna always make sure that you have all of the financial tools and support to secure your financial future. that means a lot for my community and for every community. ♪ ♪ mercedes-benz is turning electric... completely... on its head. bringing legendary design... and state-of-the-art technology... to a fully-electric suv. the all-new, all-electric eqb from mercedes-benz.

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crypto exchange ftx later today. and sam bankman-fried, the ceo, had been expected to testify before he was arrested in the bahamas last night kate, this was a hearing everybody was waiting to see the hearing will go on, just without sam bankman-fried. >> yeah, becky, those plans have certainly changed. this would have been his first time talking about what happened at ftx under oath, but he was arrested in the bahamas last night at the request of the u.s. law enforcement. bahamian police said he was taken into custody at his apartment complex without incident the southern district of new york notified the bahamas they filed criminal charges and is likely to request extradite.

he built a house of cards on a foundation of deception. the southern district of new york, meanwhile, says it will unseal its own indictment against sam bankman-fried, and all of this sets the stage for his eventual extradition to the u.s. he will not be testifying here in washington as planned some lawmakers are questioning why he was arrested ahead of today's hearing. and the timing of this arrest denies the public this opportunity. some legal experts i am talking to say the timing of the arrest may have been to deny sam bankman-fried more opportunities to influence a potential jury pool we will still hear from the current ceo in charge of restructuring ftx around 10:00 a.m. this morning. back to you.

>> thank you i guess that's why jacob frankel said earlier they were doing it to preempt the testimony and didn't want to see it happen, and you nailed it as to why, to not poison the jury pool, but they will be hard pressed to find somebody without preconceived notions >> yeah, we had andrew's interview, and hours of podcasts and twitter spaces i am told anymore of that is not what they are looking for in terms of having an unbiassed jury and to get ahead of that, although some lawmakers are disappointed based on the excitement around grilling him -- >> and the ratings >> and the ratings joining us to talk about all this and the hearing and what could have been and what may be

to come, north carolina republican congressman thank you for joining us this morning. you have been told anything about this arrest and the timing related to it? a lot of people are asking questions about what may have led up to it and what prevented him from effectively testifying today? >> no, because traditionally the southern district of new york doesn't coordinate with the legislative branch i don't have any expectations there will be outrage from any federal prosecutors to alert us to this. it's not the typical form. what we were trying to do is establish a fact pattern, and that's why we have john ray testifying first, and he's in the long-term of his career, a highly reliable witness, and in his short career, sam bankman-fried, has shown himself to be a highly unreliable

witness. i didn't have high expectations sam bankman-fried was going to expose the world or congress to some deeper insight on a set of facts, but i think it was important to have him to further the process of getting to what happened in the ftx collapse >> let me ask about a question as to what lawmakers can and cannot do to try and regulate the world of crypto. what is so fascinating about the complaint, the allegations are specific and narrow as they are all about protecting the equity investors in ftx, meaning the venture capitalists and the like but not the customers of the service, and that's in part because the company itself was based in the bahamas so it raises the question of

what kind of regulatory scheme should exist >> well, so this is the clear question i have been raising for a few years now. way have regulatory regime long standing for kau mo commoditiesd securities they were acting as an unregulated cryptocurrency exchange there's no means under federal law to become a regulated cryptocurrency exchange. it's not up to the regulators to do that. they clearly failed here to regulate digital assets for the ftc and the fcc, and it's incumbent upon congress to regulate the law, and that will be my focus, and it's my hope

that this is the foundation stone of a set of hearings that we can get to the bottom of what happened, how customers -- the consumers were defrauded it provides legal clarity so peoples' assets are protected. >> congressman, there appears to be two problems here, and maybe more one is just potentially a straight ponzi scheme, meaning taking money and pretending people had it and they didn't have it and going off and using it themselves, and that would be considered straight up theft if, in fact, that's what it is the second piece has to do with valuations, and what the tokens were with and if they were manipulated and the like there has been the argument if you don't like the coins or tokens or crypto itself, regulating that, if you don't think it's controllable, it

creates its own conundrum. >> the first issue you raise is old as time. fr fr frauds will be fraud stirs this is an old fraud with new technology wrap. it's not new you can have the markings in the last few hundred years that are analogous to the situation and we have to provide clarity regimes around the globe have tried to cut off the internet and their people have found a mechanism to use the internet, and this is internet money, in essence, so it will be difficult for one regulatory regime to say lights out, and we have to have a durable regulatory regime so

we can both, protect investors and innovation here. if this is the foundation for the technology of the next internet, we have to make sure there is a durable regime, and there's a balance between consumer protection and in innovation, and it's up to congress to provide that clarity. >> sam bankman-fried made a huge amount of donations to lobby, effectively, politicians in washington what should happen to that money at this point? >> it's up to members that took the money. it's up to the politicians that took the money, and my view on political money has always been if the person writing the check is supporting the cause of the person whose campaign is receiving it what we saw in d.c. is sam

bankman-fried littered the place with both, not just politicians but the media as well, to get better coverage and to get what he wanted out of the process what i think is happening here is people are going to be able to see for themselves what he was trying to do, and the public will make a judgment about that. just like the media is making a judgment about that and people will be held accountable for that that's all we can do at this point. >> some of the money has been donated to charities, and other money has been kept. ultimately do you think the money should go back to creditors? >> i leave that up to the rule of law and not the opinion of one politician >> do you think that sam bankman-fried bought off

washington >> he tried. he tried if you look at the interview, and not just the one you did with dealbook, which i would command anybody that was interested in the space, but his interview with fox, it shows he was a manipulator of world-class capacity, and was trying to pull off something that was light-touch regulation for his platform, and that's why he was seeking out a cftc or a commodities regime for his platform what i am looking for is the proper balance for consumers will not fall prey to ftx or some successor to sam bankman-fried. >> congressman, wouldn't it be easy to change the rules so the sec could protect investor interests in this? that's what they were created

for. isn't there a way to say, yes, they can make sure investors can't be defrauded couldn't congress do that? >> yes, and because the security exchange commission has failed to do that, we have to step up their reference from the securities exchange commission, is they refer to ftx as an unregulated crypto exchange, and there's no means for a regulated crypto exchange and there's no law that creates that structure nor any regulation from the sec. the one decision that they have made is a proactive decision on custody that is problematic for consumers. i think we have to highlight that over a period of time and a number of hearings to come in order to get clarity and build

out a solid regime, regulatory regime, and force of law >> congressman, thank you for joining us ahead of the hearing. we look forward to it and will be following it all day and i imagine talking about it tomorrow a lot thanks a quick check on the markets, and then moderna's ceo will be joining us all human kind should tune in for that and then jay clayton will join us on the arrest of the sam bankman-fried. stay tuned

good to have you here with us there's so much talk about businesses cutting costs to impair for an impending recession. where are you seeing companies continuing to make progress? >> anything that has to do with changing the way an organization interacts with their customers, whether it's the product or service they provide >> can you give us an example? >> we have a client here called wawa, and that's a convenience store, and they transformed the experience from physical to one that is digitally enabled, and they are taking it a step further to launch things like new business platforms in areas like catering, so they can

engage with the customer in a different way with a lower cost of capital take a good look at your business cases and make sure the value of the programs are clear, and if this is a program that is going to allow you to come out in better shape, go forward and conquer. just 45 minutes and 30 seconds away from this

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moderna and mercuk releasin trials for the reduction of the dis disease. moderna's ceo joins us now, the trials were ongoing. we had positive data from previous trials, but this is ongoing? >> yeah, as you say it's the significance of the study that is real. we designed the study to be

powered, so showing a 40% reduction of the recurrence or death is a big deal for patients we are excited and moving quickly. we have talked to regulators to see what we can do to accelerate this as much as we can we believe from a standpoint that we are able to teach t-cells to fight your cancer, and we believe that this should work, and it could work so it's a big deal for patients. >> you are much more comfortable

with this concept now. they are all personalized, but they have the neo epitos and dol have different characteristics that you can use to design the mrna vaccine you can go after a lot of different solid tumors and blood cancer >> that's correct, joe at this stage we think that there are 90% of cancer cases are the right place for us to start. >> okay. >> as you know, cancer is a mutation of healthy dna. now thanks to sequencing technology, we are able to look precisely at cancer right now and compare this to your body

and we have a product within 45 days of this and how to recognize the limitation of your cancer >> so the keytruda cancer cells are devious because they try to fool the immune system into not recognizing it so the keytruda tries to strip away the mask so the immune system can see it and then this. this ramps up the number of t-cells that go after the specific tumor because the t-cells should already see that tumor they already see that -- what are you doing? multiplying the number of copies so that they make many more t-cells? because they already know the n neoapetotes. >> i don't think it's more copies

i think it's teaching new epitopes we introduced it in the spring of 2019. we showed a lot of cancer patients and we take the blood before christmas and after a lot of the t-cells don't recognize the epitopes that we know exist in a cancer cell because we seek quence it, and take the blood again of those cancer patients and we see now thanks to all products and i think that is very important with new epitopes and you can keep it in check because the mutation is in every patient >> your stock was up about a dollar and a half earlier when we were talking about this it's up almost 15 points where -- would you always use keytruda with solid tumors

would you always use keytruda? what else can be used? lung cancer? it's scary because everything goes everywhere, if you introduced it into the body would it go where it's needed? you can't remove all of the tumors and that's the problem. >> the technology is exactly what you see it is if we teach the t-cell of the cancer patient to recognize the cancer that it could not recognize before, that's a massive medical step forward, so we believe it should work in many, many solid tumors and we'll have to prove it in studies and we believe it could work in different testing meaning after surgery and we'll be using the balance sheet with

a $17 million in cash. we share the profit 50/50 so you will see us together very aggressive and merck has done an amazing drugs with keytruda to test it, and you will see moderna to do the same thing with the patients. >> stephane, the study, the trial that you were just talking about, how many patients are in it and how long does it run? >> yes, becky. 150 patients and we always wanted to know is it working or not? it is so hard over the years and it was critical. so the t-value at 0.0266 and we did two patients out of three got moderna and we did less on the control arm because there is a lot of data out there on all

clinical studies and that's how merck is so it's real. >> the blind study was they got keytruda nobody got nothing, right? >> exactly and it was what you get and so people that had keytruda or keytruda and moderna and it was a 40% of risk of recurrence of cancer. >> interesting >> what stage 4 melanoma, what is the five-year survival rate on that without any treatment? >> even if you look at the published data, the one-year survival is 70% and it is very low, if the mechanism and that's yet mutation is critical you have the vaccine and then

the cancer can come back we think of a time we might be able to increase it, the mutation is with only molecule, but we can do more with the vaccine in stage 3 if you think about it, that's where the power is and safety and we can say the safety part of the combination is very similar to the key ttruda, and you think about it, it's 70% of the manufacturing process as the covid-19 vaccine it's exactly the same chemistry that we put in your body. >> stephane, very quickly, we are almost out of time how long do you think it would take before you get other cancers to the same stage with

these sort of clinical trials? >> so i think, becky, is we go directly into phase 3 with different cancers. the team is working to privatize which tumors and which melanoma, like skin cancer, we'll go after. what is clear is we want to go aggressive against different thing because this is real >> if china asked you for your vaccine would you provide it to them and people are very worried about what might happen to the elderly population in china, and if they were to come back and say give it to us, would you do it >> of course i cannot comment on those discussions, but we want to give it to people around the world who fights the virus and the best protection against this validation, and we also want to help >> great great. thank you, stephane and, what

c can i say? keep up the good work, not that i need to say that good luck. a lot to go before the market cpi and the dow right now up 232 points. stick around "squawk box" will be right back. get refunds.com powered by innovation refunds can help your business get a payroll tax refund, even if you got ppp and it only takes eight minutes to qualify. i went on their website, uploaded everything, and i was blown away by what they could do. getrefunds.com

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lot that's going to happen before then. it is now just 30 minutes before we get it. the big number, brand-new inflation data coming at 8:30. we'll bring you that number and market reaction across wall street and some big breaking news ftx founder sam bankman-fried arrested in the bahamas and this morning, new charges from the sec and we'll bring you the very latest on this fast-developing story as the final hour of "squawk box" begins right now. ♪ ♪ ♪ good morning and welcome to "squawk box" here on cnbc live from the market in times square. i'm with becky quick and andrew ross sorkin and they're ticking higher after yesterday's

500+-point gain and down 230 points all of this ahead of the cpi data which is coming in less than a half hour and treasury yield ahead of that, it was up a little bit from the 3.5 that we saw, 3.58 and that can all change, obviously. >> let's get right into the top of the pre-market movers and dom chu has that and what do you want to the start with this morning? >> let's start with the industrials and pre-market volume united airlines is down about a percent, half a percent and 40,000 shares of volume. united announced it was placing an order of 200 aircraft made by boeing and one is the 787 dream model or the wide capacity jets and the other will be the narrow body 737 max jetliner and it has the option to buy an additional 177 dream liners and it's important because this now

represents the biggest wide body aircraft order by a u.s. airline in aviation history. for that reason, those headline stocks are in the news and boeing shares helping the pre-market gains in the dow. we're watching shares of jetblue now up one-third of 1% jetblue is updating its current quarter outlook and guiding to the lower end of the previously stated range of 15% to 19% growth for a key metric and operating in financial efficiency and the per revenue seat mile. jet jetblue said the weakness is because of hurricane nicole and the timing of the holiday season, and we're watching jetblue. we'll watch tech-related stocks, amazon and tesla will be in focus and traders preparing for the key consumer inflation data that andrew laid out this morning as well as the fed decision tomorrow. if the inflation does come in

sort offer than expected it could come in for a tailwind with tech stocks hotter inflation means that you'll lower valuation and apple is up fractionally and microsoft up 1%. apple, amazon, tesla all showing gains right now. i'll send things back over to you, joe >> thanks. breaking news. ftx founder sam bankman-fried was arrested in the bahamas after being indicted by the justice department defrauding investors and his company. bankman-fried was set to testify today at the house financial services committee that will not happen, but the hearing will still go on ylan mui >> good morning, ylan. >> good morning. investors were stunned by the arrest last night and expressed initial support for the justice department's move. the chairwoman of the house financial services committee maxine waters said bankman-fried and his lawyer his know cofirmed

as late as yesterday afternoon that he would be testifying before congress today. it's about the time that the process to bring him to justice has begun and he still needs to answer to the public and she's committed to getting to the bottom of what happened. the senate banking committee had been trying to get bankman-fried to testify this week he applauds the arrest and will be looking to uncover the crypto risk to consumers, the financial system and our national security elizabeth warren was even more direct she said crypto executives who break the law are just like any other crook. if sam bankman-fried committed fraud then they should send him to prison, and he will testify today and he's submitted a damning written statement blaming the company's collapse on the, quote, absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals.

ray did not comment on bankman-fried's public statements and they did obtain a copy of bankman-fried today and apparently, he began by saying simply, "i f-ed up ". >> that does appear to be what the testimony suggested he would say. thank you for that it may be an understatement. for more on sam bankman-fried we are joined the senior policy adviser for solomon cromwell which i do want to mention is working with ftx on the b bankruptcy >> that's right, andrew. >> the criminal charges, we have not seen them thus far we believe from sources that we

talk to, wire fraud, security fraud and money launder. if you look at the complaint this morning it goes to jurisdiction and regulation and all of is quite narrow and seems to focus on investors in ftx and not the actual customers of ftx. is that almost a symbol of the problem here >> exactly right, andrew as we talked about before, what you have in the complaint is a securities transaction it was alleged lead frauj lentz and that securities transaction is the sale of interest of ftx inside the united states and what you are opening to is the fact that the trading, the customer activity was going on offshore and that that trading is actually not the predicate for the charges today because there's a jurisdictional question as to whether our

securities law reaches that trade and clearly the fcc did not need to go to that krading in order to bring charges to mr. bankman-fried. >> when you look at the charges, does it look like somebody flipped? >> look, i applaud my former colleaguings at the fcc for moving as quickly as they have to pull together this complaint and pull together these charges. the process here, i know you always think of me as the glass half full. it's a hearing and people, and i know from the press release that they also mentioned the cftc clearly working together to gather the facts and bring this case quite quickly >> what do you think of the critique that this is a commentary and a failure by the regulatory agencies.

>> we just heard patrick mchenry and the critique that he made is how we classify these assets correctly, and in classifying them they are regulating them incorrectly. it has been that many of these assets and i've said it repeatedly for more than five or six years ago, they should be regulated like securities. this is trading and this is trading that is offshore and you've identified it those are the two conundrums the classification and the global nature of this market. >> the reason i mentioned the failure of the regulatory agency is possibly the fcc currently and arguably even before when you were in office, and i reason t i ask the question is the fcc trying to protect investors in

ftx itself it is also that regulators missed the signals to prevent that from happening in the first place? >> the factual predicate here of private sales of securities to sophisticated investors. does the fcc police that of course, is that the kind of activity that takes place in the public markets of what i would say is the principal focus and the protection area for the fcc, it is not, but moving forward, andre and. they laid out a path forward for the platforms that are trading in the united states to be regulated while congress acts and you know, i -- i would urge people both in congress and at the agency to try to move forward in a proactive way they're doing a good job >> jay, we were talking at the 6:00 hour just among ourselves about the idea that the venture

capitalists and everybody who invested in this which are the 90 investors that the fcc is talking about this morning, didn't do enough diligence, clearly, didn't look at compliance and may have been either wearing blinders, knowingly, unknowingly, and i don't know if this is a see no evil, hear no evil situation and i don't know if this is a business model problem that the venture community is often given a term sheet and they sign it in 12 hours and they expect that 90% of the investments will go to zero. now they get to zero shouldn't matter and should we think about that or should we think about this as a serious governance problem? >> look, investors, hindsight is 20/20. we will get to the bottom of it. that's what we will do here. look at the complaint. one of the things that you said earlier and i caught on the program, terrific, is a lot of

this is as old as time, and i think that that's the lesson here it was offshore. it was not regulated, and they're the same types of things that we've seen for a century and it's why we have rigorous regulation of our public markets in the united states >> jay, play this out, though, for us in terms of ability for customers to get their money back does any of this change anything and what you think the future of crypto really is now here in the united states. >> okay. look, that will play out in the bankruptcy proceedings and professionalses and this is one element of that. you'll hear more on that today in the hearing and the question of the ability for customers to get back in terms of crypto in the united states what is crypto do i believe and do others believe that the technology here and the ability to move money in

a secure, transparent way is going to change it absolutely what does it mean in terms of what i would say are some of the unregulated assets that are trading and we will continue to see a shakeout >> jay, i always want to thank you especially when you have the ability to talk to you and get your thoughts in real time it is always very helpful. appreciate it. >> thank you, andrew >> thank you. when we come back. breaking economic data and we have the cpi just in the bottom of the hour 16 minute away and ahead of that we'll be sakg pein with former treasury secretary, jack lew and we'll talk about what he's doing and whether he thinks it will work. "squawk box" will be right back.

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all from the company that powers more businesses than any other provider. get started with fast speeds and advanced security for $69.99 a month for 12 months. plus ask how to get up to a $750 prepaid card with qualifying internet. investors and the fed will look closely at this hour's cpi data which is due out in just a few minutes. our next guest says inflation is too high for many americans, but the data is starting to move in the right direction. he's the man that knows what he's talking about we are joined by former treasury secretary jack lew and mr. secretary, thank you for being here >> great to be with you, becky people are hoping that it's going to be in the low 7% range year over year that's still incredibly high if we get a lower number maybe we can think inflation is starting to break. what's happening here? what would you do if you were still treasury secretary

>> as you know, i don't predict numbers and certainly not a half an hour and 20 minutes before they come out. i think whatever the number there is today whether it's higher or a little bit lower, it's going to take a while to know exactly where we are and whether or not things are settling down to a place that's going to get back to where we need to be on inflation. so i think all of the market speculation about is the fed going to move quickly to me is premature. i don't think the fed will change its course. i think they signaled broadly they'll do 50 points this week i think they're going to hang tough until they're sure that inflation is coming down into a safe zone and that's going to take a long time it's not going to take a week or a month and it will take many months and if today's data is good, people and markets will react to that and the numbers are going to bounce around i think what we know is that inflation is trending in the right direction. the range of predictions is will

it stabilize 2 or 3 or 4%? the fed did an enormous amount to get us through covid. if they were late by weeks and a couple of months and not a very long time and they'll deal with this until inflation has the economy and making sure you don't deal with inflation and you don't trigger a deeper inflation or more unemployment than you need. >> they're sort of on the record saying they'd rather overshoot than undershoot because of inflation and i wonder if that's the right default position okay we may go into a deeper slowdown than we wanted as we're making sure that we hurt inflation and i'm not sure that's the right default mode to be in because i don't know whether this is the systemic inflation that got so out of control in the '70s and '80s and if it's not, it is a

one off that came from the pandemic, then they assumed it was transitory initially why is that definitely not in the back of their mind now and maybe we should go slowly and see if it takes care of itself before we bring on a full-fledged recession >> so i'm not sure that i'm saying something all that different from what you're saying >> i said it this way, you said it -- >> okay. i think the ricksk of them overshooting and if they overshoot it will mean more economic pain. that means unemployment and with a 3.7% unemployment we have room to put pressure the economy. >> maybe you're in a good position to absorb it, but we should do it in a way that there's real pain wherever that unemployment lands and i think we're moving cautiously. inflation is horrible and people just going through thanksgiving it's, like, what am i -- you know >> there is a remarkable thing

between unemployment and inflation, everyone feels inflation, some a little and some more. unemployment hits a few people really hard and the fed is in a position where they have to balance the choices which are hard, and i think we're still in an uncertain time. >> i was just going to ask you, every secretary says they like a strong dollar and the question is whether you think it will create the conundrum from the rest of the global economy and ultimately ours. >> no doubt that the strong dollar, and it is a safer place than other parts of the world. >> i think the strong dollar is still a reflection of the strength. >> but what do you do? you're hearing people in washington talk about it. >> when you say a doom gloom -- >> no a doom loop. if you have such a strong dollar

and you create so many other problems and that's its own. >> think we were in a different situation than we were in when urging mark crises triggered global financial problems. i have not seen any reason to believe that we are on the edge of that. what we are likely to see is pain in places that requires attention. countries that have debt crises that need help and it will be a complicated time where in the past it was the major developed countries coming together and figuring out how to deal with it and now we have to figure out how to deal with china because it's the bilateral lender in those crisis and that's different than the economic crisis. >> the ten-year is moving up 3.58 is the latest tick on this and it does raise the question of what happens to our borrowing cost in the united states and that's not something that we had to worry about for a very long time because interest rates were so low the interest rates going up means that it will be a growing portion of federal expenditures.

i've actually been of the view for decades that when times are good you ought to be trying to chip away at the debt and the long term interest costs and when times are bad, you need to be willing to spend in order to get out of a crisis. we're in a moment where tough choices have to be made and they have to be made carefully, because we're in the middle of a wrap-up of congress where one of the issues do we fund the government or do we shut the government down or do we face a debt lipity crisis and it would be an unfortunate thing if we end up with the crisis in 2011 where we looked at the possibility of the default of the dead if there weren't draconian actions taken that you could not expect and the white house and the congress to agree on i think congress should deal with the debt limit now, this year, this week. >> i would think the strong dollar is a great thing to have. it means that a, the fed is

probably getting close to where they need to be. it's where the best reserve currency in the world. rates are almost a sign. can you imagine if there is a weak dollar and inflation. >> and to do anything about people have said should we have some kind of a plaza core to deal with the dollar it's just not realistic. >> multinationals would look like it's slowing demand when i've had people in other countries raise this concern to me, what i've said to them is -- >> good problem to have. >> they're still leading the economy out of this crisis you would aren't be better off if the united states went into a deeper recession or if the united states was weak. >> there's choppiness through the financial crisis. >> secretary lew , thank you. >> maybe stay after and whisper to us. >> see you soon. >> great to see you. >> when we come back, we do have

the november's read of the cpi st men away. we'll be right back. you are watching "squawk box" and this is cnbc

the final countdown, it is on four minutes and 11 seconds and the cpi data will be out and the panel of experts are rdyea and waiting. stay tuned squawk is coming right back with the big number

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welcome back to "squawk

box. we are a few minute away from the november cpi let's welcome the panel, neila richardson, former white house counsel of economic affairs, tomas philipson and oksana from j.p. morgan asset management and cameron dawson and our own steve liesman and rick santelli. neal, you don't know i think you know some stufr because you get all of that great data what are you expecting h hot or cool in a word? >> i think we will see hot in the cpi and service sector that's where all of the action is and that's where wages are still high and elevated and that's the biggest concern for the fed. >> i don't really have time to go to everyone else, and i think it would be horrible if i were to just start picking people so maybe i'll just keep talking until the number actually -- i have 30 more seconds rick, you're going to do the number when it comes out, so you

can just start talking now and keep talking hot or cool? >> well, i think it will be cool and the reason i think that is the market are moving, folks two-ier note yields have started to drop. if you look at ten-year note yields they started to drop rather precipitously from 358 and now 254 and they're hovering and they keep trying to spike up a bit and look at it now the numbers are out. up only 0.1 on headline. up 0.1 on headline remember the high watermark here was in june of '22 a serve-yeven-year high, and ife look at it high watermark was in april of 21 at up .9 if we look at year over year up 7.1, 0.2 cooler than 7.3

0.6 cooler than the rear-view mirror at 7.7 and a full 2% under 9.1, that was in june and that was a 1981 comp, and finally, in my opinion the area that you're supposed to pay the most attention to, cpi, ex food and energy core, year over year, up 6%, expected to be up 6-1 and prior to that 6.6 in september and this is the most sticky aspect of cpi. it's now at 6% so it's only 0.6 lower than two months ago which was the watermark for four decades, and indeed they're coming down remember, i gave you all the high watermarks and if you think to last week's producer price index and everything peaked in march and the entire series started to look almost in unison and this isn't quite the same, but the moves in the pre-market,

joe, was spot on >> we dropped below a -- we are hovering at 343 in a 10 and futures, zoom, zoom, zooming with the last prices right under 35,090 here it goes it looks like it will challenge 35,100 and it's flying the main reason, listen, folks, inflation is too high. fed is nervous and they'll keep erring on the side as to how aggressive they think they're going to be. however, if you take the numbers on face val you will and look at trends and consider why inflation was up there are many reasons to hope they will keep moderating. the trick is it will moderate to levels that will be much higher than pre-covid at least, that's my opinion. back to you, joe >> so, steve now we have to go 50 because we said we were going to go 50.

weave got to and we can't declare victory and we'll use the "p" word and we have to use the swivel word. do you think he changes coming in the i'll bet you he tries to bring things back down to earth. >> i think that may be exactly what he has to do, and the trouble is -- you know, i feel like i'm a genetically a contrarian here because last week when the ppi cam back, i said it was better than the headline and this is better from that standpoint because if you look at services less energy and that's still hot i think it's hotter year over year, 6.8, versus 6.7. remember i talk about the the three areas that powell is looking at, the core goods sector, the housing sector and the core services sector housing was up again and core services on the good side, better news than expected. we got this decline in goods

despite you had a 0.5% surge in energy price -- sorry in food prices and then you had the offsetting decline in energy prices and that was kind of good and some of the other stuff in there especially used car prices which may have further to fall because of the wholesale part of things and that is something that will help out down the road that's good and housing will decline over time, but it's the core services thing that's linked to labor, and i think the caution that i tried to provide in the 7:00 hour was none of that stuff is good enough until the fed sees the labor market cool so this report is not going to do for powell what everybody hopes this report will do for powell when it comes to inflation. >> neil, i know i have to talk for ten seconds and i still want to talk with you was it cooler than you thought, nila >> guys, expected cooling. cool sector.

i did not expect it cooling in services and it's because wages have been elevated and they're staying at accelerated levels. so we haven't seen a cooldown in the labor market, and the fed is pointing to 3.5 missing workers. joe, what gets these workers back because the competitive pressures that are lowering prices in the goods sector are working in the opposite way in the services there is still demand for head count and firms are competing with each other which is raising wages and that's the issue with the fed when it meets on wednesday to make a decision >> tomas, do you think that is a long-running issue or is it still a one off emerging from the pandemic is this deeply ingrained in the labor market now >> i think there are several deflationary measures that people kind of don't talk about a lot, that is -- we have a month now of .6, .6.3 and.1 in

core that is obviously and there's some deep inflationary pressures out there, i think obviously, the money supply which people don't talk about at all and if you think about money supply and lags and that's exactly what's going on and then we have inflation and now we have inflation coming down because it applies a year ago. so i think that's one. the second is this peak of this excess wealth that consumers have a huge income for covid and if you look at disposable income and that income dissipating, obviously. 1.4, 1.5 because people are in real spending going up up and that can't continue and then

rowe you have some supply measures that the government put in to to have supply and the main one in dollar aims is the medicaid subsidieses that went on in the middle class so that people didn't need to take a job to get health coverage and those are running off, too, which put downward pressure on prices once we get label supply out as well. so i think those forces are encouraging. i think the wage forces in the last few labor reports are discouraging, obviously. >> oksana, i hope you weren't dying to get in with something really unbelievable. that's what i'm expecting from you. what do you think? >> i think there are two very important issues for investors, and no matter how tough, the market has disregarded it and continued to ease financial conditions and continued to rally. today we have a number that's giving the market a real reason to rally

so the two questions for me are number one, do we get potentially another spike because financial conditions ease enough where we get another acceleration to the inflation number at some point in 2023 causing the fed to go farther than is currently estimated because the market right now is not even pricing in the distance that it is telegraphing it will go the second is where does inflation moderate at what level? because i don't think that's priced into the market action at all meaning having to live in a world where the cost of capital is between 4% and 5% for some extended period of time for a year or longer than a year what does that do to corporate balance sheets what does that do to profit margins? th of course, with wage pressures continuing to be strong and the consumer continuing to be resilient. this makes the fed's job quite difficult and investors think what is currently priced in and i don't think that anything that the fed is telegraphing and the fact that they want to get to a

positive rate they're still far away from it, and not only that, they want to be a half a percentage rate, but say none of this is currently priced into the marketses and that is what's concerning to me >> hold on i want you to be able to have, cameron, all this info before you decide what to do because we'll come to you for what to do with the stock market. you've heard all that. you've been pretty bearish and you really think the fed will have to go much further. the dow was already up back in a bull market. does anything change your mind here are you still a seller >> it's not necessarily just the destination. it's the duration of how long that they stay tight, and if we look at what the bond market is pricing in, it's a really rapid shift to rate cuts starting in the second half of 2023 of about 50 basis points and a full 200 basis points by the time we get to 2024 and given the fact that

we're still seeing some of these underlying inflation drivers be tight and they still came in at 6.8% and that's about in line with what we're seeing in wages and the atlanta fed wage tracker is still running at 6.4% that kind of environment does not support the fed pivoting to cuts in short order which means upper pressure yields and downward pressure on valuations for the equity market. >> okay. so still we may be at the high end of a trading range is that what you're saying you think we go below 3800 on the s&p and you'd be selling >> in the short term the pain trade is higher and the people took their shorts off and the market rallied, but we wouldn't be chasing the rally and we would be using it to redice risk because we still see earnings risk into 2023 and maybe it

comes in the back half of 2023 and we think again the bond market is ahead of itself in pricing in those cuts. so we don't think that this is the start of of a brand-new bull market where we will break into all-time highs any time soon in that we're more cautious in wants to take things off into a rally. >> someone said my name. wases that you, tim haase. >> don't you love when people say your name. >> go ahead. i was trying to get a couple of point for the fed funds futures market very quickly e the odds for a 50 basis point hike have gone up. so people feel secure that whatever this level was 97% and now the probability of what happened the odds of a 50 in february have gone down and now the o odds-on bet of the market is the probability of 25 now built in

for december and that's counting that the next one, tomorrow, will be a 50 if it looks like to me, i did a back of the envelope cal calculation, and the data that ran across and it's been a goose egg or negative for quite a while and it's a real earnings increase in that inflation is low thor compared to the hot wage number we got on friday >> earlier i said to steve, it's not an awful deal to be able to stay at home and we heard that the medicaid benefits where you can get health care without having jobs. aren't most of these programs winding down so people can have an inducement. they can't sit around at home for 50 grand, can they >> i don't know. you should ask the democrats and

that you have on the show. there has been a movement between trying to facilitate helping people so if they decide that they don't want to work and they want top stay home and be creative or they want to stay home and write music listen, i get it we all want to relax, but the point is are we really training the workforce to be less aggressive i know that work ethic used to be a big deal back in the day, but times have changed, definitely there used to be a time where the rule of law in signing your name at the bottom of a contract used to mean something these things don't mean much anymore and in terms of the market everybody is all hot on wages, all right wages just barely above 5% which means january, february, march, april, may, june, july and august were all higher yore over year basis and we were higher and it's only the last two months that they drifteded a bit and what they can hang their hat on is pre-covid and we were at

3.1 and we are above 5% and on the wage side i think people are getting way too excited and i would love for wages to move higher in certain areas and it's the spiral we need to worry about and let's not lose sight of what our friend of cnbc always says peter farr that when you look at shelter and home equivalent runs, they went up faster and traders are highly aware, in term of fed funds future and they're not going to trade now. we are going to be on the fly with the percentages and number numbers leak this and see how they look at the end of the session. >> you want in >> every former fed official and former secretary official and all of the people we have spoken to today pointed out that, look, the market running and jumping like this makes the fed's job

harder and they'll have to come out and jawbone this does that matter to investors? are we going to see that who wants to take that i see a couple of heads nodding. >> i'll take it, becky and turn it over to the experts chair powell warned us in august that there would be pain and the question is have we seen it yet, and i would argue we haven't we have a 3.7% unemployment rate we have wage gains that are still elevated and those wage gains are accruing to people in consumer-facing industries and they're lower paid and they spend out of every dollar earned and so the pain has not accumulated in the market yet in the economy, and if the fed is to be believed that it is still coming and that, i would argue hasn't been priceded in in todas moveme movement we've seen so far

>> the message was about jawboning financial conditions to start tightening today because the fed saw easier financial conditions working against all their effort to tone down inflation and so it's likely that if we continue to see this rally that maybe we see from chair powell tomorrow that he does talk down financial conditions and talk about the need for them to remain tight as their mechanism in order to control inflation and that's key for the markets and the more we see pressure upward on valuations as well as lower yields and the wacher dollar which all lead into financial conditions. >> steve, does this count as a swivel or a pivot with a small "p". >> i don't know. if we're going to 25 at the next meeting. if we're going to 25 at the next one or is chair powell going to say this is exactly what we said we might go smaller, but higher

eventually >> you've chronicled along with me the changing definition of a swivel or a pivot which had been, first they're going to cut and then they'll pause and the new swivel idea is that they'll raise at a slower pace and right now the fed is fueling its way through the darkness of trying to figure out when inflation is going to come down so it's a little bit more concern than there had been in the past about the idea of the rate hikes doing more damage than they need to do to the economy here so i think the idea of of a 50 followed by a 25 is not crazy, but i still think and this is going to be a key thing and maybe we'll talk about this more tomorrow when we talk about the fed again is the idea that in the projection of the funds rate that will come out from the fed itself, you are going to see an increase from the 4.6% to maybe

4.8 or 5 and we've had a lot of people on our air about calling it a benchmark and they may go s slower and people on the sidelines and the data that i looked at this morning before we spoke, joe >> oksana and tomas, we have a minute left and why don't you start, oksana, if you have nuggets? >> think at this point the market has gotten entirely ahead of itself in pricing some kind of a pivot we haven't gotten to any place close to what the fed has been telegraphing that it wants to get to in terms of the terminal rate and pivot at this point, and it stands for pretty insane valuation on treasurys the bond market has gotten way ahead of themselves. we haven't seen the pain that's going to hit credit from a fundamental standpoint and widened spreads and that will be the next punch to foreclose and the interest rate-driven pain which has been all of the pain this year and

even that has not been done and we see the rally to year end and next year we'll see some pain on that front because we are definitely not out of the woods here as far as inflation is concerned, and we have to contend with living with elevated cost of capital for some period of time. i do not think the markets are pricing that in. >> tomas >> this is good news relative to expectation, particularly, i think, core is coming down four months in a row and that's very healthy and particularly because housing which has lagged is 40% of core and housing has been up the last few months with the core real core is out there relative to which we observe is probably even healthier >> very good a good ending and exactly on time thanks to our panel, neal, tomas, oksana, cameron and -- okay i'm thanking steve and rick,

too, but we all have to do, but thank you, we appreciate it. it's good to have everyone you -- can you imagine if we only tried to do it with five people it would fall so flat. i think we can get one more row. >> six >> three of us >> row. >> the three of us that is nine >> small business playbook virtual summit tomorrow. she will examine what the economy may look like in 2023 and why small businesses are still having a hard time finding workers. the event is free. scan the qr code on your screen to register. >> let's get down to the new york stock exchange and check in with jim cramer. what your number means from stocks and what it means from the fed. >> well, i think not much wages here but almost everything that fell is going to continue to fall a lot of things that are in

stasis are about equal equilibrium about to fall. there isn't anything in here that indicates something is too low except airline fees. >> inflation numbers, not stocks >> yeah. everything is going the fed's way. i know food prices are going to come down. energy prices will keep coming down i know the supply chains for home builders are in pretty good shape. supply chains for the auto companies are in much better shape. i didn't expect the medical index to fall. that was a nice surprise and there is so much inventory in the system. i see most things going the fed's way, except for wages. we don't have that yet we he'd to see more people unfortunately be laid off. this is a remarkable number.

what it's really doing is all the cumulative stuff they have been fighting that is finally working right. the collapse of energy is important. look at just a really solid number i deal with all the companies that are making the stuff. they are not putting price increases anymore. that's over. if anything, price decreases they will charge you too much and we're rolling things back. fruits and vegetables is up because there is a cartel that keeps those up and they have to investigate. these numbers verify what the companies are telling me >> if you're coming at it from the company's side, does it mean the earnings recession doesn't come to pass this next earnings quarter? >> i think you're in this weird moment where costs are coming down to the consumer very

slightly but big to the producer so you'll still see very good numbers. i'm not sure, but i think crude is trying to put in a bottom but i don't think you will see a big increase by any means in gasoline so there'sjust a lot of things that are in this that have been in the works they're finally coming to fruition housing, not yet wages. you need to see more layoffs they don't have the wage thing under control yet. they will get that under control. a lot of companies want to see the stocks higher. they know the way to get stocks higher is to fire people >> thank you for your deep analysis >> good number nua w ll look to you in fe mites for more thanks, jim. "squawk box" will be right back.

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back to "squawk box. cooler than expected cpi data at this hour. as a result, stocks are off to the races. this is what we had anticipated would happen if you got a softer than expected number 0.1% versus 0.3% that had been estimated. as a result, you have the dow futures up 730 points. s&p futures up by 114. and the nasdaq up by 458 of course everybody wondering what this means for the fed and beyond liz is head of investment strategy at sofi we have heard repeatedly from different fed watchers, former

treasury secretary this morning all saying beware. just because this number may be softer than expected doesn't mean the fed will ease up any time soon. one number is not going to make the difference what do you say to that? >> well, that's right. and, look, there's things in this report to certainly be happy about. it's working it's moving in the right direction. we are far from what a target rate would be and the terminal satisfaction of the fed would be this could take us through the end of the year with some optimism now, the point here is if you look at what's happened in the vix, it's risen. most market participants are expecting probably more volatility on the horizon. maybe it doesn't come until january. what i think we'll hear from chair powell tomorrow is not so much him trying to manipulate a market or move the stock market

in a certain direction but what what his job is, to control prices and make sure the labor market is healthy. and i think he will reiterate that job is not done >> if that's the case, and i realize you're not a short-term trader, you're a longer term investor, 750 points does make a difference if he's going to come out and talk tough tomorrow, does the market reverse the gains we're seeing right now >> it might reverse some of them look, we have seen this happy so many times over previous fed meetings the most dangerous time to trade is between 2:00 p.m. and 2:30 p.m. when he starts talking. i don't think we will hear all that big of a message from him probably now through the end of the year, where valuations are, we are 17.5 times earnings, above the 10-year average. those are priced for an easy monetary policy environment, which is clearly not what we're

in the risk is to valuations here i don't believe we will be able to sustain that much more multiple expansion the risk to the economy is that as inflation falls, we can celebrate it as it falls but at some point it might get stuck. it's likely to get stuck above where the fed wants it to be we have to decide whether the economy can withstand that >> do you dip your toe in here do you wait? even people who are longer term investors are thinking about that right now is this the beginning of the end of the most extreme moves by the fed? >> i do think this is the beginning of the end of the most extreme moves. i would expect a downshift tomorrow and them to come off this big harm of tightening. i would wait this out a little bit. again, we could probably see some optimism and staying afloat through then of the year i think once we start 2023, we

will have more clarity on when does the terminal rate actually arrive and where and when will cpi actually abate before taking a big bite out of the consumer and out of businesses. >> liz,s thank you very much great to see you >> you too >> thank you, becky quick. >> you're very welcome i owe andrew an interview now. i stole his interview. >> no, no. he wasn't here >> check this out, folks, softer than expected numbers. >> i hurt for you. >> big news for the markets. they will pick it up on "squawk on the street" now see you tomorrow good tuesday morning welcome to squawk on the street. i'm carl quintanilla with john cramer and david faber at the new york stock exchange. annual rate biggest deskhcline n two years. we'll talk implications for the