on microsoft announcing today and google is asking employees to test its version and baidu shares surging after it announced a new ai product. we are counting down for the state of the union speech. i'm in washington. it's tuesday, february 7th, 2023 "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm rebecca quick along with joe kernen and andrew ross sorkin. live from wall street and washington today

we have been watching the u.s. equities dow is indicated off right now slightly down 17 points s&p up 2 points. nasdaq up 18 this comes after the day of modest declines for the major averages treasury yields have picked up substantially since the friday jobs number that was stronger than expected. ten-year is lower this morning than it had been, but still above 3.6% meantime, news this morning. alphabet ceo telling pemployees they need all hands on deck to test bard. they want feedback in the spirit of the internal hack-a-thon. they would test an application to build on top of the ai technology this comes as microsoft

announces a news event today likelychatgpt. it will release a new service to bing the ceo of chatgpt tweeting a photo out at the headquarters of microsoft. john ford is in redmond and interviewing satya nadella they offered the service as part of the office portfolio of products if you are on email or all sorts of things. >> this is a race with google getting upset how chatgpt got out first and more than 1 million users. >> i don't know. google had the technology first.

i don't know how this plays out or works we should say speparately that shares of baidu is soaring after it would launch its ernie bot. internal testing is likely completed in march before the service is made public i would say the separate piece of this, if you have microsoft with chatgpt and google and baidu doing it -- i thought it becomes a commodity service embedded in everything we touch online, i imagine. >> i prefer erniebot bard implies a poem. we know who the bard is. >> sharkespeare >> the famous french playwright.

>> i was thinking of the bard in san francisco. >> that's the b.a.r.t. bay area rapid transit iing s suggested to my son -- >> i got to take the b.a.r.t bard implies a hell of an ai program to do anything close to anything shareskespeare i can't believe anyone is that prolific and talented. even one with of the sonnets none of us could ever write it could ai ever write pantamic >> the clever play >> the lover and the -- that is a long way off they get to that point and they

will not need us we are watching crypto shares this morning up a little bit on the board back above 23. binance said it would suspend u.s. dollar deposits and withdrawals. binance u.s. said it was not impacted it applies to those transferring in non u.s. dollars. it could be related to the decision of dollar transaction minimums last month by binance u.s. banking partner ceo c.z. said 0.1% of monthly active users it is a bad user experience and the company is working hard to restart that service here i am in a jacket again with

sorkin not in a jacket the world is topsy turvy it is bizzaro world from "seinfeld. >> you need to have a jacket on in the gravity of the situation and place. is that a little tight >> i'm all right i just feel a little bit stuffed into this thing. i had to get on a step ladder. no, no i'm kidding. we have big guests across the board. bp bobby. there it is. the capitol. i came in and i was looking around this morning. my birthday is january 6th it has a new connotation

>> speaker kevin mccarthy will join joe and ron baron with us >> jim jordan. love him love him or hate him there is bernard looney. we will have the democratic take on things as well. i'm looking at what the president will say and i'm looking at what speaker mccarthy will say do you remember when they made fun of the person that said alternate facts like it was a ridiculous thing. >> kellyanne conway. >> today we will hear alternate facts -- they are so far apart on the view of the state of the union. >> different perspectives. >> is that what it is called

almost like disinformation one person's disinformation is another person's misinformation. we will try to find that down here just read the "new york times," andrew i think it gets harder and harder to find an objective -- i know that is what you are thinking watch "squawk box. >> you mentioned bobby joining us today he will talk about the news from activision-blizzard beating expectation from the "call of duty" release ahead of the holidays there is a question if people were still playing games they are they were all playing "call of duty." that is a sticking appopoint ine microsoft purchase of

activision executives have been offering concessions to try to fight the concerns they offered to regulators to say they will offer ten years to sony to say you can have this for ten years coming out by the way, this stock was down 4% yesterday maybe more than that during the session. it was about concerns of the uk regulator might do because the uk regulator controls the cards on this. ftc will say no and they will go to court over in that there is not court recall with the uk if the cma says no, there is no recourse that is where people are getting worried. we will talk to bobby about where things stand and if he thinks the deal goes through and what happens if it doesn't go through. the stock was up 2% after hours. guidance for the full year was lighter than anticipated the company hasn't held an earnings call since the microsoft cdeal was announced i

january of last year we will hear directly from bobby kotick he will join us at 8:30 a.m. eastern time we have more as becky and joe mentioned, throughout the program. huge lineup still to come. joe is talking about the congressional leadership ahead of the state of the union with speaker mccarthy and chairman jay powell will speak this afternoon. we will hear from minneapolis fed president neel kashkari at 6:30 this morning. we will hear from ron baron in the tesla shares rebound and other best bets right now. you are watching "squawk box" and this is cnbc to adapt in a fast 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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welcome back to "squawk box. market is awaiting the latest from jay powell who is scheduled to speak in washington today let's talk the markets with the chief investment strategist. we will talk about jay powell who has his speech this afternoon and that is before the state of the union and whether president biden may think about it and if they share speeches before and a line or two is adjusted depending on where mr. powell says about the economy. what do you think he will say

and how different it may or may not be from last wednesday given that we had the jobs report on friday between and it was in a good way hot, but in a bad way hot. >> that's right, andrew. the consequential speech between the two for the markets is fed chair powell's speech. this is an opportunity to r recalibrate or readjust what he said last week given the market reaction and given the non-farm payroll report powell said disflinflation started. we can see it and feel it in the economy. it is a different thing to say that about the services sector we are not seeing a slowdown in wage inflation just yet. how can you say we are likely to see a slowdown in wage and service inflation when you create more than 500,000 jobs and the unemployment rate at

3.4% for that reason, fed chairman powell may say the service inflation is sticky and we may have to go beyond 5% andrew, that is not closed to being priced in by the markets that is why powell may recalibrate that >> i think the question i ask you is do you think there is a major distinction between what he said last wednesday and this week and how much he already knew about the numbers >> i think he may have had some knowledge or indication because you look at the jolts report he may want to adjust the market ex-ppec expectation. it was off the dovish tone it is not that he wants to step

away entirely from what he said, but the markets are not pricing in key risks right now we have to allow for some probability of inflation being stickier than expected market conditions do not help the mandate. >> let's ask another question. everybody loves to hate big tech we were talking about google or alphabet competing with microsoft. we have an interview coming up with satya nadella later today everybody loved to hate facebook or meta a year ago you look at that stock and that would be a good trade. a lot of people say don't touch big tech it is still a falling knife. is it? >> big tech is going through a transition meta was probably the first one

to go through the transition and maybe we are starting to see some fruits of that. big tech is going through transition from one trend that drove digital transformation to another. it was all about cloud and now moving to artificial intelligence it is one of the biggest commercial opportunities we have today. when you think about who the key beneficiaries of ai will be are several groups the big tech companies the reasonwhy they are able to train ai chatbots is because they have data and they have been doing this for years behind the scenes microsoflied ai tool to solve pandemic challenges. it is now we are starting to see it reach the mainstream and consumer my point is as they transition from the one growth trend that

really powered big tech to another, i certainly would not count them out it is also not the only way to play ai. you look at the enabling technology and other layer powering ai. it is semi conductors. there is a reason for the gpu stocks have done well as well. don't count it out i think what we learned from meta is it takes time to transition it is not an immediate boost >> what multiple are you willing to pay for tech? 18 times that is what a lot of the multiples look like right now. is that rich or cheap? that is the question anastasia, we have to go thank you. >> great to see you. thank you. joe? >> coming up, two big guests we hear from minneapolis fed president neel kashkari. that is minutes away then house financial

services chair patrick mchenry will join me in washington on what he expects to hear from president biden tonight and what he expects to accomplish and if the republicans can accomplish much they will try. the state of the union is dr address is forthcoming >> announcer: this cnbc program is sponsored by truist wealth. where meaningful relationships matter most.

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now to the executive edge. mercedes-benz betting on the electric commercial van. the e-sprinter will be manufactured at a plant in south carolina it willi have a range of 248 miles. good-looking vehicle production will begin later this year

mercedes-benz has 10% of the commercial van markets in the u.s. it is in a race with ford, ram and rivian this all comes as delivery firms and contractors and small businesses are pivoting to all electric fleets. >> works for a large family, too. a lot of seating >> how large eight is enough. >> i think sara blakely has it everybody has room everybody gets to spread out works well amc theaters announcing plans the way it offers tickets. the seats will be divided into three tiers. the standard sight, the value sight and the preferred sight line the standard seats are available for the normal price of the ticket value seats which are those in the front row. get a anything crick they will be sold at the lower

price. preferred seats, those in the middle of the auditorium, will be hit with an up charge which is a premium in price. the seating map shows the difference when you purchase the tickets. it seems crazy to me a little like the airline that was talking about charging for using the bathroom >> that is what i thought about. great minds, becky ryanair? >> i think they were joking. this is like making sure you can charge for just about anything and everything >> i'm okay with it. >> you can do it at amc. >> you pay more for the exit row. >> you hate airlines for charging you for everything? >> not in a movie theater. it is not that different seems i pick the side. you can still watch. >> you have an aisle that is for certain people which is better than being stuck in the middle >> the cheaper price is less of

a cheaper discount than the up charge is for the quality of the seats. >> go with the bathrooms there, too. go ahead >> up charge subscr subscriptions. >> the nicer seats are you not prepared to pay more >> i'm not going to go if it is not a nicer seat >> you know what i'm talking abo about? >> you remember the old theaters >> where i didn't have a la-z-boy yeah i have been in some. you pay more exactly. those are reserved as well >> they are. >> i like reserved seats and you are the only people there. glad i got this one. >> good thing i bought early. >> yeah. when we come back, minneapolis fed president neel kashkari will join us with the

read on inflation, job growth and health of the economy. that's coming up next. during february, we are celebrating black heritage through the stories of the cnbc teammates and contributors and leaders in business. here is james reynold. the chairman and ceo of blue capital. >> when i think about the significance of black history month for all americans and we think about the role that blacks have played in making the united states the most powerful and most significant and most productive country in the world, we have to understand the role that blacks have played from agriculture revolution and industrial revolution and manufacturing revolution and armed forces and on. i think it's critical that all americans understand what we have meant to this country i think it is particularly critical that young blacks understand where they come from

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

good morning welcome back to "squawk box.

we are live from the nasdaq market site in times square. check this out the dow futures are off by 11 points yesterday, the dow was down by over .10%. s&p is up .3%. you have the nasdaq indicated up by 26. steve liesman is here with the first big guest of the morning >> what a morning on "squawk box. i'll kick it off with the minneapolis fed president neel kashkari >> thanks for having me on set >> it is easy with an easy place to start obvious place to start 517,000. 2.76 times the estimate. you are already situated, this is my question, you've said you are on the high side of the federal reserve estimate at

5.4% my question is after the big jobs number, are you set with where we need to go or do you think we need to go further? >> obviously, i, too, was surprised by the big jobs number so far we are not seeing an imprint of the tightening to date on the labor market there is some evidence it is having an effect, but it is muted so far i have not seen anything to lower my rate path i'm keeping my eyes open i'm still at 5.4%. if i had to pick a number today, i would be where i was in december >> are you feeling good about being at that place and thinking we need to put more restraint on the economy although your colleagues are lower >> it doesn't make me feel good. i wish we saw more evidence that under underlining inflation was trending down. if you you strip it apart, the economy is robust and wages are

growing in excess of consistent with the 2% inflation target we have to bring the labor market in balance. i'm not sure we have done enough yet. 5.4 may be enough. we'll see. >> neel, you were already hawkish on this. this may not have been a huge surprise does it vicesurprise your colles on the fmoc? >> i think it surprised all of us nobody should overreact to one report reports sometimes are hot. sometimes they're cold the strength of the service sector of the economy is robust. that's where we are focusing attention. >> i was going to say on the jobs front what does the unemployment number have to look like as it relates to inflation to claim some semblance of success? when you see the huge jobs number, is it possible jobs

could be increasing and inflation could come down at the pace you like? is that a plausible -- would physics allow this to happen >> it is hard to imagine you see strong job growth while wage growth is moderating that is what i'm looking for we need wage growth at 3% to be consistent with the 2% wage growth has come down somewhat desk depending on the measure, it is still 4% to 5% wages are still robust. >> inflation has been coming down that's the thing you are raising rates. job markets are strong if you look at things like a lot of people are focused on -- one of your colleagues, lael brainard is focused on inflation rates. they have been declining how can you say there is no progress when, in fact, those numbers are declining? >> that is good news and better

than them climbing the three-month numbers are vola volatile we can pick a given number any time to make us feel better or worse about the outlook we need to be disciplined. the nomost disciplined way is to stick to a number. that is our focus. 12-month pce inflation is our goal total inflation. not just core inflation. we look at the other measures as an indicator of where inflation is headed. the chairman did a nice job talking about this in the press conference we go from total inflation to core and take out core goods you have core services inflation. you take out housing we can analyze that we have seen no progress so far in core services ex housing. that is tied to the labor market we sliced this all different ways to give us information of where inflation is headed.

i'm not seeing enough progress to have to declare victory >> neel, that is a good problem to have. low unemployment everybody was holed up in the pandemic people are flying and going to hotels we understand that stimulus money will he vejs -- eventually fall off. you have a low participation rate people will come back to the work force there is plenty available. you will not have to pay them 5% or 10% more. when the stimulus finally runs out and the demand wanes a little bit for going on that vacation, it should all moderate i think a little patience would be fine. the markets don't believe your 5.4% why are they so stubbornly resistant to believe we will get anywhere near there? >> i'll tell you, joe, you made

the case for transitory. that is how a lot of the stuff will fade on its own >> we need to bring that word back because it is not the '70s or '80s. it is pandemic reopening >> it is not because the nature of the shocks were different and the federal reserve response was different and we worked hard to keep inflation expectations anchored we see more people trickle back into the labor force i hope that continues to tick up if you look at the markets estimates of the fund path and my estimate, markets are confidence inflation will fall over the course of the year. i hope they're right i'm not trying to convince a different inflation path if they are right, we will take that information on board and that will go into our rate path. so far, i'm a little more cautious when i look at the wage growth and jobs report and i'm cautious that inflation may not fall as quickly as markets are

expe expecting. >> the hawkish view is transitory >> it is not quite that easy you guys rely upon the markets in order to effect policy or have policy have any effect. what is the concern right now? do you have any concern that you have not seen the reaction in the markets? you have not had the financial conditions tightening? does it cause or create a need to lean further on the policy rate >> on the margin, it causes concern for me individually. i don't think it is a good thing that mortgage rates have come back the wall street journal has a report that the housing market is showing a sign of life with the rates coming back down it makes our job harder to bring the economy in balance all things equal, we would have to do more with the other tools if financial markets have a lot of optimism and inflation falls

more quickly on the margin, if conditions are easier, we need to do more with the federal funds rate >> that's fine the balance sheet. would you do more with the the balance sheet? >> there is more that one could do i think switching or changing or balance sheet path is quite high it is not something active deliberations on >> i was going to ask a question about tonight with the president speaking one, do you think they share their speeches in advance? secondly, do you think there is a conundrum? i'm curious if you agree with the president tonight, i imagine powell will say good economy, but too hot and worried about inflation and i assume biden will say fabulous economy with

maybe a wrinkle on inflation who will be more accurate? >> the president and chair powell have different jobs they will be accurate for what their mandates are and jobs are. >> you think their mandates are different? >> absolutely their mandates are different. >> the president could say it's a fabulous economy and the fed could think it may be less of a fabulous economy >> i think the president is responsible to voters. presidents make promises to voters on what they want to deliver. the fed has a different mandate established by congress. that's where we focus our energy. >> where do you think the workers who came back in to the work force this time -- what do you think caused that? we were talking about the higher partic participation rate >> i have been asking this question for two years we know a lot of people retired early with the pandemic. it is not perfectly sticky

maybe retirees will come back part-time. they will contribute to the economy. i don't know it is child care it is healthcare no one story. >> there is a paper that talked about real estate values sent people out of the work force neel, let's ask this question. the same question i asked chairman powell at the press conference boils down to this what if you are wronging not you, you guys, you being wrong. all on team transitory it was not so much transitory. some of it is transitory now you are all like inflation is not coming down we need to go to 5 come hell or high water, pretty much. what has changed with the way you do business so i can believe you got it right this time give p mme confidence. >> i would say i learned over

the past year that our models that we used to rely on forecasting inflation failed in understanding the dynamics from reopening after the pandemic we know raising rates can put a lid on inflation we need to raise indicates to put a ceiling on inflation and let that work through the economy and we can always back off. we have to let inflation guide policy rather than our models guide policy it is challenging because there are lags you are aware of. the thing you should take away is we are committed to getting inflation back down to 2%. not 2.5% not 3% get it down to 2%. will it take two years or longer i'm not sure we are going to get it done. >> are you nimble? we asked a question on the fed survey is the fed data dependent orring go -- or going to 5? that is like saying, you know,

we're driving the car into a brick wall >> i don't agree with that look at the jobs report we have been talking about these are things we pay attention to we pay a lot of attention to short-term moves in inflation and services inflation all of this. we are close to five now it is not like come hell or high water we're going 10 -- >> you shouldn't have said that. >> neel, neel, can i ask one more thing let's say we have permanently higher oil prices for whatever reason we're transitioning away from fossil fuels and china reopening. i'll prices which filter through to a permanently higher inflation rate most likely you will force 2% on us p come hell or high water the only way to deal with oil prices is to hurt demand is to slow demand in the global

economy. we have to assume we got to grow slower oil prices are the only way to bring prices down on the demand side that seems like a bad way to approach things. permanently accept lower economic activity just to keep inflation low because you can't control oil prices with supply or do you try to address the supply side? >> the monetary policy will not determine what the output is if we said after we get through the inflation period and if we all came together with congress and said the target should be 3%, that's not going to change anything the size of economy is going to be smaller if the input costs cost more. we can achieve whatever the inflation target is. i don't think that would have the damaging effect you are talking about. >> so much of the economy is supported by what seems like a healthy consumer

how healthy is the consumer with the amount of debt on credit cards and we talk to ceos of banks who say come this july, the money will start to run. >> we are looking at that. we look at income and savings. there is evidence that lower income americans are paying down savings. that may be a motivator where becky said people are coming back to work >> neel, i want to thank you for being here >> joe, did penelope help you find your jacket >> i picked the wrong one. >> you didn't know where it was? >> i know where they are you know, there are moths and dust and everything else is it all right, steve >> it looks great. with the wood in the background. >> i'll help you with the

mothballs. i have a solution. neel, thank you. when we come back, we willspeak with patrick mchenry in washington in minutes. and don't miss ron baron we will get the rebod unof tesla shares and where he feels the economy is going "squawk box" will be right back. the sleep number 360 smart bed. it's temperature balancing, so you stay cool. it senses your movements and automatically adjusts to help keep you both comfortable all night. our smart sleepers get 28 minutes more restful sleep per night. and now, save 50% on the sleep number 360 limited edition smart bed, plus free home delivery when you add an adjustable base. ends monday

coming up, house financial services patrick mchenry joins me next and what he expects to hear from president biden on the state of the union address then don't miss our interview with house speaker kevin mccarthy we will talk to the house speaker. maybe cwean get hakeem to come out. "squawk box" will be right back. on different systems. you need to pull it together. so you call in ibm and red hat to create an open hybrid cloud platform. now data is available anywhere, securely. and your digital transformation is helping find new ways to unlock energy around the world.

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it's good to have you on it was just a little over a month that you were scrambling with now-speaker mccarthy to wrangle those cats into electing him speaker. where are we now in terms of we have got some pressing issues, and how is that going to play out? >> i think it is playing out that kevin mccarthy is the right person to lead the house and lead the republicans, and we did it in public over a week now that that is settled we pivoted into major discussions on the fiscal house, on the massive increase in spending from precovid levels, and the fact that revenue is dramatically up but we have record deficits. we pivoted into the conversation, the state of the economy which i know we will hearing is different tonight --

>> what are the facts? >> it's a different reality than what my constituents are living, and they are very different measurements >> what i was getting is we have a looming debt ceiling we need to raise and those sides seem to be at odds, although the speaker said there was progress made with president biden, but as far as republicans go, you got, you know, those 20 guys that are far right and then the center and maybe some of the problem solvers and that's before you get to the other side of the aisle where it will be difficult to accomplish anything, and to the american people seems like there would be a lot of talk of what we could if we do but we can't. >> trump didn't take the

possession, there's no negotiation. and president obama sent biden to do the negotiating on his behalf >> mccarthy to get the speakership had to make a deal to balance the budget within ten years, and no tax increases. how is he possibly going to propose a way to do that, you would have to cut 85% of discretionary spending >> the debt ceiling increase, nobody is talking about a default and nobody is saying we are not going to raise the debt

ceiling, but we are going to have a two-year spending agreement so we can keep government open and deal with the national security issues and have a bigger discussion about our structural deficits for the coming decades we have medicare and social security that have structural problems in a very short timeframe, in the next ten years they start going into deficit and it becomes difficult to make payouts to beneficiaries, and w don't want that, and then we have a president that -- >> he's not going to bring a budget either, and it's not going to be ready until march for this year, and i will take your side, what are republicans supposed to do to talk about budgets when we are not -- it's

going to be 1.7 trillion and we are going to do that every year if you don't grasp this opportunity, then when do you have an opportunity? >> we will be committed to raising this issue in a sustained way and fight the good fight regardless of how the rest of washington will work. the american people care about this, but we don't have -- other than republicans in the house, we don't see this from senate democrats or the white house we have record revenue this year the federal government has taken more money in than ever before. revenue is up $1.6 trillion from pretax cuts and the jobs apbgt is and yet we still have deficits as far as the eye can see, and it's the republicans that make that connection from spending to inflation -- >> congressman we have to have you back in the studio you are going to take on the

esg, financial services, and we have empowering investors that are not able to invest in certain areas, so there are a million things -- it's frustrating you have to take these things on, but to get legislation passed -- >> we are going to try >> i want to drop the henry, the patrick henry. >> but he is gone and i am here. >> thank you next hour we will hear from the ceo of bp, and then joe sits down with house speaker, kevin mccarthy we're back after this. ...meets trailblazer. ♪

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good morning investors await fed chair, powell's speech. we will talk about the state of the markets and where he's putting money to work in 2023. the profit bonanza for oil companies continues, and bp posting record profits we are counting down to president biden's state of the union address tonight. in this hour, newly appointed

house judiciary committee chair, jim jordan, joins us the second hour of "squawk box" starts now good morning and welcome back to "squawk box" here on cnbc we are live from the nasdaq market site. and joe kernen will be talking to kevin mccarthy in just a bit. you are looking at the dow off by 19 points, and s&p 500, higher about 5 points higher, and the treasury yields, we will talk about the price of oil and

its impact on inflation. we will see what the president may say about that, and crude at 75.25 right now. crypto and bitcoin sitting just under $23,000. let's get to dom chu now >> earnings reports, we have the premarket movers tied with earnings this morning. dupont in the last hour, 4,000 shears of volume the company known for everything from kevlar body armor gave a forecast that was below some only analysts expectations for the first quarter. it resulted from decreased

consumer spending and expect to get better the second half of the year and blizzard, around 8,000 shares of volume they reported revenues at top forecasts. and earnings did come ahead of some forecasts but it's unclear if those are comparable to activist's those shares up 2% you have pinterest up next, and they are down 2% premarket and that's well off session lows, around 60,000 shares of volume revenues fell short on the park in the current quarter forecast was viewed as disappointing. we will end with a check on bitcoin prices, and a level to

watch remains 22,950 we are still above that right now and we will see if that holds. >> thank you we will see you in a little bit. in the meantime, bp posting a record profit, and the company unveiling a $2.75 billion buy back plan which was smaller than what wausau from exxonmobil and chevron, and they provided buy backs. so much to talk about. the biggest thing i wanted to talk about is what feels like a shift of both by bp itself and in the industry in terms of where you are investing in the future, and all of the blowback that we have seen over these

enormous profits >> andrew, good morning and thank you for having me on just a couple things i would say on the results from the announcement this morning. first and foremost, i think the company is running well and we had our strongest operations in history, and our lowest cost in 16 years basically things are going well. the company is running well. and the second thing we announced, we are lean into the strategy, 8 billion more in the transition and into the energy system, today's oil and gas. thirdly, we are rewarding the share shareholders with a 10% increase in dividend and a buyback. that's a bit of the story -- >> it's a remarkable thing to hold, and to say your company and your rivals have done remarkable during this period of time, and at the same time it feels like the public backlash

about that success, which in a normal world would be quite proud of, and i don't want to say it's coming back to bite you, but maybe it's a messaging problem or something else. what do you make of that >> it's a difficult time in all parts of the world it's difficult here for people here in the uk with the cost of living crisis and it's difficult in europe and the united states. our part as a company, andrew, is to do three things. one, we have to invest number, two we have to pay our taxes. number three, we have to give returns to the shareholders that own bp today we announced in each of those things of the following. we invested more in '22 than in '21. in over 50% of our investment went into america in 2022.

in taxes, we had our highest tax bill in history, and we paid $15 billion in taxes last year thirdly, as i said earlier on shareholder disptributions, we have sector leading dividends and buybacks that's how we see our role and today it's about leaning into that role. >> let me ask you about that role, because the other piece is in terms of the investments you are planning to make, how are you thinking about those investments versus classical or traditional fossil fuels and what is clean tech i think it's obviously a piece of it, but seems like maybe you are leaning a little back on that component part? >> we're actually leaning further in just to give you the numbers

we put 3% in 2019 went into our growth engines and that was over 30% three years later in part because of a large acquisition in the united states in a company that captured methane from landfill sites, and then we process it and burn it and when we burn it it has lower emissions. this is over 15% rate of return. we see great opportunity for our investors in the transition. we see strong returns in many parts of the transition. that's why today we are saying we will put more money into that at the same time we need to take care of today's energy system. the transition needs to be an orderly one, and to have it be orderly we need a continued investment, and energy affordability at a premium, we need to invest in that system also we are putting up to $8 billion more into that, more into the

gulf of mexico, and more into hainesville. >> in retrospect, do you wish you invested more in fossil fuels over the last two or three years than you did given where we are today >> i have been long schooled and coached and taught that we play the ball where it lies we are in good shape we have had three years of strong delivery. the last year's results show that, and the strategy is working and we are leaning into that strategy because it's what society needs and it's good for our shareholders and that's what we are doing -- >> the reason i ask, is i wonder if society is shifting meaning there's a real shift towards clean energy, and i am not suggesting that shift stopped or abated, but given the senate security concerns that i

think a lot of nations have, the war in kwrukraine, all of that created questions, and then demand and supply issues created questions about that transition, of what that transition period looks like you were speaking to it in how you are thinking about the investments in fossil fuels, and i was asking if you could go back in time and it is about looking at it from where the ball lies. >> i am proud of bp of what they delivered. the world needs today's energy system to be invested in it's fair to say that in places like europe three or four years ago, there was one coverization and it was about lower carbon

emissions, and it's important and crucial we deliver that. it's also crucial we have a secure energy system and affordable energy system the conversation has become more balanced and pragmatic, and our job is to deliver both, accelerated transition and security >> we have heard a lot of jaw boning from the white house about the issue, and do you think it's just political theater or a reality you have to face around windfall taxes in the u.s. >> as a irishman, i will stay out of the u.s. politics we paid our largest amount of taxes in history and over 50% of our investment went into the united states in 2022. i think if we look at it on the

flip side, the inflation reduction act is a game changer for some of the newer technologies and you will see us leaning heavily into that space. we are about investment and generating shareholder concerns and doing the right thing, and that's what we are trying to do with the strategy we announced today. >> always good to see you. hopefully we can see each other in person very soon. thank you. >> you understand that, andrew, about play the ball where -- it's a ball thing. you just can't hit a 3 wood out of a bunker, and you knew that was not basketball, right? >> i know. >> all right when in rome -- i have jim jordan coming up he hates jackets and he never wears jackets, and if he doesn't have one on i won't wear one, i

want to make him feel comfortable. jim jordan joins us next to preview tonight's state of the union. and then ron baron will be quk x"g us "sawbo will be right back.

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a couple of ohio guys talking -- that's right, you are just north of dayton, cincinnati powerhouse >> yep >> house republicans wasting no time in their new majority the judiciary committee firing off a number of subpoenas targeting the biden administration last friday, demanding documents surrounding its response to threats against school officials during the pandemic let's bring in congressman, jim jordan of ohio, chair of the house judiciary committee committee, and he's part of a new committee that seeks to investigate the weaponization of the federal government, i guess one party's view of weaponization is one thing and the other is entirely different. is this what the american people

want or expect you to do at this point? >> we talked about it during the campaign when you have two standards of justice which is what we have in our justice department, and you have americans with common sense that see that, they expect their government to serve the people and not target them, and the latter has been the case because of the number of whistle blowers that have come and talk to us, and fbi acgents came and said this is how political the justice department has become. we have a host of issues we want to deal with, and first and foremost is the border that is no longer a border that was our first hearing last week and we will continue to focus on that issue and have legislation that we bring forward. >> you can get 50% of the country that says i want to know if there was influence peddling in the hunter biden case, and

the other half said there's no there there. and it's like the balloon, it's so divided and i guess you have to look into your own soul and decide what is important you can't be with the whims of public opinion >> if you look at what elon musk exposed with the release of the twitter files, i do think you saw government working with big tech to keep information from the american people, and the biggest is the hunter biden story, you had government officials write a letter where they said the hunter biden story has the russian information operation, and that was not true then you had the weekly meeting with folks out in silicon valley

and they kept the story from the american people see it days before the most important election, the president of the united states. and freedom of speech is supposed to be protected and not to have government pressure big tech to keep that. >> the antitrust that we have doesn't seem committed to holding big tech, their feet to the fire, or that's the perception >> no, we are planning on holding their feet to the fire >> you are not worried about monopoly power or anything else the last -- >> the chairman of the sub committee, and he said no monopoly is safe, and we don't want monopoly power out there,

and all too often it's the regulations in place and a host of things in place that will allow that we will look at all that specifically on big tech, if they are going to sensor somebody, they have to tell you. we will look at section 230, and there has to be transparency and accountability if they are going to continue to go after conservatives, which we know they did over the last couple of years. >> how hopeful should we be about the republican caucus being able to come together? you used to be way out there, one of the founders of the freedom caucus you were begging other guys to get in line to elect speaker mccarthy suddenly you are almost a problem solver >> i don't know about that >> will you get anywhere >> yeah, we came together and getting rid of the 87,000 irs

agents speaker mccarthy, he brought us together when we were in the minority and they passed a funding monstrosity and three weeks ago, karine jean-pierre said we will not negotiate with the republicans on the debt ceiling. that changed quickly because last wednesday speaker mccarthy spoke with president biden -- >> at the same time, mccarthy said we are not going to default. both sides seemed locked into -- >> well, their position is crazy. they spent like crazy, and republicans did not support that -- >> you are not going to balance a budget within ten years. >> they have had record inflation and record debt, and

we need some kind of structural reforms we put in place that will help us deal with the problem they created with their record spending, record inflation and record debt. >> they were going to repeal the 15% corporate tax and defund the irs, and none of it will go anywhere their staffs are up in the morning until 1:00 in the morning writing things that will never pass the american people are going, why are you going through the motions? and the republicans say we want the american people to know where you stand. what is the point? >> i think this is the way american politics and american government works, you have to show the country what you would do to fix the problems we know there are all kinds of problems, record crime, record inflation, and inflation is

outpacing wage growth. that's why 7 out of 10 americans think we are on the wrong track. if we pass these things this would fix the problems we created, and we have a presidential election coming in 2024 >> you would think all you would want to work on are things you could work with the other side on, but i will grant you this the only time you hear about bipartisanship is when people want republicans to do what democrats are proposing. in the mainstream media, i see it all the time. we need more bipartisanship. nobody seems to hear that -- >> yeah, bipartisanship is doing what democrats want according to the press. but that's crazy that's not bipartisan. it's just continuing the same ole same ole >> you are a big supporters of

former president trump do you think he's a viable option for 2024 >> heck, yeah. no president has done more of what he said he would get done more importantly, everybody in the bureaucracy was against him. >> it's a lot of mainstream an even people the kochs, people to the right -- you are one of the last remaining -- you think he can win? >> he's winning now. he's up in every poll. you have the race. put them all onstage i remember when he ran in 2016 >> with the capitol and everything that happened, you are okay with him back in the office >> heck, yeah, we had a border secure, and job increases, and we were respected around the

world. i remember a year ago when mike pompeo was asked a question, and he was doing a interview, and this is when russia went into ukraine, and they asked if that would have happened under president trump? he said, the short answer is i don't know, but all i can say is it didn't happen under president trump. >> you don't buy the balloons happened under trump >> come on >> not one person in the national security personnel in the trump administration heard about it give me a break. i am for trump >> the balloon was not that euro big trump balloon -- did you see the meme >> yeah, i have seen a number of memes but not that one

>> you have ever been to times square you got to check that out, too still to come from washington, house speaker -- i will put my jacket back on speaker kevin mccarthy will join us at the top of the hour. >> thanks, joe and then we will talk tesla, elon musk and some other big investments with ron baron a lot going on after this. we got this. we got this. life is for living. we got this. let's partner for all of it. edward jones

still to come this morning, billionaire investor, ron baron, will join us next on which stocks he's bullish on to ride out inflation. musk, spacex to him about elon plus, we will talk to kevin mccarthy on everything from the economy to china and more. stay tuned you are watching "squawk box," and this is cnbc networking from comcast business, with fully integrated security solutions all in one place. so you're covered. on-premise and in the cloud. you can run things the way you want... your team, ours or a mix of both... with the nation's largest ip converged network, from the most innovative company. bring on today with comcast business. powering possibilities™.

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welcome back, everybody. our big lineup of guests continues. chairman and cheer of baron capital is here with us this morning, and the fund is ranked 21 since its conversion to a mutual fund 20 years ago welcome, ron good to see you. >> great to see you. >> great to see you. >> let's talk about what is happening with inflation and if you can add that up. >> every morning, i watch you on television and it's entertainin

on since then there has been one year when the news was good, one year, 1989, and that is when we thought there would be a peace dividend we have had crashes, everything. what happens is the stock market is 800 when we start, and it's now 33,000, so it's up 41 times. we have done much better than that, but 41 times in the face of all the terrible, terrible news what it reminds me is, when i was in eighth grade, there was 3,000 people in the community, and awe had 40 kids in our clas,

two classes of 20 going into high school where there was 2,000 kids, and so i call allen, and he says, yeah, what i remember, the lecture he givf o see. nothing that you hear and half of what you see. i said, allen, do you remember that he said, yeah, he was my home room teacher, i remember that. imagine that in eighth grade, that's what sticks in my head. >> so don't worry about the headlines. >> yes >> so don't worry abou russia, china, you are just looking at what >> inflation has persisted and it's a large part of the economic model i think inflation long term is

4% or 5% a year. that means everything doubles in price every 14 or 15 house. everything one of the good examples that i have, and i give examples in a chart and you couldn't show it in a chart i was born in 1943, and my parent house in 1948, and it was for $5,000 then we had that until 1955, and my parents sold it for $10,000, and they bought a $20,000, which is over 150 ten or 15 years later. the bottom line is i looke this is worth now, $525,000, and

that's 6.1% a year if i look at the other house they had which was for $20,000, which is now worth 1 million, and everything you look at, state, tuition, cars, everything, 4 or 5% a year >> if you looking at a year like this where we have seen extraordinary inflation in the e fed and trying to raise rates, it changes the investing picture over the shorter period, and what we have seen is the growth stocks have gotten crushed and the value stocks have become more valuable? >> exactly it's early 1980s, and i get a phone call and it's kim, and he said i want to meet you. i said, so where --

>> meet me at the bull and bear restaurant, i want to take you to lunch we have lunch and he tells me he is buying for himself a company called daylin, and it's a company emerging from bankruptcy, and it's a home retailer in california run by arthur blank and bernie marcus, and so i meet these guys and like them. i am investing on behalf of my clients, and he's investing on behalf of himself, and i was living on commissions and not fees he says, you know, we are banging our heads against each other, why don't we split the shares, whatever i see you give me half and you see, i give you half he put his arm around me, and he said, guys like us, we have to

stick together i looked around to see if he was talkin talk to, because guys like us? who was he talking to? and then because i had a short-term focus, he got to invest in home depot and i didn't he made a giant fortune, and not worried about long term -- >> you don't change your investing focus after everything that has happened over the last couple of years? >> no. >> you stick with it >> yes >> when you look at home depot or tesla, you were very early in the early stages of these companies. there's a lot of companies, big tech, for example, where the prices have come down because of where we are in the cycle, and people have held on to those

stocks, and is there an argument to be made, so if you are a long-term player, these are attractive prices or is that a different way to think about it, the kinds of companies you would otherwise invest in? >> the competitive advantage, there's something about those businesses that makes it difficult for many to compete in great people are running these companies, and competitive advantage means others cannot compete against them easily and therefore they can price better and be bigger than they are now, and i will get to tesla. that's what we are doing i am not really worried about the stock market i don't worry about the marked i don't worry about the economy. i listen to the guys about the interest rate going up, and i don't care >> you trying to find companies

early in the process, and are you looking at companies that have been around 20 or 30 years and looking at valuation and saying, you know, that seems mispriced to me? or by then would you know it's not on your list >> i have a mix of companies, and i invest in people, and jay, his dad was one of the first people to help me on wall street in the '70s. i argued against him for bringing it private because i thought my shareholders wouldn't do well with him going private, and i was right. investing in hyatt, it's a mispriced company in the stock market, and the private transactions are 17 times. yeah, i look at mispriced

things the reason we have done better than most, i think, is because we are not pedal to the metal and just straight ahead. >> again, to andrew's point, most of these are ones you find pretty early on. you're not looking like maybe an average investor would be looking at these things? >> i am not looking to make money tomorrow i want to double my money every four or five, six years. right now -- we had a tough year last year and i think it will take us to the end of '24 to get back to where we were in october of '21 >> assets fell -- >> 57 billion to right now it's

40.6 billion >> that was because you are invested in a lot of stocks -- >> that went down. >> -- that went down sharply you are somebody that holds on to stocks for a long time, but how much tougher does it again >> if i was worried about stock prices it would be very hard you need to know more about the business than anybody else and have a conviction in the competitive advantage of that business compared to other people you are competing against. >> what do you hear from investors? do they have the same resolve? >> i don't talk to investors, other than i walk down the street and people yell, hey, thanks for tesla and i hear, should i buy more tesla? i hear that all the time i don't hear anything negative our throws have been relatively stable and we are getting very large institutional accounts, you know, at this time, so i am

excited about our business i think that in two years we will be back to $60 billion or so and ten years after that i think we should have two more doubles, so i think our business should be $249 billion i am 79. on the other hand, i have 194 people and we never had a layoff, and two years ago we were 167 -- two years ago were the only year we were down a number of people, and we had seven or eight open positions. we couldn't hire people. but everybody is talking about working from home. we just increased our office space from -- we had 49 and 48 in the general motors building, and i asked if i could have the space, and we took that space and when he comes back, he will

never recognize it it's cool. >> we will sneak in a quick break. ron will stick around with us. when we come back, we will talk more about individual stocks, including tesla. a reminder for you, you can get the best of "squawk box" in squawkpod. great to have you both here. let's start with you health care has been through a major disruption there are a lot of calls for

change what are you seeing? >> our national health expenditure is continuing to increase on top of that we have a clinician shortage that is getting worse in the coming years, and we have health disparities that proved to be intractable. we have to change. data is one of the keys to unlocking the change we need >> how do companies best utilize data >> it's about surrounding the consumer, and treating them like a person and not a patient, and bring in lots of data to give a personalized experience. we are building the platforms to do that kind of work >> craig, tell us how you are using data at inner mountain health >> we have a long history of influencing the history, so we are building a next generation data platform, and we start first with the clinical research and then protocols and deliver a personalized care experience for our caregivers, bring back

the joy of practicing medicine >> thank you so much for joining us >> thank you we want to get back to our guest this hour, ron baron morning star rated one of its funds for three, five, 10 and 15 years. you are somebody that looks at stocks closely let's talk about tesla because tesla shares for the year to date are up 80%, but for the one-year period they are still down 35% this is a stock that has gone from 381 dollars to 108 and back

up over the last year. that's a lot of volatility >> yeah. >> it has been awry. >> i agree with that before we get deep into tesla, i want to make a comment about -- two comments about, number one, how it's the safest car that ever has been built in the world. the safest car that ever has been built in the world, and two weeks ago there was a man that took his wife and two children, two daughters, and drove it off a cliff 250 feet off the ground at 71 miles per hour, and he was trying to commit suicide and murder at the same time, and the fly cars off the cliff and lands on the bottom, and the center of gravity is the center of the car instead of the front, and they lowered people down, and they opened the doors and they were

fine, unscathed. >> amazing >> elon musk should tell people, if you want to commit suicide, do it in a bentley and toyota, my son and i went to visit toyota in japan a couple months ago, and we had a translator with him, and he starts off, he's responding in answering my questions in english, and then all of a sudden he switches to japanese, and it happens every time, it starts off in english and goes to japanese, and i say, listen, i can't have a conversation with you and we have a translator, and i have to talk to you in english. nothing. then we walk out, and the whole

strategy behind toyota is they are negative about electric cars, and what he wanted to do, we want to have the lowest cost of mobility in the whole world, and as a result of that rich people, they can plug in their cars, and there are a lot of places without into that i said, michael, i don't understand any strategy that they have here this reminds me sort of sony in the 1970s, just stuck in their ways but i don't know we never heard the strategy. and he said, dad, i've never been more bullish about tesla. what do you know, the head of toyota just retired yesterday or the day before or last week, he's the grandson of the founder, and he says, i'm too old for doing this he was 65. i'm 79 basically he says, i'm too old for doing this the bottom line is the head of volkswagen gets fired, the head of ford, mark field, gets fired. because they have bad strategies, bad people and mark field can't do this, a few years ago, you couldn't believe the negative things he's

told me about elon musk. all along. and just, he had a bad strategy, not a great executive, i shouldn't say that good guy >> you told me at one point, i don't know, in the last year or so that one of the biggest tesla has is that elon musk is the key man and his time has got divided with spacex, he admitted the last three months have been terrible do you think you have his time and attention back >> sleeping on the floor that doesn't do good for his back >> he said himself, he would not wish this on his worst enemy >> he did that before, he was trying to get started with his production of the model 3 and the model "y." and you know, he is a driven

man. and -- but he has 120,000 people at tesla, and 11,000 people at spacex, and he has an incredible ly talented core of people and he's been there a real long time the culture he has is being innovative and driving down his costs. driving down the costs he has a mission and he'll be in twitter a little bit longer. and i'm sure he'll have a ceo whose newsroom experience, like you. who has newsroom experience and run the business better and focus. he says, running twitter right now, he's fixing it up, he's on a trend towards breaking even. we have a small investment in twitter also >> i was going to ask you about that he tweeted earlier this week or maybe it was over the weekend that it's on the way to being -- break-even >> i'm not an expert in twitter yet, but we have $100 million invest inside that and $35 million and he made us $5

billion so far, on a $400 million investment >> your point is, he's not worried. even though he's been through some rough minutes, you think it's okay. >> he told me i was going to make two to three times my money over the last few years. he didn't ask me to invest, but, how could i not take an investment in him when he's putting up $15 billion and ask us to put up $100 million. >> did you think the company was also near bankruptcy >> the reason i ask that, he told you that it was going to make three times his money, at the same time, he says publicly, that the company is on the verge of bankruptcy. >> he explained -- i don't want to talk more about twitter, because i'm not the expert on it yet, but he explained when we made our investment that he saw that there was a lot of cost there, it was an incredibly poorly run and to him, the most important element, i thought, when he said it's about giving a marketplace

for a talent center, for him, he's the best-known man in the world, i guess and for him to sell cars, everyone else spends $1,000 to market a car, he spends nothing, because everyone knows twitter when we're talking about satellite broadband, everyone else used to spend money to do that he spends nothing, because everyone knows who he is now everyone knows he's giving to ukraine >> an amazing thing. >> when's the last time you got to talk to him >> i communicate with hi regularly by email i haven't spoken to him for maybe a month or so. but i sent him a note the past weekend about, you know, a class action suit and how i thought the class action lawyers are sort of a scourge and it should be that if there is a unanimous verdict and i would think that, and i think the plaintiff should

be responsible for everyone's legal fees if that's the case and he agreed. >> we're almost out of time. do you want to talk about spacex >> so tesla -- real fast, tesla goes -- they're making a car for $40,000, selling for $55,000, making $15,000 in profit a car the industry makes $7,000. he cuts prices by $7,000 wipes out the other profits of internal combustion engine companies. and all of a sudden, demand picks up so much, it's unprecedented demand for his cars right now unprecedented. so we started investing in his company in 2014, and they were doing 31,000 cars a year, 1.3 million, 1.8, 1.9 million cars right now, he thinkses 20 million cars by 2030 when they do, they're thinking -- he thinks that the company is going to be worth more than aramco and apple together at that time, $4.5 million. >> do you?

>> i don't know. i think it's going to be worth a lot. it's an option to sell for 500,000 a share, and i'm thinking $15 a share by 2030 >> we have 30 seconds left do you want to say something quickly about spacex >> real fast on this one, though, casting and batteries are driving down his cost. he's about to do a $20,000 cost car, $25,000, and that's going to make this company looks 10 times again or 7 times again spacex, what's unique about this company, they're using -- to get to space right now, they're using russian technology, which goes back to the 1960s and the 1960s what's happened there is that it used to cost you $100 million to get to space, $200 million more for a satellite, for us to get to space now, it costs, we can use a rocket over and over and over again, $20 million, it's about to cost us $6 million the cost to get to space is going to be nothing and satellite, we think about, as

being the backbone for the internet for the entire planet and goldman sachs and morgan stanley think the opportunity is $1.5 trillion. >> one more thing. >> we're out of time >> launch is like the railroad to space >> ron, we never have enough time but we want to thank you, you think big and you dream big. >> i'm sorry i didn't get more stocks >> next time wewill do it. >> thanks. >> next time we will do it joe, over to you thank you, ron >> great coming up, house speaker kevin mccarthy will be our special guest live from washington, d.c. he's here. kind of got a new haircut, right? kevin? a little tighter on the sides. i love it. plus, activision blizzard out with better that expected earnings we'll talk to ceo bobby kotick on the quarter and the latest on the company's deal with microsoft. "squawk box" will be right back.

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ladies, please! you put it on airplane mode when you pass our house. i was trying to work. we're workin' it too. yeah! work it girl! woo! i want to hear you say it out loud. well, i could switch us to xfinity. those smiles. that's why i do what i do. that and the paycheck. good morning when the fed speaks, the markets listen futures are mix ahead of a speech later today from fed chairman powell. and the gop agenda house speaker kevin mccarthy talking to "squawk box" this morning about everything from the state of the economy to the debt ceiling and call of duty powers' activision blizzard, that kind of gaming franchise also one of the concerns for regulators looking at the microsoft deal ceo bobby kotick will join us for a first on cnbc interview. that's going to happen at 8:30 a.m. eastern time this morning the final hour of "squawk box" begins right now.

good morning welcome back to "squawk box" this morning on cnbc i'm becky quick along with joe kernan and andrew ross sorkin. we're here in times square joe is in washington this morning. he'll be speaking to house speaker kevin mccarthy that is coming up in just a moment joe, are you ready to go >> i am so ready and so is the speaker here it's been exactly a month, january 7th -- >> early in the morning -- >> i had to -- >> he said, yeah, that's right >> now it's february 7th we'll talk about the first 100 days of the presidency -- the first 30 days. >> first 30 days >> we will take a quick look at the u.s. equity futures at this hour you'll see the dow futures off by about 41 this morning we do have j. powell speaking a

little bit later this morning. s&p futures up by about 3.5, nasdaq down by 41. and the ten-year quite a bit higher than where we were friday morning at this point. 3.64%. the two-year is at 2.247 joe? >> very good, beck after five days, 15 rounds of votes, and several concessions, california republican kevin mccarthy was named the new speaker of the house, setting the agenda for the 118th congress speaker mccarthy joins me this morning. it's good to see you >> thank you i hope you like being in the raeburn -- >> i feel the gravity. i do i like the wood paneling you finally caught the bus >> yes >> are you like the dog that catches the bus. oh, my god, i've got the bus, now what >> i feel very honored to be even in this position to have this opportunity >> i'll tell you what the differing things swirling around would you want a rubber stamp, where you get another first vote did you watch the democrats? they are united. it was almost like the borg

collective -- hakeem jeffries, hakeem jeffries. >> but put it in perspective i had every republican vote for me, too. >> was it a bad thing -- i'm not saying it was a bad thing. >> i think it was a good thing i can easily say, any person can win it on the first round, but it takes 15 bills -- no, this would have happened later in the year it's better that it took place now. we are actually stronger and united we would have had these difficulties we have a five-seat majority so five people can stop anything it's better to have that discussion -- >> it's going to be that way either way >> i mean -- >> you're saying, you've got some of it out of the way, but there's still going to be cat wrangling, is there not? is it not going to be difficult for you, to get your caucus to go with you on -- look back, when we had 242, we had cat wrangling. i believe if you study the history of congress and people when they had tight majorities, ed they were more productive at times. if we focus and get our problems out of the way earlier

what we have to really do now on committees, work them at the very beginning of the policy you don't pass a bill without talking to everybody in the conference and trying to wrangle people to vote for it. look what we've been able to accomplish since january 7th we've had a bipartisan vote, 146 democrats joined with us to put a select committee on china. we had a bipartisan vote to stop the president from selling our strategic petroleum reserve to china. we've been able to move different pieces of legislation, repealing 87,000 irs agents over to the senate. so we're being very productive for the beginning. >> i'm talking about jordan with that or mchenry, as well. and i talked about you, like, off-camera it's nice, it's symbolic, we know what you want to do i can't believe your staff works late into the night, writing all this stuff that doesn't have an ice cube's chance in hell of getting to be legislation. and you say, well, we want the american people to know where we stand.

they know where republicans stand. >> it's not about knowing where we standpoint, it's about getting into it law. >> you've only been here 24 hours and you're so negative >> and i have a rash all over my body >> think from one perspective, i never give up. that's the approach had you been up for speaker on the first round, you would have quit then. no what we're going to do is pass the bill out of the house, make the senate move, make proportions start moving you know how we've got the ability to sell export oil and gas from america it was during -- we could pass it on the floor, but the senate won't pass it. but we did it in divided government during the pro proportions process. >> you are so negative >> you've been here so long, you think this is normal >> if i think it's normal, i'm trying to get the world back to normal first thing we did, we opened the house up where the public can come to it the next thing that we're able to do, we repeal 87,000 irs agents i can't help it if the senate

doesn't work, but that doesn't mean we'll give up >> do you think the american people want this >> what? the american people voted for this the american people actually likes -- >> why not focus on maybe something that can actually become law it would mean bipartisan, and i conceded to jim jordan, by most people, it means republicans doing what democrats -- >> no, no, no. government designed. you're sitting in the capitol. this whole government is de designed to find compromise. the american people just voted for american government. it's a small majority in the senate we have the republicans in the house and the president. the president started out this year by saying, i'm not going to negotiate on the debt ceiling. well, that disturbs the markets and everywhere else. where was i last week? sitting down with the president in the oval office, negotiating, just like he said in 2011, you have to negotiate. >> you're going to go back when to talk more this week? >> he's going to call and we'll set up the next date >> you can't give us details on what -- but you're -- it's not

going to happen. there's not going to be a default. >> no, there won't be a default. >> well, what does the compromise look like with the white house when they say they're not going to negotiate >> you're a great reporter we're not going to negotiate this in the press, but let me tell you what's going to happen. we're five months away, four to five months waway, over the beginning of february. this is the time to start working together to find compromise in the last four years, when the democrats controlled this, they increased discretionary spending by 30% $400 billion we're at 31 trillion, 121% of gdp. every time that we have actually had real fiscal reform, it came in a negotiation with the debt ceiling. one of the times, then vice president joe biden was a part of it. joe biden in 2004 actually voted against raising the debt ceiling, because he said the policies that brought us here, well, i demand that we change them look, we have an opportunity right now to be reasonable, to be sensible, and most importantly, to be responsible

about this debt ceiling. get ourselves on a fiscal track that we're changing the directory, that we're actually moving down, not adding more debt here. and find out where we could find common ground and let's be able to move forward. >> i think one of the concessions you made was a plaplan balanced budget in ten years, right km. >> everybody writes about all of these concessions. the rules neverchange from january 1tos january 7th >> i would like to balance this budget >> without raising taxes >> look, you have more revenue than at any time in american history. we are now at 20% of revenue you haven'ted that high -- >> you would need to cut discretionary spending by 85% of what has been happening to get down there that doesn't work without -- >> what you have to do -- you have to curve the growth of government and you have to add, bring in even more revenue, right? you're at 20%. you haven't had this in 77 years. it's not a revenue problem but when you have to find is individuals on both sides of the aisle that will sit down and be

adults in this manner and solve this problem >> earlier, i keep saying it, that someone laughed when someone coined the term "alternate facts." we're going to watch the president tonight with the state of the union and i've seen sort of your prebuttal of what's going to come and you can prebutt some more right now. but people at home in the hinterlands are like, what's real and what's not? what are the facts what is the state of the union right now? because we're going to hear it's great tonight. >> it's not great. people are worried every breakfast, people used to have eggs and think it was no big deal, just some protein. now it's almost a specialty, because the price is so high they're worried about the field, they're worried about their jobs as they go they see inflation time after and again. and when you look at the latest polling, they're worried about their government this is the moment and this is the discussion that i had with the president. it shouldn't be that they're worried about the government, the number one issue why are they worried about that? people just bickering back and

forth and not solving problems we need to do the most basic things what is that pass a budget. get the appropriations system. not bickering about a death ceiling, but sitting down like adults and utilizing it to put us on a path to more fiscal responsibility what they had done in those four years, they brought us inflation with that runaway spending they know they've got to stop that what they have done is weaken us with this idea of not making america energy independent then the country sits here and looks at more than 4 million people coming across the border, that there's no security there they watched last weekend, there's no security over our skies. a balloon just comes across with china. they're wondering, where is america. what are we doing, what are we standing for in this process >> you were there for some of the spending, obviously. >> yeah. >> and do you tie the inflation that we're seeing. you can unequivocally connect the dots between what we spent in the last two, three, four years, and the amount of m2 that

the fed has created, or was it the reopening of the pandemic and all the associated problems and the lockdowns in china, the supply chain issues, the ukraine war that putin launched where oil prices went over $100. there's inflation around the world. how can we point specifically to things that congress did here? >> every graph you can see, there's different ways that cause inflation. but the american rescue plan was the straw that broke the camel's back you see it just jump from that place. when they came in and did the 2 trillion, they did it all partisan not one republican voted for it. you're right, am i here during the spending if those eight years that republicans were in the majority, when they took over in 2011, how much did discretionary spending go up during those eight years? zero it went down 10 billion. democrats took over for four years after that they increased discretionary spending by 30%, more than $400 billion. they just raised in this omnibus bill, the worst way ever to do politics in the last weekends of our year with two senators that

were no longer going to be here, they wrote a $1.7 billion, and increased the baseline by $132 billion. that's $1.5 trillion added for the next ten years if we do nothing, you know how much we're going to pay just in interest in the next ten years $8 trillion. and when the cbo numbers come out in a couple of weeks, it's probably going to be higher than that can you imagine in the next decade, we're paying $8 trillion just in interest this is why this is the moment in time, don't be negative, even though you sit in washington maybe my cup is always half full that's why i can sit through 15 rounds because i know what the end will look like. this is our moment to change the trajectory, to put us back and i always believe what winston churchill said about america. you can always count on americans to do what's right after they exhausted every other option we have done that with the last four years of what the democrats' majority have done. now you have divided government, now you have opportunities >> there will be attempts to spend more that's not going to happen in

the next few years, i guess. is what the fed is trying to orchestrate right now, is that any way to run a country >> if you want to talk about inflation, the fed could have taken action a couple of years ago on the interest rate and knocked inflation down rather rapidly and we wouldn't be in this place >> should they try to get employment back to 8%? is that their mandate right now? does that make sense maybe not 8, i was exaggerating, but they do want a weaker jobs market they think that that's essential to rein it in. >> but had they acted earlier, you wouldn't have to worry about that >> and what should you do now? >> the first thing the fed shouldn't do, don't play politics don't worry about the environment. just worry about monetary policy i want them to worry about the monetary policy and just focus on the economy >> you think a recession is preferable to high inflation well, i do think -- i think inflation is the worst thing you could ever do to an economy. >> some type of growth slowdown.

>> well, you have to >> that might help in 2024, anyway >> look, i'm not playing politics i want to get this economy back on track but you cannot sustain yourself with inflation the number one goal what i see from the fed is they've got to tackle inflation that's their mission, that's what they should do, but they missed the opportunity what else can we do about that we can stop the runaway spending with government when it comes to inflation. we have billions of dollars sitting out there. we had runaway spending when it came to the pandemic there's money that hasn't even been spent, that's sitting there that we can bring back in. we increased domestically what we're going, we can rein that back in as well. there's more fraud that we can find if we simply made people do a budget in the house and the senate, schumer has been in power for quite some time. he's never done a real budget, never done an appropriations process. that's where people actually have a say when you put sunlight in it, what you do at the end of the day is get a much better product out.

>> i don't want to be negative, but what happened in the last election given the state of the union that a lot of people felt before the election, the red wave didn't happen. was it a red trickle what do you attribute it to? and what should republicans looking at 2024, what should the game plan be if they want to win back the white house >> there's a lot of places that i could look out, especially from a republican point of view. where should we improve and where we shouldn't the last two election cycles, we've lost the republicans -- the republicans have lost the presidency, in the senate, the republicans lost both cycles governors lost, legislators lost the only place republicans won was in the house if you look at the house, in 2012, we had roughly 232 members. we didn't even win the house and had a strong majority. we won the popular vote by 1%. do you know what we won the popular vote in this election by we have 222 members. 3% so what meit means in redistricting, we're never going

to have these big majorities again. we'll have it more competitive republicans won in new york, we won both cycles in california, we won in oregon, we won on the border we have more women elected, more hispanic republicans, more black republicans elected. since reconstruction in the house, there are places you can find positive. where did we stumble in pennsylvania, we didn't have a good gubernatorial candidate in michigan. i had a candidate in pennsylvania who outperformed the republican governor by more than 20 points and still didn't get elected. by 14 points and didn't get elected. >> let's talk about what we can -- the u.s. economy, we all want to grow the pie, we all want a vibrant economy it's made up of private companies, private and public companies. what is the state of the way, i guess, washington looks at american business right now? because it's sharply divided now we're going to hear about tripling the 1% tax on buybacks. we've got the 15% minimum corporate tax.

we've got just windfall profits because the oil companies made so much money and they're enriching executives and wealthy shareholders there is an anti-business tone in the country right now there's esg -- what are you going to do about -- if i were you, i would think it would be essential to get things back on track for u.s. businesses. the reason that we're trying to kill demand with the fed is because we're not trying to increase supply. we're not cutting taxes, we're not, you know, cutting regulations. we're not opening up anwar we're not drilling on federal lands like we -- we're not doing any of the supply side things that would actually help the economy. is that something that -- >> it's one of the core things >> it's like the only thing that should be done you should be looking at all of these, investigating, going back and doing all of that? >> we can walk and chew gum at the same time. and in congress, you have responsibilities >> you've been around here a long time. you know you can, right? >> i know we can i've watched us do it before

look, getting america to become energy independent is not only strong for our economy, it's were the for the world american natural gas 41% cleaner than russian natural gas why wouldn't we think from a persp perspective. would the world not be safer or we not be stronger where democrats have failed time and again is when they pick one form of energy, instead of all every study will tell you, we need to double every form of energy we have now and what we're finding, look, i live in california, so i lived through this problem i watched gavin newsom shrink the production of california oil by 20%, 80,000 barrels, but he buys 50,000 a barrels from putin. i watched him shrink our grid by 9% and tell us we can only buy electric cars, which at that moment would take 14% of the grid right now it's one-half of 1%,

and then he tells you when it gets hot, you can't charge it. i've watched government go into regulation with this new majority this all has to be reined back we now have to allow business to perform themselves, which would make america stronger, make our economy better, take care of our supply chain what we've watched democrats also do is take away these work requirements and when you take away the work requirements, they incentivize people to stay home. which gave you part of inflation and wages, which gave you a part of the supply chain problem, with productivity. so there's a lot of areas that we can be successful in, but you might not see it as a big bill passing, but will be fundamental to the basics of work in america that will get us more productive, make us stronger, make us more energy independent. and i think the future to be much brighter. >> let's talk china, while we can. we have about a minute and a half left. but this is just the latest

salvo, if you will, and was that -- have they done it before do you know? do you have any clarity on whether -- >> i'll have a gang of eight meeting this week. i think when they say they've done it before, they're trying to spin it when they say, they've done it before, they're now reclassifying that maybe that was a -- >> why'd they do it this time and what does it mean about our relations and for business, that all of our multi-nationals that do business in china, what does it mean for them, what does it mean nor taiwan? >> what it means for taiwan, you should look to ukraine it is no secret that china has changed their posture with america. there is no secret that you have watched time and again what president xi has done when he changed his constitution and put him in again there's no difference when he's gone after american companies in there. the idea that we thought decades ago, putting them in the world trade organization, they were just going to change and be like us, that's long gone that's why one of my first actions was to create the select

committee on china it's not from a military point of view, but from an economic point of view. a place where mg has failed the american public is a flip-flop on the policy of china and china thinks in thousands of years and we think in three months so creating a select committee on china, where it's bipartisan will have one voice. why does china control 90% of our minerals, so we open a mine in california, but they control 95% of the processing, so we send it there. what do they do with the food supply what do they do to our medicals. if there's anything we should have realized during the pandemic, we should not be dependent upon them. in the democrats' majority, they never even looked at where the pandemic started they gave china a pass that no longer can be the case you cannot allow, i don't care if it's china or any other nation, to enter the sovereign air space of america and sit and watch. that's a sign of weakness. but it goes back to what secretary defense gates has said about our president. for the last 40 years, every

policy decision he has made has been wrong he was late in ukraine or it never would have started in 2015, i was sitting him with the situation room asking him to sell javelins to ukraine so they couldn't come in >> they're wrapping me, but 22% of the public wants a rematch of the last election. the more you hear now, i think president biden is going to announce and i think he's got the backing of most of the democratic establishment i guess -- i'm not sure where else they would go at this point. what about republicans and do you expect a rematch? is that what republicans need? >> i don't know if it's going to be a rematch i can't really change a presidential outcome but i'm put in a place to be speaker of the house so i know what we can do now can change a lot of what the future looks like going forward for this country this is my focus, this is what i'm doing day in and day out i've had one month on the job. but the one thing that i've

always remembered, even though it was so tough to get, it's not how you start, it's how you finish that will be our promise to the american public. >> 15 tries and here we are and now the work begins. but -- everybody is pulling for you, even on both sides, and for president biden, because -- >> look -- 70% still wrong track. we've got to get on the right track. >> that's exactly what i said to the president in the oval office we do not want to be in a nation where their biggest fear is their government that's why we need to sit down, let's negotiate this out, let's make a good agreement that puts us on an economic path that makes us stronger, and maybe we can make an agreement that passes some legislation, too so don't be so negative. i'm more happy -- would you -- okay, you would you have been ha happier, that you're sitting here, and you're sitting with hakeem jeffries as a speaker -- >> i would have been happy if he would have come on today and he tu turned us down

>> his office is right there >> you accepted and we appreciate it, mr. speaker thank you and god speed. thank you. >> joe, thank you very much. and thank you to the speaker in the meantime, we're watching shares of activision's blizzard this morning. revenue beating expectations that was thanks to some blockbuster performance numbers from its "call of duty" release that came ahead of the holidays. people stopped playing games, except for this one. they were playing that a lot in fact, the popularity of "call of duty" is one of the sticking points in microsoft's attempted purchase of activision we will talk about that key issue and much more with ceo bobby kotick, that's in a rsfit on cnbc interview that's coming up in just a few minutes we'll be right back. to adapt in the changing world, you could hire a professor of theoretical mathematics. we all know this equation, right? he'd crunched numbers day and night. that's it. to maximize profitability. morning. i have quarterly numbers that are beautiful. and forecast revenue from every corner of your organization.

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i screwed up. mhm. i got us t-mobile home internet.

now cell phone users have priority over us. and your marriage survived that? you can almost feel the drag when people walk by with their phones. oh i can't hear you... you're froze-- ladies, please! you put it on airplane mode when you pass our house. i was trying to work. we're workin' it too. yeah! work it girl! woo! i want to hear you say it out loud. well, i could switch us to xfinity. those smiles. that's why i do what i do. that and the paycheck. welcome back to "squawk box" this morning take a look at futures the dow off by about 88 points the s&p 500, up about 2.5 points of course, we will be hearing from j. powell later today and state of the join tonight with president biden. but right after this, activision blizzard reporting stronger results thanks to "call of duty." the game's popularity one of the concerns for regulators looking at the microsoft deal. we are going to be talking to

activision blizzard ceo bobby kotick in a first on cnbc interview. it happens next after the break. don't go anywhere. [music playing] ♪ imagine something of your very own. ♪ ♪ something you can have and hold. ♪ ♪ i'd build a road in gold just to have some dreaming, ♪ ♪ dreaming is free. ♪ accenture, let there be change.

welcome back, everybody. activision blizzard, the developer and publisher of video games reporting fourth quarter earnings last night, beating on revenue amid concerns over the company's proposed $70 billion acquisition by microsoft

activision blizzard's ceo bobby kotick joins us right now for his first television interview in quite some time bobby, it's good to see you here on set >> thanks for having me. >> thanks for coming in. >> first, congratulations on the numbers. i think there were a lot of questions about whether people were still playing video games or just getting back out there again. i think the answer is, they were playing "call of duty" and a few other of your titles >> they were playing "call of duty," "candy crush," "world of w warcraft," but i think when you look out over the next few years and the macro economics statistics, it's not clear yet how our industry or any other industry will fare so i think while we had a great quarter and a great year, i still think you have to have caution. >> and that's because we saw so many people get into video games during the pandemic and we're still trying to sort out what their real, normal, back-to-regular behavior is. >> i think what you'll see is the industry has really shifted. if you think about the last ten years, games used to be played

on expensive consoles and in only developed countries with middle class markets over the last ten years, the business has evolved to being principally on phones. and today, the biggest platforms are apple phones and android phones so those are much more accessible so i think what you're going to see is people will be playing games, they're mainly for free and the question is, how much premium content will they consume? and i don't think we really know but i think the good news is that the industry is largely evolved from a business that was about these specialized devices to these very broad appeal devices. >> it's interesting that you kind of put it in that light because all of the regulators in the united states, in the eu, in the uk are looking at this deal, and i think they're looking at it from the prisms of the consoles and whether it's going to be fair competition if microsoft is allowed to go ahead and purchase activision blizzard >> yeah, i think there haven't been any transactions. so whether it's the ftc or the

cma, they don't know our industry they're trying to come up to speed and understand our industry better. i don't think they fully appreciate it's a free-to-play business that the japanese and chinese companies dominate the industry. you look at sony, you look at nintendo they have these huge libraries of intellectual property sony, sony studios goes back 80 years. nintendo has the very best characters that exist in video games. and i think they are a little bit confused about where competition is today the best companies in the world right now are companies like ten cent and bite dance. and, you know, these are companies that all have protected markets. we're -- we have struggled to enter the japanese market, we can't enter the chinese market without joint venture partner. so the competition actually isn't european companies, american companies, it's really those companies in japan and china. >> "the new york times" had a story this week, though, questioning whether uk

regulators would actually allow this to go through and the big deal on this is, if the cma and the uk says, no, there isn't an appeals process like there is in the united states, with the ftc, microsoft can go ahead and say, we'll take this to court, and they may actually win if the cma and the uk says "no," that may be the end of the line. >> if you look at the uk and think about the post-brexit uk, it's probably the first country where you're seeing a recession. and like the real severe consequences of a recession. if you're the uk, and you have an incredibly educated workforce, you have a lot of technical talent, places like cambridge, where the best ai in machine learning is. i would think that you would want to kpembrace a transaction like this where you'll see job creation and opportunity and it isn't really at all whether it's sony or microsoft's platform it's about the future of technology and they've said now for the

last year, i think they said they would like to be the silicon valley of europe or of the continent. and if deals like this can't get through, they're not going to be silicon valley, they'll be death valley >> can you play armchair certified psychologist there's an op-ed, lina kong chalks up another defeat, this is with regard to meta's acquisitions within unlimited. is your sense -- she has been trying to rewrite, if you will, the anti-trust laws. how much do you think that goes into the thinking versus what might be described as sort of traditional anti-trust practices in this case >> look, i think it's an admirable objective if you're right to curtail the power of companies for sensible purposes. but to just make blanket statements about big companies having outsized influence and doing everything you can to

eliminate big companies, that isn't an ideology that is rooted in what's made america successful >> other related sort of consult market questions so, the sorkin boys now play xbox on a samsung tv that has no console, as you know so the question is, whether you think long-term sony, nintendo, everybody who's in the console business will be living on some chip in a tv that eliminates the console unto itself. >> here's what i would say over the next ten years, you'll see, as we have started to see over the last ten years, every device with a microprocessor and a display will have the ability to support dpgames. you know, you've already seen the android phones and the apple phones that can broadcast to a big screen, so you don't necessarily a dedicated console to be able to have a great game experience

i think that's -- microsoft's business model since the 1980s is, sell their software on every single hardware. >> ten years from now, will there be consoles? or do you think the console business is eliminated by sort of folks who do this look, the xbox, by the way, for those who are playing at home, it works, but it's not the experience i would say and my sons would say, not as good as having a console >> well, here's what i would say. i think you're going to see pcs continue to have a lot of momentum the customization opportunity is something that players love. i think you probably see dedicated game consoles, but they'll become an increasingly smaller part of the overall market and you look at phones, the power of phones is extraordinary. and we've gone from tens of millions of customers to hundreds of millions of customers, just because of the popularity of phones the other thing that's happened with gaming is that gaming used to be for, you know, since 1985,

when i started making games, the business was very much a solitary experience. you played -- you know, maybe there was one other person in the room with your atari or, but today, they're social experiences. and so all of the experiences sort of, you get the benefit of community and the ability to connect with people in a social environment that's rooted in joy and in fun that's going to happen across all devices. >> bobby, what do you think happens? we're looking at the stock trading at $73.56 it was down yesterday as people worried whether the cme would stay no to the deal. it's up even higher now. do you think this deal goes through? because the zeal $95, we're at 73 it's an ark trbitrage play >> i do. i think there's no legitimately good reason why we shouldn't have the opportunity to compete against japanese and chinese companies. and i think regulators in the

eu, the uk, and the u.s. will recognize that western companies need to be able to compete >> and if it doesn't go through, what happens >> i think it's going to go through. >> so -- >> is it going to be okay to stand by itself if it doesn't? >> look, we have $12 billion on the balance sheet. we have a lot of momentum, but i really do think there's not any good reasons it shouldn't go through. >> harder question, maybe, marginally jim cramer just yesterday was on our air, and he effectively said, he thought the company would actually be worth more if the deal didn't happen now, i'm not sure that i would take that, but you're sitting right here what do you think? >> i think 98% of our shareholders voted for this transaction, so they believe it's in the best interest of the shareholders >> and that's what you want, too? >> look, i think this is a great opportunity for our company. we have the ability to get access to people and talent and technology that we others wouldn't easily have access to and i think that's going to allow us to continue to make

great gains. and it's the greatest challenge we face right now, is how do you find talent in machine learning and in ai, in data analytics, in user experience and user interface? microsoft has an incredible pipeline of talent so, we can still grow, but we'll accelerate the growth as a part of microsoft >> the deal is supposed to be done by the end of the june quarter or somewhere into the middle of july july 18th is the deadline for it if the ftc goes ahead and you wind up in court with that, and it stretches past that, what then happens >> look, there are a lot of different alternatives, but we're focused on figuring out how to close the deal by july. >> if the deal does happen, do you see a wave of consolidation happening in the gaming space? so for years, for the past decade, we all would talk and report about different people talking to big media companies wanted to own gaming companies, even just in the last year, a

parent company of ours, this network, comcast, reports about talks with ea and others do you think that then the flood gates open what do you think happens? >> look, to effectively compete against these japanese and chinese companies, there is going to need to be more consolidation. it's an incredibly fragmented business $200 billion industry with very few companies that have meaningful market share. so i think you'll probably see more consolidation >> what do you think about the big platforms. you talked about apple and android. and sort of how much power and influence they have over gaming. because one of the thing that's happened right now, there's even a big fight going on between, if you join up with microsoft, you'll be feeling it every day with apple, as to, can you have a cloud service that basically sells lots of different games versus have to have each game as an individual sort of approved program. on ios, for example. >> yeah, microsoft's business model for history has been

selling software on apple hardware so, whether it's, you know, the apple windows operating system, which you can operate on apple hardware or any of the application software, we'll be -- microsoft will support apple in every way i think the real question is, are consumers going to have the ability to have the direct purchasing capability from the provider of the content or is it going to be just that limited purchase opportunity through the apple store or through google play and i think you'll see -- and if i were the ftc, what i would be spending more time on is, how do you ensure pricing is the most advantageous to consumers? i think until apple or android, you have the ability to have alternative stores, yo to see improvement in opportunities for pricing. >> bobby, there was an s.e.c. settlement that was announced, i believe, on friday it's a $35 million fine. the company is not admitting or

denying wrongdoing when it comes to claims that the company violated federal whistle-blower protections and failed to maintain adequate disclosure standards at workplace conduct what do you say? do you have any comment on what happened with it >> yeah, it was a very amicable settlement the s.e.c. made some great improvements on suggestions that we can make to our employment agreements and good suggestions on skpms processes that we can add. and it was a very straightforward ettlement. >> bobby, i want to thank you for your time, for being with us today. >> great to see you. >> in person, no less. >> thank you very much for having me. >> bobby kotick. >> i'll go play call of duty now. >> joe, we'll send it over to you. >> coming up, we'll check in live with jim cramer prosecute floor of the new york stock exchange we're all over the place the message literally and figuratively and the message from the democrats, the chair of the democratic policy and

communications committee, representative joe neguse of colorado will be here. we'll talk prime-time deon, since we're -- he's a double buff, i'm a single buff. we'll have that anmae med ybso politics when we return. "squawk box" will be right back. wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq

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like when a package has arrived. - bye. have a good night. -boo! when the most trusted name in home security adds the intelligence of google, you have a home with no worries. brought to you by adt. i want to get down to the new york stock exchange, jim cramer joins us now. jim, i don't know, you want to bet on whether the microsoft activision deal does get done? >> well, i mean, look, david faber yesterday said that the british are really not going to budge. i don't think nina khan budges i think it was a good idea activision blizzard's quarter was fabulous they got the right titles. that stock would be at 90, 95 even, without this deal. right here because the quarter was so great. and on the release, you know, when he's not going to talk about the deal, but, the release was so much better than take 2, it sort of just blew you away.

they have very good engagement last time it was all about engagement who's got the great engagement pinterest claims have great sb ga engagement this is like the rogers deal with dupont. the chinese blocked the rogers deal with dupont, caught a real break and the stock went up. i think pbobby should hope that the deal goes away >> well, he's not going to say it he's a really good guy a soldier in the microsoft army now. but it's time for him to go awol >> in the meantime, i want to get your thoughts on what we may or may not hear from jay powell this afternoon and how that may get juxtaposed against what we might or might not hear from president biden tonight during the state of the union >> we see a lot of deflation in the system we just haven't seen deflation in wages that's made our job a little bit harder, but not so impossible.

and we'll fine i think the president doesn't ever address these things and just says, look, everybody wants a job gets a job it's really an amazing time. and it's never been better to be an american. and this is it because he's not really self-critical. >> did he call for the encirclement of the russian army >> i don't think >> jim, we'll see you in just a couple of minutes in "squawk on the street". >> i enjoy talking to you! >> you know i love talking to you. i would talk to you for hours! >> you know i would talk to you for hours! let's just high jack the process. >> can we do a special sort of after-party with jim cramer kind of thing >> wouldn't that be great! >> maybe it's a streaming show >> we can bring our wives. i wish you would come to florida with us. you would have just loved it you would have loved it! >> my bags are packed. send the invitation.

>> you're coming on the next one. >> you know where to find me >> all right, buddy, you're coming on the next one you're too much fun. >> sending it back to joe in washington >> i'm here. next, the democratic agenda for 2023 congressman joe neguse of colorado, chair of the democratic policy and communications committee is going to join us right after the break. "squawk box" coming right back

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we're back in washington

our next guest is a member of the house democratic leadership and can tell us what's on the dems policy agenda in the new congress let's bring in congressman joe neguse of colorado, chair of the democratic policy and communications committee the party's communication arm. you're very communicative. we have so much in common except it was, like, quite awhile ago -- there was no pearl street ball in boulder when i was there. econ baker hall, and also the law school in boulder. greatest weather, that's for sure i said you must be purple from the district you represent >> colorado, as you know, right, very eclectic community. agriculture, ranching, suburban communities, and college campuses glad to be with you, joe as a fellow buff, very excited about coach prime. >> we were talking about that. we could use a little

excitement are you a problem solver are you almost there with those guys >> we work -- i work a lot with the problem solvers, and with a number of members in our congress >> blue dog? >> we have an eclectic caucus. the house democrats in my view, we're the big tent party in washington you just mentioned those other sub caucuses >> i was kidding, but the democratic party, they're like the board collective there wasn't one non-hakeem jeffries vote. the democrats take pride in that, but it's also like do any of you think on your own >> look, i think we have a number of members who -- >> we stick together you need to. >> we stick today when we need to we're unified, united, focused, you saw that on full display on the speaker's vote >> what are you going to try to accomplish you don't have the house, so

what can you do. >> i think three central areas we'll focus and zero in on, leader jeffries made this clear, we'll extend an open hand to the republicans to work together >> really? >> honestly. to lower costs, build safer communities and create better paying jobs for the american people look, the proof is in the work we did in the last congress. a lot of what we did -- you know this, joe -- was bipartisan. >> whoa. whoa whoa >> sure. >> nothing was -- one thing was bipartisan that was maybe the c.h.i.p.s. act. >> can i give you three examples three simple ones. chips act, the infrastructure bill, the biggest infrastructure investment since dwight eisenhower >> but you weren't satisfied -- you might have gone too far. you don't think any of this inflation is from taking it too far? >> i would say i think inflation is caused by a mosaic of factors. the disruptions we saw because

of covid the distortions in the markets, to rates, margins, rents a lot of that is being ironed out now. that's a byproduct of what the fed has done it's a byproduct of some of the supply chain improvements by the biden administration there's more to do you know this, we've seen a cooling off in inflation over the last several months. >> hears the point i make, to get this under control the fed will raise rates you know we have 31 trillion now. you are an econ major. we don't have money for anything else so, gdp will suffer. all the great programs that democrats want government to address, suddenly you can't -- you don't have money to address those things there are consequences to going too far. would you do another trillion in

additional spending this year if you could? >> i haven't heard that's on the table. >> 1.7 trillion in the omnibus, that was not bipartisan. >> i would say this, i think the president has said it. we should have a conversation collectively about rational, pragmatic, fiscal policy that should be divorced from holding hostage the debt ceiling, which is a very different conversation obviously what i think -- i think what speaker mccarthy is doing -- >> he's not going to introduce a budget on time when do people, fiscal hawks, when do they get their chance to talk about this if it's not now? >> they get their chance during the budget process we have, as you know, a process in the congress every fiscal year there's a number of members pushing to return to regular order and have kind of restoration of the debate around budget policy that we've had previously in prior congresses that's where that debate should happen it should not happen in putting

the full faith, credit of the united states, our status as the world's reserve currency potentially in peril, which is what republicans are doing now that's a dangerous game. >> that's never happened both sides sort of -- >> we ought to do what we did during the trump administration, a clean debt ceiling the republicans did that with president trump in the white house. let's have a conversation about fiscal policy within the construct of the budget process. >> i asked the speaker about what i -- obviously i work at cnbc, it's a business network, we celebrate capitalism normally the private sector and the strength of the u.s. economy, which is made up of all these great companies. don't you feel that the sort of negative or -- the undertones that come from democrats about corporate america, do you think that's healthy do you think that's a positive do you think they need to be capitalism 2.0

>> i would disagree with the premise in the sense of characterizing what some democrats may or may not have said i spent the vast majority of my career in the private sector before coming to congress as did the vast majority of my colleagues in the house democratic caucus. we believe strongly in supporting the free market and doing everything we can to ensure that folks can live the american dream in the same way me and my family have been able to live it you see that coming from every corner of the house democratic caucus that, to me, is reflective of american values at the core. >> when you hear that -- we'll hear the president talk about a lot of positive things the deficit came down. but it's because we didn't spend as much on the pandemic. there's been great job additions, but only recently did we get above pre-pandemic levels you'll hear a different story tonight. it will -- that's what presidents do when they do the state of the union why do you think we're still at a wrong track -- right

track/wrong track of 70%, 71% in the country. what needs to be done? do you think the biden administration is misreading the public >> i think there's some challenges that exist that we have to tackle as a country. the president, my sense is, he will lay out a hopeful, optimistic vision for the country. he'll talk about where we have been he'll talk about the fact that the state of the union is strong reflective of the labor force market numbers we've seen. lowest unemployment since 1969 long before i'm born not that i'm aging anyone. >> he promised unity when he did his initial inaugural address. do you think he's governed as a unifier? >> look, i -- i recognize some people see this a different way. i can tell you, having served the last congress, you look at all of the accomplishments that the biden administration was able to achieve on behalf of the american bill. the vast majority of bills were

bipartisan >> is that a 9 we're out of time. let's do this again. great having you on. we need to reminisce about -- >> go buffs! >> it was herbie's deli, the sink, and back to the sink again. we got to go >> that does it for us today we'll watch the state of the union tonight. make sure you join us back here tomorrow morning right now it's time for "squawk on the street. good tuesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer at post nine of the new york stock exchange. market waits for chair powell today speaking in the noon hour. the ten-year yield back to 3.7 bostic and kashkari talk hawkish. our roadmap begins with the street as we seek clarity about rates. the president expected to push for quadruple