cease-fire as president xi tries to play peacemaker. the founder of ozy media carlos watson arrested facing fraud and identity theft charges. when was that? he was on and tried to explain everything >> about a year ago. >> is it a year? it is friday, february 24th. "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live at the nasdaq market site in times square i'm andrew ross sorkin along with joe kernen. becky is off today we have a lot to talk about. the s&p managed to snap a four-day session losing streak

the markets are waiting for the january price index. it will be released at 8:30 a.m. today. that reading is on inflation and followed closely by the fed. we will follow it closely as well look at treasury yields and where they stand you are looking at the 10-year treasury at 3.9. things are coming down we will get more fed speak at 8:00 a.m. with cleveland fed president loretta mester that is an important conversation >> she is the one. she is starting to look smart for we don't know how long until the economy says no. probably 50 is not necessary i'm waiting for it it's going to bite >> yeah. >> eventually the increases will have an effect >> they have already we don't know. >> that's our problem with information that looks back a

quarter with companies looking back a month with government releases and things. things can change quickly. today is the first anniversary of russia's invasion of ukraine after a year of war, there are no signs that the conflict will end any time soon. the u.s. is getting ready for another $2 billion in aid. china is now calling for a cease-fire in the opening of peace talks. the 12-point proposal that president xi has to end the war. president xi is expected to visit moscow with a summit with vladimir putin we will have a live report with eunice yoon. we will talk about the growing relationship with russia and china. the leader story, andrew, if you read between the lines u.s. set to boost its troop presence in taiwan i read that and that would be

concerning we are concerned about our troops anywhere. with what is going on, it seems like an escalation it could cause tension did you see we're quadrupling the number of troops this is in a training and capacity review. they will send a message at this point and watching what happens with china and russia. it informs us of what happens in taiwan eventually. you know, for a lot of reasons, taiwan might be, for us, more strategically important than ukraine or what russia is doing. except for energy. what is on your mind >> that's on my mind

>> i know. >> i have known him for years. for you who are not aware. thomas h. lee. age 78 original pioneer his firm was something that was considered in the same breath as kkr back in the day. would have been considered in the same breath as blackstone back in the day. dead at the age of 78. there are now reports this morning that his death may have very well have been a suicide. found at his office on fifth avenue the report suggesting that there was a gunshot in the office. >> a gun there in the office >> you know, when i first saw the news last night, someone relayed to his family. i have written about him for years.

he bought snapple. >> he started his own firm and left and scott was running his old firm. >> i remember writing this big sunday piece for the times a profile of him in his apartment down in the 50s or 60s east side. he just bought warner music. there was a little bit of a split within the firm. he went off to do his own thing. if i remember, what did he name his firm from the movie "wall street." blue -- >> horseshoe >> something like that >> he would call he had a lot of opinions big viewer he would weigh in on what you said this and you would say that how much do i make for you he said keep doing what you're

doing. >> he was always super kind to us and the broadcast i remember he came to something -- >> he came to a lot of things. he was a frequent guest before you were on. >> i remember -- a great benefactor to new york the museums and libraries. >> read between the lines. there's no reason to think any financial issues going on? >> i don't know. >> we don't know people get depressed 78 years old >> right >> i remember ernest hemingway i said when i got here this is the way i'm going out. >> it is too early to know the answers. we can sit here and speculate. >> we dochbtn't know about illns pain >> it is a sad story a sad story for his friends and family >> it is

>> it's the end of an era. he was a character >> was i don't want to try to segue you want to do this? i'll try it will be awkward boeing shares today. faa says the company is halting delivery of the dreamliner 787 over a fuselage issue. boeing says in reviewing the records, it discovered an error by the supplier related to the jet's forward pressure bulkhead. boeing will not be able to resume delivery until it can show the issue is resolved there is no immediate safety concerns for airliners in service. the ceo was on yesterday he said airbus gained market share in the last three or four years based on these issues that boeing has had everybody has supply chain issues he conceded airbus does as well. another one here for boeing.

in the meantime, the department of justice now accusing google of destroying evidence according to reports that the doj says the search giant failed to suspend a practice of routinely deligheting internal messages which is required under federal law to preserve those for anti-trust lawsuits. this is accusing google of maintaining monopolies of searches and cersearch related advertising. it brought me back to the moment of covering frank probably 15 or 17 years ago one of the great silicon valley bankers. he is still around and doing well what i was going to say, he had been accused and at one point convicted and it was overturned of destroying an email

that was considered obstruction at the time. >> likes to play golf. >> great golfer. >> at&t. pebble he must live out there >> he does the justice department planning to block the adobe deal to buy figma the case could come next month the deal was announced back in september. that is going to being s sometht watch. this is remarkable a great story of the company in that came out of nowhere and really changed the creative class and adobe seeking to acquire now theirre appears to e an effort to prevent that. washington getting aggressive. the question is you go to court and you find out in court whether this approach and anti-trust is the right one. >> interesting piece in the

op-ed. ftc is involved with european. i hope we don't go the european route with anti-trust. -- >> yes all of the anti-trust units have been colluding >> that is what the airlines say about the ticket price. >> regulatory agency >> you can pick your word. wbd. warner bros. discovery with a loss and short thfall in revenu. the company loss less than expected in the dtc division as it works to bring costs under control. hbo and hbo max and discovery added 1.1 the million subscribers to end 2022 with

96.1 million worldwide i'm smiling because david is our friend and our work colleague and comes on a lot did you look at the deadline pieces >> i saw a bunch of pieces i did not see it >> lots more republicans lots more republicans coming to cnn which would be when one gets there, that is the first, i think. you can break the ice as the first actual republican at that place. hey, what am i chopped liver, andrew? i hope you appreciate me i don't know how much they want to improve cnn you know what i'm saying >> you are making yourself available? >> negotiating on air. i'm kidding. i'm under contract obviously j just appealing if you get to the point where you have to say publicly you know we may bring republicans in there has been a problem in the

last couple years. do you think charles barkley is the answer for chris licht >> did you see what charles said >> no. >> that was more interesting than all of this charles barkley in talks and confirmed to the new york post to do a show on cnn with gayle king it would be them together. he said he was only considering it because of his respect for gayle and then said he wants to do anything to help the company bec because, as you know, it is an "s-show. >> oh, oh, oh, yes >> that's what he said about the company. >> that sounds like what malone said what's wrong, rob? is that your decision, rob is that your decision? >> i don't know. >> i wonder who makes the decisions. >> we're over time we're over time. coming up --

>> you know, by the way, i think you will -- i'm hopeful for david. >> so am i he's brilliant we have seen them. this is going to work eventually king of hollywood. robert redford at his house. >> i would like to see charles and gayle together >> that might work. >> that is a winner of a show. >> it might work i don't know what they will do in the morning coming up, we have some of the morning stocks -- i like poppy. we will get into the downfall of ozy media founder carlos watson. d.rested and charged with frau you are watching "squawk box" on cnbc >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

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markets headed for the worst week of the year so far in february investors are waiting key retail earnings next week joining us now is stephanie link chief investment strategist at hightower and cnbc contributor i use the headline pieces in a contrarian way i read through this and it is well written, steph. that is this has been a huge

head fake for the polls in what we have seen in the last six weeks. now the smart money is definitely on further downside they go into some put call ratios declining and new highs and new lows what was helping there now it looks like that is breaking down. the spx below key support indicating lower levels. are we now -- is it a confirmed head fake we are definitely headed to test the lows in the s&p? >> well, look, i think this is a trading range choppy year. we had a nice start to the year. so could we see a pull back? certainly. what i'm encouraged about is what you said. so many bears are out there. so many people are negative. especially on the economy and especially on earnings i don't see it, joe. look, i get the fed and what

they are doing is going to slow the economy. don't know if it will head us toward recession or just a slowdown we get that. okay the economy is actually really resilient. gdp. 2.7% yesterday the first quarter atlanta fed gdp number is trending to 2.5% for the first quarter, right you have initial claims below 200,000. you have even the chicago fed national activity index which is an important index to watch. it just turned positive for the first time in four months. you have earlier this week the ism services and composite numbers at 50 in expansion mode. i'm not saying we're off to the races, but the economy is in better shape there is more underline momentum than given credit for. i think earnings can hang in there.

if you exclude technology, joe, earnings are up 6.5% if you include technology, earnings are down 2% i don't want to just kind of exclude a group and say everything is great. i'm saying underneath the surface, things are not as bad and i think we can be in the trading range as a result until we get more clarity in terms of what the fed will do and what it means for the underlining growth >> 6% or whatever you said 6.5% is eerily similar to the inflation rate right now can't you just raise prices? is it real >> i think companies are doing a really good job at certainly restructuring and doing cost cutting. >> and raising prices. >> yeah. and raising prices. >> it is not always bad for

companies. >> right >> steph, i want to call this guy who wrote this article and find out if you know the smart money. are you the smart money? when people say the smart money is now bearish who are these people don't they change every day? the smart person was the dumb person yesterday i don't think there is anything such as smart money. the consensus is wrong is the smart money the 10% what does that mean? the smart money? >> i know. i know i am a long-term investor and long-only investor i have to look at where there are opportunities. i try not to be on the same side of the boat as everybody else. being a contrarian, you make more money than going with the crowd to your point. i think you almost have to step back and say where is there strength there is strength in

semiconductors i like that sector there are pockets of strength in consumer industrials from nshoring. within those sectors, you have to find some names and there are a lot out there. i like this news today boeing i'll be a buyer of boeing. i was a buyer of broadcomm with nvidia yesterday there are opportunities, joe you have to dig deep. >> if a re-test of the lows gets us -- and we lose another 5% to 10% and some will get out of the market and then they would miss getting back in. it is going 3,000 on the s&p and then you would say maybe i need to if you buy the right stocks, me mi -- they may not go down it always is being discerning and selective. you can play in about every market this doesn't seem to be quite as

clueless about what is coming as we were last year. we know inflation is higher interest rates and possible slowdown those are front and center unless we're under estimating how bad it will be >> that's a good point that is the question that we're all thinking about how much impact of the fed raising rates and keeping rates high then what will it do to growth we know it will slow to your point, you have to find high quality companies and look at free cash flow. joe, the long-term total return in the s&p 500 is 7% it is not down 20 like last year it is not like up 28 the year before it is a moving average you just have to stay long term and focus on high quality blue chip companies

>> we had companies flourished in the past with the 5% ten-year it is not like, oh, my god i can't live in this environment. all right. even 6%. you never thought they would go below 6% ten years ago all right. stephanie link thank you. it's in the closet steph, is it back in the closet? where do you keep that thing it is back in the closet >> in the closet back in the closet when we come back, more on "squawk. ozy media founder carlos watson arrested over fraud and jiidenty theft charges. more on the story when we return any questions, chris? all good, thanks maura! there you go, one new inhaler! nice

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welcome back to "squawk box. yesterday ozy media ceo carlos watson arrested in new york. it happened an hour after "squawk box" went off the air. facing conspiracy to fraud and identity theft for the role in the impersonation of media executives while in talks with investors. the s.e.c. charged watson with defrauding investors of $50 million. watson appeared on this program in october of 2021 calling it misleading information and the call with goldman sachs considering investment at the time he used some kind of voice machine to have a colleague pretend to be a youtube executive. claiming they had a deal it appears all of the numbers in

the decks, at least allegedly, were falsified they were changing the numbers constantly >> they would buy ads. >> yeah. that's not even in the complaint. >> they would buy ads and say ozy media is the greatest. whatever publication they bought the ads in, they would say this publication says ozy media is -- >> run another ad in the l.a. times. says this is the greatest thing. >> exactly >> we are going to talk to the journalist, mr. ben smith, that broke the original story he is responsible for all this he will join us in the next hour we will break all of this down not only do i remember carlos being here in the morning, effectively the morning after, he would come on with the ozy-fest with a-rod.

he was paying a lot of celebrity endorser types to participate in the different events which added to the halo effect of what he was trying to do >> i remember we scheduled a-rod and it all fell apart. it may have been covid related that time. later, it really fell apart. >> he will tell you, i went on -- he had a show. i went on his show >> i saw the ads >> they would call up and say bill gates is going objeto be oe show >> you went. >> all of us did no, no, bill gates. >> they said andrew ross sorkin was going to be on the show. >> maybe >> that's how. >> you know? >> he came on and i think he thought if he could, like, pass a litmus test on the set, but it

did not go well. >> he broke out his phone and started reading text messages. we got to go >> you know what it was? an "s-show." right? >> zip it. coming up, we are at the one-year anniversary of the russia and ukraine war now china's president xi may have some ideas of how to achieve peace. we will look at the growing relationship between russia and china next >> china. >> i don't know if that leads to peace. is the future of work about to get another overhaul? the impact of a.i. on your job security coming up in the next half hour. that is an important conversation. we are celebrating black heritage with cnbc contributors. here is frank holland. "worldwide exchange" host. here's frank >> no one does anything alone.

during black heritage month, we must remember people laid the ground work for the opportunities that we enjoy today. for me, that is my parents and especially my mom. always explained to me everything is worked for and sacrificed for and prayed for. none of it given i remember my mom or grandparents took less and endured disrespect and put dreams to the side to put me in the position i'm in today. i was the first in the family to graduate college it was made possible by my family to open doors and create opportunities where there wasn't a way and it was all hard work and sacrifice and prayer >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”.

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on the one-year anniversary of the russian invasion of ukraine, china's president xi is offering a proposal to end the fighting eunice yoon is joining us now

from beijing eunice >> reporter: joe, the foreign ministry unveiled that proposal which says is based on xi jinping's thoughts the 12-point plan calls for a cease-fire and is basically a reiteration of the principles that the chinese government raised before on ukraine stressing, for example, the importance of national sovereignty and criticizing sanctions which china sees as imposed unilaterally on russia and bloc confrontation the initial response and reaction has been reserved, i would say, leaning negative. for example, nato secretary-general pointed out it doesn't include condemnation of the invasion the eu ambassador to china welcomed it, but said it did not name aggressor the ukraine foreign affairs

director was asked about the chinese attempt of procuring neutral ukraine. china talks with russia, but not ukraine. at a regular briefing today, the foreign ministry was bombarded with questions to clarify the proposal did not provide specifics. instead, criticized those who criticize the plan saying those were smears on china instead, also, dismissed reports that chinese manufacturer of drones was in discussions about sales to russia saying that those discussions are disinformation the back drop of all this, of course, is the plan is emerging when u.s. as well as european officials are increasingly concerned that china could aid russia's war effort in a more meaningful and military way. in fact, secretary of state

antony blinken brought up in discussion with the atlantic last night that he was worried that there could be a dual-use of products and technology this is coming and vladimir putin suggested he would host president xi soon for a visit and the speculation is it could be this april. guys >> eunice yoon in china this morning. i appreciate it. for more on the geopolitical implications of the china and russia relationship is michelle caruso-cabrera >> i was your long-time chief international correspondent. i covered the first invasion of ukraine back in 2014 >> council of foreign relations member >> yeah. >> let's talk about it >> andrew? >> i am. i'm not proclaimed to be a

geopolitical expert on anything. to me, the question is when you think about what seems like a tighter relationship, at some point does it get to the place where the u.s. and the west has to say something in a different way than we have thus far? >> we are at a pivotal moment. blinken has said they have intelligence the secretary of state said that there is intelligence which indicates china is considering lethal aid to russia that would be a significant escalation. >> is it at the red line >> the president has said it is a red line it would accelerate a decoupling we have been watching. >> what does the decoupling look like if you are apple or nike or starbucks or name your company that does a big chunk of business in china. does someone in the u.s. say you have to get out in the same way they got out of russia then you

have to get out of china >> two significant things happening right now in washington, d.c. there is a process for starting to control outbound u.s. dollars to china out bound investment controls. that accelerated that is something we have not done before. this is something people call reverse cifius that is the committee. >> blocking our people >> exactly we tell chinese companies they can't buy this or that or the other thing. now we could be saying, the u.s. government saying to u.s. investors, you cannot put your dollars in china that is controlling outbound flows. that is significant and something all of the regulators and all of the lobbyists in washington are watching for because it would be difficult and significant. we don't know the scope of it. it is a two-prong process right now. a potential executive order that

is beingworked on and worked o because they are trying to decide the scope the executive order is happening because the members chuck schumer and cornyn signed a letter to get legislation to control the u.s. dollars this is a big deal this will exaccelexaccelerate >> is there a risk prem thium f the u.s. businesses that have a good size of business right now? this market has not moved based on the china-russia situation as i have seen it recently. >> are you seeing a depression of values? >> right should there be? >> you know, it is hard to say we have been waiting and waiting for this action to happen. look how long we have been waiting to see what they are doing with tiktok. that is taking a long time.

>> number one, we supposedly have intelligence that china is getting ready to provide lethal weapon number two, he has a peace plan. do they want to end the war or supply weapons >> the peace plan is to improve their standing with the west, right? i had a conversation with the senior european diplomat just this week who said they have been in meeting with wang ji and they will not supply weapons to ru russia we have not and will not the senior diplomat feels china is embarrassed by what happened. we are listening to national security folks they are saying that putin lied to xi jinping, to his face, before the invasion. that xi jinping is angry and obviously embarrassed. this war is not going well the bottom line is xi jinping's red line is according to the

folks, is putin has to stay in power. why would xi jinping be thinking about lethal aid now versus the last time it was considered in march because of russia's potential loss in the war. >> i'm trying to get the pulse of this country, too who is the party of isolation? democrats or republicans it is almost republicans now that's kind of a shift it is $115 billion so far. that's a lot of money, but if you are talking about, you know, something that could end up like poland is next we apiece the guy. $115 billion is not that much. there are other people with east palestine. no money there you heard the rhetoric how long do we have a stomach for this >> i parse it a couple of ways there is bipartisan agreement on

china. on china china is an aggressor and a threat to the way of life in the united states. democrats and republicans singing the same tune. national security circles and defense department circles, taiwan and ukraine are connected at the hip if we are not strong on ukraine, it will send a messages to china that we will be weak on taiwan that is how they connect those the same time it is right. y it is interesting that histo historically the democratic party is far more anti-war that is not the situation right now. it is different. there is bipartisan agreement that we must stand strong on china. >> right wing. hard core whatever it takes with russia. >> mm-hmm. >> it is not monolithic. anyone on left say let's get the hell out of here and stop

spending money >> they have been very quiet it is very different. >> will you keep your ear out for that >> ear on the ground michelle, great to see you thank you for coming in. when we come bark,ck, how a. impacts the future of the labor market and more fed speak with 00retta mester joining us at 8: a.m "squawk box" returning after this head to help relieve snoring. so, you can both stay comfortable all night. and now, save 50% on the sleep number 360 limited edition smart bed. ends monday.

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well come back. futures deteriorated a little. down 167 on the dow. nasdaq and s&p both in the red this morning yesterday, we got a little bit of a respite after it looked like it would be down again. it was up, down. down triple digits on the dow, 108 points s&p broke a down trend back to -- is that an old expression back in the soup? i said it on twitter someone acted like i was saying like bar the door. i have old expressions i'm from cincinnati. >> is it bad to be in the soup

not good to be in the soup. >> even if it is a cold soup >> i don't know this generation drinks soup? we got to go we are digressing. >> why does the spoon have to go out? >> we may not have jobs when this is over coming up, artificial intelligence about to take your is job a.i. and chatgpt could change the future of work we look at the drawbacks and benefits we'll be right back. ibilities a. from paying your people from anywhere to supporting your talent everywhere, we use data driven insights to design hr solutions and services to help businesses of all size work smarter today. so, they can have more success tomorrow. ♪ one thing leads to another ♪

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is artificial intelligence coming for our jobs? advancements in ai led to concerns about the future of

work joining us now is sidal neely, harvard business school professor and author of "the digital mindset. do you think anyone that has a job would say, yes, ai is coming for all our jobs we're all in denial, aren't we i can't be replaced. i know that. you can't possibly be replaced is there really something to worry about. it is a tool, it is not an end in and off itself. >> good morning. good morning i think we need to worry about how the nature of our jobs are changing what these technologies are doing is human augmentation. so things are happening faster, and the way work occurs changes. so, for example, think about sales forecasting, companies like collective i have perfected the ways in which forecasting happens using ai and data from companies and cutting down the

amount of time it takes to do this forecasting so, sales people have more time, sales managers have more time that now they have to change their tasks in order to achieve their goals. so, another example is the coding system. all the engineers can put in prompts and get these codes, baseline codes that are generated for them, that then they can use and augment so, they're much more efficient, they're faster, they're more effective. so for all of us, we need to focus on upscaling we need to focus on learning how we're going to rethink our work and for organizations, it is about rethinking business models. >> none of this seems new. i don't know if it is that different. do you remember the age of -- i loved it, it was so exciting, computer-aided design, computer-aided manufacturing, it

put people out of work bouecause of those things. i guess it is a quantum leap to think you get to where the human is actually not needed anymore you mentioned, i said maybe our jobs are gone. remember what year max headroom came out, remember max headroom? >> yes, in the early '80s. >> 1985. so we're still here, all right if he was -- how long ago was that if i had -- if i had a computer, i could come up with that number but it has been that long, tsedal, i'm still here. >> you're still here and every technological revolution has created more jobs than it has destroyed. but what's happening now is we're in the exponential age upskilling, reskilling, rethinking how work gets done has never been more urgent and so what this means is our jobs are not going to go away as we think that they're going to

be disappearing and that these machines are going to take over. they're going to -- these machines and these tools are going to be part of how we do work and so we need to think statistically. we need to think about scaling we need to think about reach that's what all of this is about. upskilling and updating business models. >> so we do four-day weeks, tsedal, i never know what -- you think we ought to be working at home you have some of these -- i think these ideas that are out there sometimes. that's why we have you on sometimes. because you're very futuristic in your thinking are we going to be working four days a week? we did last week seemed okay. >> listen, i don't know if we're going to be working four days a week, three days a week. but what i do know is work and people and employees' expectations of work has forever changed. no different than after the black plague of 1346, no

different than after the spanish flu of 1918. the two things that changed the most were work and technological advancements and so here we are, again. >> tsedal, thanks, as always. >> so good to see you. >> good to see you we got a lot done this week. >> we did. >> a four-day week. >> a four-day workweek. >> i'm so exhausted. even in four days. >> just us >> well, i know, but four days, we got a lot done, but i'm also tired. so it is not a panacea not going to solve all our problems let's go six let's go six. >> coming up, we got to go. >> weekend squawk. >> we have two big hours ahead stay around. we're going to get you ready for the trading day. and then the story that has everybody buzzing, ozy media ceo carlos watson arrested, facing fraud and identity theft charges and we'll talk to the journalist

that first broke that story back in 2021. "squawk box" returns in a moment but with upwork... with upwork the hiring process is fast and flexible. behold... all that talent! ♪ this is how we work now ♪ it's hard to run a business on your own. make it easier on yourself. with shopify, you have everything you need to sell online and in person. you can have your inventory, payments, and customers in sync across all the places you sell. it doesn't have to be lonely at the top. join the millions to finding success on their own terms. start your journey with a free trial

today.

good morning interest rate hikes and key inflation data in focus this morning. a breakdown of what you need to watch in today's trading session. all straight ahead. plus, ozy media's carlos watson arrested on fraud charges. this includes impersonating a media executive to try to secure investor funding and warner bros. discovery

sinking on soft ad sales and restructuring costs. we're going to talk aboutthe struggles of the streaming world and so much more as the second hour of "squawk box" begins right now. good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square, i'm joe kernen with andrew ross andrew ross. >> i'll take it. i saw they're missing my last name, but, you know. >> andrew ross a person named becky is off today. becky quick. >> madonna is only one name. >> you still need two. >> i need two. i can't get to one. >> u.s. equity futures at this hour down 171 or so on -- as you can see the nasdaq down 1110 and

the -- treasuries right now, we're going to talk about treasuries in a second i'm excited. i need a life because i read priya's notes and there is some really interesting things and i want you to stay tuned for this interview which is going to come right after we talk to frank. >> i'm lined up. and this guy only needs one name his name is frank. he hosts a show that airs right before our show. "worldwide exchange." >> the show has two names. maybe three if you separate the world from the wide, but let's do the movers. we'll start off with shares of boeing they're falling this morning as the temporarily pauses deliveries of its 787 dreamliner due to a fuselage issue according to the faa it is the main body of the plane. boeing says the issue was caused by a problem with a supplier those planes which are often used for international routes had issues for years and delives

have been halted before. adobe shares falling on reports the doj plans to block the deal to acquire collaboration softwaremaker figma. they said acquiring it would give a real boost to growth for the portfolio, especially the creative cloud that includes marquis products like photosho and acrobat. adobe said it would generate over $400 million in annualized reoccurring revenue. shares down more than 3% this morning. beyond meat shares, they're soaring after reporting a smaller loss than the street expected shares up more than 13%. revenues for the plant-based meatmaker fell 20% year over year and they're expected to climb even more this year. the company said demand softened, founder and ceo said beyond meat is pivoting away from growth above all and is focusing on profitability. it was the first ipo covered here at cnbc i relived that moment with jim stewart, we were talking about

this beyond meat ipo yesterday >> do you like beyond meat >> it is okay. >> do you like beyond meat >> no. >> i didn't think you would. >> you knew he was going to say no. >> i knew it it was a set up. not set up we don't plan any of this. you think we plan this show, but there is no planning. >> joe is like -- >> producers plan the show i don't want to take way from the planning that goes on. >> just to be clear, hard working people, thank you, everybody, but joe is like -- if he likes it, everybody likes it. >> the producer just said that, we try to plan it, but you don't. >> unscripted. maybe scripted is the way to say. it is not scripted planned but not scripted. >> there you go. >> now the producer is saying we try that too okay >> frank, for my birthday, they brought me a tower of bacon. >> i remember. >> at the nasdaq that should -- if anyone has any questions about my predilections, that might do it. the recent rise in treasury

yields made bonds look very attractive to investors. that's fascinating bring in priya mesa, we may not talk about stocks, but reading -- i'm reading over your comments and you're pretty hawkish, that's why it is so interesting you're buying the ten-year, you don't think it applies to the ten-year. you think the two-year and that the fed may go even further than people are expecting maybe all the way to 5.5%? that would be on fed funds at this point >> right yes. so, you know, i think the fed is fighting the inflation monster right now. and our view is that inflation has probably peaked. but it is going to be really hard to get to the 2% target and the fed is committed to the 2% target i think they have to keep hiking the 25 basis point increments. 5.5% i wouldn't put it past them to %

the problem is that i think all the talk around the no landing or the soft landing, i think you're really fighting the fed the fed is telling us they're going to slow things down and our view is there is in way to get inflation to 2% without the fed slowing the labor market so, the reason i like the long end is the long end is not pricing it so 10s, 30s, even 5-year treasury is not pricing in a hard landing our view is the fed is saying they have to slow things down. if you're thinking about treasuries, you know, longer term treasuries, that's pricing in a chance of a recession next year i think it is much higher chance of recession will actually happen think owning the ten-year is positioning for the economy slowing down it is a soft haven move away from risk assets i think a lot of people are going into cash. i think cash is fine for now it gives you liquidity but really will cash be there which when the economy sheads

into recession next year, i think if the unemployment rate is getting close to 5%, the fed is going to start to cut rates then that cash, which is great right now, doesn't look that great. which is why i would say owning some treasuries, you know, hard to say whether 4% is going to be the peak of 4.25%. you need some duration risk in your portfolio it is a great hedge if you head into a recession. >> really kind of a contrarian view it is longer, ten years, principle risk in that you're embracing the duration risk there because it moves past the near term concerns about inflation to where the fed wants to get us, which is in a slower economy. so, if they are successful, this is a -- as you say, a recession hedge to buy the ten-year. but you also pointed out that at least this year the interest rates have finally gotten religion to some extent.

they believe the fed at this point. for a while it seems like they were resisting >> exactly i think what we saw over the last couple of months is some decline in inflation and i think the market extrapolated that. we got cpi from 9% to 6% and the market said okay, great, this is what we're calling disinflation was priced in. the market said inflation will head all the way down to 2%. and our view is it is fairly easy to get from 9% to 4%. maybe even 3%. trying to get to 2% really needs service inflation to come back the fed needs to slow the consumer down, we're not seeing signs of that. the fed needs to slow the labor market down. if we just had earning 5%, i would say even 4.5%, 4% wages, very hard to get that service inflation down and the u.s. is largely a service-led economy. so, you know, i think our view is that the front end rates can keep rising, i think the idea that inflation will just go down

in a straight line and we're going to get key data today, i think that's going to tell us that not only is core pce high, but the number they were watching, that's the consumer, i think that's going to be high in our view higher than what is priced in. that's going to keep the pressure on the fed. i think they like to pause, but if inflation doesn't let them, i think they'll keep going in those 25 basis point increments. nobody likes an inverted -- it is negative to want the long end. but i think that will remain because front end is going to be under pressure the zero to two-year that's not what i like to own. i like to own longer range that is going to price in rate, that's next year recession i think interest rates are in restrictive territory. things have to slow down we're not seeing it in the data yet, but as, you know, the lags kick in, i think interest rates became restrictive in our view, only late last year. so, even if the lags are shorter, it is a year lag, so by the end of this year that's when we have the recession beginning

fourth quarter this year, extending all into next year, that's when i think the owning, you know, long end treasuries is going to look attractive that front end is going to be really a function of inflation, when does the fed start to cut rates. the long end should price in the idea that over the next ten years interest rates are not going to be at 4% because the fed will have to respond to a weaker labor market. >> can't believe anybody is watching anything else right now. like i hear that all that was very interesting to me priya, and you're as crazy as i am, i think. you really like talking about this stuff, right? it is interesting, isn't it? >> it's fascinating. i think interest rates, i mean, maybe a little biased as a rates strategist, but -- >> i don't know what it all means for stocks, priya. i don't know how stock bes ss ro the outlook you just gave. that's not what you're paid to do obviously what do you think, though? doesn't sound great but doesn't

sound horrible to me either for stocks. >> it is not great but data is strong the consumer is on fire. we'll get personal spending and personal income data that will show the consumer is alive and kicking, stocks like it but we have to watch the fed if they crash the economy, it is longer term negative. >> all right priya misra, td securities, thank you. >> thank you >> if there was a water cooler, this is a story -- >> would you like -- >> if there was a water cooler but in this i hybrid world, the digital twitter, maybe this is the story. when we come back -- >> you didn't like this one? you didn't like the yield inversion? >> yield inversion story is a fascinating story. it is a fascinating one. >> preparing for the next one. >> ozy media ceo carlos watson arrested on fraud charges, accused of defrauding potential investors, lenders and potential acquirers. we'll hear from ben smith who broke that story originallywhe

he was a columnist, media columnist with the "new york times" and following the downfall take a look at the markets right now. we are looking to open in the red. dow up 180 points. nasdaq, up 111 points. pnt500 off 25ois. back after this. there are some things that go better...together. burger and fries...soup and salad. like your workplace benefits and retirement savings. with voya, considering all your financial choices together can help you make smarter decisions. voya. well planned. well invested. well protected.

welcome back to "squawk box. carlos watson arrested yesterday in new york city watson now facing charges of conspiracy to commit securities fraud, wire fraud as well, aggravated identity theft for his role in the impersonation of multiple media executives while in talks with investors. in a statement, the u.s. attorney saying the following, carlos watson is a con man whose business strategy was based on outright deceit and fraud. soon after the arrest, the s.e.c. charging watts within defrauding investors of approximately $50 million, in a statement to cnbc watson's legal team saying the following, we're extremely disappointed by the actions taken taken today by the government we have been actively engaged in good faith and constructive discussions with the government for resolution of the matter without criminal charges it is hard to understand the actions taken today in light of those discussions. carlos watson appeared on this

program on october 4th, 2021, following reports of misleading information and that infamous call with goldman sachs, which was considering an investment. >> one of the mistakes we made is that sometimes we were too aggressive in marketing them unequivocally and i own that, not anyone else, i own that, that's my mistake, i'm the ceo, i'm responsible. we tried our best. if you're asking me do i think we got it wrong? 50% of the time or 80% of the time no if you ask me do you think we got it wrong 20% of the time, yeah, we probably did, that's on me, i own that just because something is sloppy or stupid doesn't mean it is illegal. i just want to be really clear about that >> and we will see whether that is the case because prosecutors clearly don't think that this was sloppy and stupid, they think it is much more. joining us right now is editor in chief ben smith who broke that story about carlos watson back in the fall of 2021, as a media columnist for "the new york times."

it rocked the media universe at the time and, ben, i'm curious if in the moment that you were reporting that then you thought that today or yesterday would happen. >> you know, honestly, i did i think, you know, that great interview with carlos that he thought it was just sloppy and stupid, it is very hard to convict people, notoriously hard of securities fraud. this was so obviously illegal. and the fbi and youtube and google and goldman sachs were already talking to the fbi at that time. i'm sure the media coverage encouraged prosecutors as it always does, but it was hard to see how they were going to get away with that. >> one of the most fascinating aspects of reading the stories in the past 24 hours was the idea that two of his colleagues effectively pled guilty just a couple of days ago as john does so people didn't know it was

happening, except a reporter at "the wall street journal" sat in and watched this happen, and it sounds like carlos watson didn't know it was happening at the same time? >> yeah, just great courthouse reporting from the journal real value, and having somebody sitting there in the eastern district waiting to see who comes through, right >> is your sense that this was spurred by goldman sachs initially? your reporting early on was about this now infamous phone call where either carlos watson or his colleague pretended to be a youtube executive, claiming that they had a special distribution deal with youtube when in fact they didn't and they pretended they were working at youtube how much of this do you think was instigated from -- because of that phone call >> that phone call is -- it was youtube, not goldman the google security team and i think it initially contacted the fbi. one of the most amazing things,

this isn't in the reporting, but the way i first heard of this story was a source whowas not an executive of these institutions a number of very serious investors, people who watch it appear on this show had invested in the company, had vouched fo carlos watson, and the person who tipped me to it was a random outsider who had kind of wandered through the picture at one point and said this is crazy this makes no sense and it was an emperor has no clothes thing, they were able to get this narr by starting with a series of high profile people vouching for them in the way that the next sucker looked and said look be at this group of people, this must be okay. >> is this another -- we talked about sam bankman-fried and ftx and the idea that there are so many venture capitalists who seem to glom on to this thing that now has this -- that has obviously imploded why do you think -- is this just

a situation of sheep, they look at one famous investor and say i want problem tart -- to be part of it? >> if these guys are investing, it must be okay. the second thing is the indictment calls him a con man what con men are great reflecting back at people what they want. when tlaunched in 2024, what he was pitch wing was a youth-focue media company, it wasn't anything far right, it was, like, kind of billionaire friendly centrism and that was appealing. when the politics changed in the summer of 2020, it was pitching itself as a black-led media company committed to social justice and progressive causes and its identity would shift with the moment, but really very pitch toward what rich people and investors thought media ought to be like, which is kind of how they managed to pull this off for so long when if you ask

any consumer, anybody in media, nobody had seen this thing in the wild that's so amazing. >> i got to ask you, i remember carlos was at one point critical of you as i was reading through the complaint yesterday, literally within an hour of it coming out, there is a moment or a piece of it where they talk about him trying to sell the company to another company. and if i recall properly, there was a moment, maybe a hot minute, i don't know, where he was in talks with buzzfeed where you used to work i was wondering whether you think that was that situation. >> yeah, i think so. reading that, i believe media company wanted buzzfeed and they reached the conclusion after i left and all those details were news to me but basically at some point he -- he misrepresents to other people how much he was offered but he also -- it seems like forged documents that they

presented buzzfeed during due diligence. that's the allegation. >> the other thing i was going to say, by the way, if you read the complaint, there is two things going on. one is that he's lying about the actual numbers, which i think there is no question when you lie about numbers, that's true numbers meaning actual revenues, profits, that -- you know, as wrong as wrong can be. the other allegation was that he was -- maybe people call this bluffing, i don't know what you call this, where, you know, somebody says somebody else is going to come in at x valuation, you should come in at a higher valuation, and it was interesting because there was a bit of an allegation there that that unto itself is fraud, and i was a bit surprised by that, not to defend carlos watson, but how many times has someone tried to sell a house where the broker says, by the way, there is another bidder over here who is willing to pay x, you need to pay y, and in truth there probably isn't really a second bidder >> yeah, a lot of this stuff is

sort of on the spectrum of where normal negotiations take place but way on the far edge of it. i think -- i believe marc lasry was a person whose throwing around. i saw a document that had his name saying he was an investor in a certain round when he was in fact not. it wasn't something mentioned in conversation, it was a document being circulated >> fair enough ben, it is a fascinating story we'll keep our eyes on it. we hope you will keep your eyes on it and we'll be talking a lot more about it as things progress thanks. >> yeah. certainly i'll have something on sunday at semafor. >> the greatest new journalistic site ever. "squawk box," right? >> what are you talking about? >> we think that semafor is great and now ben you go ahead and say that, as seen on "squawk box." >> are you running ads on the

sides of buss? >> put it on the website. >> as seen on -- >> as seen on "squawk box." >> andrew ross sorkin says groundbreaking coverage. >> groundbreaking coverage, yes. you didn't have to pay for it too. >> go ahead and do that. >> keep going. please, don't stop keep going this is great. >> coming up, coming up, the ceo of circle on why the s.e.c. should now be tasked with regulating stable coins. and later, looking forward to this, more fed speak and interest rate talks. cleveland fed president loretta mester would have been in favor of a half a point hike earlier this month if we're going there, we might as well get there. more quickly she'll be our special guest at 8:00 a.m. eastern time "squawk box" will be right back. time now for today's aflac trivia question. what company released the alto computer which was the first to feature a graphical user interface? the anser when cnbc's "squawk box" continues )

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now the answer to today's aflac trivia question. what company released the alto computer, which was the first to feature a graphical user interface? the answer, xerox.

and still to come, ceo of crypto and fintech company circle joins us to talk the latest on crypto regulation and the s.e.c.'s newest investigation into stable coins. plus, booking holdings ceo on why he sees no signs of slowing, not yet. stay tuned u' wchg quk x. plates. plates. plates. there's somehow no better way to travel this place, than on a plate. and when you add price drop protection, expedia pays you back if your flight becomes cheaper. so you can taste your way, through every single plate

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whether stable coin issuance violated investor protection laws according to "the wall street journal." the latest hit to an industry rattled by layoffs and bankruptcies joining us on set, jeremy allaire, ceo of circle we all saw the -- speaking of bitcoin, we could talk crypto in general, but 65 to 16 will get your attention and certainly not qualify as currency, i don't think, in terms of using -- you don't want something if you buy something when it is 16, and six months later you look back at it and it is 65, you feel like an idiot for spending it on anything it is not there yet. but recently as a regulation in

the overhang increased, it somehow has -- bitcoin, 16 back to 24,000, 23,000. is this crypto spring now in your view, after a crypto winter or not yet >> i don't know about the specific label, but i think what you're certainly seeing is the -- just like with big tech, and tech there were, you know, names that, you know, on the nasdaq that -- >> significantly and then people say where are the long-term platforms, and there tends to be, you know, some higher degree of confidence in that. so, bitcoin is here to stay. ethereum as a platform, people are building on it, here to stay you've seen that, we also saw, you know, all of last year during the carnage while, you know, all of these dith gital assets were down so much, it was one of the only assets that grew in 2022, a digital dollar that works on top of these blockchain

networks is -- has really utility and real value, gives us somewhat of an indicator into where is the utility come from as we go forward >> it almost seemed, as the tougher he talked a couple of weeks ago, the more the whole marketplace seemed to resist or embrace the idea that maybe we finally get things sorted out in terms of regulation. >> yeah. i think to some degree there is a kind of anxiousness, like, okay, what are the rules going to be? how do we get through that i think the other piece to this, though, is i think it is very easy to get kind of grounded in a very u.s. centric view of the world, what are the u.s. regulators doing what is happening in u.s. markets. as we know, digital assets are extraordinarily global the demand and interest in them comes from highly global audiences. and in fact, you know, you think

about the drivers in many cases, you know, rising interest rates, strong dollar is actually disruptive to many currencies, sovereign debt issuers gio po geopolitical uncertainty also increasing the conditions in which one would be interested in a nonsovereign digital commodity is still there >> i don't disagree with anything you just said but it seems to me for this thing to -- i would argue that a lot of this has already reached escape velocity, you could argue that to reach true escape velocity you need u.s. regulators and western governments to effectively bless this, to validate, to say here are the rules, we're embracing this, we're saying this is how it is going to work, be and that has not happened w and we had an s.e.c., gary gensler on the program a week and a half ago after the crackdown on kraken, you know,

there are selective enforcement mechanisms, i think he's trying to tell the market different things without actually putting rules in place, in part because i think he doesn't want rules, he doesn't know what the right rules should be or zdoesn't thin they could be implemented in the right way. >> there is a lot in that. i think in the west and in most developed markets or market centers, there is a lot of movement on this and in fact the u.s. is the -- is one of the last to move so, the eu, comprehensive, the uk, comprehensive, hong kong, singapore, japan, uae, a lot of these places are providing legislation, the legislative bodies are doing the work. it is work to say, okay, what are the statutes going to be -- >> not signed up for all the same some of them have not voted on all of this stuff in the right way. not in the right way, just at

all. there has been stuff that has been proposed. >> sure, well in the eu, it is rolling through. in the uk, it is imminent. i guess my point is, there is a very clear path towards regulatory kind of frameworks on this and that's only going to come further and faster and i think in fact in the u.s., there is total consensus that, for example, my business, these payment of stable coins as the government is describing these, there are bills, they're going to work their way through congress, it is a bipartisan issue. we will see that there is a lot of other things happening in congress, and so the american dysfunction and what can you actually legislate. i think that's there i agree with you, like, that has to happen before -- >> what has to happen to create the inflection point for that to happen we have been talking for five years -- as long as -- as long as i've known you, i've known

you since brightstart and all that stuff -- brightstart? >> bright cove. >> what will happen that will shift the balance? >> i think some of it has happened things blew up and people talk a lot about it back when the white house and everyone said it is urgent that congress act because there could be, you know, bad things could happen there could be runs and all this stuff. and guess what happened? things melted down, the runs and so on. i think that impetus is there. >> separately, i'm curious about -- we have seen a complete meltdown in the valuations of a lot of fintech companies right? p paypal, stripe and the private markets, other places where people thought there were going to be these sort of fabulous growth stories, huge margins, the whole premise and promise of crypto is to actually compress that margin down to next to nothing. >> making progress on that >> are we? >> we are.

a couple of things on that so, i think circle specifically is a kind of countercyclical business, rising interest rate environment. we're a financial technology company and we are growing incredibly fast, our profits are growing very, very fast. we're growing our head count so we're, like, totally the antithesis of tech and fintech and others and that's just noteworthy, right, when you look at the headlines. i think secondly, though, you know, the whole promise, i've been saying this for ten years, which is we're going to get to a place, where you'll be able to make a payment transaction to any counterparty in the world, at the speed of the internet, at the cost of moving data, which as we know the cost of moving data is essentially zero we're basically there. usdc, on these blockchains, can now do large volumes at a fraction of the penny to a penny or two and so now we need to wire it up

to good customer experiences, but we're basically there, so i think the story over the next five to ten years is that any business who marks up payments or intermediates that and that's the core are going to see real margin erosion as that takes place. >> sounds like you don't care whether the fed stops or not i was wondering when does the fed -- what do you think crypto will do when the fed stops or bitcoin? that would be off to the races >> yeah, i think to the degree that digital commodities are, you know, trade like risk assets, they'll do -- >> the premise of fixed amount versus currency and everything else it works better when -- >> i think that's right. i think that's right yeah you've got kind of other macro forces at work outside of interest rates in terms of the diversification of things that people want to -- >> andrew is 45. you're not ready to tell him to

put his spare cash into bitcoin rather than -- >> i'm one of the, you know, it is not rational to not -- >> he's young and -- >> to not put at least 100 to 200 basis points of your -- >> that's a big number for him. >> we used to have -- >> a big number. >> thank you we had a number of guests who said you want to put 1%, 5% of your networth into bitcoin still think that's a fair -- >> i think that's a very fair and sound -- >> financial strategy? >> yes >> take it out of your beanie babies, that's what you always compare the two, and put it into -- switch it. >> i'll swap out all my top shots. >> yeah. >> thank you. >> thank you >> going to commercial -- >> we have gone over time. we had this fabulous conversation. >> i know. what are we going to do? >> when we come back on the other side of this break, the total amount of aid and weaponry that the u.s. sent to ukraine in

the last ear, it is staggering and still more to come details after the break. and then warner bros. discovery facing declines in its main tv business as it looks for ways to boost its streaming assets we're going to talk about that and much more with lead executive tom rogers don't go anywhere. ugh covid-19? and being overweight makes it more risky. i'm calling my doctor. if it's covid, paxlovid. authorized for emergency use, paxlovid is an oral treatment for people 12 and up... who have mild-to-moderate covid-19 and have a high-risk factor for it becoming severe. my symptoms are mild now, but i'm not waiting. if it's covid, paxlovid. having even one risk factor, like being over 50, diabetes, or smoking increases your chances of severe covid. taken within five days of symptoms, paxlovid reduced the risk of developing severe covid-19 by 86%. paxlovid may strengthen or weaken other medicines. taking it with certain medicines may cause life threatening side effects

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welcome back to "squawk box. the futures now in the red, down 170 points now on the dow. the nasdaq down just not triple digits anymore, just 99. s&p off 23 it was up yesterday, broke a four-day losing streak find it? >> i just -- >> keep going. >> i didn't know this. >> do not go there >> you don't want to talk about it on the air? no >> no. >> okay. who knows? we're going to go to washington for now. >> if i say no -- >> the biden administration announcing the u.s. is going to send ukraine another $2 billion security package amid renewed warnings now that russia could be planning a new military offensive timed around the one-year anniversary of vladimir putin's invasion kayla tausche is in washington and joins us with the latest good morning >> good morning.

president biden is going to be talking to his g7 allies and president zelenskyy this morning. his visit to ukraine and poland this week meant to shore up waning support for a war that as of today is entering its second year in the last year, the united states already provided $32 billion in military aid, $13 billion in economic assistance to keep the bills paid, and nearly $2 billion in humanitarian assistance. in all, congress has green lit $113 billion for ukraine through september. now, despite that figure being exponentially higher than any other nation has contributed, as a share of gdp, developed countries are sending about 0.2% and that's just to defend the land, which has been decimated by russian air strikes, rebuilding carries a whole new set of costs which the world bank estimates will total $349 billion, with residential buildings and infrastructure being the largest portion of that the private sector is now beginning to step in two weeks ago, jpmorgan

executives held a summit with president zelenskyy in kyiv, in his bunker, to discuss near term access to capital and economic stability. the bank restructured the country's $20 billion in sovereign debt last year ceo jamie dimon telling cnbc we're proud of our long-standing support of ukraine and committed to doing our part to lift up the country and its people the full resources of jpmorgan chase are available to ukraine as it charts its post conflict path to growth black rock consulted with zelenskyy in september, signing a memorandum of understanding to help bolster the country's outlook. but there is no sign of when there would be a return with both sides agreeing this is going to be a long haul. >> that was my question. how much of this is philanthropic, if you will, versus how much of this do you think is a business decision where there is going to be a return >> well, certainly i think post conflict there is a view that

there would be a return on this investment and that you would have ukraine as a long-term client going forward but i think a lot of it is also philanthropic. jpmorgan has given 10million in humanitarian assistance to poland, to house refugees and help with the situation there. so, you know, certainly there is a philanthropic element to this. but i think that there is also a view that, you know, it is in the west's interests and it is in the interests of the global economy to bring this war to an end and showing there is that much support from private america and deep pocketed companies goes a long way in doing that. >> kayla tausche, thank you. coming up, soft ad sales in restructuring costs hitting warner bros. discovery as it works on adding subscribers s to hbo max and discovery plus we'll talk to tom rogers about the quarter and much more after the break. it is a wonderful day in the neighborhood mr. rogers coming on

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[ engines revving ] fire 'em up! [ cheering ] you ready? let's do it. ready. i know you're ready. let's race. boom. introducing the 10g network only from xfinity. welcome back to "squawk box. this morning, warner brothers discovery reporting a lighter than expected loss they work to bring streaming content costs under control. with us now and more tom rogers, media executive chairman, former nbc cable president.

tom, it's great to see you curious what your reaction was to the earnings last night the stock off this morning about 2.5% >> well, it's interesting, andrew, the company was viewed as having inherited a mess from at&t and because of that they didn't have control of the company. they made a lot of progress. they announced a playbook of basically cost-cutting, reducing leverage, focusing on streaming profitability, a playbook, i think, that bob iger at disney has adopted and they were able to say, look, we're going to get our leverage of 5x to under 4x by the end of this year. that's been the major overhang on this stock, just how much debt and leverage the company has had and it sounds as if it's got something going in the right direction. their streaming losses were far

lower than any of the other major media companies. progress there as well clearly, though, linear decline remains an issue they are more tied to linear networks, traditional tv networks than the other majors and with that, there's clearly challenges ahead as to whether they're going to accelerate and get the major streaming profitability before the linear business falls off a cliff >> well, that's the question can they and the other piece i was going to ask you about, maybe in this environment given what we're seeing with the doj and the ftc and fcc, the possibility of a transaction is almost impossible to comprehend. we keep talking about consolidation in this space. this has been one of the chess pieces on the board. do you imagine there's a trade to be had in the next couple of years? >> i think it's a -- certainly a strong possibility i think that, you know, as we've

talked about with disney and comcast and the hulu joint venture and how that can be expanded rather than a buy/sell, i think getting to major scale on the streaming side is something that the traditional media companies have to explore. and warner brothers is certainly in a position to do that in another year or so i think -- their streaming story which they say they're going to talk more about in april is less penetrable than the others their 96 million subs consists of hbo, cable and satellite subs, meaning wholesale subs that are sold through distributors as well as their direct to consumer hbo -- >> do you like those customers better, then >> well, certainly wholesale subs are in some ways better you don't have to do the marketing. others take on certain costs

there's more churn in the direct to consumer realm. but this is all about converting wholesale subs to direct to consumer and it's unclear really what is going on underneath the hood there in terms of what's purely streaming and they're going to have to break to out more going forward but the streaming profitability certainly improved and is well below losses that the other major media companies are incurring. >> but we always keep talking about consolidation in the space. but the other piece of this, you look at what they've been doing. they've been taking content off the platforms, saying there's too much you go on netflix, there's too much the idea that you're combining with somebody else, i get that from a cost basis. but it's not exactly like the services are desperate for more and more content you could argue there's a couple of services that could use a little bit more content but not necessarily something like warner brothers discovery. >> well, this is a global came

and streaming profitability has to come well beyond a service in the united states. and there's a lot of issues with respect to content creation that's more localized and really playing out that global game i don't think it's purely a question of whether one company has enough content or not. he made a major point that because of the amount of content they have, so much more than getting watched in their own services, they believe there's a lot of revenue opportunity being an arms dealer, selling to other services, particularly free streaming services, where they believe there's untapped revenue potential. >> real quick, we're going to run out of time. gaming they're one of the few in the gaming business. what do you think that portends longer term? >> well, gaming is where young audiences are and they are the

only one and major differentiator there that really has its own gaming division among the traditional media companies and came out of the box with a harry potter game ten days or so ago where they almost hit a billion dollars of revenue in the first ten days. they got something there that's important. my company -- trades under the symbol game and, in fact, m emerging with another gaming company, owner of the dallas cowboys is going to be the largest shareholder of the company, creating just this answer to traditional media, which is no longer delivering younger audiences and younger audiences are getting harder and harder to find out they're hanging out in gaming and e-sports we announced this week that ninja, the biggest influencer in the gaming space is actually going to become the chief innovation officer, senior executive of the combined -- >> big announcement --

>> he's got 74 million followers. the biggest gaming influencer on twitch and with that, we really think we're going to create some real scale, some real authenticitity, some real innovation -- >> tom, because you're an nbc guy, you know we got a commercial break we got to go to a hard break great to see you congratulations on that deal and on all your smart analysis always helping us through all this we have a lot more coming up on the other side of this. cleveland fed president loretta mester is going to join us ♪ to help you see untapped possibilities and relentlessly work with you to make them real. ♪ why are 93% of sleep number sleepers very satisfied with their bed? maybe it's because you can gently raise your partner's head to help relieve snoring. and relentlessly work with you to make them real. so, you can both stay comfortable all night. and now, save 50% on the sleep number 360 limited edition smart bed. ends monday.

good morning futures are lower. we've seen them deteriorate throughout the morning almost 200 points of downward pressure on the dow. we're going to watch closely for the next 30 minutes when new inflation data will hit. ahead of that, a can't-miss interview with cleveland fed president loretta mester on rates, recession odds and everything else. and postpandemic travel is alive and well the ceo of booking holdings joins us for his first interview post fourth quarter results. the final hour of "squawk box" begins right now

♪ good morning good friday morning. welcome to "squawk box" right here at cnbc live. i'm andrew ross sorkin along with joe kernen. becky is off today we have a big hour ahead we have two big hours behind us already. a lot of stuff going on. >> 14 big hours this week. >> we've got a lot of news that we've been talking to. we've talked to tom rogers i still can't get over this -- i can't get over the tom lee story. private equity, one of the early pioneers -- >> who we are intertwined, our 30 years, whatever it is in this business, he was around. >> he was around

he died at the age of 78 and according to sources, committed suicide. we will keep our eyes on that story as it develops. in the red this morning. dow off 211 points the s&p 500 off as well. about 29 points. nasdaq off 115 points. treasury yields right now. ten year at 3.914. the two year at 4.733. let's get over to frank holland who set the table for our entire show -- >> 5:00 a.m., no less. he's been up for a long time >> is there anything we said you didn't already know? or on any day? >> i learn so much from you two. it's a privilege to be here, joe. seriously. >> sarcasm dripping with sarcasm. >> it's bad when someone has to say "seriously." >> you can wear lululemon pants

every day and nobody is going to say anything to you. that's what i learned. >> see, i did know that. >> that's something you knew. >> but frank has a full-body shot. >> they told me what to wear this is what i have to wear. >> i think we're going to get you a double breasted suit. >> i don't -- >> i think, you know -- >> really? >> i'm a big guy >> and some jordans. >> sign him up for the sorkin sweater of the month club. the gift that keeps on giving all year round, clark. >> listen, i would like some jordans, andrew. thank you. joe, i'm waiting for the playstation. start off with block moving higher after a beat of revenue the highlight, one of the highlights of this report, profit for that business unit increased by 64% year over year.

the company said monthly active users increased by 16 points point of sale business known as square also posting double digit growth boeing shares are falling as they pause deliveries of the dream liner because of issues with the fuselage. there's no immediate safety for dream liners that are already in service. shares are down more than 2.5%. a quick check on ai stocks yesterday was one month since microsoft announced an investment in open ai. we've seen big moves when it comes to the ai stocks c3 ai, up 55%, nvidia up more than 20% considered the leader when it comes to ai chips. this 22% rise compared to the

smh etf. all of these stocks down in the premarket today. an andrew, back over to you. >> got to get him some dunks i want to get straight over to steve liesman i don't know if he's wearing dunks this morning who joins us with a special guest steve? >> good morning, andrew. thank you very much. i'm here at the u.s. monetary policy conference put on -- but it's in new york and i'm here with loretta mester. thanks for joining us on "squawk box. i want to start off with where the market is right now. there's been a big move in interest rates yields are much higher now i guess my question to you is, do you see now is there stuff tightening in the market for the market to help the fed affect its policy of cooling the economy and bringing down inflation. >> we like to align with where the markets are and we don't want to surprise the markets the alignment is closer than it was before we're going to set policy to do

what we have to do to get back to price stability we've been raising interest rates. we've seen some of that working through the economy. we have seen some pressure off the inflation. but inflation remains too high as you know, coming out of the meeting last time and the minutes showed earlier this week, we're going to have to do a little more to get that back to price stability of 2%. >> i said there's only one species of fed official now, a greater or lesser hawk where do you put yourself in that are you on the high side when it comes to that average or median fed funds forecast among fed officials of 5 1/8 >> i like to be known as an owl rather than a hawk but it's not up to me to call myself that. i see a little more impetus in the inflation measures than my colleagues did at least in december when we put out the last readings.

so i had my fundsrate a little bit above the median in that projection and i haven't really seen much change in my outlook for the economy since that time. so i see that we're going to have to bring interest rates above 5% we'll figure out how much -- that's going to depend on how the economy evolves over time. i think we need to be somewhat above 5% and hold there for a time in order to get inflation down to 2%. >> you haven't seen anything in the interim that causes you to change what your dot was in december >> no, i think i'm where i was because, remember, i saw a little bit stronger inflation impetus than the median did. and i think that the labor markets -- i'm not really seeing a trade-off between the hot labor market and inflation i'm really focused on inflation. what we learned over the last expansion, the prepandemic expansion, is that, you know, the unemployment rate can be very low without necessarily

spurring inflation i'm really focused on the inflation numbers and i don't see that we have to have this trade-off, necessarily, between labor and price stability. i would say i'm greedy i want to have healthy labor markets and a return -- >> i want to get one more before we get to joe kernen the real question i want to ask you, what the heck is going on with the economy it was supposed to be in relegi recession, we have retail sales go through the roof. is this economy weakening or ignoring the fed when it comes to higher rates? >> no, i don't think so it's ignoring we've seen some of the impact of higher rates, certainly if you look at the housing market that's clearly slowing, right. manufacturing slowed a bit maybe it's not slowing as fast as we thought.

if you had to characterize what's happened coming into this year, there's probably a little bit more underlying strength than a lot of forecasters thought, but there's also some movement -- good movement on the inflation measures they are coming down it's just that the level of inflation is still too high which is why coming out of our last meeting, the broad, you know, consensus was among all the participants was that we're going to have to do more which is why the statement said ongoing increases. >> joe >> thanks, steve president, i'm trying to get some insight into the idea of maybe 50 basis points and why it might have made since, why it could still make sense i think if you know where you're going or pretty sure of it and you need to get there,you migh as well get there. is the argument. i'm wondering whether maybe everybody else is -- or some people are more cautious is because there's still data dependency is it possible that something what happens more quickly in

terms of a weakness in some areas so that -- is there a reason to just do 25 if you need to do 50, you might -- and go higher than that, you might as well do it unless you're leaving an opening for data to come in that shows that you didn't really need to go that high is that why you don't go 50? >> joe, it's a good question about tactics, about how -- you know, to get to where we need to get to you know, i'm on the record saying that at the last meeting i saw a good economic case for doing 50 because my view of the outlook hadn't changed and i believe we're going to have to move our policy rate above 5% and a 50 at the last meeting would have brought the top of our target range to 5% other people on the committee had different views. so that's what the value of having people sit around the table, we come up with a consensus view now in every meeting, right, we do that same kind of analysis. we look at where the economy is,

we look at the incoming data, we project out where we think the economy is going, understanding that the economy can evolve in different ways than expected and then we set our best policy path but i think the message coming out of the meeting was, we got to keep going a little bit more. we come a long way we brought the funds rate up quite a bit. we have a little more work to do in order to ensure that we get back to price stability, and making sure we're committed and people understand our commitment is what's going to be able to -- >> do you support a 50 at the next meeting >> i don't prejudge. i go into the meetings and i'm going to look at the data and we're going to have a new set of work -- and that's going to help guide where we need to get to. that's a tactcal decision that we make at the meeting it's got to be based on where we're going, how much the economy is slowing in terms of getting demand back in line with supply and, of course, the supply chain issues are also improving. demand is moderating if you talk to our business contacts and our labor market

contacts, in my district and i would submit in a lot of the districts, businesses are saying that things are moderating i know people think, well, the data is lag and you're only looking at the past. we have a lot of contacts across the districts that we talk to all the time and that's very important because that's forward-looking. they're telling us what they're planning to do. >> andrew has a question for you. >> can you succeed at reducing inflation without raising unemployment and what do you think a palatable unemployment rate is >> well, you know, this is an interesting labor market to say the least. it's shown a lot of strength there are structural things going on in the labor market as well as cyclical things. so i do believe that we can get demand down without seeing the same kind of rise in unemployment in past slowdowns we've seen in fact, when you talk to

businesses, a lot of them said it's been so painful over the last couple of years and they've spent so much effort to hire people that they're going to do everything they can, even though they're anticipating a slowdown in demand, they're going to do everything they can to keep people on staff. after we get beyond this slowdown and back on the path to price stability, they'll have the staffing they need some of our firms are still hiring because they're anticipating that if we do have a slowdown, it will be mild and then we're going to go back to a really healthy economy so i do think that in this labor market, we can get back -- we can have both, we can have healthy labor markets and get back to price stability. but i also think it's really important to know that if we want to sustain healthy labor markets over time, we've got to get back to stability. we got to get inflation down, get back to our 2% goal in a timely way and that's why i'm

focused on that right now. >> the problem is history is not really on your side. not you personally, you as in the federal reserve. it doesn't have a terrific track record of bringing down inflation without a recession. can you avoid a recession? >> growth will slow this year and be well below trend. i still hold to that forecast. when you're that low, it doesn't take much of some kind of shock that you're not anticipating which is the nature of a shock you don't anticipate them. that can push you into negative growth for a time. when you talk to your business contacts, they're preparing for that kind of recession when you talk to one, they say it's going to be mild. again, i think we can get back to price stability what's different now is our commitment to getting back to 2% and all the things we've learned over time about how important it is to have that commitment, to communicate it, to be very clear

about where we're going, right, as clear as we can without being p -- but be very clear. >> joe's question to you was about lags this is 2023, there are no lags anymore. do you think there are lags that are yet to hit this economy that will, i guess, offset the need for you to go quite so high? >> there are two things. one is, in terms of communicating where we're going, what you saw, well before we made that first rate increase back last year, at the beginning of last year, markets had already priced in some of that because we were communicating in advance. that doesn't detract from the fact that it does take time for the rate increases to go through the economy. we saw that in the housing market i didn't react immediately even in the housing market it

took some time those lags are still there i believe we're going to start seeing, you know, more of what we've done in the fast to affect the economy. but nonetheless, if you just look at what's going on in the economy right now, the fact that inflation still remains high, parts of inflation are coming down, other parts including the important service sector have not moved, we're going to have to do some more. but we are making progress on that path. >> if energy prices -- if something happens there, i don't know, we're using the spr, take your pick on what could cause a spike there. and i know you could do core maybe, to try to factor that out. but, it seems like it filters through to everything else if that's why inflation stays stubbornly high, would you continue to work on slowing the overall economy when really you're not -- that's not really

why we have the inflation. you can't really address the energy supply problem. it just seems like that would be a bad reason to go much higher than you need to go in terms of tightening for something you can't really control >> so, joe, it really depends on what's causing that -- the energy prices to rise. if it's because it's outpacing supply, we're going to have to think about what that means in terms of the path of inflation if it's the supply shock, which is typical of what you're alluding to, then, right, you're exactly right. we have to look at what's the underlying inflation rate. what are inflation expectations doing, which are all important anchoring them, keeping them at 2% over the long run long run inflation expectations are still reasonably well anchored so we'll have to do that judgment but you're right this is a risk management kind of process that we have to go

through. so it really depends on the source of that rise in interest -- >> we're going to have to go quickly. we've been giving every fed official a hard time about the following, you guys had it wrong when it came to the inflation and policy the fed was on the wrong side. why should we have confidence now you have this right this time >> we're just like every other economist trying to do the best job we can we reacted terms in once we agreed that this inflation impetus was there, it wasn't going to dissipate quickly, that we were really going to take action, we did that. and we are very committed to getting back to price stability in a timely way. >> thanks for joining us for the record, andrew, this is the first time in eight years on "squawk box" that she's been here and you've been here as well. >> wow tell her i said hello. you're right. >> i'm honored to have gotten a

question from you, andrew. >> thank you for bringing us this conversation. coming up, breaking inflation data, personal income and spending inside the american travel rebound, the ceo of booking holdings stay tuned you're watching "squawk" and this is cnbc >> announcer: this is cnbc program is sponsored by baird. visit bairddifference.com.

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welcome back to sid"squawk box. january bookings for travel were 26% above 2019 levels. joining us right now is booking holdings ceo, glenn fogel and a longtime squawker. glenn, it's great to see you this morning. >> good morning, andrew. how are you doing? >> i'm great and it sounds like you're doing pretty great too the real question everybody wants to know, how long does this hold up the numbers have been extraordinary and does the yolo life continue for the american public >> not just the american public. don't forget, we reported record room nights, but i made the point that that was going against headwinds. asia didn't open up until the end of the year. we were fighting against what

was -- if you recall, the beginning of the year, we had substantial problems with the virus and that's hopefully gone away so we're still looking forward there's a lot of tailwinds for us coming ahead along with the american travelers, certainly enjoying going around. >> what are you seeing in terms of hotel pricing right now. >> it's high it is high and you look at it and think, wow, that's a lot of money the interesting thing is what we're not seeing, we're not seeing people trading down for a lower star rating and we're not seeing people cutting back in the number of nights they're going to stay when they go on a trip. >> we've been watching walmart, amazon, we've been watching home depot and there has been a sense, at least in those places, that people are trading down that there's the beginning -- little cracks and that's what i think people are -- i don't know if they're focused too much on, in terms of where the american consumer truly is.

i'm curious how you think that manifests itself in travel why do you think travel is different? >> there's a couple of things happening there. luckily, we have open table which is, of course, our restaurant reservation i can see trends there too and i think we have a couple things happening first of all, people were cooped up in their homes for a long time with the pandemic and people want to travel, that revenge travel is still happening right now. that's one two, people are saying, look, i don't know what's going to happen in the future people say, you know, i can travel, i'm going. i'm going to go enjoy those things i wanted to do and during the pandemic, they bought a bunch of things because they were in their homes. now they don't need to go to target, home depot and they say, i want to go to paris. maybe that's part of it too. >> in terms of international travel versus domestic, in terms of where you're seeing it, is there any interesting trends there? >> well, it is going up. each quarter we have a little

bit more entrance into our international, transnational travel it's still going up, but it's not to where it was in 2019. i reported 48% of our business being international, meaning that going across borders and that is not quite up to where we were in 2019 so, again, another tail wind for us is more international travel. i think it's going to happen -- particularly because asia still has a lot to go. they're not up to where we are in the u.s. in terms of getting out of that pandemic restriction area. >> can i ask you a geeky question >> sure. >> who do you feel like you compete against now. you're against the airlines themselves, hotels themselves. i'm a kayaker, i think you know that because of the ui, right? i think it's an easier way to find the thing that i'm looking for. what do you think is doing well that's not you >> sbomebody who is doing well that's not us.

i keep telling every regulator, that this is an extremely competitive market sometimes you just need exactly what you want and you go directly to the supplier because that's what you want and it's easy to do it and it's not complicated. you go right there that's something that we compete against because everybody says, look, i know i want to go to this hotel in this city and i need a one-nig night for a busi trip and i get that and maybe they have a loyalty program. the fact is, travel overall, though, generally, very complex. and we've seen all the problems that have happened over the last couple of months in terms of the weather and other types of problems when you are traveling. it's good to have someone like us there to help you navigate those kind of problems. >> glenn, when am i going to get ai where i write a sentence that says i need to go to california on this date, i need to leave it by 10:00 a.m. in the morning, i need to land by this time, i

instead to stay at a nice hotel and come back on this date and it just happens? >> i've been talking about this for a long time. and i've had this vision that we're trying to put together and work on for some years and we're going to continue to be working on that. what you just said, what we're trying to create, you went beyond that. i don't want to say the things you said that i want a nice hotel. us at booking holdings, we want to know you want that nice hotel and you don't have to ask th estion. >> we've got to jump it's nice to see you, sir. >> thank you, andrew. >> thank you we're back after this.

welcome back to "squawk box. rick santelli here live on the floor -- i wish i was on the floor with some of the last breaking news of a very wild week our january read, we're expecting a number up 1% up 0.6

that isn't bad considering it was up 0.2 until we get a revision that's the strongest level since october when it was up 0.8 if we look at the spending side, better than expected up 1.8 that is the best levelgoing al the way back to -- and this is pretty healthy, going back to march of '21 march of '21 when it was up 5.2% if you look at real personal spending, adjusted for pricing pressures, it's up 1.1%. exactly as expected. now the money numbers, on the personal consumption month over month and realize the high watermark was 1% going back to 1980, that was in june of '22. it is up 0.6 of 1% and the rearview mirror, it's up 0.2, up s0.6. if we look at year over year

personal consumption, the deflator, it's up 5.4. the high watermark was 7%. that went back to '81. that was in june of '22. 5.4% in the rearview mirror we had 5% that becomes 5.3 5.4 is the highest since november when it was 5.5 core personal consumption expend year deflator month over month, up 0.63% that was back to 2011 comp that was in april of '21 it's up 0.6 again. and we want to pay attention to the core deflator, one of the more important numbers for release today. expecting 4.3. it comes up 4.7. high watermark was in february of '22 at 5.4. that went back to 1983 at 4.7%, that is the highest level going back to october when

it was 5.05. we do see we're below high water marks but we're more firm on some of these deflator numbers interest rates have ticked up just a smidge. we're hovering at 391. we're at 392 preequity openings have dropped a bit and they were under some pressure and just to put a face on it. right now we're at 474 on a two-year joe we haven't closed above 4.275. that would be an important one that would take out the current high yield close from last fall and match just this week at 4.725. and we're now up, what, up four on the week, up 12 -- four on the day, up 12 on the week for twos and at 391, we're up three on the day on the tens, nine on the week we see once again that interest rates have really started to pop. you could almost take this all

the way back to the jobs number on february 3rd. back to you. >> that number and then two inflation numbers and now this we're joined by liz young and mike santoli i was thinking, steve, remember when we got the ppi and the cpi, none of them were the worst it's been, but none of them were as good as we were hoping for if you ask chatgpt to forecast this number today, this is what it would have been you could have figured this would be it. and the markets, they're down, but they're not like, oh, my god! the stock sold off another 100 points as rick said, a couple of basis points on the ten year but it's crappy news for inflation hawks.

but i think it's sort of where we thought we would be, probably. >> so, joe, it's a bit -- do you ever drive to the end of a road and all of a sudden the road goes from asphalt to dirt and you're starting to wonder, boy, should i bail out of this and keep going and hope this thing goes back to being asphalt and a smooth road? this is hopefully the bumpy part of the ride. this is something that the officials have talked about, that word bumpy. it was in my bingo card for the minutes. is it on the way up or part of the oscillation as we go down? i think there's a lot of expectation that this is the oscillation part we're going to have this linear or smooth ride down in inflation. it's going to go up and it's going to go down hopefully the trajectory is still downward i want to make one other point here, joe, which is we want to look at the savings rate which is up to 4.7%.

i think that's important what's been happening is, consumers, despite the challenges that they have, with higher inflation, seem to be rebuilding their savings here at a time when they still have high savings from the pandemic. so i think this is a decent outlook for the health of the consumer we're up to 4.7 now. it should be up near 7%. that's how much of their disposal income are they putting away, income as a percentage of their spending so it's 4.7. it's on the way up that's a good sign i think for the health of the consumer and one other point which is now, joe, we're at 5.21 for the year-end funds rate. >> liz, get over to you quickly. take it away because i know that you have to think about these things we saw the ppi and cpi this is -- this seems similar, doesn't it similar flavor

>> similar flavor, yes, and i'll start with something positive. personal spending is still strong and beating expectations. anybody out there who believes that the consumer can spend us through this, this data doesn't fight that trend the worrying part of it is that personal spending growth is outpacing personal income growth that savings number that steve just mentioned probably likely to go down and/or consumers are bleeding out the savings that they had built out before this and we're seeing some of that in the credit card spending data as well as for the actual inflation numbers, i want to make a quick distinction so anybody understands what the differences are. we talk about cpi all the time pce is a more comprehensive measure of inflation,measures urban and rural areas. it's a more realistic view of inflation. this is why the fed watches this particular data point. i don't think this is all that encouraging for monetary tightening reasons and that's why we're seeing a

pretty big correction in the futures of equity markets today because this just further reiterates that the fed has to keep going, has to keep it high and probably has to break demand in order to solve this problem we can't always have it both ways and i think that there was an i assumption that inflation was coming down at a good clip it would keep coming down and now we're getting data that it could get stuck or pop back up. >> mike santoli, what should stock market participants do with this info >> well, it elongates the process that we thought we were incoming into the year, of when in fact the fed is going to be able to rest after this big sprint that they've had higher and really when we get an all clear on the other issues, which is how much can the economy with stand of all this. what we've witnessed in january, this is hotter across the board, whether spending, jobs and inflation. you had a rally in the bond

market coming into this year, yields went lower. mortgage rates came down wages were still strong and you got a bump in the economy and apparently also giving some impetus to the inflation numbers. that's the push/pull process that we're in. now, the stock market looks like we're going to open up down 1% the s&p 500 has still been in this testing mode all month. yields higher. fed expectations higher. the market trying to observe all that without giving up that january rally entirely i think that's the process we're in right now because the offset is, you know, spending is stronger, companies have had not terrible guidance and so it's not the worst thing in the world to have the economy be sturdy while we're dealing with a tighter flag. it's better than the pandemic we had a couple years ago. >> i'm hanging on to that things are someday going to be okay and what i mean by that, you point out the highs of this cycle in terms of inflation were

still on our way down from those. and you point out, it's not as much as we wanted, but you go back and you got the great analysis of every month where, here is where the high watermark is, here's where we are now. what disturbed me today was, to go to the all-time high, we're going back to like 1980 and then to show that we're below the worst recent levels, we're basis points away from the worst most recent levels. this is still bad. it's as bad as it's been since the 1980s and it's only moderated a little bit. >> i personally disagree once again. i think if you have a flu that could be treated by antibiotics and you take your first antibiotic and you look at your watch and -- >> the flu is a virus. an antibiotic is not going to work -- >> i'm sorry i know your background i know your background >> all right. >> let's say i'm sick and i take

medicine and i look at my watch and ten minutes after i take it, i'm still sick i pop another pill another ten minutes go by, pop another pill that's insane. listen, i don't care what any of our interviewers from the fed give us guidance on regarding lags, they are snugging up faster than the economy could possibly make these adjustments. at some point we know how this is going to turn out >> steve, bullard would say there's no lags anymore. are there, steve >> i'm not fully buying the bullard idea that there are no lags i think rick is right about the ability of the market to process this you see the markets now come a long way i wanted to give you, joe, the latest numbers that are just moving while we talk we are at a peak funds rate of 5.39 i'm pretty sure these are all-time hires

the january 24th fed funds, 5.24 not only are we trying to process what the fed has already done, but we're trying to process more about what the fed is going to do and, joe, we've had a mind melt all week harping is probably too strong but keep racing this issue of, are you going too far? are you done too much? if you take my bumpy road thesis, you could have a falloff come march and i think that's what's going -- i want to give you one more number which is the probability of a 50 come march it's 29% it's ten points higher than it was coming into this >> liz, we're going to say good-bye if you go three steps forward and two steps back, you'll eventually get where you're going, right >> you will. you will it will just -- it will take a little bit longer i find it hard to believe that

we'll see a headline that says fed raises the rates 500 basis points and everybody goes on their merry way unscathed. i'm cautious here. >> okay, great thank you all. it's friday. i'm too lazy to go through everybody again. we're going to talk one chipmaker poised to grab market share. plus, we want to get to gene stay tuned you're watching "squawk box" on cnbc (vo) this is more than just a building.

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let's get down to the new york stock exchange.

jim, it's a four day week. we don't -- >> it was like a six-day week. >> we got home depot, walmart, inflation data where are we overall, you think? >> look, i don't know who these people are who make the expectations i mean, i know there are a lot of people who are looking at the -- i guess the ten year and saying, well, it's going to peak out here but the fed is going to tighten too much i don't know january is a strong month. whether you talked to walmart, january was great. and maybe we wanted january to be bad but i think that the people who make up these things do not look at the components, meaning the big companies that we deal with. glenn fogel, january was amazing for them at booking. and so i don't know where people think things are bad if everybody says things are so amazing. >> yeah. and it is what is -- who said that i think tepper said that

>> i'll give tepper a call during the break and see what the heck he's doing. >> that's a good idea. i did hear from him a little bit but it was off the record -- >> maybe you shouldn't talk about it >> yeah. he didn't tell me not to tell -- not to say i didn't talk to him. he didn't -- didn't really say . i'm not going to talk about it thanks, jim. >> we'll get the skinny. >> you call. we'll see you in just a few minutes. "squawk box" will be right bac that you want to keep in the family... ...or passing down the family business... ...or giving back to the places that inspire you. no matter your purpose, at pnc private bank, we will work with you every step of the way to help you achieve it. so let us focus on the how. just tell us - what's your why? ♪♪

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welcome back too "squawk box. joining us now, gene munster, managing partner of the deepwater asset management is the knife just going to continue to fall here, gene? at what point do you say there's value, and at what point do you say we got a lot more wood to chop >> more of the latter, and of course, when the fed chairman powell had the comments a few weeks ago, the view on that was optimistic, even though he reminded us it's all about the data we're getting some of that data today, and the reason why i think there's more wood to chop here is that, ultimately, there's another vector that i don't think is talked about as

often. fed talks about it a lot, but it's the unemployment number this has a unique impact on tech stocks on employment, let's call it 3.5% historically, that is the most entrenched piece of the inflation number is wages. people get raises. it's rare that they want to give up those wage increases, and so to get to that 5 or 6%, unfortunately, it's disappointing to say it, but it's probably two to four million jobs need to be released from the economy here to get that down. >> let me ask you about that, though i just asked loretta mester about that very question, which is, basically, can you lower inflation and do that without increasing job losses? she seemed to indicate that she thought there was a way to land the plane, you know, do two things at the same time. i don't know sounds like you think you don't believe it >> historically, that's been the most entrenched piece of inflation. i just think from a psychological perspective, you think about the two levers of inflation, one is prices,

companies raising prices because of higher input costs, but then they can change those prices, i think, more quickly than a person wants to give up wage increases. the way you essentially do it, people don't take pay cuts they really do that, essentially jobs get released so my sense is that just psychologically, this is the most difficult part, and i think historically, this has been the case. of course, the backdrop of the strong economy and the tight jobs market would lend to the belief that that doesn't have to happen, but we are in the camp that that does need to happen, and i think if we play this forward to think about tech and what the impact is on rates, unfortunately, it's not good news and i'm -- >> so, play it out where are we this summer where are we this fall what does the economy look like? what do these tech stocks look like >> i'll look at it in the first half of the year and the back half of the year and i think the first half of the year is we're going to

continue to see inflation not going down at the pace people want and i think rates remaining high higher for longer. my sense is that this is going to go -- these are going to go lower. we're a growth investment firm we focus on tech we have a product that is 50% in cash still we didn't play the rally in january, and we're not really deploying on these pullbacks right now, and so i think that the big piece is near-term if you have the benefit and the opportunity to time the market i think it goes lower. >> goes lower. okay, so we're looking at chip makers right now everything is down, down, down, twilio, down 2.3% right now, adobe off 5% after the figma deal seems to be in jeopardy snowflake off 3% at some point, do you just -- the real question, a lot of people say, if you own the stuff, hold it do you hold it do you sell it if you think the knife is falling >> unfortunately, it depends on

the perspective. if you're in -- >> what's yours? >> our perspective is we have a fund that's 50% in cash right now for investors who want exposure to timing of the market >> what are you doing with the 50% you do own you're saying 50% in your portfolio is cash. what are you doing there >> i want to answer that question, but i never fully answered your question from before which is what happens i think the back half of the year is going to set up nice for tech, because i think the comps start to get easy. but to answer your question, what are the types of companies we own a.i. is a big theme. there's a ton of hype around it, but there's substance around some of the picks and shovels around that opportunity, so amd would be a company we would own. google, for example, and i think that some of the negativity around microsoft and the impact on google is way overblown we see that as a big opportunity. meta, that has had, of course, a big bounceback here, but what they're doing with a.i. for essentially better recommendations, i think, is important. but also, i still have this

belief that tiktok is going to get ban. it was just banned in the eu this morning for lawmakers it's a function of time before tiktok gets banned >> outright? your call is tiktok gets banned outright and that is, therefore, a benefit to meta? >> that's one -- i mean, that's not our primary thesis, but that's one of the benefits that i think is probably by the next presidential election, it's one, two years away what's more important, though, just kind of putting it all together in this environment, what are the types of companies we're owning we're owning companies that we think have upside to margin and are profitable companies today that can have upside to margin traditionally, those companies have weathered the raising rates more bravely >> right i didn't hear nvidia in that list >> nvidia is one that we do own based on the, essentially, the play -- i was just remiss there. based on the opportunity with a.i. and what they're doing in the datacenter >> okay. but the good news is, you sold

your ozzie media >> that's gone >> yeah. gene munster, thank you for joining us on this friday morning. >> thank you >> we appreciate you being with us as always joe, it's been a heck of a morning. >> yeah. we can summarize -- go across the board here we got about a minute. we'll look at the 350 on the dow, more than 50 on the s&p, we had one day that we broke a four-day losing streak that was yesterday on the s&p, back in the soup, we decided, cold or vichssois, back in the soup ten-year picked up a little, but we are still just barely under 4% two-year, 4.76%. bitcoin is now below $24,000, in fact, and on days like this, we ask alair about it, when the fed's tightening, it's a riskoff

sort of an environment for crypto as well as the nasdaq i don't know i think four days was fine this week >> yeah. we had a lot of news to do today. >> right, but do we need -- are you coming in monday >> i will see you monday >> you'll be here monday >> you're going to see me here on monday? i think becky is going to be here on monday >> we'll all be here on monday, i guess, although it seemed fine this past week make sure you join us on monday. "squawk on the street" is in the case ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer at post nine of the new york stock exchange david faber has the morning off. stocks are adding to a third weekly loss as the data again comes in hot, core pce, highest annual rate since october, personal spending, best monthly gain in almost two years our road map is going to start with inflation still running warm, the fed's favorite pce gauge accelerates in