of new mortgages is very low it has to be right that when we're no longer buying mortgages, and we're not buying them now, and i don't think we have to buy -- we don't -- i hope we're not doing that any time soon. we only do that in severe situations you know, the fixed income markets are gigantic, and there's a lot of buyers out there. when there's a yield, there will be buyers. i think that -- i suspect that will be the case not that it wouldn't have some awkward pressure, but we weren't a buyer for a very long time >> thank you very much, mr. chairman i yield back >> the gentleman yields back noteworthy, i want to thank in

particular members mr. fitzgerald, ms. williams for their additional minutes back to the fed chair. in an environment like this, time is money, and it's much more valuable these days i would like to thank the chair for his testimony. without objections, members have five additional days to submit questions to be forwarded to the witness for his response i ask chair powell to please respond promptly with that, the hearing is adjourned. >> thank you welcome to "the exchange," everybody. i'm kelly evans. as you just heard there, jay powell wrapping up day two of his testimony on capitol hill. he didn't really back down from his hawkishness yesterday, but he did try to couch it in his opening statement by insisting that the course is not on a preset course. the market's response, the dow is down 146 and the nasdaq is

positive by about 19 points. check out the 210 yield spread clear signals here that's putting pressure on the banks today. but first, let's get to steve with the highlights. all of the greatest hits from today's session feels like most of the damage, i would going to say, was done yesterday. he didn't really back off of that today >> no, he did make i would say, kelly, some more modestly dovish remarks in day two of the testimony compared with day one. but markets seem to not really react to them and really stuck to the comments from yesterday they also had to process some stronger economic data here are some of the key remarks he made. his first answer, powell said -- no decision has been made how much to hike at the march meeting. he said, we're not on a preset

course for march and will be guided by incoming data. he said slowing down the pace of rate hikes is a way to monitor the lagged effects of monetary policies those comments are not -- i would say directly contradictory to what he said yesterday. when he said the fed could increase the rate in response to data the peak rate is still around 5.66, and the probability of a 50 basisen point hike is still elevated at 68%. the reason could have to do with the data we got, the job openings and the adp report were higher than expectations that is, they lean towards whatever betting you might be making on a more aggressive fed

rate hike. >> steve, real quickly, the jobs opening report, we did it with a lag, but there was some moderation, but there are still a lot more openings. this one not exactly showing that the fed is slamming the brakes on hiring demand. >> this is one of those things even if it's half wrong, it's still too high that's kind of the setup for the jobs report we will get on friday if it's half of the pace of january, it's still too high so it doesn't seem like at least in raising rates now the fed is in danger of making too much of a mistake here i think that may be true later on this year but bringing up the funding rate and the action right now in the bond market, which is helping the fed slow the economy, it's got to be helpful.

he is getting some pushback from some of the more liberal lawmakers about the impact of it but they just don't have a better response, which is if you want to tackle inflation, raising rates is the fed's tool. >> right we just had the ten-year a little softer. chair powell has left the door open to a half point hike after saying it would be quarter point hikes. listen >> if you go back to 50, you're negating all the forward policy guidance you gave over a month ago. if you stay at 25, you fall further behind on the inflation front. so, you know, it's a situation, it's a hole they dug for themselves and they keep on digging. they have to stop digging such a deep hole. pause there's real consequences. >> one of my next guests says

powell's indecision has been costing investors big time welcome to you both. nancy, i'll start with you there nodding to what muhammad said. why does it matter if the fed changes from 25 to 50 and back again? >> well, i don't think it really does except for the predictability factor. if powell is more interested in a volckeresque k he's not achieving that. there have been so many false messages throughout the last year i'm not even thinking about raising rates, 75 basis points is off the table and a couple weeks later we get it. this recent disinflationary comments he made, and now we're back to those job numbers are strong, maybe we need to raise more the market cares more about predictability than about the actual rate level. we know we're closer to the end than a year ago.

that's why you're seeing the nasdaq hold up pretty well, because i think they're interested in seeing the fed give us a consistent message they're looking at data backwards, and that's one of the good reasons they have to keep digging themselves out of the hole >> why do you think the nasdaq is holding up better i am curious about some of that differentiation we're seeing today. >> well, it depends on which part of the nasdaq you're talking about. the names we own are producing strong earnings growth they rised guidance on margins in some cases and on earnings. so whether it's a hard landing recession, we think we're going into a recession and in that case,you can still make money in stocks, but you need to be in the right segment. so the cyclicals do well in this environment, and that's where we're focused. so nasdaq technology names have

held up nicely those are the places where we're -- >> it's not like -- now if you see nasdaq leading the way, you think the growers are in a no-growth environment. peter, the yields are creeping back up towards 4% rick santelli joins us rick, what's the deal? >> well, keep in mind that these are -- this is a reopening, so it makes it easier to move the paper. but here, the yield was 3.985 at the auction. but the market was trading three basis points lower, 3.598. everything else is almost meaningless when you have a lower yield, you have a higher price. when you have a higher yield, you have a lower price if you're auctioning securities, you don't want a lower price

most of the other matchups were near averages. but the pricing gives it a d as in dog and you can see almost immediately on the results of the auction, yields are moving a bit closer to 4% by the way, if everything is as hawkish as they say and the fed has their thumb on the pulse, why are ten-year notes so far behind and the curve so inverted we can't even hold 4%. we're nowhere near that 4.25, which is the high-yield close, which 2s and 3s have scir circumvented kelly, back to you >> peter, yesterday one of the big takeaways was the fact that we saw the short end really spike, but the ten-year went, in some ways, lower was that the first time -- kind of what nancy was saying, we're seeing this trend where growth in the future to people looks like it's just going to be weaker

and does this auction fit that theory what do you think is going on here >> it is the belief with some and also the fed that they can raise interest rates, and the whole economy is going to be impacted immediately. no, what happens is first the people that need to borrow, some buying a home, car, house, business, they need to raise money and they're immediately impacted but if my adjustable rate mortgage doesn't come due to november, i'm not affected yet if i'm in real estate, and my 2020 construction loan doesn't mature until early 2024, i'm not yet affected so it takes time for the rise in interest rates to spread its way throughout the economy and that is what is happening. so when people debate, no landing, soft landing, hard landing, yes, it spreads and spreads. as time goes on, as loans come due, as borrowers need to

borrow, as projects don't get done because of the high cost of capital. >> why are you making more sense on this than the fed chair that sounds to me how it works small business loans, they're going to be near 10% by the summer powell's not focusing on that. he's not saying, guys, listen, this is how it works, just wait. he's saying the cpi was too hot last month >> right some people started talking about the lags that's why i don't think the fed is going to recalibrate to 50. the last few statements, they talked about the lags. >> you don't think they're going to 50? >> they've done the 75 four times. they've done the 50. they'll go 25 here acknowledging the lags >> is the market going to rally if they only go 25 >> if you reverse to monday, we were expecting 25. if you compare to what he said yesterday, yeah, maybe there's risk to friday's payroll number being weaker than expected because of the big

discrepancy with what edp has been saying. so in the short term, you're set up for a bond relief rally i think the markets need to shift to rates staying high for a while. and just by keeping rates high, even if they stop going up, just keeping them there is a continuous form of monetary tightening >> nancy, as we all kind of are getting frustrated with the communication, would that nature of explanation help here when he's going back and forth, should it be jobs or inflation, again, it's this idea of the economy is going too slow, period we don't want price pressures to say where they are that's obviously happening, maybe a little more slowly than they would like. nancy, i wonder if you could comment, 2006, all they had to do was pull the rug out, rate hikes, the whole thing collapsed. the banks imploded, american balance sheets imploded. this time around, they're hiking and hiking, and the whole

economy is built on too high prices and too strong demand how do they get it to collapse >> i don't think they can, kelly. there's a couple things going on one of those is that fiscal policy matters volcker called out congress when he was the fed chair and said you have to stop spending so much money, but this chairman won't do that. this was a self-inflicted wound, and peter's right, you really have to pay attention to what the data is -- the forward looking data, because the backward looking data has happened if you look at the lending market, standards have tightened, and spreads have come in they have also tightened so the market is reacting to a number of things as this rolls through, and the lag is very important. the supply chain has cleared up, so i think you're going to see

the continuous moves down in inflation that match the way we moved up it's just not going to be linear so this labor number on friday, i think the revision to last month is going to be critical. in the previous month, we got a revision of over 200,000 jobs. so this minute focus on a data point that is imperfect at best and subject to revision, i think is not what the fed should be focused on or the market >> final quick word, nancy yesterday in response to powell's comments, gina sanchez thought she meant that soft landing is out of the window would you agree with that statement, or do you think there is still a way, as powell said, something to the effect, we don't need a recession but what is no you in your playbook in terms oh of that >> we are assuming a mild recession. i don't really have to be right about that to get my portfolio

correct. but i think this notion of a soft landing, i don't think we're that clever. and i think as peter points out, the lag is important and we don't know the full effects of the quick and rapid, and this is similar to arthur burn, rapid tightening, and then reactive data focus so that's my only concern. >> we'll leave it there. thank you both very much rising rates also continue to hit commercial real estate. kbw says you can forget about a soft landing we're already seeing some defaults powell saying yesterday the fed is keeping an eye on the exposure across the banking sector, but my next guest highlights some of the things the banks have -- jake, thanks for joining us >> thank you very much >> so the important thing here, what happen it is the shoe drops? if values go down the way you

expect, are these losses priced in >> well, we were going to title our report "assuming we survive," but in all seriousness, the crux of what we publish, we expect the downturn to unfold in commercial real estate we expect a 30% plus decline in office value, and to your question, we think that is a 30% to 50% into the correction we believe that's worse than the consensus. >> so you think we're showing some of the names, bank of maren, bank of the ozarks. they could have 12 to 22% of exposure the fed says they're keeping an eye on this, but could commercial real estate be what residential was last cycle >> we think there will be a

meaningful correction in commercial real estate, 1% to 3% low losses, impact to book values and equities for the lending companies, including the banks, the insurance companies it will be higher depending on the amount of leverage >> so one of the things the fed chair emphasized, he said this is not a problem we see systemic to big banks, implying we wouldn't have a rerun of 2008. wells in particular comes up with a little more exposure. even goldman can you explain that >> i'll have to defer to my colleagues my focus is the commercial real estate sector. bank exposure does remain significant. most of the risk is in the small to mid-cap mains but overall, the bank exposure

to office is over 10% of loans for about 16 companies >> and those were the smaller banks i mentioned, you know, on the question about wells, we're talking 4%, 5% of the loans. goldman, even though they have more exposure -- so you say the reits sector is most at risk are these declines already priced in? >> we don't believe that the risk is fully priced we project a 4% to 8% decline in book value for the sector. as much as 12% for some of the thams that we highlight. so that could imply lower book values, and the trough price-to-book multiples, we're told the middle, higher end of that range

so there could be downside on book value and the valuation >> and the life insurers we mentioned as well. when we think of as to who is holding the book, who are the names there that you think could have some exposures? >> i'm going to have to defer on the specific names to my colleagues but for the life insurance sector overall, we expect serious stress to be very manageable for that space. >> what would you final comment be if you were -- let's say you're testifying in front of congress and they say okay, we have a combo of rising rates and this sort of lack of return-to-work trend, and if this plays out how you expect, what are the knock-on effects to the broader economy? what would the effects be to the banks that you most specifically cover? >> i think it will be isolated to commercial real estate, but that the effects will be widespread i think it's not just office

that is impacted, but the surrounding businesses in those low return-to-work environments. the multifamily for example. so we're trying to encourage return to work to the extent possible i think offverall, this reflect the impact of technology, which is really that covid accelerated the adoption of remote work trends that were already in place. that's generally something that we don't think we can avoid. i think it's going to continue >> and hopefully to have the equity to cover those declines jake, thank you for your time today. >> thank you for having me coming up, housing activity has come to a halt, but prices aren't dropping like you would expect is supply the reason for that? we'll ask andy walden, next. plus, the war in ukraine is

driving a new surge of american energy exports to europe but is the bump a temporary blip or is the oil export boone here to stay? the ceo of america's largest emergency company joins us and let's get a look at the markets, at fresh session lows the dow down 211 now even the nasdaq has gone negative the ten-year note, just a hair under 4% back after this. i count on personalized financial advice from my ameriprise advisor. she knows my goals and can help me reach them with confidence. the markets may fluctuate but you're still on track. more than 9 out of 10 clients are likely to recommend us. ameriprise financial.

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welcome back mortgage demand hitting a three-decade low new data showing applications up 7% last week refis even rose. who is refinancing in this environment? demand is way below last year's levels the reason, there's no inventory. rates are high, and reits are still above 7% let's welcome back andy walden what is your take on the latest round of data here >> you covered it well there we saw some demand return to the market earlier this year when we saw rates get closer to 6% very welcome news for lenders. at the same time, sellers are

backing away from the market so we still have these deficits out there, resulting in price hardening this spring. >> what's going to happen in kind of the spring selling season originally it looked hike we could be off to an early start, and what now >> you're right. so we saw demand return early. we went from a 30% deficit down to a 15% deficit, back to a 25% in terms of demand i think what we will see is a modest rise in transaction volumes. we're seeing that in our mixed data for february. so we're probably nearing the bottom there in terms of just overall sales volume and purchase origination volumes out there. but it will be a slow and bumpy return to normalcy for folks wanting to see prices remain high, the dow is good for them you're seeing this stalemate in the market not a return to balance, but we're not seeing anybody budged here low transaction volumes is how

we see this playing out. >> it's almost like the bitcoinization of the housing market there's only 21 million that we're ever going to have and everyone is just holding onto them. i don't know how you get -- in a market where -- we go back to 2006 when prices started to drop, we overbuilt, you know, we saw people that immediately back away what is it going to take to get prices to turn in this market? >> yeah, what's different about 2006 through 2012 was the fed dropped interest rates to catch the market there, so you don't see this effect that we're seeing now the other thing that took place is we had a massive wave of default activity you had interest rate sensitivity and folks were willing to sell because rates were resetting we're running at some of the lowest levels of outstanding a.r.m. loans we have seen in 20 years. so default activity is extremely

year, 70% below prepandemic levels, existing homes are selling at a 27% lower rate in february than traditional. so every potential possibility that we have for increased supply is running well below normal levels. there is no line of sight into how that returns we're seeing rates fall, you see the demand return. but that same lever pushing on demand is holding supply tight, and there's less of a line of sight in terms of how -- >> you did just give me one idea how this -- when this will play out, which is to say when the ten-year starts dropping so in other words, if you look at the market now, we have people pricing in extreme rate cuts kind of next year it's like the more hawkish powell gets, the more rates decline. next year, if the ten-year is down and back to 2.5% and people feel like i can move because the

new mortgage will be affordable and i'm going to list my house now, i wonder if we wait a year or so, i don't know it will be a very different story >> it could be the 30-year tries to project where the fed is going so we could see absolutely to your point, you could see mortgage rates ease before the fed starts to let off the brakes the question is, will that move the needle for sellers it absolutely has. you can trap demand with interest rates even when interest rates eased in january, early february, we didn't see the return of seller to the market. that's where my concern is it hasn't ebbed and flowed directly with interest rates, so there's no guarantee that sellers are willing to sell at 5.5% or even 5%. >> what was the prevailing rate precovid, something like in the

4s we would have to get back down to the level at which the people in current homes would feel like they are translating their rate 1 for 1 before they leave, you know >> yeah. it will be interesting for sure. if rates get that low, now you have a resurgence of demand again to match the new supply. so it will be a battle between those two dynamics throughout 2023 and 2024. >> very odd and very important andy, thanks for your time >> thank you still ahead, those recession jitters are not taking the fun out of one entertainment stock, hitting an all-time high today, doubling off a recent low, and with an analyst saying it could rally another 35% from here. is it time to strike while the iron is hot? as we head to break, another look at the markets. the dow down 230 points.

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lowering electricity costs today, and protecting from volatile energy prices tomorrow. so walk with us— and let's make cutting energy costs real. welcome book "the exchange." markets looked stronger initially as powell began speaking, but the nasdaq has given up its gains only down 12 points. same for the s&p 500 and the dow right now down by 216. the chips are among the leaders in the nasdaq. nvidia, similar story. only 3% away from its all-time

high, it's not just the chips. this has been a big area of strength these are all in the green and among the leaders. states are allowed to use leftover covid relief funds for infrastructure projects. they expect that to provide an extra $40 billion in funding so really significant fiscal stimulus let's get to tyler for an update tyler? >> thank you very much good afternoon, everyone after a two-year civil rights investigation, prompted by the death of breonna taylor, the justice department says police repeatedly used excessive force. and discriminated against black residents in their enforcement activities this morning, the attorney general merrick garland called the conduct unacceptable and heartbreaking and said the doj has an agreement with local officials to work together on reforms.

joe biden will lay out how he wants to cut the nation's budget deficits by a total of $2 trillion over the next ten years when he releases his budget plans tomorrow that's according to "the new york times," which says one of the measures he will propose is a new tax on households with more than $100 million that would apply to earned income and unrealized capital gains around the globe, millions are holding demonstrations to mark international women's day, demanding equality for half the planet's population. >> tyler, thank you. see you soon coming up, the head of america's largest energy port on what is driving demand for american oil and how the port is handling exports back after this.

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when you need it the most. call our warm line at (833) 317-4673 or live chat at calhope.org today. welcome back to "the exchange." u.s. oil exports soaring to record levels in the past year, according to "the wall street journal," as the war in ukraine is driving up exports to europe. one of the clear beneficiaries of this shift is the port of corpus christi, the largest oil exports. joining us is the ceo of the port of corpus christi great to see you again welcome. >> thanks for having me back, kelly. >> is your trajectory going to keep going up, up, up, or is there moderation after this hot run you've been on >> yeah, that's a great

question we've seen tremendous growth in american energy exports as our allies and our partners continue to have that demand, and we have obvious hi seen some trade flow shifts as a result of the sanctions that have been placed on russian energy at the port, we set records again in 2022, with both crude oil and liquefied natural gas. this country is exporting 10 million cubic feet of natural gas a day. 60% of that moves through the port of corpus christi with lng, we can expect continued increase in exports. but crude is a different story we're starting to see certainly in the tight shale markets, we

think there will be a plateauing on the crude side. >> talk to us about that, because we are getting more information about that, where are we seeing volumes start to mod moderate >> certainly in the permian basin, kelly we're seeing well yields down fairly significantly the top producers are telling us this week that we can expect a plateauing and they still have capital discipline in terms of their deployment of capital. we're not seeing as many new wells be drilled as they're focused on creating more shareholder value and returning dividends to their shareholders opposed to putting that capital back to work with new wells. so we certainly think there is going to be a plateauing, which will likely drive up prices of crude oil. >> anything unexpected to you as you connect the industry dots here where do you think based on

these conversations and pr presentations the market will be in three to six months' time >> in the end, three to six movements is not a long time in the energy markets so i think we will see continued demand and see some great financial performance from the traditional energy producers in the near-term. longer term, though, the big talk this week was about energy transition a lot of talk about hydrogen and carbon capture and sequestration. all of our customers have made decarbonization commitments to their shareholders and to society at large so that's really where we're seeing capital deployment being focused is on some of these new cleaner, greener energy supplies, and the port of corpus christi, with our program, we're following suit >> that's a great point. it's gone from being a joke to almost the feature piece of this whole conference is the energy

transition how quickly times change so if i'm you and i'm exporting oil and liquefied natural gas and i know we're going through this transition and lng is the bridge fuel, where are you going to be in 10, 15 years? are you shipping hydrogen of some kind? is it carbon capture what does it look like >> yeah, that's a great point. that's where we have to be having that eye towards the future we need to continue to protect our current portfolio of our hydrocarbon customers. but they are also going to be leading the effort when it comes to the transition. hydrogen is percolating to the top of the discussion, but there's still a lot of research and development that needs to go into this particular sector. so we think that a lot of capital is going to be invested, and we also need to manage the market's expectations about when

those new cleaner, greener energy stocks will reach the market economically, safely, and certainly competitively. >> shawn, appreciate you joining us we'll let you get back to it >> thank you still ahead, the pandemic pushed a lot of women out of the workforce, but they're staging a return and employers are making moves to make sure that doesn't change and don't miss the premiere of our new show "last call with brian sullivan" starting tonight at 7:00 p.m. eastern i very much look forward to ckft ts. ba aerhi my ameriprise advisor has helped me navigate uncertain times before, now is no different. with his advice, i'm confident i'm on track. the plan we created is for the long term. no wonder clients rate us 4.9 out of 5 in overall satisfaction. ameriprise financial.

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>> hi, kelly 90 million workers have child air, elder or other care responsibilities outside of their full-time jobs according to a report by a boston consulting group having a plan to deal with care giving has become a top priority for employers to attract and retain workers here is one company's approach and why it matters linda martinez is a district manager of onemain financial more than 1/3 of the employees here are women many like martinez are also juggling care giving responsibilities >> we need to lead with empathy. we need to have that flexibility to really meet our team member where is they need, because we want to retain them. >> reporter: a report finds 61% of companies currently offer flexible work arrangements, like telecommuting, compressed workweeks or caregiver lead. less than a quarter offer subsidies for child care, but

that number is expected to jump to 50% how important is the child care issue for workers at your company? >> what became a pattern early on is what we offered prepandemic wasn't going to cut it moving forward. >> reporter: heather gale is the chief resources officer for onemain. she jump-started the company's care giving benefits, adding subsidies for up to seven days of backup care >> if i don't have an engaged, capable, well-trained, ready-to-be present employee, ready to speak to a customer, that's a customer i'm not going to be able to serve. so we look at what we're spending our benefits and what we are losing if we don't have that person there. >> reporter: if women participated in the labor force at the same rate as men, there would be an additional 10 million workers. as the mother of two young boys,

she has felt the impact. >> if you can make the workforce family friendly, people can work longer hours >> reporter: the majority of job seekers would work longer if they had access to affordable care options when we set out to do a story in care giving in the workforce, everyone we spoke with has a personal story but more than half of u.s. workers are caring for children, parents, or adult family members, and there are men and women involved in the care giving responsibilities. >> i think about remote work i understand that companies want to get people back in the office, but if you want to keep people around through the difficult child rearing years, that flexibility is enormous there's been work on this showing that it improved people's -- i was going to sayer if -- going to say fertility,

but whether it's the woman or the man, does this become more of a flashpoint as people have to return this year for the next five, ten years when companies go maybe giving more flexibility is a way to serve that goal in the long run >> absolutely. it's more of an issue now as many older workers are in the sandwich generation. many workers who have small children now and have aging parents, and as people are living longer with chronic illnesses and disease, they're going to be care giving responsibilities on that end also add to that special needs, children, loved ones that need care there are so many people that are working and that are caregivers, too. >> if the hardest part is just getting to the office sometimes. i don't know if onemain spoke to this, if that work can be done or you -- >> so they have some that have to be in the branches. there are a lot of companies that have to have the frontline workers. but they can make it flexible if that they may come in later if

they have to drop off a child or go to a backup child care facility so just being flexible and understanding that people want to work and they'll work hard if they are given the opportunity to have that flexibility to care for their families >> when you're like, it's so hard at home sharon, thank you so much. care families >> you know what's so hard at home, i'm happy to come here to work sharon, thank you so much. >> reply pleasure. >> don't miss the cnbc your money event, women in wealth april 11th ways in which women can increase income save for the future and maximize today's opportunities you can register for this virtual event by scanning that qr code on the screen or going to cnbcevents.com. still ahead one more look at today's mystery chart. the stock has doubled off its recent low it's up more than 20% this year. and one analyst says there's more upside ahead. we've got the name and what makes it a good buy next [music - cover of blondie's “dreaming”] [music playing] ♪ imagine something of your very own. ♪

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welcome back to "the exchange." let's take a closer look at an under the radar consumer and entertainment play shares of bowlero. the world's largest bowling operator, up more than 20% this year yesterday the stock closed at its highest level since going pack v pun via spac in december

of 2021. the company's ceo was on "mad money" with jim cramer last week talking about their fortunes listen >> i think we're the number one spac of 2021 we're a real company, jim. we broke through a billion dollars in revenue in december that felt really good. we started with a million dollars a year in revenue when i bought the original lanes and now we're a billion. 353 million of ttm ebidta. we're firing at all cylinders. >> my next guest just initiated bowlero with a buy and a $22 price target jason tillchin is an analyst at canacord genuity this must be a fun job do you have to do channel checks >> we're bringing the whole research department out to a bowlero center next week to experience it in person after seeing this story told through our report but it's really unique as tom said in the clip that you just played to put out more than a billion dollars of revenue over

the past year. well ahead of what they projected at the time of going public, which is sort of the opposite of what you hear with most of the speaks that went public in 2021 i think that's one of the reason as he says it's one of the best performing spacs that depud that year >> that alone is worth highlighting why do you think they chose that -- in retrospect should or could they have done an ipo? >> they probably could have. they had more than 100 million of cash in the balance sheet at the time they went public. it was really more -- i think liquidity to the private equity investor that came in back in 2018 but ultimately this is a business that is really quality. there's strong growth in the top line both organically and inorganically. and then on top of that really strong margins inherited in the bowling business model >> it was also really interesting when he said their average customer is a six-figure household and he has bowling centers in the suburbs, he told jim, that are doing $10 million. what differentiates them from your typical mom and pop bowling alley? >> jae it's really amazing. when you talk about bowling, the stat really surprised me when i

first heard it but it's the number one participatory sport in the u.s more than 67 million americans bowl annually. and i think one of the things that really stands out it's just accessible it's affordable, it's located close to home, people of all ages and skill levels can participate and because of that you're seeing really strong demand especially coming out of the pandemic and one of the things that's unique about this story, there's 328 centers across the country they're seven times bigger than the next largest dpeert but still make up less than 10% of the total bowling alleys that are in the u.s so there's really still an opportunity ahead of them to continue to acquire new krerpts and put "thor" operating playbook to work >> a ridiculous question, it sounds like they should just take over all of the bowling alleys at this point would there be any antitrust concerns if they tried to do that >> well, it would be a lot of work there's still 3500 independent le owned centers across the u.s., which is as i said about ten times the amount of centers they currently operate even he though they're much larger than the next player in the space, antitrust really

shouldn't come into play here. and what's really special about this story is that the management team's been together for more than two decades. so they've developed a really repeatable operating playbook when they go in and acquire a new center they can double the margins within the first 90 to 120 days and then they go in and make further investments on the capex side to improve the decor, install arcades which are their highest r.o.i. investment. >> i took the kids, all they did was the arcade, jason. they just -- they're just punching away at it -- so the arcade is the real cash generator here >> the bowling's also a cash generator. the bowling is 100% incremental contribution margin. the food and beverage is about 70% to 80% and the arcade's about 90%. but the low hanging fruit there is that there's still no arcade in about 65 of bowlero centers there's an opportunity for upside consensus as they add more arcades, things like that and upgrade their centers. >> i find this totally fascinating. thank you so much, jason, for coming on, getting into the nitty-gritty with us

we appreciate it >> my pleasure thanks for having me >> jason till tchen, cannacord general ute. for more of any mi thoughts on the market sign up one easy step cnbc.com/newsletter. hit the qr code on your screen coming up president biden is set to announce a plan to increase taxes on those making $400,000 or more but one detail creating? controversy. there's tyler getting ready lloihionheth sboxing gloves on i' jn m t oeride of this quick break.

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because now clean energy is more affordable energy. we've been investing in american infrastructure for thirty years... lowering electricity costs today, and protecting from volatile energy prices tomorrow. so walk with us— and let's make cutting energy costs real. all right, everybody, welcome to "power lunch. good to have you with us alongside kelly evans i'm tyler mathisen coming up, stocks and bonds duking it out for your money with yields soaring and stocks kind of stumbling. many people seem to be happy to take 5% on the three-month, six-month t bill including my wife. but will those same people have a serious case of fomo, fear of missing out, i