or not. predictions straight ahead. meanwhile inflation in the uk rose unexpectedly in february, and ecb president christine lagarde warned in a speech this morning that inflation is still high in europe. and we'll show you the shares of gamestop soaring in early trading after the retailer reported its first quarterly profit in two years. it's wednesday, march 22nd, 2023, and "squawk box" begins right now. ♪♪ good morning, everybody. welcome to "squawk box" on cnbc. we're line at the market site in times square. i'm becky quick along with andrew ross sorkin and joe

kernen. it's anybody's guess at this point whether they'll raise rates by a quarter basis points. the dow indicated off by 23 points. dd@r(t&háhp &hc% the nasdaq down by 26. that comes after stocks rose in yesterday's session. when the dow rose, that's a gain of about 1%. s&p was up by 1.3%. the nasdaq was up by 1.6%. this's two days in a row. yesterday there was a rebound in regional banks that helped lift the stocks. first republic shares up. we'll have that story in a moment. take a look across the board. jpmorgan was up by 3%. bank of america, 4%, wells fargo, up 3.5%. we're watching treasury yields very closely as we await the fed's decision.

the 10-year at 3.58. the 2-year at 4.13. take a look at bitcoin above that. 21,874. meantime, it's fed day. 2:00 p.m., mark the calendar, set your alarm, do whatever you need to do. the economists are expecting a quarter point rate hike. of course, you can watch cnbc throughout the afternoon for a full coverage of the fed announcement and news conference, and you should. i think the phones are going to light up at 2:00. >> i'm going to be watching tv at that point. must-see television. >> "new york times" had an interesting take, lede story. they're not even talking about interest rates. they're talking about what the hello happened. powell on the spot for the

monitoring or the lack thereof. >> the supervision side. >> yes. >> the elizabeth warren side of things, her criticism. i think they're stubborn. it's like they said they have to do it and they keep going at it. it will add another 25 basis points. anyone who's got these long duration bonds or mortgage backs or anything that you've got that's long duration, you go another 25, it puts you deeper under. >> if they don't raise do, people look around and say what do they know we don't? are they looking at bank deposits? >> what if they're moderate? >> you look at the numbers in the uk. >> which is where we're going to go to next. new overnight, the fed in the uk jumping unexpectedly in february. jumping higher than they

forecasted. there was an increase month to month. that broke the consecutive three-month increase. the largest contribution coming from restaurants, cafes, and food, and clothing. meantime christine lagarde is warning rates are still high. she said uncertainty around the path of inflation has increased. the euro moved higher following comments and maybe it's that that allows him to say, look, i've got to raise rates. maybe he says the deposits aren't move. we have to raise rates. main we'll pause next time. i think you could -- >> well forecast you go back to the classic explanation of where interest rates should be, i guess we're still below where they're supposed to be. >> by a lot. >> it was a quick move. you're right. do you add additional fuel to the fire if you're concerned about what's happening and the

stability. >> has anything been broken? i don't know. this is different than just really crap assets this. is a liability because it's long-term duration. it's all money good eventually. if you don't have fear and some type of panic from depositors, you should be able to wait to maturity. with all that's said and done, did you see the s&p yesterday? >> yes. >> 4002. it's been years. nike shares are lower. earnings at 79 cents a share beat estimates of 59 cents. the gross margin get 43% for the quarter. a pretty good number. it was down 3.3 percentage points. offered higher mark jouns and promotions to liquidate inventory. inventory was up by 16% versus a

year ago. the company contributed to higher footwear costs. >> they said things were pretty good in china given how difficult it was in december for part of the quarter. >> when does that movie come out? >> it's out very soon. this is one i'm actually eager to see. guile the theaters for it. the movie "air jordan" movie. >> aired monday night. not publicly. i believe it's o out this weekend or next weekend. >> it's coming. >> and then it will be available, by the way, on amazon. that's the big issue. do you go to the theater or wait? >> michael jordan, that's what i got out of it. it's so bizarre, right?

former teammate. >> it's nothing to do request business news except michael jordan. >> it's around a lot now. &háhp &hc% i didn't know what everyone looked like. it's interesting. kind of big age difference. game stock shares are surging, 16 cents a share or $48.2 million during a quarter and net sales dropped slightly from a year ago to $2.23 billion. it can't be compared to wall street because analyst cover it like shannon sharpe sneerch is needling scottie pippen. there's a lot going on. >> it's business in terms of espn is disney. >> and nike's a business. >> just so you know what we're

talking about, scottie pippen's ex-wife is now dating michael jordan's son and they were teammates. >> we talked about it before on the show. >> anyway you thought it was kind of a compelling story. meanwhile, where are they now? game stop -- where are the meme stocks now? we never talk about them anymore. >> bed bath and beyond? i don't know. >> they're shutting down 400 stores, taking down signage? >> and becky is helping amc by going to see air. >> i go to amc a lot. >> we sat "ant-man." >> a beautiful place to see it. they need more movies is what they need. i don't think there are as many movies coming out as there were.

>> and the theatrical world is shorter, so you can always see it at home. first republic bank has tapped lessard. jpmorgan had already been hired to advise on strategic options and jamie dimon and all the other bankers who have put deposits there, probably willing to advise for free on some of these things too. they assured them the bank was conducteds by as usual including processing transactions. >> a number of those banks who put deposits in had sole shares of first republic back in february.

i think it's one of the imperatives among the banks that they need to help, that they were selling shares to other people at prices that were -- >> i think that's a fair price. it's also their own form of trying to shore things up and say it stops here. in the meantime tiktok's ceo will testify before congress tomorrow. the ceo says he will pledge to keep safety, particularly for teenagers, a top priority. they'll protect the firewall from unauthorized foreign access, but the question is whether that will be enough or whether all of these calls for banning the app will be something that congress actually acts on. when we come back, we will continue to talk about what's happening with the markets this morning, the futures this morning a little weaker. dow futures off by about 40 points, the nasdaq down by 30.

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we are counting down to today's key fed decision as the central bank weighs the battle of inflation compared to the turmoil in the banking sector. joins us now is mark mobius, veteran investor and partner of capital mark its. when you look around the globe right now, are you more concerned about the inflation sector or more what's happening with the financial sector? >> what's happened in the u.s. and in switzerland is really of great concern for international investors, particularly the big investors who trust the big banks and think their money will be safe. i think these why gold has gone up a bit and bitcoin, believe it or not. that's one thing. the other thing, of course, is

what's happening with the interest rates. this, of course sri latest because otherwise you have a lot of banks in trouble. they're sitting at lower and lower interest rates as prices go up. these are two big concerns we see interna;#=911e9ñ you see the emerging markets un underperform. you see a tremendous amount of uncertainty out there. and it will be for quite some time. >> yesterday we had the former governor of the federal reserve on the show. he said it doesn't matter at this point if the fed raises it another 25 basis points. the damage has been done. it sounds like that's not what you think.

it sounds like you think if they raise rates, there will be a lot more pressure. >> of course. if they come to the rescue, at the end of the day, we're not only talking about the u.s., but the global situation. if you look at switzerland, they're under pressure now. this is something we have to deliver very carefully and then maybe they retreat to other areas of the world such as the middle east banks. that's a big question mark. >> mark, have you moved money into things like the petro banks. >> no. i'm very, very concept skeptical of banks generally, even petro banks because they're so opaque. others know what's going on

behind the scenes as we've now learned. i stay away from banks. in terms of keeping money, my cash, yes, i -- investing money, no, but keeping cash in some of the banks, yes, that's not a problem as far as i'm concerned, and i've got money in one of the banks in the middle east, in dubai. again, you have to be diversified. you can't put all your eggs in one basket. >> you have talked, i think, recently how you've had problems getting money out of a bank in china. is that the case? if you can't go to european banks, where do you think the safe place is to put your money? >> thank god i've been able to get the my money out of china. it just happened today, smachlt i'm really happy about that. you have to remember all of these countries have complicate sets of rules, and sometimes if you're not able to meet the

documentary requirements, then you have problems. so i think you have to be pretty well diversified. i'm looking more and more at asian banks. i'm here at singapore, and i think the banks here are in pretty good shape because the behavior rules are very tight, but, again, you have to be diversified. you can't put all your eggs in one basket. >> at the end of last year, you said bitcoin was going to go to 10,000 in 2023. 28,000 a day. is 10,000 still on the horizon this year, do you think, mark? >> i think at the end of the day if interest rates keep on going up and if the bank situation stabilizes, then probably you're going to see weakness coming back to bitcoin and cryptocurrencies generally. at the end of the day it's pure sentiment holding out. mind you, i have a lot of good friends who have great faith in

bitcoin and cryptocurrencies, and that's fine. but at the end of the day, we have to look at where the interest rates going. that will be the determining factor at the end of the day. >> you don't think at the end of the day -- it sounds like it's ending a lot. you don't think we're closer to the end of the interest rates than the beginning? then that would play into the plan. >> target is 2%. and we're now at 5%, 6%. we can't be at the end. you know, the other factor here is where is the money going now? when you consider the money pouring into the sector, into defense billions and billions of dollars, that means more and more money into the hands of workers. mate get tight. may get tighter. how can you break down inflation

in this kind of environment? the central bank's answer is always raise interest rates, and i believe if they feel the banking situation is stabilized, they will go back to raising interest rates. >> all right, mark. we want to thank you for your time today. we'll have you back soon to talk about what you're doing with your money at this point. we're out of time. but come back and see us again soon. >> thank you. coming upton other side, more layoffs in the chips sector. we'll bring you the details zoo later lloyd blank fine is going to join us to talk about the to join us to talk about the turmo

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we are of marvel technology. the chip maker is kuing about 4% of its work force. the previously cut jobs in china have just marked its first significant layoff in the u.s. in several years. meantime virgin orbit says it's returning a small team to bjork tomorrow, this as it aims to prepare for its next rocket launch according to a company email obtained by cnbc. virgin yore bin extending the

unpaid furlough and pause until at least monday for the rest of its workers. they use a modified 747 jet to sent sad lights to space by drops a rocket from under the aircraft's wing. it's separate from the space company virgin galactic. berkshire hathaway's greg abe l shows that he bought $24.6 million worth of berkshire shares on friday bringing his total stake to $105 million. coming up, results from the new study on just how fragile the banking system could actually be. that's next. and throughout the month of march, we're celebrating women's heritage, sharing the stories of women leaders and businesses and those who make and contribute. here is rayrayna moskewitz of e,

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good morning, everybody. welcome back to "squawk box." we're live from the market times square. futures are barely budging in the red. we're waiting to see what the federal reserve has to say at

2:00 p.m. today. right now the dow futures off by 11 points. s&p futures off by 1.5, nasdaq by 3. >> they're bracing on the fed's next decision. a coauthor on monetary tightening and bank fragility. they suffered $2.2 trillion in unreliable losses in the last year and as many as 90 banks could be at risk of insolvency if depositors withdrew their money at one time. good morning to you. do you really think -- i mean, listen, i was reading a study, and the idea that this happened to depositors, that would be a problem. wouldn't that be a problem for every, and shouldn't a bank be prepared for that? what should be the threshold? >> thank you for having me on.

i just want to say -- the depositors would show up but might not have enough of liquid assets including cash to pay them. that's not really what we do. we look at is it enough to pay the deposits on. as you mentioned, the study finds that market value of assets decline by $2.2 trillion relative the book value. a typical bank is left with 90% debt. most of it is deposited by household banks. the market value of the assets is not enough to cover the face value of the debt obligation.

of course as you mentioned, most of the depositors are likely to stay, especially the ensured ones. tomasz, what do you think the answer is? we had a debate whether there should not be just an implicit but explicit guarantee. there's an editorial in "the wall street journal" that says effectively it's a terrible idea. it effectively would allow banks to run wild. they wouldn't have a governor on them. we talked about whether the customer acts as a governor on banks or not. what's your thought? >> so, yeah, from that perspective regarding deposit guarantees to banks and depositors, is rates the potential of a hazard issue. the problem is the situation we're on right now, and i think

this is what folks didn't realize, 37% of bank assets are financed with uninsured deposits. we're talking about $9 trillion in the system. the depositors are much more fragile. think about the fall of a mid-sized company. you see that the fed is doing something about this, but you might be tempted to move your assets somewhere else. and to your point, you don't necessarily need 50% of them.5kz in answer to your question, exposing the idea of trying to establish the system was originally one, but, of course, it raises a broader question. >> that's the question. i think we're all trying to grapple with it. i think a lot of people agree generally with the idea of guaranteeing deposits at least on a temporary basis to try to

stabilize the situation. but the flip side is if this becomes a guarantee for life, you're going to have concentration risks, high net worth individuals. instead of spreading money around at different banks, they'll send you all to one bank. there are these unintended consequences. we talked about the possibility of sort of guaranteeing a payroll account so that businesses that have payroll can meet that. that seems like a fair way to approach this. but should it be a blanket or do you think when you look at it, it should be something else? >> well, i wouldn't go for a blanket, but i think going forward, you'd have to seek a regulation, capital regulation. there's an interesting piece of evidence. you look at what is the financial leverage of banking institutions that don't have access. think about quicken loans in the mortgage market.

they're twice as much capitalized as u.s. banks. pushes banks to very high leverage. those who don't have access to deposit funding because markets forces them to do it is twice as big. so if you want to think of sort of the broader issue of deposits, i think it's sensible to start thing about higher capital requirements because as one of my collaborators would say, they look at the private equity funds in terms of deposits. >> tomasz, let me ask you about another story. i happen to be reading a story in "the wall street journal" and i see you're quoted in this too. this is another issue that people are raising concerns about, commercial real estate and the record number of commercial loans that are going to be due, expiring in 2023. it looks like the smaller banks hold about $2.3 trillion in

commercial real estate. that's about almost 80% of those held by all banks. this is a big issue too. $272 billion in commercial mortgages are set to expire. those are with banks that for the most part have less in assets. what kind of a problem is this and how do we stem any sort of tsunami from kind of sweeping over them with this? >> this is a significant problem. if you look on the order of 20 to 30% and more, you see some of the borrowers, it is a significant problem because some of these office loans default. it's not as big of a problem as a broad scale decline because of the rise of interest rates but

it would put pressure on banks. >> are these additional loans that -- are these additional assets that they hold where mark to market isn't reflective of what's really happens like the whole when it comes to treasury? >> absolutely. they're significantly done, one, because interest rates are higher, and if it's all assets, they perform. secondly, they don't fully price risks or reflect riffings of the possibility of default. if you look, they still generate from the loan response, but we start seeing the early signs of distress. and i know for a fact that a lot of borrowers are thinking about defaulting. >> we've seen big defaults recently. here's what i don't get. i thought the lesson that we learned from 2008 and 2009 wasn't just about ceos or cefs,

you also have to mark to market. how did we have such big blind spots both at the banks and at the regulatory level? >> i think banks relinquish security of this, but, you know, the majority of the holdings on the other side are halting maturity assets. you look at the regulators and those that cause the rapid rise of rates. that pretty much wipes out most of the -- the bank capitalization. of course n reality the depositors are likely to say. a good chunk of them are likely to accept a lot of deposits. but this is a problem regulators should think about especially when there's a systemic risk of deposits in the system.

>> tomasz, i want to ask you real quick forecast the fed raises rates, how bad is it or good? do you have a view on how it will change the dynamic? >> i think it could put pressure on the fed. it's harder to raise rates. my guess is they would raise it 25. i would think they would hike it a bit. but they can get it back. >> professor, thank you very, very much. thank you again. >> thank you. coming up, we're going to talk to jim o'neill about the surprise jump in inflation in the uk and the ecb's warning that inflation is still high. later former goldman sachs ceo lloyd blankfein, what he thinks (vo) the fully electric audi e-tron family is here.

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futures are in a wait-and-see mode at this hour. a little bit of red on the screen. i don't -- you know, when we do -- if we knew right now, okay, let's say they raise 25. >> i don't know. i don't know what happens.

>> i don't know. >> that's a bigger question. >> the market doesn't know. >> if they don't raise rates is the market going to think, great, we have some wind at our banks or are they saying, uh-oh, what does the fed know that we don't know? >> if they're hot, we know. people aren't going to like that. this one, i don't know. it's one of those weird numbers where you can have it in advance and still screw up. >> by the way, it's not just what they do, but what jay powell says. i think he's walking a very fine line in terms of what he messages to people. >> i think tomasz had it exactly right. 25, not that much, you know. we're still fighting, we're still fighting. >> i want them to hike by ten basis points. >> that would be a good one. >> i can't take credit for that. that's what jack lew said when he was here the other day. >> yeah. i think that will happen -- there's no reason to have to go

25. we don't do quarters. might as well be ten basis points. crypto at this hour, we were talking than a little bit earlier, it's a little bit red. check out crypto-related stocks, names like coinbase, marathon, digital, riot, all up between 130 and mirror 170%, some as much, this year. amazing. check this out. the new york mets unveiling a members only jacket -- no, no, members only speakeasy at met field. i still have my members only jacket. >> was it blue? they all were. >> it will have a private bar, sight lines to the field, complimentary parking, food and

beverages, but it will cost you with first row seating going for $25,000 a seat. third and fourth -- >> a game? >> it can't be. >> available -- sitting on the floor of a basketball gaming that's almost one game. a lower price of just $19,000 the rows two back. the mets are pretty good. i like the mets. i was going to say, you have to watch the mets. i like the mets. do you? >> i grew up watching the mets. >> pete rose had a fight with -- remember that? >> on the mets? >> yeah. >> they're saying ray knight. >> he was a red for a long time too. was buddy harrelson a met? crickets. total crickets >> i was a white sox fan.

>> if i want to have a sing-along with our staff, you know what i thought we could come up with together? "the star-spangled banner." is that right? except for rob. >> dawn's early light. >> happy birthday. >> that's a steely dan song actually. >> have you ever heard of aretha? >> aretha who? kidding. frankly, we know zwroo when we come back, we'll talk with joanne lipman. she has a new book called

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the pandemic ushered in a new era of digitization and remote work as the global workforce re-evaluated the relationship with jobs continuing to thisq-day. the new book next,q the power o reinvention of life andñi work looks at how meaningful career changes and there is a lot of demand for that right now. joining us first on cnbc is the joanne, the idea that people are so unhappy at work, weçó reache record levels at this point. what is going on? >> yeah, yeah, so thanks for having me, becky. so what next is a deeply reported guide toñi navigating change in how we live, how we work, how wexd lead, backed by hundreds of personal interviews and a lot of the research and science behind the process of

change. and what i found in reporting is that thexd reason i wrote itr for exactly what you just referenced, right? it is for this moment in time, so man1gñ of us arexd searching a new normal for a -- after the past few tumultuousñiñi years a we're looking for something different out of work. and as you mentioned, i lpmean, allup had a poll that said job unhappiness is at a record high. and if you look atçó surveys of the last few years during the pandemic, the majority in several surveys of people who g for newñr jobs were looking outside of their field. and, yeah what the pandemic did is it was kind of a great reset for all of us, saying wait a second, is this the work i want to do, is the way i want to live my lw&#. >> you talked with some really interesting people, likexd jame patterson, the famouseqdnovelis whoçói] used to be an ad execut.

alan greenspan, former head of the federal reserve used to be a professional jazz clarinettist. you spoke with a woman who used to be a stay at home mom and she went on to beñi a nonprofitçó c and mayor. these are pretty substantial changes in life. id those people get to these new careers and was there people all had? >> yeah, so i asked %-lp4ebçó t walk me through their career ñi changes. and in addition to the ones you economist who is now alp cattle farmer, a former nbaxd player w xdñ former banking guytv:jzñr now i flight attendant. i mean, the -- there is alp who slew of different changes and i asked people to walk me through and then i went to th[dw3ñi exp know, career gurus and neuroscientists and psychologists to walk me through the stages and it turned out they actually had very similar career trajectory to make these

pivots. and there werei]fá aw3lp couple commonalities, one that was i found very interesting is almost everyone who makes one of these transitions starts transitionin they don't really even understand they're collecting information in what i would call áhp &hc% consciously being .there. alan greenspan, for example, told me whenlp he was a jazz musician he wouldfá do hisq bandmates' taxes andçó really g much more involved in -- he said more than playing the music.s t- there is anotherlp element thatr they almost all had in common, an expert companion, a phrase that i actually borrowed from trauma psychologists, but in trauma psychologists, an expert companion is someone who helps walk you through sort of what you've been through to help you #$uá$e iáother side, i

actually think we all need one and what yourxd expert companio does is they have an objective view of you and it is really helpful and all these people told me about it. it is someone who can reflect back to you what are your strengths and what is the progress you've made and whau so helpful is because we all have these sort of innate strengths and talents that we don't recognize because they're solatural to us. and we don't even see it. and so somebody else can reflect that back to you. and, you know, there is a number of other çósteps. there is -- i have a ñrñrreinven road map in the book of four steps that pretty much everyone goes through, search, struggle, stop, solution. and pretty much everyone will hit eachfá one of those parts. that search is one i just referenced, you start on the >> and inb■ would say you write about this from experience ñito1 i knew you first as a page one editor at "the wall street

journal" and then in charge of thm?x weekend section and creatg that section, and then as a magazine editor andó[■w3 now as college professor and someone who is writing her own books and author andñi things too. >> by the way, i think ano7lr e award winner with tható[■ emmy right behind her. >> i wish i could claim that. 9pt$at's actually mys7■ son's. >> wow. >> he's a zu =i■ producer,z( ye( yeah. >> proud mom. >> i am a proud mom. but there is one other pointñr would like to make, when you talk about career r yours is amaze, andrew's, all of you guys, amazing, but what is really important when i talk about that road map is that second step, the struggle, and the reason i want to emphasize that is because we all go through it, but when we tell tend to skip over it. it is, you know, markq zuckerbeg goes from college kid to tech billionaire and you skip over, you know, vera wang goes from

in fact what i found is this struggle part, everyone goes through it, is really miserable, people don't like to talk about it, and it feels like you're standing still and it -- wh- tell these stories, it makes us feel bad about ourselves,t( because we feel like there is something wrong with us if we're struggling. but i want everybody to know, when you are5a■ struggling, it feels like you're standing 15=9 really important workñi getting done and i talk you through that. >> congratulations. 9-js and, by the way, the book is titled "next: the power of invention in life and work," joanne lipman. joanne lilet's do it. >> we'll talk to jim

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i'm so glad we did this. i'm so glad we did this. i'm so glad we did this. life is for living. let's partner for all of it. i'm so glad we did this. edward jones good morning. to raise or not to raise? thatris the question for thefá federal reserve as the global banking crisis presents a newt, ripple in its rate hiking game plan. we'll get you ready for the

day ahead asçó investors brace r the fed's decision. the dow futures are slightly higher. nasdaq futures slightly lower.xd plus, the big business of tech. we're going to be speaking to and inflation. the second hour of "squawk box" starts right now. i]xdxd good morning. welcome back toq "squawk box" right here on cnbc. ñ the nasdaq market sitei] in times square. i'm andrew ross sorkin with becky quick and joe kernen. look at u.s. equity futures at this hour. let's look at them again, byq te way, 2:00 p.m. today, when we hear from the fed and see what it does then. right now, dow up 18 points. 19 points. nasdaq off about 12 points. t#m÷ s&p 500 up+o just about 3 points. look at treasuries, though. that may all move as well. right now the ten-year, 3.609f

the two-year at xd4.189. >> as we mentioned it is decision day for the fed and expectations are for a quarter point interest rate hike at leastçólp by most. steve liesman joins us right now with more on this. steve, this may be thet( meetin we're going into where we have the least ability toz( really kw what's going to happen, maybexd guesses all over the map. >> yeah. becky, this is a really difficult choice for the fed. maybe@

the marketrrá expects the fed w be almost done when it hits that 4.75% range today and then debate about whether it does one more hike in may, and then pretty good agreement the fedfá fairly quickly reverses course and cuts at least twice by year end. the opinions are strong on both sides what the fed ought to do today. you have those saying the fed shouldlu,uu confronting high inflation, while others insist that raisingfát( rates just wor the bank's problems.çó forecasters predicting tightening credit from the banks is going to drag down growth and drag down inflation. but, here's the expectation. the fed is going to say it can raise rates and handle financial stability with a different set of tools. so expect powell to express confidence in the banking system, liquidity levels, capital levels, but link the outlook to future t(hikes, guys to the fallout fromxd the banksó joe? >> thank you, steve. how high did we get on the

probability for a 50-basisw3 por hike? ancient history, but it was, like, two weeks ago. but my point is, they were massaging us for çó50.w3 powell was sort of preparing us for 50. they wanted to do 50 again. so this just hit the -- it is totally blind sided the entire fed. >> yes. it did. it blind sided the fed, the markets. we were up, joe, after powell spoke and i don't remember when that was, was that lastt( year was that two weeks ago? >> it is all muddled together, but we were at a very high -- >> 70% plus, my friend. >> for t(50? >> for 50. >> now itrmight beçó zero. >> and guys in the back, if you have the january 24 funds rate, you can see that we were lookind at the least year end rates, joe, i think north of 550. and now i'm just going to double-check because it is so different, right, 550 and now we're at at( year end rate of 4 and change.

4.40. we have taken 100 basis points and change out of the expectations for theñiq market. >> it just scares me because they can bet( so sure about something and they're convincing us and the margin of error is so great that really they didn't know back then that they should be going 50 and they were certainly going to, you know, i guess it is all sort of data dependent and, you t(know, nobo is perfect and it is an art, not a t(science. joe with this idea, hey, we'rex reducing the balance sheet, we're raising rates, and there is no problems in the financial system and bank failure was not on people's bingoxd cards. h f-fö@(yw>r]çp,my blackstein atñi dynamic funds. 25 is not going to end the world. you think that's what we get, noah, so they can say, yeah, we're still paying attention to inflation, we're not going to let $yeñ stay out of the bag,

but we're aware of some of the, you know, some of the risks toe raising so they go 25? >> i think they will go t(25. i think that wille1 unfortunate go 25. i don't think they should raise at all. i heard this theme more recently on the balance between financial stability and price stability. and if, you know, some sort of economic trade-off that in reality, you know,jf there are long lives for what they have done. there are also clearly credit problems. and moste1 economists seem to n understand how credit works. and thei] multiplier factor, financial accelerator effectc o problems in credit. so theyfá probably shouldn't do anything. it is not añi trade-off between price stability and financial stability. financial stability and creditñ really are what should matter most to them. and so,fá you know, myfá concer

that they could makee1 a very difficult situation a lot worse, you know? peñnp)e one offing silicon valley i]bank, but onlp first republic, signature bank from new york, top ten commerciale1 real estate loanoke1 portfolios the united states, and even if you look today, some of the office reits, stock prices are 40% below the covid lows. now, all commercial real estate isn't necessarily in that dire of shape. thereñr are knock on effects woe the oneoff and futuret( signali since the risks are asymmetric to the çódownside, maybe they fl like they neegñ to go 25, gettig into debates on twitter with academic economists isn'ti] reay the issue. the issue is credit and whether they do thate1 or not, i don't know. they didn't see this one coming. >> we have heard for years that when interest rates are negative around the worldñ$páñi times, o

zero for an extended periode1 o time, that juste1 by definition money is going to go to some -- take some risks that it probabl1 shouldn't. wexd understand that outcome fo staying at zero. i don't know if we understood how many people go in long duration assets and not just treasuries, but some of the things you were just describing. a lot of theseokñie1 sayings, w being carried on companies and individuals' books says one thing, and if you hadx#uz sell t today, it is a completely different number. you can imagine -- what if -- we thought about issuing 100 year d988íg÷ ipdoubled? how much of a problem is this, the duration risk? >> well, i think, you know, the longer part of the bond markett interestt( rates are and the further they go on the shorter end, the moreok risk they bring into the long end.

the problem is on thefá credit side,e1 i mean, 100-year bond i money good because they print the currency they'll pay you "%. there is never going to be a problem with that. it is not going to be what you think it is, longer term, because inflationçó needs to la at the value of what that was. there was a lot of other things going on, so for people to be dismiss of one offs and not toq look at the lagçó effects of wh they have done, 7e(ñ know, it i important. my biggest concern is what theyó do. clearly there are areas of the market, you know,ñi you've seen this in growth stock rebound, which i think is sustainable longer term, but you do worry about some of the policy decisions. i call this sort of long covid economic policy, where one bad policy decision after another has been made since the onset of the pandemic. and we're just hoping to get past that. but i do worry aq lot about jus this dismissal of what'sçó gonen in banking,e1 given how much of

2020, regional banks accounts$ñ for a huge portion ofçó loans me to the u.s. economy and, you know, this steady bleed of assets will continue as long as the money market funds are well below deposit interest rates and that goes to thee1 top five. >> is it a big -- is it a big problem if we were to explicitly, we don't know if we can withoutñi congress, but ifñ did guarantee deposit, i've seen some people say that iti moral hazard, all of a sudden bankers +çr every dollar that they take in, they say, well, i can always get -- iq can always get it bac if it isxdt( guaranteed. if it isxdt( guaranteed. 4 even though it is i]fdic type insurance. is that bad? is that ai]q badxd idea? >> you've already donei] it for the largest banks in the u.s. by declaring them too big to fail. so, also what is going to

happen, it already has been done for part of -- i'mok not the policy fed. i'm just a guy who likes stocks- that's well beyond my salary cap. but obviously you've sort of done that partially, but, you know, that'se1 certainly -- in e case of signature, we heard about a lot of new york real estate people who had money there who -- it was the real estate people who were pulling money out very rapidly. something has to be done in this case for sure. >> so would you -- woól■ you buy the s&p or would you juste1 avo the bank, the kbw? what would youçó -- >> i think technology --ñi i thk technology stocks in certain areas, people are excitedi] abo ai and okñiml. there is a real opportunity inç automation, and things like this to continue to replace higher labor costs with automation and ai and ml and i think it is very

selective in the growth area, growth stocks for the last two years have taken itçó on the ch because of higher rates. many went down 30 to 50% over the last two years. of course, iti] takes a low pe go down to 100 overnight. but the hiddeni] growth stocksç made valuation feasible and some secular tailwinds but it has to be caveated with, you know, the idea that everyoneok knows everything and these are one offs is incorrect. and policy and choices they make here are very, very importantoko this year and beyond. >> noah, we can fight inflation, but we can also handle the stability, it might be more linked than people think. thanks. >> thanks. quarterly results and the state of the consumer and çómore. check out the winner and losers in the s

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petco earnings out this morning. the company reporting earnings of adjusted 23 cents añi share that was a penny shy of m cf1 o expectations on revenue of$1.581 billion. sales up by çó5.3% inf'm the qur

better than the street was looking for. they were expecting e13.6%. joining us now is ron coughlin, petco's ceo. thank you for being heree1 toda. >> great to be here in person. thank you. >> let's talk about what's e1 happening. there are so many questions about the economy.!u■e1 especially with everything we're watching in the banking sector and issues about consumer confidence. does any of the concerns that we see elsewhere, does any of that show up in whatlútáu are seeing in the stores right now because > if you look at paste1 recessions and this time, the pet industry continues to grow. it grew through the 2007 there is some research that just happened withfá pet parents and said would youi=$ápáher cut dow on your food or your pet's food, it was twice as likely to cut down one1 your own food versus your pet. >> and your kids? kids areñi eating hamburger helr without hamburger. >> sloppy joes for the kids. food continues to grow i]strong.

services, e1grooming, vet grew strongly. there is impact on discretionary spend like other places. so you might let that collar or lead last a littlee1 longer. but that was -- >> is grooming going longer too? >> groomer, growing double digits. that's strong as well. the discretionary spend piece has been about 5 to 6 quarter dynamic. we expectm'%q■ to play out, it pla >> is there any sort of tradedown, we hear from walmart or some places that."■ consumer are trading down. they do that when it comes to their pets too. >> it is really a tail of two cities. there has been a premiumizitzon trend for the last decade. so if you look at our high end fresh frozen food, if you look at origin or the high end foods, they're growing double digit e1 stills. our portfolio continues to premiumize. but there are lower spendingfá customers who are looking for more lpvalue. we're having to adjust and have more open price point products and we have alp great value, loyalty program called vital care, which allows you to save c

you get free% checkups, groomin, discounts, merchandise discounts and we hit half a million cheap. what do you attribute the last 12 months, the look of thatlp chart to? inflation, is it eating into your margins? >> it is a good value and good time to buy. if you look at the pressures on the stock, they are cyclical in nature. it is the interest rate because of debt, number one. number two, discretionary spend. both of those are cyclical. if you look at secularly, the categories are a strong category. our hand is very strong in terms we're the only play we are 360 9hr(t&háhp &h >> were you able to passc along inflation price increases in your -- is margin strong? >> the pricing was able to be passed around. the issue on gros#f margin is discretionary spend because supplies are moreq profitable. so it is a short-term cyclical

mix issue. but the pricing was passed through in 2022. '23 roughly even between disinflation and inflation from what we can see now. >> is there a way to prompt people. r m dog's name, we're going to make you bandannas and you made -- you made one for becky too. >>u■ñi i did. >> goes right here. >> for cocoa. >> but i said, you have to make four of them. did you say -- do you need a psychiatrist or do you need a bandanna? one of them is not ours6■á one is the grand pup that is staying with us. would you like everyone to have four e1e1dogs? would that help? >> one of the dynamics is there are 60 million people working from home now. and the more you're home, the more time you spend with your m■ that come into that house. so that stay at home/t dynamic good for our e1business. you don't forget your vaccines, you pick up those extra toys, you give the treats during the day. sot(e1 --

>> stay at home. >> great. >> they are great to have. >> i'm not a dog owner or pet owner. what is the annual spend of the average consumer who ownse1 a d? per dog? >> yeah, it's -- it's probablyi rougo+h'ear $1,000. >> thousand dollars a year annually? >> yes. >> i went in yesterday, i got some of the -- i have an r 18-year-old dog that i buy the stuff that neutralizes when there is an accident because there is constant accidents, that was $39. the food was $60. i got two rachael ray snacks, $135. yesterday, $135 i walked out of the pet store. >> very lucky to have a 15-year-old -- >> 18. >> 18-year-old. i lost my guy at 15. you're very lucky. >> and then freddie is a girl, on the left, that's gunther, m.i5

there isrearl, the little guy. >> what is the issue with debt? >> if you look at our talked about our quarter, we beat consensus on the top line, beatñiçó consensus from ebitda standpoint. our cash flow is extremely strong. we paid down $35 millionfá of dt last week.c we committed to another çó$100 million for 2023. so we're making a lot of progress. we also?;■ put collars on the d. >> on fixed rate? >> collars? >> collars on the debt, caps it out on protecting us on the upside. we think we made a lot of progress on the debt. as the interest rate has gone up, that's been a concern. >> interest rates going up and tighter liquidity too. is that a concern? >> well, now that we have -- we have thee1 collars and showed w can pay down the debt, it is less of a concern. >> okay. ron, thank you for coming in today. >> thank you very much. appreciate it. >> iq can use all those things

too. *q refrigerated? >> they do. what is differentt( about our productr that it comes to you fresh. it is not frozen. buddy harrelson -- ç pete rose said i won the fight, coming up, a new call on the banks this morning from widely followedfá mike mayo. plus, gamexd stop jumping in premarket trading. dom chu next. and then later the fed's game plan and whatçó markets should expect. we'll talk to former goldman sachs chief economistñiçó jim o'neill who will join us in aw3 couple of minutes. "squawk box" will be right back. "squawk box" will be right back. time now for today's aflac you know coach k, retirement looks good on you. who needs championships when you can look at birds? uh, coach, i'm looking at a goat! a hospital bill for $1200 bucks? gaaaaaap! did you say gap?

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weighed 2.5q pounds and costçó nearly çóq$4,000. let's get to dom chu with a look at this morning's premarket movers. dom? >> all right, so, what we have right now is a situation where if youñi look atçó the overall picture for earnings, the key to what we're watching right nowq s for shares of çói]nike. and foot ware maker, gains and losses between 1% right now. nike comes out andñi easily top expectations for both profits and revenues, butxd it is inventory concerns that have some investors still a little bit worried right çónow. they think, though, nike, that thoseñi inventory levels will g healthy by the end of their fiscal year. nike did take a hit onfá profit margins because it had to mark ó down, discount some of the inventory to move the product out. we're watching that, some sales weakness in china that came in below expectations, nike shares on balance down about 1% in theá premarket trade.

from the original meme stockñi perspective, our next squawk pick is>x#ame stop shares, up premarket highs now. thexd volume isq starting to pi up. the video game and entertainment retailer came out with results. profitable. profit per share positive for the first time inq two ñryears. sales, though, did fall slightly over the same period last year. now, they cannot really compare to analyst estimates because not a lot of analysts cover this particular stock. it is not reallyó[■ a fair comparison to make.+■ profitability there, game stop resolving some investor concerns at least for now. by the way, keep an eye on fellow meme stock amc sympathy on that. our last pick right now is a two-fer. we're looking atok shares of pn financial and u.s. bank, these are two of the biggest regional banks in america. they're getting some help premarket right now. u.s. bank up by half of 1%. pnc up fractionally, just about flat on the session.

mike mayo, banking analyst atqq wells fargo, coming out andó[■ naming both of these signature top picks. they like the franchises there. keep an eyeu■ on those regional banks. back over to you. >> good. thank you, dom. they didn't show some of the other memes. that's how those things work, though, right? game stop earns axd profit and l the meme stocks start going again? >> here's what i would say. these days, i don't k#v how many meme stocks, true meme stocks there still are.xd we knew what they were. i looked atu■ bed, bath & beyon that's a penny stock now. not sure it is a fair comparison. amc is the most, i guess, significant comparable meme stock. >> right. where are they now? i think we should do a segment on that. where are they now? where are they now? >> '1+y you tell me, i'll make it happen, joe. i'll do that. thanks. coming up, full coverage ahead of today's fed decision. formeró[■ kansas city fed presit

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welcome back toc "squawk box." we have been watching the futures this morning. they have been bouncing around a little bit into negativet( territory, a little bit of deposit territory. right now a mixed picture. you have the dow futuresçó up b 30çó points. s&p 500 futures up by close to five points. the nasdaq down by 2 points. tiktok's ceo will be testifying before congress. this will happen tomorrow in prepared remarks. the ceo pledging now to keep safety for teenagers as ai] top safety for teenagers as ai] top priority. the platform has &e$er shared data withxd the chinese government. he said that before. tiktok will also pledge to firewall protect the u.s. user data from unauthorized foreign access. this is nothing new to be honest

with you. he's been talking about this since the past year. we talked about itw3 in novembei i think we did that interview. >> i think ramping it up, though. >> i don't thinkqçje)ju any different. it literally -- it is the same. it is we're going to -- we're going to separate the stuff and never done it and you have to decide, i think at some point whether you believe the company or you don't believe the company. >> yeah. when we come back, former goldman sachs chief economist jim o'neill will join us. and former kansas city federal reserve president tom hoenig will also be joiningçó us short. a reminder for you, if you (vo) if you've had thyroid eye disease for years and your eyes feel like they're getting kicked in the backside, it's not too late for another treatment option. to learn more visit treatted.com. that's treatt-e-d.com.

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welcome back toñi "squawk box." we're counting down to the fed'i highlyçó anticipated decision wh february cpi indicating inflation still running hot, widely expected the fed will continue on its rate hike path. but some analysts are calling for a pause or a cut. jim o'neill, former chief

economist andñi former ministerf the uk treasury. good morning to you, jim. it has been a long time. >> good morning. nice to be with you.w3 sorry i'm not here on video. i don't know what happened with the picture. >> i'm curious on ae1 morning le this, if you were jay powell, what would you be doing? >> i would be praying. this is a toughy for the fed as it is for the banke1 of englandn the uk tomorrow. on balance, i think given how the market is priced right now as a saw somebody describe r they have a bit of a three hit with a 25 basis point move. but i think the statement is probably more important than whether it is 25 or 0. ifw3 they sound too hawkish, th run the risk ofçó setting off a

new bit of whatever has been going on in the past fortnight and given the inflation numbers last month, they can't7co#e1 re afford to say, well, we're kind of all over and done/t with forever. so, tricky even by the standards of recent times. >> so if you go 25 basis points, are you doing that just forçó credibility and is that even credibility? meaning, is that a pretend credibility? we don't want to scare the markets to think it is even worse than people know. or would you really want to be going and doing nothing? >> you know, i think it'sñr kin of by default. the only choice they got in the circumstances, so the way you imply that question is kind of 1et one of the reasons why i think that's sensible to do thing is my own bias is that

1e%9 actually is improving quite a bit, particularly on a global basis. i think last time i was on with one of your sister programs, not so long ago, i pointede1 out th and it happens much more since, despite the recovery of china, global commodity prices, particularly sharply. and that's where a lot of the source of all of this came from, and we got a lot of weakness in prices going on around the world, so the leading indicator■ would be suggesting to me if i was a central banker, we hiked q lot, we need to be careful to not cause something we're going to regret. and i'm also saying that with a background of somebody that has been around for a few decades and every rateñr hiking cycle,w amazingly, however nuanced and

fifferent each of them are, it seems to weed out some kind of problem in the system and the key for policymakers is to not tip it over into let's call it an unnecessary systematic crisis. >> right. jim, help us with this, how risky do you think the banks are? the other piece is the risk of deposit flight, whether we have in the united states and people say we have too many e1banks, i don't know if you think that's i true. i think we all appreciate and like community banks and regional banks which touch people in a way that sometimes the big banks don't. how do you view that piece of it? >> i've been thinking a lot about that ahead of -- i think it is very different than ñi'08. the endnationwide housing bubbli think first systematic nationwide one of a overvalued house prices in the u.s. i think

it ever had. plenty of regional ones.ok but the afksjf across the piece whether in the u.s. or overseas were completely exposed to that bursting and this is different. there might$ááát pockets of bubbling aspects in the vc world, i suppose. and so some as wet( saw with silicon valley bank, heavily exposed to dominant a player in the space, and as i said, you know, every rate hiking cycle finds out the weaknesses, but if i look at the -- fromú macro perspective, there is no obvious sign of the same kind oá systematic bubble that wasok so obvious in lp'08. so famous last words. i think that's the general picture to me. and one important caveat, i lxe silicon valley bank that the role of ther quite as savvy enough.

a number of these regional guys have been probably playing on china keep their overall valuation and equity requirement below theok threshold-9■ of whe they come under ñh%■ full regulators from the fed. that is something that needs to be dealt with. >> i got one for you, talking about regulators or governors on companies. anything about credit rating agencies, we talk about them av lot in 2008. havingxd not done a good job, moody's or s&p. >> you know, no e1e1disrespect the work that thesefá guys do wh all these agencies,'c■ but in r)h$ave never believed but in they're leading indicators. they -- it is not easy, right? but they tendht■ to respond to t already is going'c■ on witht( markets. anñd you see it happening here. and frankly you'll get to the

lagging indicator. just take -- i'm not following it every day in theg7i ways i d. yesterday was quitee1 interesti and i thinké"ñ some of them downgraded some of the big further. but surprise, ñrsurprise, becau of what janet yellen said, we had a big rally in the stock prices. so, you know, i never thought of the rating agencies as leading indicators. and for them to be really, really useful somehow they got to try and become more cutting edge and leading indicator in the risks that are out there. >> what was it that janet yellen said that you think led to this? is it the idea that even though there is queqû9m■ about what they can do and how far thexd government can go, you think that she's basically implying that she is going to say every ñ them will belp allowed to go under? >> i can't imagine that the fed would be pressurized took go th

far. but i read from what she said that they need to look at what they put in place in '08, which, you know, until recently in what has worked reasonably well, particularly for the really big systematic global banks, credit suissexd adjusted, and until recently, that'se1 worked prett well. what this has revealed, some very, very important regional banks, silicone1 valley being regional in the sense of being so heavilye1 relevant to the startup world, and actually have notd way that they should be for a dominant industry, and they probably have to get some kind of similar treatment to the big guys. >> jim, i want to thank you for your perspective. we'll all be watching to see what happens at 2:00."■ p.m. a little bit later today. >> thanks for having me on, guys.

>> you bet. it is decision day for the fed. we're going to speak to former kansas city fed chief thomas hoenig and get his thoughts on what the fed should be doing this afternoon and maybe more importantly on the events os( te past couple of weeks, what caused them and whether we're caused them and whether we're doing

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new overnight, inflation in the uk jumping unexpectedly in the month of february. consumer prices rose by 10.4% on an annualized basis. that was higher than the fá9.9% economists were expecting. it was a m of xdxd1.1% and that's nearly doubled the forecast. ¢

course and continue raising rates. joining us, thomas hoenig, now a distinguished senior fellow. i love the piece i saw over the weekend in "the wall street journal," i want to get to that, a similar op-ed today echoingxd lotlp of your comments from ove the weekend, thomas. but we'll start with what you said. you think theok fed needs to st the course and whatever happens over the last two weeks continue to figh!] inflation? >> i think the fed is, yes, let's continue the course as difficult as that may be because inflation as they have indicated themselves has to be the priority going forward from here. ñ to be further unease as a result of that, but down, then they're going to have bigger problems later onok as w witnessed in the past. so, yes. >> you've beenok warning for ae while that maybe everything wasn't totally fixed with dodd

frank and you key on one very important thing that now is front and center and that is risk-weighted capital standards. bb=o healthier than they actually are. that may have gotten svb and some of the other banks that we'rei] looking at now, got we' looking at now, got them in trouble. now we're talking about an implicit guarantee for deposits, which just seems like it increases the likelihood that bank managers don't need to be that careful about capital. >> well, that's an issue. if you have the moral hazard that you're growing, when you bailed out all immature depositors with the silicon valley bank, you set the expectation. that's why you hear the secretary of the treasury and others reemphasizing that depositors will be safe. that means there's less for the banks in terms of growing deposits and that's difficult.

in the short run you understand that. but the effect is to cause bankers and depositors to take their eye off the ball as far as safety goes and there is a long-run cost for that. the risk-weighted capital, it measures what someone in the fed says is a risk rather than how much capital do you have to absorb losses from wherever they come on the balance sheet, including interest rate risk. >> a pretty good paragraph here from the journal today, a stable financial system requires clear and transparent standards, no. sound regulation. i don't know about that. and above all market discipline to punish reckless behavior. if they guarantee deposits once when there's run on a bank, why would we think they wouldn't next time? isn't that a press didn't to

tell bankers they don't need to be nearly as careful because they're going to get a run, no bank can fail then? >> bankers doesn't have to be careful, they assume they're going to get bailed out. yes. that's going to be a problem going forward. it's been a problem for decades. the central bank and the treasury have been intervening in the financial markets since at least the mid 90s starting with the asian crisis and the discussion financial crisis and on and on from there. so the expectation is set. it will talk a lot to change that expectation. one of the things they need to do is raise the capital level. if you look at the full balance sheet and risk, they have capital listed around 5%. off of trillions on the balance

sheet you have a 5% margin and that's too low. the fed needs to have stronger capital standards so someone has to be looking at these banks going forward. >> these rule remind me, even a lot, talking about financial news and that's goldberg scheme. dodd-frank is so convoluted and every regulation has so many aspects. what about higher, real capital ratios? if it was 10% and you didn't use risk-weighted capital, will banks lobby and say they won't lend money if they have to have 10%? >> if you're a stronger bank, cost of capital goes down, number one.

and number two, you can withstand shocks like we're experiencing now much better. no, now amount of capital will save you from bad management but capital will keep good management able to absorb shocks that come their way. when you have 5% rather than 10%, your margin of error has been shrunk by half because people don't know how much capital they have protecting them and why take the chance? >> that was going to be my point, thomas, this idea that no matter what happens, bankers are probably in a fetal position and very reluctant to be issuing loans, particularly at the regional banks where they've seen a loss of deposits that come through. we're looking at a con traction in the economy. nobody knows how much. when you're calling for the fed to raise interest rates and continue in the fight against inflation, we don't know how much of the job is already being

done for them. i guess there would be a lot of people who would argue for caution and say let's see how things shake out first. >> well, that's an argument. it's the argument that was used in the 70s, then we ended up with 14% inflation and a much worse situation. we need to take care of the fundamentals. the fed kept interest rates at zero for over a decade. you can't correct that overnight. and by not having strong capital, the ability to hold on to loans becomes less because now you have to maintain your very low capital. that may be contributing to the slowdown, but i'd say they'd better focus on inflation, better focus on getting capital levels up so we can withstand these shocks without so much

turmoil and without that we're going to repeat this again in the next decade perhaps. >> so it's in the banking system and real estate. across the board how much duration risk is still around that we don't really appreciate from staying a the zero for so long. is svb the tip of the iceberg or something we can manage, you think? >> certainly we have other duration risks in the sense that you have banks -- they put assets on their books, longer term assets and interest rates have risen. it's also going to take place in the loan book and other assets. so, yes, we have other duration risk issues going forward. we have to be aware of that. doesn't mean that the world is necessarily going to come to an end but we have to manage it now. that's why i think going forward

banks should be thinking about should i retain more of my earnings? let's build our capital account. we'll have a stronger capital, we can make the public know about that and that will i think help build confidence. we have more -- in my opinion, we have more stress ahead of us because it increased interest rates in one year by a factor of more than 20. that's a great amount of an increase. you're going to have stress. >> thank you. the world is not going to end, what you just said. i'm going to take that to the

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like happiness, love and confidence... you can't buy those. but you can invest in them. at t. rowe price, our strategic investing approach can help you build the future you imagine. good morning. playing the waiting game. relative calm so far on the futures this morning. the big focus, of course, pause or hike. we're going to talk to former fed president about the challenge for chairman powell and former goldman sachs ceo will be with us.

lloyd blankfein. we're going to get his views right now as the final hour of "squawkbox" begins right now. good morning. welcome to "squawk box" here on cnbc live. i'm joe kernan. we had two good days after a pretty scary weekend. today is in wait and see mode. down a little, up a little, but all waiting for the decision, which if we get 25, i guess

that's what's expected. i'm not sure that changes things that much. obviously the comments and the outlook are going to be important to see whether that's changed at all given what's transpired in the banking sector. treasury yields also, you wouldn't say they're way out of whack with what we've soon. we've been below 3 1/2. >> a heck of a lot stronger than last week, though, the yields. >> right. and after a couple of bank failures. so receivership or however you want to -- >> that was down to 3.6%. >> a high of 4.7 or something. >> as joe mentioned, the countdown is on. the markets will get the fed's decision on interest rates at 2 p.m. eastern time followed by chairman powell's news conference. steve liesman has been

handicapping expectations which seem to change on an hourly basis. >> while investors try to game out what the feds are going to do today, this's a little-discussed wild card and that's the large number of freshman voters right now. they all joined the fed in just the past year. now, all have voted for rate hikes since joining the fed. inflation has been running high. you can't tell these days the different between a hawk and a dove. the outlook is more uncertain. differences could emerge today with the vote. you could call fed chair jay powell mr. consensus. he works hard before meetings to forge that consensus.

7% of all votes cast were votes under bernanke and yellen, only 3% under powell and only two dissents since the fed lost what's been the greatest rate hike cycle in 40 years. futures market is back to predicting a firm 80% probability. markets expect the fed is going to be almost done when it hits this 475 to 5% range and there's debate in the market about whether it does one more hike in may, then the fed is seen quickly reversing course. if not today differences among fed officials could emerge in the months ahead over how much this bank turmoil affects this economic market but also, guys, at the federal reserve. andrew? >> i want to get over to our senior commentator mike san

>> take a look at the s&p going back to last may. go to a ten-month chart. it basically shows you how we've been in this range this long. since may and, by the way, that's when the fed funds rate was still 1% i think back in may, with only a couple of hikes into the whole campaign. we managed to kind of oscillate around this level for quite a while. we're above where we were when svb first buckled, right? a little bit anyways, a few points. but look out. since february 2nd, you're coming together at one of these fulcrum points.

i guess the pause is in the fix income, which is extreme. in is the treasury volatility index. it's at such a level, just off its highs but above 150 has only happened a handful of times in the last 30 years. so clearly the fed has to do something perhaps to offer clarity that bond investors have to have some insight. gold leading into this bid on a very good run, went above $2,000 an ounce briefly early this week. after it happened these sprints, now the onset of covid is right there, it had another one of these spikes, that's the pfizer

vaccine getting approved and then you have the new administration fiscal impulse and the start of fed tightening. so keep an eye on this. gold doesn't do as as well when central banks are seen as being in control, joe. >> a list of things that happened in the past 25 years made my toes curl up. we're done, right? nothing else can happen, right? >> that's just a handful over 25 years. >> is there any way we can go back to leave it to beaver? i guess not. that life is gone forever. >> i'm sure it would have gone haywire in the cuban missile crisis or something like that. >> you're right. life is -- man, got to be on your toes. coming up, restoring confidence in the banking system.

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welcome back to "squawk box," everybody. we continue to monitor the futures. we're in a waiting period, waiting to see what the fed is going to do. as a result, we have not seen serious movement in one direction or another. s&p futures up by less than half a point, nasdaq down by less than 20. >> he weathered the 2008 banking crisis and has some advice for bank regulators, former goldman sachs ceo lloyd blankfein. i was hoping you'd join us in studio but then i was told you're in florida. >> i'm in miami but my taxes are

still in new york, rest easy. >> history they say never repeats itself but sometimes it rhymes. is it even rhyming at this point, in your view, what we witnessed in the past they weeks? >> it's a lot different. in 2008 you had bad assets and people didn't know whether you were very valuable or valueless. this was a big issue. turned out to be more value less than valuable. here you have the best assets in the world in most of the cases, good, sound mortgages and u.s. debt. banking system in much better shape than it was before, doesn't involve the biggest bank, which were much more systemic at the time. but, you know, it's different but there's a lot -- there's only a few ways of getting things right but a lot of ways of screwing it up.

just because it's different doesn't mean it's not concerning obviously. >> the reaction of regulators this time around, we keep talking about explicit, implicit, deposit guarantees. do you think we're going down kind of a slippery slope when you start telling bank managers they don't need to worry about runs anymore? >> well, they have their own worries, solvency and other issues aside from whether they keep their deposits, whether they can make money or not in their businesses. they may not do it. but the cost of their funding goes up and they have to pay out and they don't make more money because they have securities that don't pay a lot of money. say it again, joe. what was the question? >> do you think it's a dangerous precedent to start saying we going to guarantee all deposits? there are some really rich

people -- go ahead. >> we're going to go down a policy road here that's going to be a lot of debate. but also, there are consequences, a moral hazard to doing anything where you go out of -- you change the rules to make things come out better for someone else. a lot has been said about this. i've said this before. what is real? are we really relying on depositors to enforce bank standards? really not. no more than we're relying on flyers to enforce the standard on airlines. usually the government puts its seal of approval on it. we take that for granted. some of what we're talking about is risk here but on the other hand, if you don't, what's going to induce people to put money into reej until banks that have substantially lesser regulation, capital requirements, stress tests? for my money, for no difference

in interest rate, i put my money into biggest banks that are going to be frankly safer. do we want that? certainly it wasn't an objective to get more concentration and you have to think of the value of the way our banking system is structured in this country. it's not like any other country in the world. we have over 4,000 banks. most countries have a few large banks but their management is central placed. we have banks communities, banks in industry, banks that cater to particular demographic groups and we have among economies the fastest growing economy. you have safety and you also want to have growth and risk taking. these come down to policy judgments. you're right but the other side is right, too.

where do you want to come out? >> where would you come out? because there is a question about, as we said, i think philosophically everybody loves the idea of a community bank, it touches the community in a way that a big, bad bank from new york that has branch necessary some community may not. having said that, as you look at thousands of them and from an economic efficiency perspective, you can make an argument about the ability to regulate them. i'm not sure our regulators are so brilliant that that's our problem but maybe. i don't know. there are people who say there's just too much of it. >> well, now that we're in this mode, we're going to be focused on safety and soundness of regulation, kind of oblivious to the cost of that. we should pay that cost but where do you want to balance it out? i do think the banking system that we have, actually does a

pretty good job of extending credit into all the capital areas it needs to go, especially small business. i'd like to preserve that. i would like to manage out of this particularly moment so if somebody came around and temporarily guaranteed all deposit, i would understand the institutional part of the fed. the policy, maybe it comes out with higher caps than $250,000 on guaranteeing, maybe much higher. more regulation. you can say and it probably the conservatives would say anybody conservative and looking at safety and soundness and say why did you have your no stress tess lower requirements with small banks? the reason is not that they're safer, they're not, but it's less consequential if they have a bad outcome to the system

because they're not systemic. guess what? a $200 billion-plus bank shy of 250 is pretty consequential. you may have to elevate the regulation of anybody else who has deposits and with that regulation and extra capital requirements come extra cost and a lower velocity of lending. if you make people hold more capital against the loans, of dollar of capital and deposit is going to produce fewer loans against it so there will be a deflationary effect on it. it's not right against wrong, good against evil.

>> the one thing is the idea that banks were carrying all of these assets. these are good assets but they weren't market to market. and in a rising interest rate environment, obviously they're much less valuable than they're being carried. that's the thing that i don't get. i thought we learned our lesson with not marking things to market. >> i testified about this. now, the history of my old firm is a little bit different. we were an sec regulated firm, always market to market and didn't have the framework of no market to market but culturally market to market is the one thing that for sure would have spotted this crisis, the losses, and forced risk management on them because it would have been run through the p & l and it

would have been dealt with before it became existential. andrew would know in a post-financial moment i testified that market to market was the way to go, i believed in it but people brought up the down side of that, which i also acknowledged, which is more volatility. these are things that go bad and come back unless they go bad and stay bad and get worse. most times you can breathe through this and look at the normalize the p and l without market to market your big battleship of asset and the whole battle sheet. but on the other hand you're going to get situations like this where you're going to ignore the problems too long until they get existential.

you asked me my judgment. i would take the consequences of a little more volatility in the p and l. you can explain that and show it but the best risk management tool that i know of is market to market. the first sign of trouble we ever got was not the intuition that something was going wrong, it was looking at the p and l and seeing that prices were going down. that is the best risk management tool. >> what do you think jay powell should do today, lloyd, and what do you think he should say after he does it? >> well, i think there's been a steady refrain of not much difference between a hawkish pause and a dovish 25 basis-point raise and it all in the rhetoric that followed that

shows he concerned about growth and the economy, too. personally, having said it's not usually consequential, the market is saying 85% at least of a chance of disruption. personally i wouldn't do it. part of me thinks they won't do it. there's also an institutional aspect to this. when you think of the mandates to the fed, you have the economic mandate of growth and inflation fighting. those things have to happen over time. inflation could go up, it could go down. you're trying to get to a mid point. but with safety and soundness, you have to have safety and soundness every day. on the economic side, there's a lot of influence on that. but in safety and soundness, institutionally, the fed owns that. if i'm sitting on the fed, something that can never go wrong, never go off the rails, i

would kind of lean into that side of things at this moment. >> we've had people say that the fed -- we created the fed after the 1907 banking crisis solely for strength and instability of the financial sector and only later did they get those two mutually exclusive mandates. you got to control inflation and you got to have maximum employment, which seemed diametrically imposed. >> there's the money policy side and regulation. you could split that. those can be split apart. i don't think they need to be split apart. i think you can manage that and i think they are highly related. if you're worried about growth, you for sure don't want the banking system to have huge problems. apart from the trauma of the banks are the transmission mechanism. when they raise rates to lower rates, they're trying to affect

where the left-handing expands and contracts. >> here we go, implicit and explicit again. implicit what you just said. you think if they do go up 25, that could put additional stress on the stability of the system? >> as i said, not a lot. again, it is a dovish way, by that i mean the dovish rhetoric around saying we acknowledge that we are concerned about the problems, we have other tools available to us to address. it's a kind of weird situation where the market is forecasting a raise and then right after it, you know, a collapse in interest rates or drop in interest rates. i would skip the intermediate step and just pause here. the deleveraging effect of all this, the less lending, the more conservatism, the chilling by banks of capital is highly

deflationary. there's going to be less lending. the effect is probably as much as a 50-rate. i would have a hawkish comment and say we're doing that because financial conditions have been substantially tightened by this. two weeks ago we didn't contemplate the conditions we're experiencing now. this is cautionary. >> where we are right now, are interest rates normalized and do you think we'll be where we are right now a year from now or will we be lower where they have to cut in. >> i'm not buying the market right now. interest rates are high because we're trying to step on the brakes. when you're driving normally, you don't drive with your foot on the brake. i think in a normal lifetime

from where we are today, rates will probably go down in the normal time, we'll have a normal yield curve where short rates will be lower and long term which used to be more risk would extract a higher interest rate to compensate. that's normal. >> maybe go to 7% or something. we've heard 6% and 7% bandied about. that's not in the cards in. >> yes, it's not in the cards today. again, i'm in the risk managing business. i don't care what anybody says. i don't even care what i think. >> talk about contingency planning, first republic, what do you do? should the government be forcing some sort of shotgun wedding? same thing with pac west and a couple of the others? >> i think and this goes back to -- catches some of joe's

moral hazard. if these institutions were weak and would not make money, i think that's what the resolution authority is for. i'm not seeing the forensics on the balance sheet. i'm just saying in what i see of those institutions, possibly, probably, but i understand that in a moment of systemic drama, you might, you know, i'm not ideological. i don't want to go down with the ship, you have to be practical. maybe it comes down to what i would do if i was in their position and knew everything they knew. one thing is the bank, this consortium going in and try to help out a bank.

i don't find that very confidence inspiring because i don't really think they're doing analysis and deciding on good credit or good investment. i think people are trying to be good sit accepts and having their arms twisted to participate. i don't think it has achieved yesterday the confidence inspiration that they were seeking because everybody -- i think everybody realizes they're not doing it out of a commercial analysis of the prospects of that institution, they're doing it because they're being asked to do it. to do it. >> lloyd blankfein, we look

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we got a couple stocks to watch today. gamestock shares higher, 48.2 million during that quarter and sales dropping slightly from a year ago. the results can't be compared to wall street estimates because too few analysts actually cover the company. let's talk about boeing as well. the company's cfo saying that the company could take additional charges to the kc-46 tanker program that has a supplier quality issue. the company said deliveries were delayed because the supplier had delayed because the supplier had some completed proceesss

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welcome back to "squawk box," everybody. continuing to monitor the futures and really things have been tied to the flat line all morning long.

you see it right now, futures are down but only by about a point and a half, nasdaq down by 21, s&p down by over a point. >> let's get to rick santelli with a look at the treasury markets this morning. he's standing by at the cme in chicago. what do you think is going to happen today, rick? >> well, i think the fed is going to deliver a quarter point. it kind of feels like an old car that's just about out of gas, joe. radiator's leaking but it's on the top of a big hill. it's going much too fast at dangerous speeds and the fed wants to slow it down, even though most likely it's going to break down and get to the bottom of the hill and stop. i don't see any way around them doing 25. i think the logic that many have expressed on your show, joe, that if the fed doesn't raise a quarter point, it's going to show how nervous they are about the banking system. if they were nervous about the

banking system, we wouldn't be talking about the banking system, they probably would have monitored it better and i think everybody knows there's some nervousness out there. people are awake. people aren't ignorant. it seems like a very superficial argument. joe, i think you actually get the a-plus. you've been talking about raising capital requirements at banks. for years, going back to '06 in the credit crisis, trying to modify behavior of banks is a alsoing proposition. they're lions, they're meat eaters and the government leaves raw steaks all over the place. like clients that trade. talk to terry duffy who runs a great exchange here at the cme or any other exchange in chicago. they learned when markets get crazy they protect the house, the exchange, the customer, the client by raising margins.

it's a very simple principle. >> you got enough to withstand anything and you withstand anything and that informs your behavior up to that point. at this point the behavior is not being informed any better than it was previously. it's crazy. bankers are going to do what bankers do. you can't blame them. they want to lend as much as they can, right? they want to try to make money. can't make it -- >> i never blame bankers. to me the issue is blaming bankers just means you don't understand bankers, you don't understand the business, you don't understand the usery business and i think when janet yellen as treasury secretary does pretty much the same thing that she did as chair of the fed, always the path of least resistance, just knocking down the rules so we don't have any problems. i haven't heard kick the can in a long time. it was very popular '06 through

'09. that's exactly what we do and i've getting tired of it. why guarantee the banks with some of these clients with big debts on our show, they should snow better, joe. >> rick santelli, sometimes we know things at 8:30. today -- >> 2:00. >> more on this critical fed decision, i want to bring in a visiting scholar the mit. good morning. eric, it's the question, we're all trying to figure out. what do you think the fed will do and what do you think the fed should do? >> i think it's a difficult decision for the fed, as many of your speakers have highlighted, inflation is too high. but on the other hand, there's a lot of uncertainty as a result of the financial turmoil that we have. arguing for actually raising

interest rate is clearly if they want to get inflation down to 2% over a reasonable period of time, they're going to have to keep raising rates until something else happened. but in this case, something else has happened and that is the turmoil with the banks. and that creates two challenges. one challenge is we don't really know the extent of the problem at this point. we know that there are several regional banks that have either closed or are having significant problems but there are probably other financial intermediaries similarly situated and weren't well positioned for how interest rates went up. we may not see all the problems that occur. the second issue is we care about financial intermediaries because they provide credit to the economy. it will be unclear for a while how much the economy is going to slow down. in the past the fed has tended

to try to take it easy around financial instability. my own view is they should follow the policies of the past. if they pause and find out the financial turmoil dies down, they can also raise rates a little more quickly. but if they raise rates and financial turmoil becomes substantially more significant, it is going to look a little bit awkward that they were raising into that financial turmoil. >> that's what you think should happen. what do you think will happen? >> so the markets are saying they're likely to raise by 25 basis points. i think actually that the risk management argument in the end will be the argument that wins the day. >> meaning they won't do it? >> meaning they'll pause but

they'll pause with language that makes it very clear that if the turmoil resolves and inflation is a problem they will quickly go back on track to raising rates. >> and some people say you could say we're going 25 basis points and then after this we're pausing and we're going to see where we are, or we're not going to do anything but we may do 25 in the future, right? how different are those two things? one actually is a difference, i know but in terms of the perception and the marketplace? >> well, in terms of inflation, whether you tighten by 25 basis points in this meeting or tighten more at future meetings, no model will say there's a difference for an inflation path. if you tighten into the turmoil and make the situation much worse, that's something you just don't know. part of the problems with

financial instability is there's so much uncertainty, it's very difficult to quantify. >> what data does the fed have that we don't at this point? are they looking at daly numbers of deposits at different banks what those levels are? what kind of things would they be kind of using in the risk management side of this equation? >> yeah, the federal reserve officials will have substantially more information than is it public available. both the discount window and bank supervisors will closely monitor the liquidity of not on institutions that had been highlighted but the larger institutions and smaller institutions as well. they will look what the collateral positions banks hold in case things get worse and they need to tap into the discount window. there's a lot of information

about liquidity and financial institutions that won't be publicly available but will be available to the policy maker. >> weigh in on two other things. one is the role of the fed from a regulatory perspective as supervisors, if you will, of these institutions and what you think went wrong. >> first i would highlight what went wrong with the risk management of the financial intermediary itself. silicon valley bank is a $2 million bank. they should think of interest rates going up and down. in terms of the supervisory process, i don't think we have enough information right now. during a bank exam they'll highlight things brought to the attention of the board of directors. they can highlight the things that the board of directors

immediately should be focused on. they can change the ratings of the bank, of the holding company. there can be informal actions, only if there's a written agreement or cease and desist order that the public is aware of what the supervisory process actually did. i think we're going to have to wait and see what the investigation being conducted by the vase chair actually turns up. i'm sure there will be other information. right now i don't think we have enough available public information to ascertain what the supervisors did what they told the banks and how the banks reacted. >> do you think we'd be better off in in this country continuing to sport community banks throughout the country, thousands of them as you know or what do you think about the argument we should have more consolidation in this country? if we're going to guarantee deposits in this country, we

might have that consolidation anyway. >> so banks are in very different markets. community banks do focus on small business loans are much more likely to be lending on real estate collateral, are much more important for real estate more generally. the largest banks are less likely to give loans that are to small and medium-sized businesses. so by consolidating the banks, you do still create a problem that small businesses and mid size businesses may not find their credit needs met nearly as well. so i think it's very important that we maintain community banks and regional banks that are in different markets. >> do you support guaranteeing deposits across the board, implicitly and more important explicitly? >> i think the secretary's

comments already implicitly did it. but i actually think that there is not that much market discipline provided by large depositors. there are a couple of reasons for that. if you're really worried about deposit insurance, you're not going to put your money into a small or medium-sized bank. you'll either put it in a large bank, you'll have an arrangement where there are swaps or you're doing repos or you'll buy treasury and have a treasury function directly. so those that would closely monitor that risk probably do not have large deposits in mid size reemg nal banks. the second thing is i don't think bank management necessarily responds that aggressively. they do respond to shareholders. i think they're much more responsive to stock prices than

they are to deposit flows so i'm not convinced that market discipline plays as large a role as some economists believe. so much i think if you want to stop bank runs and avoid significant consolidation at the largest banks, increasing the deposit ceiling makes sense and possibly saying all deposits are insured makes sense to me. >> eric, fair enough. appreciate your time this morning. >> up next, we will head down to the floor of the new york stock exchange and find out what's on jim cramer's radar this morning. first republic down by about 3.5% after a big gain in 3.5% after a big gain in yesterday's market.

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welcome back to "squawk." we're looking at shares of pac west this morning, says it has more than $11.4 billion in cash. it says it is determined3 has determined it would not be capital raise at this time. nonetheless, i think some of the statistics and numbers around the depositçó xdçóbase, they sa and some other numbers inñr her maybe at least initially giving some people a little bit of confidence in that firm right now. >> 100%, for w3sure. >> excuse me? >> i said, you're 100% insured. >> the fdic part. >> implicitly. let's get down to cramerçó the new york stock exchange. we'ved■ reminiscing. everything's coming back, jim.ñr financial criux, everything. we've beençó talking about game stop today, one of our former favorites. i just want to mention one thing. i mean, it'sñr up $10.t(

it doesn't have a lot oflp analt coverage, butw3 the guysñrq at wedbush, they're raising the price target today, jim. it's at $27. they're raising theçóq price tat to $6.50÷ú■ fromñi $5.30. so,ok just factor that into the calculus on what to doñr with that. bute1 whatlp do you think? >> i like the quarter. they cutñi expenses ratheri] radically, and they actually bit. >> they had consoles. they had much better management. this was añr breakout quarter aa them to dor so, i think the stock will be up more than it is now. >> pining for the days. >>ñi it's a solid price target. >> pining for the days of, boy, those were the things were really rolling. you just heard the -- >> actually, can i add something specific to the pac west bank

corp.? it says they explored the idea potential investors, decidedi] wouldn't be prudent to move forward with capital raise at this time, but they goxd on to y they did secureçó $1.4 billion fully funded cash proceeds from atlas sp partners through a new senior asset-backed financingñr facility. so, basically, they put up the assets and said, it sounds to me like they had to do thctv insted of doing a capital increase. >> i think you're right. it does seem weirdxd that they said the company determined it would not be prudentxd to move forward with the transaction. well, i mean,q i think prudent means, move forward with the transaction. theyñr need■ç■r but you're absolutely right. they've got a source of money.çó over and$)+er again -- >> by the way, that new money is senior to anything else they have assets backing it up. it sound(ée1%-át+h(á$ @r(t&háhp% get capital the other way. >> that's onexd way to look at , iok think. the $1.4 billion fullye1 funded cash proceeds.

i think you believet(ñi in thes banks atfác your own peril. >> i wonder ifçófá there'sxd --. i wonder if it'sçófá risk weigh. they not have access to the capital, or is itñr that the capital would have come at such a steep price? >>ñr discount window. i mean, we have to know -- are they telling us exactly the flight of the xdd(tju)uáñ they're saying that the insured they're saying that the insured deposits now exceed5% of 6 you're doing business in an app driven, multi-cloud world. that's why you choose vmware. with flexible multi-cloud services that enable digital innovation and enterprise control, vmware helps you keep your cloud options open.

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welcome back to "squawk box," everybody. futures lpe1are, again, hanging around the flat line this morning, waiting to see what happens with the fed atñi 2:00 p.m. eastern time ñilptoda ecision they'll make and then what jayt( powell has to s at that press briefing that styáuj 15 minutes later. ahead of that, though, we are getting some flashes, different things we have been hearingt( about. want to bring in toi] talk more about markets, stephanie link, hightower. we were just talking about these headlines co,q bank corp.,e1 they did secure cash proceedst( fromt(ñr atlas partners. this is a senior asset-backed financing facility, soñi i gues this would be first in line.q

it does have some assets backing it up. trying to figure out what this means. if you look through the numbers on this, they say they explored the idea of raising capital, the best way to go about doing it, also saying, look, they do have over $11.4 billion in available cash as of march 20th, and as of march 20th, the fdice1insured deposits exceeded 65% of total cts. what do you think as an investor, hearing all that? >> yeah, it's a lot to digest.ñi first and foremost, i'm a littl■ banks, tell you how strong they are, and -- excuse meym■ -- and they kind of go through al9m of these things, but these are unusual times, and it's good to say -- for them to tell us what they're e1doing, to be more transparent. i kind of think it's fascinating that they borrow $10.5 billion from the discount window among other federal prograrkip r(t&há% but i don't think they could t(sbecky. the dilution would beñr

unbelievable. and i think that would spiral things axd bit out of control. so, you know, i'm a lit$i,ñ war. we're all watching these regional banks. f't republic asñi u&l. so, i think thata@$his makes th case, in my opinion,nb■ that th largest banks in the country ar( just so much bettera5■ equippedá this kind of environment, given theñr massive excesst(+■ capita they have. so, i think they're goingñi to @d i think the big banks are going to continue to gain market share as a result, and i think they already are. you're hearing deposits are going their way. there's a lot of -- >> would you put your money there? that's myc okçóññrñiquestion. the secondary question is not times like this but what the profitability ¡spects are for any of the banks down the road, given regulations, given the potential for higher fee structures. i think that's what people are trying to figure out too. >> for sure. and i think that you have to be

selective, what you'rei] lookin at and obviously, there's a lot of analysis that has to go into it, but i do think, when you can get somethinglp like a bank of america for 0.9 times book and with ah3g yield andq excess capital and $2 trillion inñi t( deposits, i think that is -- and it's down 16% in a week and a half's time. i think that'sfá an opportunity. i also think schwab is a very a ton of excess capital. they can get as much aslp $250 billion inrf) from various different cash sources, and their deposits are notr their deposits are mixing andr moving towards moneye1 market funds. >> is that where you -- schwab? >> those are thexd two that i have. yeah. and i am overweight the financials, because i do think, again, there's a big one, they will weatheri] the storm

better when all the tu+eáz kind of dissipates. >> stephanie, thank you. we love talking to you, especially when there's breaking news and you kind of dig through stuff with us. we'llv3'eok you soon. >> thanks. we are almost out of time. it's going to be a big dg9 um. don't move. stay here for the whole day. fá . we'll be talking all about it. "squawk on the street" begins rightfá now. ♪♪ good wednesday xdmorning, st" that's the name of this show. his name is jim cramer. we'ree1çó live from post nine ae new york stock exchange.t( jim and i celebrate humpday, as we used to call it. what would you call that, jim? i would say, mixed, nothing open. >> yeah. pac west day.xd you want to go with that? right there. i'