we will have a full rundowne1 o the fed moves and what it means for your money. i think it had to do with this. treasury secretary janet yellen not discussing5a■ a boost of insurance on banklpu■ deposits. ñi coinbase is falling after the s.e.c. is preparing5@0 well notice. it is thursday, march 23rd, 2023. 3/23/23. >> that was good. >> "squawk box"ñrñi begins righ now.u■lplplpñi

good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaqi] marketq site in time square. i'mlp becky quickt( along withe kernen. andrew is off today. you will see green arrowsp the board. not as strong ast( a few minute ago. dow up 75. s&p futures up e120. nasdaq up 143. all of this comes after some big lin. markets down 1.6%. alllp equity markets. as joe mentioned, it wasn't really jay powell's fault for really jay powell's fault for any oft(tpq things that happene. he walked the fine line. markets were taking everything in stride after the fed decision and his remarks. later in the session, if you ar1 minutes before the close, that is when things fell off thexci cliff. that is when janetçó yellen was talking(>e1 congress.

we will talk to steve about this in a moment. she was pressed hard if the treasury could act with thesá fc and fe@e=■ insure alle1 deposit. the answer was the one she had to give. no, we don't have the authority to do that. >> ite1 is not a good idea. hopefully in élp back of their mind, they realize thate7jñ nota good idea. when you really -- it would be nice. nice if wee1 can say that and never worryw3 again. $17 trillion inww/s deposits? they would have to run --ñr it would be on a case by case basis. when you do it once,e1 it implyg you do it every time. the tide. >> you have the big çóqbazooka

your pocket like paulsensaid. it was good.i] you knew it would be 25 points. it is not going to kill you. 25. it says we're still cognizant of inflation. we are understandingq we need t wait and see how much of a slowdown the latest crisis -- it may be 25. >> you will see credit -- i don't want to say too much because steve is here the 2-year treasury. the yields have come ban back -- come back down. the fed may have to reverse coursee1 later this year. they say no right u■now. >> we had no idea what the5a■ reactionxd would !u■be. when i saw it, if he had gone zero, it could have been worse. if he had done 50, it could have been worse. >> yeah. yeah. ixt%9-juáu are right. i think he did a u■mastezgil jo of explaining and talking how

bank depoitssá have stabilized and you aret( seeing good thing there. you are right. >>ñr we will see with first republic. i didn't look at it today. >> it was up 3% earlier. >> down 15 again yesterday.e1 up 40 centsfá at 13.71. >> steve, take it away. good luck. i'm sorry we stepped on the top of that. we need a straight conversation with you that will last theeoruñ ten minutes. what happened? >> i'm glad you had that conversation. i'm fascinated byjf your though. you are on top of the qstory. let's go through. the fed hike 25 points yesterday and sent a message thee1 turmoi has not been bad enough toxd der the fight against inflation right now. fed chult jay powell in response to the question i asked suggested what would stop the fed hiking in the future is the economice1 impact of the turmoi and potential to tighten lending

standards. >> we are focused on macroeconomics outcomes. in particular, focused on this potential creditñi tightening a what can that produce in the way of tighter credit conditions. i think when we think about the situation with the banks focused on our financial stability tools and in particular,eozu%ñ lendin facilities that the debt --ok sorry, discounte1 window and facility. >> the fed backed off saying it expects ongoing increases. now says they may be appropriate. that depends on how much trouble the banking sector has.5a■ does it reduce lending or the economic impact? mññ the market trades with a 50/50q nin. that says the market isñr price for oneóhq'd done. sounds great. the dropçó in c)5ju yesterday has, as becky and joeñr talked

about, has anything less to do &háhp &hc% yellenñi talking to■1."■congres. cnbc was never able to confirm that story at the time. our reporting suggests that guarantees for uninsuredlpu■ 1y9-mzeáñ fail. the dodd-frank law eliminated the ability of regulators to unilaterally provided a blanket guarantee and it would require . the administration may have looked at it, but theñid have gotten ahead of itself on the one news story and seeing it likely because congress has to passt( it. it was always a long shot. h$ don't know what else we coul have done here. >> it was ae1 terrible idea. >>lp janet yellen was in the

position the day before saying everything is okay. we will look and imply thingsçó would be there. when she is in front of congress, she has to say what the law says which is we can't do this. we don't have the authority to do it. that is what she was pushed into. you know, i understand why the stocks fell based on that. >> we dw statement like we dj÷ok in 2008. remember whenw3 they giveñr loao people who didn't havñ■p address because they have theñi am-back pretended money was good because of the aaa rating. they went nuts. you remember what they built up with the fees they charged? you remember how well they were doing? merrill would watch. v■xd in the mortgage

backs? banksters golp crazy when greeds there. can you imagine if they insure deposits? they would finance everything because deposits were good. there wouíd"never been another run. that is a recipe for disaster, steve, is it not? >> um, joe, i think weú ñ have to re-think the banking system right now, joe. it is because of this. the5a■ idea the deposit -- >> moral hazard is 100 years old. >> joe, everything you said is true. given the ability to lend with no concern about the deposit base, banks might. joe, the moralñ hazard still

exists. the bondholders were wiped out. that is not gone.5a■ joe, you know i have myt(6z■ do thexd not find it and the bondholders are thet(i] depositors really inflicting on the banking system? are they acting if the banks in? >> not ine1 lpadvance. >> they got alpu■5/ haircut. the fed didn't. the san francisco fed said you have to do something. four years.g why wouldn't the equity holders know it or analysts we read about know it? bondholders? >> if you start looking through these, you really have to dig and know what you are looking

for on some of them. i will give credit. >> i did it. >> they were the ones up front on the balance sheet. they were. i read through it and they were hold to maturity. the other banks, you have to dig. i was looking for the same thing, steve. they are not up front. >> you remember enron? enron disclosed all those third party deals. everybody said we're shocked to find out about e1it. it was in theñ1 disclosures. >> we keep saying 475 basis points ine1 a year. until a year ago, no one -- they should have thought rates would go upe1i] some day. >> exactly. >> you know, four years ago no one was thinking we're moving off zero quickly. the fed thought inflation was transitory a year ago. no one knew 5% in a blink of an eye. that is what you are supposedxdo think about.

smart risk managers are not stuck in this mess. most of okthem. >> joe, for so long, we had the ability to move money with the phone. technology developed and nobody cared. there was no reason to move your money. you were going to get zero interest here and zero interest there. all ofr fast. so, the idea that the deposits are not as sticky as we thought they were, itxd really challeng the banking model. is a deposit and how long will it there be? if myzv■ deposit can leave in a hurry, how much lending can i d■ >> that sounds like treasuries or good mortgages that have a veryt( good risk profile and if you are locking5%u(fb at low ra. 2.5%.lp

3%. rates move. >> that was the yield curve. there was a reason to go long. not really. >> right. >> youfá shouldn'ti] go long. who in the right mind would buy a 30-year at 2%? nobody. you havet( to be insane to do >> a bank's business isfát( transformation. it takes short-term money and lends long. if you cannotfá rely on the e1 short-term money. the answer may be the toaster coming back. that may not be enough. >> right. >> you know ite1 will be giving them anywhere else. that's the k$;dit risk. >> what about the deposit base, r(t&háhp &hc% >> thee1 problem is you will ha to have money to get a loan.e1 that's where we are coming backó if you put down x with us and we have thise1 much in holdings, y get a loan.

>> by the way, that was the svb banking model, becky. you have to keeh■p your money i that bank. you have to be a customer across all services. they sort of figured it out. they didn't do the ç!q■ thing on the back end on the liabilitó side. >> low risk xdmanager. >> jamie dimon is the risk manager. >> heñi ñiwas. >> you have to rely on somebody else. >> all right. liesman,xw■en you have really good hair and i'm not contrasting -- i don't want to be like this and out of the shot i have looks like i'm hiding e1somethi. coming up, more on the bank stocks. jane frazier is the not seeing a credit crisis. credit crisis. later, reaction of the fede

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that and the paycheck. citigroup ceo jane çófraser expressing confidencexd in u.s. banks.u■w0"r(t&háhp &hc% saying tpi9q2áqáhu isolated qincidents. >> the banking system is sound. we are talkinge1 about a few ñi

banks. we heard frome1 chairman powell today.ql"éáhis is not5a■ someth% spread across the entireok bankg system. this is not like it was last time. this is not a creditxdçóe1 cris. this is a situationq where a fe banks have some problems and instead of making sure we nip that in the bud. >> fraser said mobileñ!ó bankin apps are a game changer when it comes to fueling t!hk runs. steve was just makingw3 that ñi point. regional banks on the move in the pre-market i&m you see. bouncing. that was after a pretty big loss yesterday. takee1 a look at the big bank ñi stocks.ñi a different world. all up less than .50%. scott seifert from piper e1 sandler. scott, everybody has different

concerns and balance sheets and 4ce%■ don't know whether there lot of trouble spots. you point out the wholee1 depos riskñi is going to continue.r as a result, banks will be more conservative, probably, about liquidity. that means they will make less th banking typee1e1 activity and regulaors could come in, too. itw3 is like an earnings warnin that we have to consider for all of the banks. >> that's right. thanks, joe. i think you raised a number of good points. you can almost look at what we are going through nowñr as a two-phase situation.u■ one is the immediacy of the crisis which number one will get through soon. two, i think what içó stress is ■ the industry is weathering the immediacy of the crisis. i'm sure, for instance, a lot of

depo- áj moved into the big banks on< ■ perception of safet. i expectu■ a lot of velocity within the industry as funds. net, it seems like we could be in the same place where we eme it exposedxd serious blind spot in the systems infrastructure. you know, i think as i suggested, most banks willçó ge through this fine. you know, there is ançó elementf wellçó poisoning here and longer-term ramifications. althoughfá deposits are holdingn at a typical bank. the value of the liquidity sky the value of the liquidity sky rocket ed. and we called that deposit data, that will likely go into overdri m i think moreover, banks will 9%9

where and what costs they deplo1 liquidity. i call tsupply of credit ore1 loans will shrink over time. of course, you alluded tolp the big wildlp card here, joe, the regulatory response. banks will have to hold more capital. if for nothing else, the swings with the unrealized gains and losses. it seems possible that they havó to reconstitute asset base.xd we have all become concernedt( about this idea of uninsured deposits which wasn'tp on tv%÷ radar screen a couple weekse@sa. better banks have held on to more cashñr on the balance shee. it hurt their margins. you know, they have become more ironclad in terms of safety. to thexd extent we have to push the dynamic down fore1 the syst

means a more conservative and lower earning group. >> so the good intentions were to let theok regionals ande1 smr banks not have as strict of the things we want them to do. small businesses. how many banks are able to use basically hides the duration risk? are therlzso other banks that h 80% like lpsvb in long-term treasuries or was that rare? >> it seemed the perceivedu■ weakerñrñi players are ooutlier. we are dealing with the notion of unrealized losses with the rates shooting up to the5a■ deg

the past yearqçó although thesee safe and money securities. it is a substantial one which has been well vettedu■ the last couple weeks. with that said, the blind spot we had was although we knew about this for the better part reaction is theñr unrealized losses don't matter unless you have to sell the securities. in a couple ofg situations, it looks like that has been the case. you know, my best guess is thez regulators will tryñi to close that gap in thee1 form of capit meaning if you look ate1 the biggest fee banks, bank of america andok jpmorgan chase, ty already have to account for those swings in regulatory capital. when you get into the smaller players, they don't. we will probably close that gap at a minimum. moreq broadly, what came out of left field for alle1 ofxd us wae

swiftnesses withe1nich the deposits could end up fáe1exiti. >> with the real estate which is a bigger question for the regional banks. commercial real estate and how much is held t'

as a result, it is possible we could roll into a more significant credit cycle which is not good for theñr group. >> scott, thank you. piper sandler. you play golf? >> i do. i do. you have to play golf tonb■ wor] here. >> do you play with jimmy? >> i have not had the pleasure. i think you have. >> you hó6# -- he won't play with me. >> you have."■ to be good. >> he doesn'tñr want toñr walk around with somebody and hit somebody. >> he is safe. he is one of the best out there. >> what is your handicap? >> 12. >> no, no, no. you haven't got a prayer. >> you are probably ri&0á9 >> golf elitist. thank you. thank you, scott. >> he is ae1ñi really good man. >> okay. see you later. thanks. >> your putting is contagious? >> my putting is okay.

short game. >> short game? >> if you consider chipping with one ñrarm, which isñrht■fá what1 considering. you know you have serious issues. i have to pick theñi arm. when we come back, coinbase shares falling aftere1 the compy s.e.c. is planning enforcement action against it. we have details next. in the next lphour, qceo of tiktok set to testify in congress today. we ♪ ♪ luxury exemplified. innovation electrified. with apple music seamlessly integrated. the all-new, all-electric eqs suv from mercedes-benz. see your dealer for exceptional offers on mercedes-benz electric vehicles. ♪ old school wisdom, with a passion for what's possible.

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the s.e.c.çóñi issued crypt l;k!+dx÷; notice. warning the company ofe1 violations of u.s. securities law. a wells notice is the final step before charges. ompany said enforcement actions relate toe1 its staking service and asset service. coinbase said,0u4e chief legal officer, said it is confident in the legality ofñi assets andok services. coinbase shares are downñr significantly. interesting. it added to a decline of 8% of ye[ugrday's session. it has to do with safety and security and i don't think this is necessarily5a■ a negative f if they were tolp prevail, i think, it would be good for the company because it would defy5a the regul this is gary gensler. it would make it clear exactly

who is in charge and who you needq to look to as you make sue who is complying. >> that is what the s.e.c. is it has not givenlpxd guidance b congress to say whoñi the regulator is in ñicharge. gary gensler is bringing the action. >> you see bitcoin. it's up today. >> ifça■ you can get clarity an regulation, that would be helpful. >> it5a■ñi was risk assets yest and more rate hikes and 25 basis points. >> equities were down across thó board. >> exactly. that is why.çó >> this morning,çó it is up 2%. >> just a matter of ti)÷ before we open the xdspigots again. that is what the hodle1ers thin. just a matter of time. >> if you look at treasuries, it is indicating the same. we will see.

i don't know if that is realistic. none of use1 would anticipate where we arexl■1 today a year a >> you thinkpw1■ make it throug 2023 without a cut? >> i hope so. >> you think we make it without a cut in it interest rates? >> i would say yeah. >> ixd don't know how much furtr i would go. >> everything happens quickly. >> i would not sayçó 100% certainty. >> we may have another virus. >> let'sçó not do e1that. the s.e.c. in another move charging eight celebrities with toutingk&+o cryptocurrency disclosing they were paid to do lpso. actress lindsey lohane1 and jak pau among them.ìáhp &hc% they agreed to pay q$400,000 fo

the settlement.ñi s.e.c. charged some with manipulating dh■ tokens creatint ás!t he is the one who told the celebrities they could not say he was paying them to do this. all of this attention around with warren buffett. ou of them here. if you pull back o.hú$e photo, you see this was au!■ meeting w son and four others. this5a■ photo was taken at a lu buffett had with son and son paid $4.56 million.xdp,■ justin sun is raising money for glide. the san francisco charityñr buffett has been raising money for a long time. the association raised money for a long timeu■i] becausefá buffe never been a fan of crypto

currency. buffett changed the requirements of the auction to say he would have to personally approve a5a■ bidders for the auction. he+■ did it to keep out promote. $4.56 million is not a bad amount of money to look like you are getting the blessingi] ofu■ buffett with cryptoculy-ency. >> that picture with everybody else e1out. >> the las@i auction was last year. that was the last auction he would hold for thet( lunch at glide. somebody paid $19 million for it. justin sun wanted to bid $20 million. he reached outñ buffett said no. we will not do that again. it is an interesting thing. you put yourself in that position. >> i know. i know. just pay. i'll go. lu? >> yeah. yeah. yeah!e1 for e1lunch.

kim kardashian. >> yeah. >> she was totally, i ñithought disclosed she was a paide1 spokesperson. then instead of going to put it to bed, i forget what she had. >> $1 million. >> she said to her assistant, pay it out of petty cash.t( that is it. >> for gary e1gensler and it is pretty smart. if you wante1 most publicity,fá get big headlines. u@)jp#ter the celebrities involved. he has limited authority. congress has not signed off to say the s.e.c. is in charge of this stuff. it is up in the air. i understandw3 his attack plan fear into the industry to maybe bring them online. >> i'm not sure it is bad for coinbase. >> if you get regulatory oversight, that would be helpfui

situation. when we come back, formerçó dallas fed president rqzi fisherçó5a■ weighs in on the la rate okhikes. the dow was off 1.6%. the dow was off 1.6%. amd up d lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.

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good morning.5a■ welcome back to "squawk ñrbox" live from the nasdaq market site in times u■square. check the futures. they have pulled back. up over 150 points at one time. the dow was afteru■ that sellof yesterday which happened late i1 the session. 1.5%. i don't want to overstate i]it. we will see what happens.

nasdaq up stronglp this morning. i don't know. i don't think we would be telling you, woulde1 we? this happened last week. >> are you taking issue with what is new? we are bringing you the news. >> new this çóeç=i9%9 this did not -- weñ/s did not report on this eight times last week. this is something -- >> çóyesterday's news today? >> electric reporting that tesla told employees it expect to los1 $7,500 standard tax credit because of the batteries which come from china. teslaw3 expects the irs to upda guidance about the origin requirements. figure out howe1 to write broadcast newse1 whene1 i left

brokerage. t)q). don't say thingsñr that you w3s aren't true. >> the kimono and show how theq sausage is made? >> whati] about it? it hasw3 to be entertaining. quick, let's get to yesterday's news. >> here we go. yesterday, the federal reserve hiking interest rates by 25 basis points despite instability in the banking sector. fed chair jay powell indicating rate increases are near an end, at least we think, acknowledging the credit conditions areq!u■ ly to tighten as a result of everytky right now, we bring ine1u■ form dallas fed president richard fisher. he is also a cnbc contributor. richard, your take from this? we were saying powell did@÷ñ a

pretty good job of walking a tightrope yesterday. what was your take? >> becky, your mixed metaphor or opening the kimono and showing how the sausage is made, i would not put that together. let's get to yesterday's news. i tf)■ñr he held a well balance press conference. he made itt( clear theyu■ will battle a new w3target. they will keep at it. you are separating out the regulatoryu■u■ dive and the fir chairmani] of supervision. i thought he did a good job. his body language was good. his confidence.e1 he is under enormousfxypressure. the whole committee is under enormous pressure.fá he made itr the most important thing which is dealing with the inflation

dragon. they are beginninge1 to trade dn i'm nr7■ sure they will stop wih the 25ñi points. the treasury curve peaks atr 4 curve almost ñir the 10-year. to me,ñi that market is taking m seriously. the 10-year treasury is closer to 3.5 than up to the 4. we are living in a 5% w3world. i think equity investors are saying this over and over. they will have to get used to it. i don't think that adjustment has beene1ñi completely made realizing money wille1 not be fe again. you have to -- gt-p>> i didn't . go ahead, richard. >> you have to doe1 the work. you can't just ride the markets. we have the generation of investors that got a freefá rid. it's over. now you have to look at things and determine whate1 thexr price isxd for the value rather

than be carried by the massve marked fueled byok free money. it's over. get used to it. >> people are saying look at the 2-year treasury and it is falling below 4%. that is the indicationok thgñ f wille1 stop rates and maybe dro rates before we get to theu■ en of the year. what withould you say to that? >> i don't see it. he made that clear. i just d]n%t see it. they are not talking about rate cuts. it is not on thev i don't see it happening becausi we we we will see what the anecdote 5■ is. >> did it worry you to see the uk inflation pop up again yesterday? >> it sure did. we will see what happens today. >> you will start backing lp

can u.u imagine across the board? >> i'm not in76o favor of that. i was interested in yellen's 9esponse to the senate hearing saying it wasn't the case. how do you differentiate? only to people in silicon valley or democratic donors? this is what thexd republicans á othersçó willu■ allege and they their finger in the dike here. i think they made it clear, you can't do it for every little rupture thatsv4 occurs. >> they are telling us we have to go. you have to go. you have a tee time? you have a tee time? is that why you're already dr%ñáq"? nice day. 75 in dallas, right?xd >> i'm in new york city south. >> you are?e1 are you playing? >>q i am. as soon as the sun comes up. >> palm beach.e1 not -- can you tell e1us?

don't tell us. there will be a mob if you tell us where you are playing. >> a lot of good golf courses here, joe. any time you want toe1 visit. >> one with the windmill? time it to get through? >> that's my speed. >> becky. >> thank you. great to see you. i'll stay away from the

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coming up, prices co inge back above $70 for crude. we talk about the decision from we talk about the decision from the fed and demand in power e*trade's easy-to-use tools like dynamic charting and risk-reward analysis help make trading feel effortless and its customizable scans with social sentiment help you find and unlock opportunities in the market

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reading it. after yesterday's decision after the fed's decision to hikee1 ras back above 70.t( joining us now with his crude outlook, that's what it said -- >> i thought you were making fun of him yesterday. >> i like the crude w3outlook. an outlook on crudexd oil. ed, keep it clean. edw3 morris, global head oflp joins us right now. what happened? and why would another increase, if it had been no increase, you would think that would beok mor bullish for oil, but do you tie what happened yesterday in oil to something thejf fed did and have we refilled the i]qstr? have we done that yet? we should do it now. >> they're far from doing it. ixd think politically and just given the status of the -- they can't do it until the end of the year. certainly it would be strange if by this time next year we were notlp adding, prices stay at th

level that they'rexd staying. >> why? what has been the dynamic? i would think that if the economy is as strong as we -- the fed thinks, and as thee1 lar market thinks, and china's reopening, if demand is going up, why are weñi at $70? why aren't we higher? >> $70 a barrel for two reasons. first of all, the market isjf significantly weaker than the bulls would have you think. we had seeñi 1.7 million barrela day in thejf month of january. we calculate that from all the highxd frequency data we can lo at the stock will year to date day. most people thought inventories would be falling, they're growing. so the market is weak. part of the sell-off was because the market was significantly inflated on the expectation that eimm%=9jez sight at the time thatçóñie demand

skyrocketingw3 and the consensu was there wasn't enough oil in the world and that turns out to be not true. there is more oil than people think and demand is significantly weaker. china rebound is not yet there. we expect that it will be there by the end of the year, but it certainly is not there.i] people are not consuming goods, they're consuming services, and services are just not very oilç intensive. and yet aviation isñi coming ba in a very big way, but the economy's growth is based on services, just as it is in the u.s. and what people haven't really taken into accountt( is e significant pivotal role that the u.s. is nowh"paying in the ax5■and is just frankly reallyo downa5rez people don't want to admit it. demand isñi down about 1.3 milln barrels a day in our growing healthy economy and that's due to structural changes. our production is up. if we look at the year on year numbers, it is up well over 1 million barrels a day for all liquids. that increase in production and decrease in demand in this count'qg!m■ meant more than 2

million barrel a day increase in our exports. so the u.s. is exporting on terms of the data that we had yesterday something like 12 million barrel a day. that's extraordinary. and we expect that ise1ñr going continue for the rest of the year. >> that all sounded great to me. unless you think, you know that we're allw3 going to be under water in a couple of e1years. that all sounded good. so we have increased production, which wefáu■ needed to do to me the demand because nobodyu■ wan $100 oil. but the one thing i didn't understand -- >> i wouldn't say nobody wants $100 oil. plenty of e1oil-producing companies -- >> that's a big tax hike that would add to our problems and filters through to inflation,xd that means that the fed would stay higher xdlonger. nobody wants --e1 for the ma majority of the world, nobody wants $100 oil.

i thought a service economy would be really oil intensive. i immediately think of hotels and, you know, people traveling, and jets, but also just going after restaurants and inputok ç% costs for all the, you know, the -- for anything you do, it seems likee1 it -- oil is the underpinning of how you're able to do these things, but that's not tzá;? >> well, it would be the case if five days a week. it turns out they're not going surveys indicate people are back at work in terms of work time in an office, commuting to and from an office, 60% of the time they were doing it in 2019 and that -- >> all right. >> and structurale1 things lpto >> you were on your best behavior. that wasn't crudei] at all. when we come back, a big lineup coming in the next hour, former fed vice chair roger ferguson will weigh in on thefá fed's rate hike. the ceo of tiktok will

testify before a house committee later later

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good morning. the fed hiking rates by aq quarter point and fed chair jay powell weighing ine1 on the banking turmoil. yesterday's steep sell-off, we're going to findq out what's moving. the ceo of tiktok set to make an appearanceñi on capitol hill as calls for the video app to be banned continue to grow. we'll hear from senator markxd warner. the secony"=uizüátupu)h!ox" begins right now. good morning. welcome back to "squawk box" on cnbc. and we are live from the nasdaq market site right in times square. i'm joe kernen with becky quick1 andrew isw3 offxd today. u.s.e1 equity futures pulled ba from the beste1 levels. but still up. up about 50 points afterw3 the g sell-off yesterday. >> for the week, do you know

where we stand? mondaa@e9 tu >> strongw3 days. i think for the dow ande1 the s, you're up by half a percent for the week to date@!fore you take into account anything with the futures and the nasdaq up by tq >> did you watch the treasurys? the two-year is below 4 again. >> still is this morning. >> raise rates, rates are supposed to go up. that's not what ñrhappened. sort of goes, you think one thing and the effects of these things can cause the opposite ?=yñ there is the two-year, you see right now. and the e1ten-year, below xd3.w today, even though we're raising rates. again, what do you think the market is sniffing oám that thiá banking issue could be more? could hurte1 growth more in ter of loans and -- >> jay powell admitted that. there are going to be issues that come and economy shrinking from the credite1 tighten being >> i saw some people

say yesterday's hike was 50 basis points. 25 for the banks and 25 for what he did. i think it is even more than 25. >> a lot oft.qt say it is 1%,ñr 1.5%. >> let's get to the satisfied lease maniacs, steve liesman, talk about the fed's rate decision, the banks and more. hey, steve. >> hey, good morning, joe. yeah, the fed's hike yesterday and forecastsq for at least one more hike sets up a conflict withe1 markets. they're looking for cuts. the!ded sent a top message that recent bank failures and turmoil in the financial system not enough to derail the more recent fight. it softened its outlook somewhat, and bankok troubles could lead to tighter lending standards and lower inlztion butñr maintained that e15.13%, policy forecast and said inflation remains elevated and

the fed chair said no cuts were forecast. so here's what fed chair powell cut this year.d if the fed coulm >>e1 participants expect relatively slow growth, gradual rebalanchmg of supply and demand in the labor market with inflation moving down gradually. if that happens, participants don't see ratee1 cuts thisehñye they just don't. i would say as always the path of the economy ise1 uncertain. >> trouble e1is, the markete1 doesn't really believe and they have a different forecast. year end funds rate trades at 4.17%. actually lower than it was before the meeting and powell spoke. after hitting a peak rate of e1 4.92, thexd market sees 75 basi points ofxd rate cuts despite wt powell said. now, meanwhile, we're gearing up for the bank of england, which is widely expected to be the third major central bank to hike this week or in a week's time with a 93% probability of a

quarter point rate hikee1e1 com in about an hour. there is talk that coulde1 paus but that went away aftetf an outsized inflationçó report yesterdi @r(t&háhp &hc% if it hikes, the banks will be uniform across the atlantic. inflation remains the main driver of policy. banking turmoil within limits only plays a role to the extent that it affects the economy. guys? so, time flies when you are s. having fun. when do we know -- when is the next time they -- when is the next meeting to raise or stay neutral, steve? how long do we got? >> we got until may, joe. you can take a little time off, maybe get some golf in an#i the come on back and we'll -- it is may 3rd, and then right around then you got a jobs report andç then you got your inflation reports, but, joe, another to xddo. the h41 çótoday, how excited ar you about that?

that's the fed'si] balance shee tune into "closing bell," i know you'll be out there with your popcorn and gatorade for the qh1 report. >> is that today? >> the balance sheet -- >> you knewe)@ip r(t&háhp &hc% >> it grew, right? >> we'll see -- well, it will bd a gauge of how much stress there is in the system by looking at how much banks took down from the emergency discount window, and how much they took down from the new fed program. and i'll give you another thing, which if you're not excited enough about the economic data here, i think one of the new key reports is going to be the fed's senior loan officer survey because that's going to give us ane1 idea of how much credit standards are tightening. and that's now a new driver of policy. i'm not saying that it is the new cpi, but if you look for ñ that sol, senior loan offikdc çó

server. >> we all feel a little sol after the last couple of weeks. i was watching cnn all day yesterday, didn't see one thing about an h41 or something. talking about some indictment or something. have you heard anything about that? >> well,qt( i heard there could something. >> first time anyone has said anything on this network, i think. you should run to this network just so you don't have to hear all that stuff. nothing. i was kidding. >>t( i think that -- well, yes. yes, the h41ú tomorrow, by the way. >> what about3w■ the debt ceili? we're not talking about that. we got our own problems. bank failures, but we don't want the country to fail, do we? >> um, you know, the probabilities in our fed survey, joe, of a debt ceiling actual default are very low. everybody thinks they have been through this game before, you know, they're going to fight to the death and then going to say

let's have dinner. >> probably, yeah. >> probably not. >>e1 maybei] not.e&ayrñ reagan not be happening anytime soon. >> no. but that'slp the expectation. i don't know if i want tolp get- do you want to get sucked into that, joe? because i've:lañ been there bef on the edge of my 5a■seat, you know, for the default, and then they -- >> no, no. hopefully -- hopefullyt( it will --xd hopefully everything works out, steve. hope springs eternal. more on the fed's rate decision in just a bit when we hear from former federal reserve vice chair roger ferguson. right now over to dom chu, he's got a look at this morning's premarket movers. dom, we looked at the winners and losers yesterday. and all of the losers in the s&p 500, top four biggest losers were all the regional banks. that's not the case this morning. >> no. and that's not the case as well. that's the reasone1 why we're going to start with the regional banks given the hyperfocus on

those stresses in the financial system you were referring to. that bigger sell-off!u■ yesterd contigeds that streak of highly volatile moves, but regional by trying to find again some stability. seems like a broken record at this point. check out first t(republic, pacwest, western alliance, west coast kind of banks up there, solidly premarket, credit?;■ ratings fitcheq$rpj downgraded first republic to a single b, about a week after it e1downgrad to a junk statuse1jf double b rating. charles schwab recovering somewhat here today as are some of thee1 coinbased shares, big hit premarket, down 11.5 to 12%, just over 600,000 shares of volume following on 8% droplp during the sell-off yesterday. the securities and exchange commission issued ae1 so-called wealth notice to coinbase,

warning it identified potential violations of securities laws. coinbase did respond by saying it was preparedd calls this disappointing e1outce 3q welcomes a legal process to provide more clarity on digital assets if necessary. andñr then we'll end by the way1 a check of social media stock bes in the u.s. as the industry eo shou chew latere1 onfá this mor. the app faces increasing regulatory lawmaker scrutiny over potential personal data and national security concerns. now, meta platformsñr and snap e seen as the more direct competitors for tiktok. those share up solidly now. a lot of that could be be thee1 subpoena uprising after a big sell-off yesterday. >> true. that or the expectation that they're going to benefit if tiktok is not successful in its bid. >> yeah. these two, i guess the number of times i've seen some of these

social media platforms, becky, where i see on instagram, tiktok videos that are just (■repurpos for instagram or snap videos repurposed for som+,jing xdelse% they're all intertwined at some point. >> thank you. we'll see you later. >> yep. when we come back, ford announcing a new model. but not a new car. they're changing the way they report the performance of the ev unit. we'll hearq from ford's cfo joh lawler next. before we head to a break, a check o.■( the markets. check o.■( the markets.

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ford out with news and phil lebeau is here with a special guest. >> john lawler joining us today on at( morning where you guys a reaffirming your guidance for 2023, but i think it is more what you guys are saying about the projections for the ev business, the reality of where you are in terms of how much money you're losing, where you're headed. first off, with the ev business, you lost 2.1 million -- billion, i should say, last year. you're going to lose $3 billion this year. you hear the chatter. people are saying, when are you going toñi make money on evs? >> right. it is a startup buried within ford motor company. that's why we like our plan here

to segmentw3 the business aroun three distinct customer groups. ev being oneñr of those. iconic ice vehicles. and then commercial customers. when you look at the path for our evñrs, we're losing money ná we're a÷startup, we'ree we're developing the products and we'll share later today a bridge that shows how we're going to bring the profitability of our ev business up to the 8% ebit margin we committed to by 1 >> getting there, you know there are more than a few skeptics i don't think the cost of batteries are going to come down as much ss■ you say they're goig to come down. i don't think they'll get the efficiencies they're counting on. how did you counter that? especially off the fourthxd quarter where you surprised everyone withñr higher costs? >> we have an incredible teamrwo generations of ev vehicles. they know the game plan here. it is not just about the battery

costs. it is about simple efficient designs of the vehicle. we arelp obsessed with taking t energy efficiencyok of a vehicl up, which allows us toe1 put a smaller battery in thee1 vehicl lowers our costs and allows us to on that path toward 8%. >> coming off thee1 fourth quarter, let's be honest, it was a mess. you surprised a lot of people by saying, look, we left, you know, a couple billion dollars out there that we shouldn't have left out there. and it raises the question, look, manufacturing is what you should be known for and yet you're still talking about complexities, you're still talking about we have gote1 cos in here that we'rejf having troáfle wringing out of the organization. shouldn't that be a strength of ford, not a weakness? >> well, what is really happening for us is our push into the new businesses, evs,jf that's going really well. rjz track, we're please with that.z track, we're please we do havexú%ssues in our industrialmfplatform, where we'e working through those. we're focused on quality, we're

focused on our costs. and we're driving that out. we know what the game plan is to fix those issues. we're on it. it is the number one priority for our leadership team, and what you will see as we go through this year and as we go over the next couple of years, you'll start to see that come through. it is the segmention of the business, into those three segments, where you really start to see that clearly come through and itok will unfold differentl in each and that'sw3 importantq because our bluee1 business, you'll see costs coming down and we'll investw3 in our growth businesses of the pro business for commercial, and .ve■evs, bu one point there, phil, that ice business for the next couple of years, ford blue, that's a growth business too. >> it is a growth business if you can control your costs. i have to push back here on one thing. covering you guys as long as i've covered you guys, it seems like every once in a while, three or four years, this issue comes up where there are problems getting the costs out. we are just not as efficient as we should be. why is that with ford?

company that makes it so hard for you guys to get the level of efficiency that you should be getting? >> i would say as aok managemen team, we're moving past awareness to acceptance and now accountability. clear accountability, each )e iz leader of that businessok needso deliver. i think what happens is that when there is a company that knows they have an issue, and that doesn't change, therexd is group within that company that benefits from that and we're starting to get to that root cause and changing that. >> is that whye1 you're doing this, so that every -- on the accountability front of things, numbers, it is going to be out the head of that group will bear the brunt of it. >> what we're seeing is witho co this segmention, increased need, speed of implemention and accountability. accountability is key. ofúuqese divisions. they're accountable for the bottom line, they're accountable

for delivering and that's how we're doing things. >> elon musk spoke on his last conference call just about how if they drop the price at all, there is a huge sensitivity toe that. and consumer demand reallyñit( you play around with that same sort of idea, what does that do in terms of what you might do to eq!%9 >> ev specifically, but across the industry, it is always sensitive to price. so, you know, that's going to stay true with evs. we saw it with what3w■ happened the turo ó[■crossover, we'rew3 to remain competitive with our mustang mach e. over time, as evs grow, we're going to see price compression. it is part of it. as demand grows, supply growth, you're going to see the prices come down and we're planning for that. >> i was going to say, that's built into -- >> that's built into tdñ 8%, absolutely it is. >> is it realistic to expect we can see a $40,000 ev?

we have been hearing about it for four or five years, not just from ford, but other automakers saying we'rei] going to get the prices down, there is going to be a mass market model coming and you're working on your second generation and down the road there will be a third generation. but whenever i bring this5a■ up people within the industry, away from the automakers, they all go, i don't see it happening. is it realistic to expect a $40,000 ev? >> we think so. we have people at our company where it is their mission. this is a mission forc them to create affordable, attractivee1 differentiated electric vehicles and we are, as you said, we're working on our5a■ second generation, but we're also +p(orking on our third generati and you'ree1 going to see a ste function improvement with each>o of them. >> and with battery costs? >> and with battery costs. >> what is the biggest hang-up in terms of ramping up battery production, not just for ford, but the industry? is it the raw materials? is it standing up the battery plants? >> i think it is both.

e1 raw materials, we have done rp&s, 1:jj$jt the materials for our 600,000 run rate coming out of the end of this year. we also have to scale 2 million units, but it is also scaling the production of the battery cells themselves in an efficient and in a manner that has equality that we need. so it is both of those. it is not easy. and we're learning that. that's why we like being a first mover because we're learning all of this as we're starting to ramp up and we're ramping our first generation of vehicles. >> let me quickly ask you before we have to go about the market overall. not just evs, but the market overi39 the high prices we're seeing, average transaction price of almost $49,000, you got higher auto loan(áerestjf e1fárates, a such tight supply. when does the equilibrium change. when doesñq■ not become such a tight market in your opinion? >> we're starting to see some of that supply come back. so we guided this year that we said we thought prices were

across the industry and i think you'll start to see that come home in the second half of the year. >> the first half remains tight? >> it will remain tight and i think you're going to see some pricing tailwinds in the first half. >> and if we have a recession? >> if we have a recession, you'll see demand fall, prices come down,5a■ as that demand fa, if we have azv■ recession. motor company. theyól:uz to all the ev numbers a little later on today. we'll have more throughout the day. >> e1john, if you see a lpreces, that's not your base case at this pointhpw >> we planned for multiple scenarios, in our base case we have a moderate recession in europe and a mild recession here in the united states. that's our base planning assumption for this year. >> thank you. appreciate it. phil, thank you. >> good to be here. >> good to see you. when we come back, the rapid development of ai hau1çó invest looking for opportunities. a number of announcements this week catching the attention of our very own jon fortt. he's going to join us after the break with more. is tiktok too big to ban?

senator mark warner will ahead of today's hearing. he's been pretty critical of the app, along with just about everybody else in washington. he'sq introduced bipartisan legislation seeking to ban the video platform. he'll join us later. "squawk box" will be right back. time now for today's aflac trivia question. trivia question. th i'm telling you, coach stale, i could really get used to this retirement thing. ahhh! coach k, there's a goat here. the story of my life. no coach, there is a goat here! whaaa! what's this? a thousand dollar hospital bill? but i have good health insurance! gaaaaaap! did you say 'gap'? he's talking about the expenses health insurance doesn't cover. but with aflac, you can get money to help close that gap. aflac, huh? gaaaap! aflac! gaaaaap! get help with expenses health insurance doesn't cover at aflac. official partner of march madness.

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now the answer to today's aflac trivia question. the minnesota valley canning company created what famousñi iñ the answer, the jolly green giant.lpok all right. it has been a huge week for artificial intelligence with adobe andfá nvidia both announcg major newçó initiatives just afr microsoft and google rolled out advancements in office and work space. so, to capitalize on the future of ai, shouldok investors bet oa platform or platform companjn■ likexd nvidia or should they be betting on companies like adobe. jon fortt is here to weigh in. good morning. >> good mu]ming, becky.fxtr(t&ho they should bet on platform

companies. think nvidia, microsoft, google, they have the scale --fá nvidia this week announcede1 its dgx, cloud service that will let businesses effectively build and operate their own custom versions of generative ai models. microsoft last monthe1 explaine how open ai is but oneq$uu of is azure cloud infrastructure to deliver results. and googlexd delivered new ai features inside of the work spaceñi offering. you get the idea. these companies were winners in the cloude1 area and now sellin picks and shovels in the new ai gold rush.lp platform providers have already shown they know how to compete. >> okay. where there are giants, as you mentioned, companies like microsoft, amazon, google, they manage to become even bigger

when they got into the cloud and the mobile era. but iswgñ it pretty unusual for a big player like that to lend? >> well, on the other hand, it makes more sense to bet on app companies that surge aheadçó in ai. don't assume cloud giants will dominate ai. adobe is a great example of a potential upstart. they announced firefly, a home grown family of ai models that generate images, text effects and video. adobe is planning to let other companies built oni] firefly fo their own custom ai experience. so why does that matter? microsoft and google and nvidia are valued as platform companies. nvidiae1 is the smallest with a $650 billion market cap. that's 500% bigger than adobe. but theñ1 revenue is more like % bigger. the platform companies are alreadyk1)iced to win. investors aren't paying enough attentionw3 to duolingo that ju

announced it is building conversational ai into a new premium tier of its service, or o cf1 o whose sensors,w3 cameras and software work together and might use ai to turbocharge its w3 momentum. >> some people question whether the small software companies will even survive. >> these are toughñi times. but there are targeted companies that are generating cash and actually growing pretty okñiqui. samsara up 42% year over year. >> now do the other -- do a double on the other hand. >> switch hands again. >> well -- >> she said they might -- there are questions they will survive. you said they will. now do theokr they mig >> oh -- >> we can do this until the cows come home. >> we could. iq really think their survival not so much in question unless we have a super deep recession and somebody -- >> seriously, next time you come

on, do your firstçó -- have a question, and then the answer is another on the other hand. >> just do hand? >> no, do --e1 keep doing it. dr >> or -- >> like an octopus. >> what if there is three scenarios? this segment could be -- what if there are three scenarios. on the other hand, on the foot, there could be -- >> a multiverse of on the otheró hand. >> this little piggy went to market. >> thank you. still to come, former chair roger ferguson on çóyesterday's rate xdhike. and senatore1 mark warner w must lov ] that head shot that e have of him, legislation toe1 b the app received bipartisan support and he joins us for what to expect.

throughout the month of march, we're celebrating women's heritage, sharing the stories of women lea÷cm■ ini] business and those of our own cnbc teammates and contributors. and here is maggie ñitimoni, heineken usa ceo. >> it was a male or female in any room, i think allyship is really important. and allyship isw3 that someone advocating on your behalfjf whe you're not in the room. and i think women, we need to step up and do thatñi more not care about that works together with us, whether they be5a■ malr female. i think allyship isç

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the fed hiking interest rates by a@";■arter percent, may hoped it might pause, but while fed chair jay powell insisted the u.s. banking system iszv■ñi his words sound andt( t(resilie

treasury secretary janet yellen put a scareqñ)ju)q markets by saying the government is not discussing the prospect of ensuring all deposits. let's bring in roger ferguson, of federal reserve, former ceo, a lot of alphabet soup here, former ceo of tiaa and cnbc contributor. wow. we covered the whole gamut there, roger. good to have you on as it alway■ is.e1fá welcome. >> thank you. good to be here. >> we got both chair powell and secretary yellene1 need to be vy careful about that they say. sometimes i guess ambiguity is good. you see how we talk about taiwan. i love that one, strategic ambiguity. i don't know what we do at this point. nobody does. i have the same feeling about deposits now. if there is a case where we need to coverx1lpe1 deposits, youlp know we're going cover deposits

if necessary. we're not saying we're going to cover all deposits. can you tell me exactly what the future plan ise1 on that? >> i'm not sure exactly what the future plan is. i think what you're hearing is policymakers who are balancing two things. one is the reality of anxiety among some banks ase1 jay powel said, serious problems among a small numberq of banks. and at the same time, a legal regime that basically says, no, we're not going to ensure all deposits. fine line to create a sense of % reassurance without crosù line into upsetting congress and changing the general expectations. i think it içi go to be very,fá verylp tricky. more than their words. and i think their actions are such they're really working hard to stem any kind of systemic "át banking systemlp and i presume they'll continue to do that using both existing

some new tools as well. >> i don't know. valley bank here? what is so special about those depositors? most of them are way over 250, not like ma and pa, they're startups and vcw3 firms and vero well heeled investors that probably should have known better, and they probably should have gotten a haircut. do you think that was a badxdxd precedent and will a community bank and, you fáknow, in the midwest, will thei2■p depositor get the same benefit as thesee1 very wealthy movers ande1 shake out in salfrancisco? >> look,xd i would be careful i saying everybody at silicon valley bank is a fat cat. many are startups. young people put their life savings into these ideas. some of them, yes, are very successful entrepreneurs as well. but, you know, at the end of the day, you would understand this,

much of the jobok creation ine1 america comes from smallñr businesses. the fact that these are startups and tend to be a tech in orientation doesn't make them less important to the economy. they might be the future of the economy. my view is, i think they did the right thing. it is veryl■d very difficult to figure outçó exactly how to do this and to -- as to the second part of the question, i think the reason they stepped in so firmly for depositors at svb is they don't have to continue to do this and other community banks. so let's hopeñie1 that things a stable for now and that we don'1 haveñi to test the fed and the treasury to create new tools. >> we probablyfá don't want toq give the impression that the th for -- when capitalists do what they do and risk capital, either win or lose. if there is no losing, there is no capitalism. we seem to be doing it again and

again and r and someone character without sin there isq no such thinge1 as religion. >> well, hold on. >> well, hold onvrp+e to recogny holders in these banks are going to be wipede1 out and depositor are a different classe1q ofe1 p. we do have an interestinge1 qhcllenge where the law says we insure deposits up to e1$250,00. i understand that problem. i think they had to make a really tough call here did it ultimately i think to save a large number of small and medium :jz otherwise missed payroll andi] would make things even worse. tough cases make for tough precedents. >> they do. when it isqt( happening, just w to try to help and ease the pain. you don't think that banke1 managers and across the board, if they knew that there couldn't be a run on deposits, you don't think that they would --t( that would change their behavior inw

terms of what they thought was prudent? >> absolutely not. most people i know in banking are not sitting there on a daily basis trying to calculate how much the government might bail them out if need be. they want toe@/un banks successfully. think about the management at silicon valley, many of them probably had much of thelp savis in that equity. >> no risk manager. how serious did they take their responsibility? didn't take it seriously at allr transcendentaljfok meditation h >> i'm note1 going toñi go too down the silicon valley case. i'm sure there will be lots of efforts to study that one. you make a general statement on bank managers and i say the vast majority of them are running their banks as prudently as they can. and let's beok clear, a very challenging economiclpok time f all banks. i think that's part of the challenge here, this is, you know, when interest rates move

this much, there are certainly p r(t&háhp &hc% relatively quickly in the banking sector. >> the wayw3 that the ten-year d the two-year reacted to what i'm sure you saw jay powell did a masterful job yesterday, this is whatok you said he should do, almoste1 exactly, will the bonds -- will the yield curve eventually coopera cooperating? we just don't understand how it is cooperating with what the fed is doing? >> i think we continue to have two things. one is ñiyes, i do thinke1 chai powell did a masterful job çó yesterday. they made some changes in the language so that it softened -- should havexd softened future expectations. where there is ongoing e1 uncertainty and shows in the bond market is the question around soft landing, recession, how quickly do other fed policies like the reverse toward easing, chair powell took a )qu$at norc/s expectation of a cut in 2023,

markets put a higher weight on the risk5a■ of recession, and that's where -- that's where i think there is a difference. i would not encourage anyone to necessarily do anything q differently. markets need to tell what they see and the fed needs to tell what it is planning to do. >> will they raise again, roger? >> i think they said what theyo think, they don't know>dyet. that change in language about some further tightening might be important or might be appropriate.pmpi really think t at this stage really unknowable. and i think that's where it should be, given the number of changes that have occurred, given the uncertainty about the loan space, theyuqyare, i think positioned properly to be as nimble as they possibly can based on the totality of the information. too early to say they should pause, t'ú early to say they should go another 25 and we have to let next few weeks of data play out and thençó havee1 aht■ sense of what is the prudent thing to do. >> roger, thanks. i hope we see you again, like

your next schedule. i hope we don'tt( have to rush u in like early next week or i] something. week anyway.w3 tp[-m9 >> i'm standing by. thank you. when we come bqn1ñ senator mark warner will join us on today's tiktok hearing. right now, as we head to a break, check out this morning's break, check out this morning's winrs andne

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news out from china just this morning. min there said china would firmly oppose any sale of fátiktok. that comment comes ahead of the tiktok ceo's testimony today before a house e1committee. joining us nowçó is senator mar committee on intelligence. his bipartisan legislation to ban tiktok hau!een backed by the white house, and he thinks the tiktok e1ceo's testimonyfá capitol hill later today will have little credibility. senator warner, good morning and thank you for being here. >> good morning, becky. >> what do you mean when you say little credibility coming from the ceo who is going to be

testifying? >> e1well, ie1 met with the tik leadership. they willfá make, you know, gre promisesok that none of thñ■p d they collect from 150 million americans that are on tiktok on minutes a day will end up in china yet we see report after report where it is. we've seen journalists being monitored by tiktok and that's just the data collection piece. the other half for this very probable president obama for used as a propaganda tool, it's interesting, one of the things you're leading on that china would not want to have any kind of divestiture. i believe i've seen reports that say president xi would rather shutdown tiktok in america than give up the source code.

the only way it would work in y mind to is to have it out of china. >> so beijing says they're making sure nothing comes across and washington says they wouldn't do this unless there was a sale, it's a collision course. will it be shut down in the united states? >> one, i think it screams out that we need a rules-based approach and a legislation like mine that does not name a specific company like tiktok and we're dealing with tiktok now, and there was a russian company. we need a system that deals with foreign-based technology with countries like russia and china what fall to the national security realm.

things like a.i., synthetic biology. the national security realm is now defined as well by tiktok -- as well by technology. the other item, i firmly believe if tiktok were to go, a creative site for videos, there's a lot of creativity on tiktok. the social influencers make the money. the market will create another enterprise, whether it's an american company, indian company, french company. we ought to be on guard for some of these countries we have an adversarial relationship. >> you're not concerned about the flood of tiktokers who made their way to washington who said please don't take this away, it will take away my living. >> i think those folks will find an income off of other sites. i don't know all of the economics here but my understanding is youtube

reimburses more. up will see other competitors rise up. i believe in the creativity of folks all over the world. as we know, i believe it was 2017 that china passed a law making it a requirement that any chinese company into the day has to turn all the data, any of their basic intellectual property to the chinese communist party at their request. there is no requirement, there is no ability to say, hey, no, we're going to take care of our customers or shareholders first. their first foremost obligation has to be to the ccp. >> you said on the banking committee you understand the market pretty well, you've been around. yesterday stocks fell in the regional banks after janet yellen was testifying before congress and the treasury secretary said basically she is

not authorized to do blanket insurance for all deposits, that that's not something they're allowed to do, it would have to come from an authorization from congress. is there an appetite to do that from congress? is it something that would be able to be passed? >> we need to find what caused this activity. i believe in is what case of traditional regulation, l this had been a $500 billion bank, failure of management on managing their interest rates. i also have raised with secretary yellen, this was the first internet driven run, the fact that $42 billion went out in six hours, the equivalent of 25 cents on every dollar. i'm not sure what structure could have stopped that. there is some old law about inciting a bank run back from the 1930s we're taking a look at but on the fdic insurance front,

i think there are a wide group of individuals. i think some of the far right guys on the house probably have taken some stance but the vast majority of democrats alike understood the backed fdic insurance needs to be adjusted. how we do that, what's the right number, i think there's a lot of conversation. i'm talking to a lot of folks who got more expertise than i. i do fear if we don't deal with that in some way, you know, it may not hurt the very small community-based banks who have 90% plus insured deposits but the slightly larger and regional banks, how you're going to be able to keep a corporate account, who somebody who wants to use that bank as their source to draw capital down to run their busy think is going to be suspect. i would remind -- and i know your audience gets this more than most -- from the crisis from 2 -- 2008 until 2012.

that was passed by congress. it expired in 2012. where you put the cut line, how you pay for that, that's the devil in the details. i think we have to do this thoughtfully. >> in 2018 you voted to roll back some of the oversight and restrictions that came from mid-sized banks, including svb. senator warren said that's the real reason for why we saw this meltdown. what do you say to that? >> i say let's actually get the facts first. if it ends up being that the absence of increased capital -- i don't believe it was a capital issue, i believe it was a liquidity issue. if that ends up being the consolation, i'm up for fixing

the problem. if we give the idea that tweaking this one way might have prevented this and we give this false sense of assurance, i believe and i'm operating on any safety and regulation should have caught this. we get a false answer if we don't have our facts first. if this had been a $5 billion bank without any of the enhanced security, i still think the regulators should have spotted this. this bank tripled in size over a couple years. it went for eight months without a risk officer. it appears that evidence is coming out, that the fed in san francisco this dinged it a number of times. why wasn't that followed? let's get the facts first and then people can do the political talking points. >> okay. senator waer,rn i think i'm ready for this. heck ya! with e*trade you're ready for anything. marriage. kids. college.

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banking system is sound as he hikes rates amid the turmoil. treasury secretary yellen not considering insurance. and energy and commerce committee chair kathy mcmorris rogers will join us ahead of a high stakes hearing. the final hour of "squawk box" begins right now. good morning. welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. andrew is off today. u.s. equity futures are up a little after a big selloff yesterday. 51 points on the dow, nasdaq up 117 or so and the s&p, i would

put it somewhere at -- i'm sorry, just under 4,000, right? 3,950 i would say the s&p. >> it closed at 3936 yesterday. >> a little bit above that. treasury yields that's maybe more interesting than the futures. can you see the ten-year below 3.5. the bank of england announcing its interest rate decision. let's go to steve, see whether we're synchronized. >> yup, up by a quarter. they're saying if more pressure appears further tightening would be required and very much like us making a comment about their banks, saying the u.k. banks are robust, have robust capital and

liquidity and they are resilient. they are actually, joe, the third central bank to raise today. and if you take a look at our chart here, we got the bank of england up by a quarter, we have the bank of norway by 3/4% and down we low, the european central bank. so central banks on the move this morning and yesterday, despite what's happening in the banking sector. i think that's the story today, joe, is that the fight against inflation continues. joe? >> yup. do the banks in england have higher capital ratios as well or

mostly just the european banks, steve? >> i'm not an expert on european banking. i believe they all went to more robust -- >> the swiss national bank with 50 basis points barely gets on zero. >> remember they had a problem of people piling into their currency. that was why they had this problem with their currency. everybody loved the situation franc. >> but the way we're moving, we're definitely not synchronized on the absolute level. i don't know whether that's necessary or not. these are multi-speed economies. it does show you how hard it is for the european to try to have everyone -- when you can see the differences that just are between multi-speed economies, and yet they're all trying to --

it highlights the problem. can you thank the people? you do it much more sincerely than i do. right? >> not a high bar. >> let's take a look at the market with the ceo and chief investment officer and, sylvia, there is a lot to big through over the last 16, 1 hours or so. what did you think, what was your takeaway from this back and forth about will we or will we not have a blanket deposit protection or insurance on any of these things? does it matter? what are you still kind of thinking through with the fed? >> good morning, becky. on the fed i'll take the second question first. on the fed i think that the fed initially gave the market, you know, what it was expecting, that 25 basis-point rate hike and words like could and should and may instead of ongoing. you kind of saw futures

immediately rise and sort of like that message. but the more that the fed chair talked about it and talked about how the goal remains to bring inflation down and there could be more rate hikes and he doesn't see rate cuts in the next year, the markets sort of didn't like that. where we stand now is stocks are pricing at 56 and it remains to be seen. in terms of what the fed does for the rest of the year, in terms of pausing and considering bringing down rates next year i think is going to dictate the market performance in the short term. if he does hike again and we ignore the credit kind of crunch or potential crisis that we have and don't let that play out in some place, i do think they would be negative for the markets. if we get a pause and see inflation coming down and silvergate and things like that, if it does bring it down, i think that will be positive for

the markets though a higher risk of recession there. >> you're talking about two different things. you're saying if they stop hiking and inflation comes down, that's the big unknown, right, what's going to happen to inflation without this. it's not so much what the fed does but what the inflation numbers show us down the road. >> i think that that's true. it's what the inflation numbers show us down the road but the kind of wild card there is what if the fed sort of doesn't wait to show us what inflation shows us. the psychology of investing and things like that. i just think that's going to play out leading the fed to potentially at least pause. that's my sense of it. >> so in your mind, you're still worried about the credit crunch and what happens with the banking system and less worried about inflation? >> yeah.

i do think that inflation is starting to come down. we're seeing it kind of year over year obviously. it hasn't been linear, you see it in cpi, you see it in goods, services remain a little hot. i do think that it's moving in a positive direction. i do think that what happened with the banks is going to actually, you know, ad to the deflationary pressures there. i think that's a positive thing. what i am sort of worried about is the psychology of investors and traders. you saw these run on the banks. i think that can kind of spiral into other things like investors taking money out of the market and on the sidelines again and potentially not spending on goods and services and going back to the idea of a sort of forced recession and the panic. i think there's a need to install confidence in the banking system, whether it's fdic insurance or clarity on what happened on a deeper level of these events before we'll get

a sense of whether or not the markets are going to kind of recover from that. >> richard fisher joined us earlier this morning and he said the message that he got from jay powell and company yesterday is that they are going to keep raising rates, get used to it, this is where things stand. if that's the case, what do you think happens to markets? >> i think if that's what we see, then we're sort of doomed for at least some level of recession. i think we're doomed for a pullback and i think investors will -- you saw that play out in the second part of the day. when the fed speaks, the market sort of rallies, inflation is coming down things are working and then oh no, let's talk a little bit further but we're not finished, we're going to keep hiking and the terminal rate will be higher. we know markets don't like it every time that it's said. i just don't think the data will match up with the eye dhee the

feds will keep the rates from going above that. >> thank you very much, sylvia. >> that's only a quarter point away, isn't it? >> yeah, but if you look at where yields stand today, they're expecting a pullback. >> i know. does he think the fed's going to have a series of hikes or higher for longer? >> i think higher for longer. >> 5%. we still have a big lineup. for the rest of the hour, energy and commercial committee kathy mcmorris rogers on today's hearing and we'll talk to barry about how bad the economy was about how bad the economy was months ago and parts of it were ♪

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welcome back to "squawk box." futures right now are -- i can't keep doing this. they're up 50 points on the dow, the nasdaq up 100 -- >> still there. >> they're like one point different from where they were five minutes ago. later this morning tiktok's ceo will testify on capitol hill where he's expected to face questions about the social media app's data security practices and impact on children. earlier a commerce ministry spokesperson said china would firmly oppose any sale of tiktok forced by washington. joining us is kathy mcmorris rogers who chairs the energy and commerce committee where mr. chu will testify. what do you aim to find out chairman mcmorris and can a

decision be arrived at where all parties get what they want? a lot of people that love to go on tiktok, it just doesn't seem like long term there's any viable way out of this mess. >> well, mr. chu, the ceo of tiktok is in front of the committee to expose the threat that tiktok poses to our national security. tiktok has been caught repeatedly in lies about its connection to ultimately the chinese communist party beep are going to be asking questions today to ask him why he has said that individual's data is not being tracked or there's not surveillance. and those are questions that we want to ask and ultimately to

expose the fact that tiktok is a threat, it cannot be trusted with our data as americans, cannot be trusted to protect children's health. >> how acrimonious do you expect the hearings to become? >> both republicans and democrats are going to be asking questions today. he's going to be asked a lot of questions about both the national and the personal security threats. i believe that from this hearing there's going to be a renewed call by the members on the energy and commerce committee for a national data privacy standard in the united states of america, because that is the most effective thing that we can do to protect americans on. and the legislation that we've been working on with restrict tiktok, bid tech and others from

collecting the information. those under 17, it would stop the listening on the devices, new technological tools, weapons that china makes to get for strategic gain but also to protect us from a national security and personal security perspective. >> what kind of concessions do you think that tiktok or even the chinese government are willing to make on this? how far will they go? and in terms of enforcement, how do we know they're even complying what they're going to do? >> we need transparency, we need truth. there's not the trust right now because, as i said, they have not been -- they have lied to us over and over and we do not have confidence that there's not some

kind of aback door tho and the fact that they're collecting massive data on americans and now 150 million americans that are on the tiktok app, collecting all kind of data. and then how they can manipulate that data to influence what people see or hear or believe is of great concern. >> yeah, it's all there right there in front of our face. we just saw president xi and, you know, putin making nice. we know about china's -- i think they see a place for china in the world that maybe we used to have in the united states and i think they would like to supplant us there. so it's all right before our eyes it's going on. i don't know with 250 million users, i don't know what the end

game looks like when you consider what's at stake here. seems like it's got to be pretty drastic. are we willing to do that? >> well, i think the immediate action is to ban tiktok. that is what we need to do to protect us from a national security threat. and then the most powerful defense for us as persons in protecting our data, whether it's tiktok or big tech or a future technological tool weapon that china might develop is the national data privacy law that has been long overdue, where republicans and democrats are calling for a national and we've been working on legislation in the house and we're going to continue to lead on this ever. you pointed out it's bipartisan a coup of. can you see any okay californias in the way? are we going to ban tiktok?

if it's bipartisan, you ought to be able to do it. maybe that will be the second veto. >> stay tuned for the hearing today. it's up to us to make the case as to the threat that tick tock is. >> good luck. thank you. >> thank you. coming up, if you struggled coming up, if you struggled to cancel a prescription or inner voice: (kombucha brewer): when i started my new kombucha business... ... i thought there would be a lot more kombucha... ...and a lot less business. inner voice (graphic designer): as a new small business owner... ...i've learned that trying to be the “cool” boss... ...is a lot harder when you're actually the “stressed” boss. inner voice (furniture maker): i know everything about my new furniture business. well, everything except... ...the whole “business” part. not anymore. with quickbooks, you can confidently manage your business. new business? no problem. yeah. success starts with intuit quickbooks. you got this. let's go.

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welcome back to "squawk box," everybody. the futures this morning are indicated higher. in fact, the dow futures are up about 65, s&p up by 21, the nasdaq up by 133. got to look at the financials. the big bank stocks this morning are higher across the board. jpmorgan up by 0.7% and 1% for morgan stanley, too. the federal trade commission is expected to propose a click to cancel provision that would require sellers to make it just as easy for consumers to cancel their enrollment as it was to

sign up. that's one of several updates the commission is proposing regarding prescriptions and recurring payments. how about you don't make them recurring unless you opt into that. the negative option rule was established in 1973 it fight unfair or deceptive requirements around subscriptions. >> a report says the company plans to spend a billion a year. apple has approached studios about partnering on films due for release this year and in the future. in a separate report, it says the company is considering bidding for streams rights to a range of english soccer games. we made a mistake, called it football.

>> well, english football. >> i know. english football games. it would allow apple to stream some games in the u.k. it currently has a beal with b.t. sport, amazon and sky, which is owned by our parent company comcast but getting a separate deal to air games through the 2027-'28 season. we do have football games in germany and england, too, actual football rather than soccer. >> they called it english football. >> yeah, they did. >> we need more movie releases. at the peak it's at 120, 130. now we're still at 80. the pandemic put a huge strain on everything. check out the shares of corn base, if you would.

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welcome back to "squawk box." rick santelli here live with the breaking news of the day in the form of initial continuing claims for the week of march 18th, initial claims 191,000. it's a bit less than expectations and at least for

the moment until we get a revision, it's 1,000 below last week's and it is the lightest level since the last week of february. and the fact that it's psychologically under 200,000 it, would be a good thing if you were measuring the economy from a labor perspective but not necessarily from a fed perspective keeps the later mark. there's 1,994,000, a slight revision of last week, 1,680,000. so they moved it 4,000. under 1.7 million, that's the lightest level, well, since last week basically. if we look and it was a little less than the 13 billion

expected and definitely refs on. we continue to monitor all that is the tread and trern and paul in the q & a certainly didn't do a lot of damage to the equity markets and interest rates were moving a bit lower but then again, janet yellen changed the direction there talking about no blanket coverage. i happen to agree with that but it definitely didn't pli well with equity. >> right now i want to bring in the chairman and ceo of starwood capital. he has been vocal for quite a while telling us how he thinks the fed should have stopped raising rates sooner. what's look, i thit i was in

israel so you have a huge -- the biggest in the whole economy, the federal government across the hill, they're not actually changing their spending patterns based on his interest rate raises. so the onlyand i do we looked at what was happening with impact, the other banking system. so i think, you know, that he obviously he didn't need to do what he did yesterday. i think to say that the economy isn't going to slow down because of a regional banking crisis, to even pretend that's these banks are solid when they have $3 billion from the fed overnight

and bore o -- i mean, litz this weekend my colleagues went through six regional banks. you have to mark it or not. and now they're insolvent. why? the government put you on ten-year fixed mortgage track. it one-fifth as opposed to floating rate notes. >> he learnedthe we live on the largest mortuary. we're 930% rate hedged.

but and it is the rulebookthe occ and the federal government saw and it didn't even stress test these banks and its rates rose. you this should. >> it isn't an aregional bank so you still have to go and borrow additional capital. so you would say it was disu enand the regional banking system is not small. i was spried to find it makes 07% of all commercial real estate loans. it the guy who wants to boy a tract toor, so the i. oonchtss or goldman sachs, the effect

will be -- it will celebrate what i talked about earlier, which is the price due to real estate in fixed assets is slow. and as loans mature, now every day you'll hear about an office building going back to a bank and that the fed was also -- they were spending a lot of time on systemic banks and say doing not increase your exposure. i wonder who on earth they will refinance that officer building. if you take that to its logical conclusion, val and it's a situation where they don't lend and other people can't lend, cities near the street go down and you end up a pla if.

>> when you say the car hit the wall, you mean the commercial real estate market? >> i mean the economy will have a hard landing. >> the economy. >> this -- he is using a steam roller to get the price of milk down 2 cents. to secure a small fly. i think it's sort of time you change your conversation. there's good inflation and bad inflation. good inflation is wage inflation. we should be having parties that is not what this country is about. >> the way it becomes problematic when it evening and wages aren't even keeping pace with prices going up. >> that's true, except less of the commodity complex are

equally or more important. look what oil did today. component costs will go down, especially as unemployment rises. so having these or if i can't get a housekeeper or somebody cleaning rooms in my held ol', rng and that's wealth reation for the nation. if we just kill their jobs -- that's the problem. with $1.7 trillion, health care, education, government, those guantanamo bay. >> so you were not kidding when you said how much time do we have? because there' and make sure that people are rool mg and how many of regional banks? so you have six of them and your idea behind it is that, what,

without having the ability to borrow from the fed's window right now, they'd all go insolvent? >> technically if you marked all their ult bills. so you moved rates so far so fa. and to senator warren, i've never said anything like that before. and he said he's not trying to to that. what's. construction jobs in january -- open jobs fell 50%, the largest

drop in history. we're building our projects but when done, the shelving is on the table. this rent equivalent in this last report showed rents going up 9.6%. it's either .8 or .7. it's the highest number in the report and it's dead wrong. that survey of homeowners was invented in 1981, 50 years ago. i don't even think i had an iphone in 1981. rents are about up 4, not 9.6. if you adjust, inflation would be 2.6% according to our data

analysts. now he's thrown a whole enough wrinkle, which is to blow up the national banking st which he can't really do that. >> no, he's kermd and let me talk to you about commercial real estate. that is what you know better probably than just about anybody else. up said last year that you were looking at great opportunities when it came to commercial real estate. this year just this month you said, yeah, there's some great opportunities and unfortunately we can't do anything about it because you got to worry about liquidity. as you mentioned, people are handing back buildings to the banks and saying forget it, we're going it it's not true of

where. they got good currency and the rest of the markets are very challenging. nobody knows in this interest rate environment what to pay for a building because you can't borrow against it. so you have to go to an alternative lender and most of those alternative lenders don't have liquidity right now. i don't see unless you lower rates how we're not go to have and then steady to multi-family properties so there is liquidity there. it's very expensive college didn't raise rates in 21 and the delay in his data. by the time he caught up, rents had already trended down. i don't know why when you have

used products and -- i don't know why one-third has to be on the cpi. if you called me, i would want to writ what i know. what kind of program did they develop in 1981 that they've modified three, four times. >> i agree with a lot of what you're saying. we have a problem, houston. we have a fed that stayed at zero for so long and kevin morris was on the other day saying they buy all thee bond which mabelth -- they were like partners in the spending. so they did that now so they made this mess basically now they're going to try to kill the economy to really fix part of the problem. this is no way to run an

economy. and kevin wood says there should be a regime change. how do you solve a problem like the fed? >> i mean, the -- the consequences, everyone is taking a run at anything productive and buying treasuries. now you can't put your money in bank anyways i think we have a regime change for ph.ds. you can't take the regional banking system and replace the positive one with money borrowed at 5 and second these banks to have any profitability or be able to lend people at reasonable rates?

>> one guy is at 8, one at 6, one at 12. they should probably go back to some modified maturity thing. the problem is where it gets bad is that there's a crisis and there's a distress mark. they took the lending rate from 5 to 0 so every bank was instantly able to -- no lending bank can do that. but the banking system they fixed and there were bad actors then, right? but now i think they have to lower rates. that's how you recapitalize the banks. i think they've done enough. if they don't lower rates, the

bond market is telling you what's going to happen. the credit guys are the smartest guys in the room. the interest rates have to fall and the economy is going to implode. the housing market is actually a funny thing because people do want to buy homes, the strength of that home market, but -- and don't forget the builders are subsidized, too. it's like a car company giving you 0% financing. >> something to give back so you can end the mortgage rates. when are you back in new york? because this is a pretty complex set of issues and i'd like it dig into it deeper with you. >> i'll be back the 5th and 6th of april. >> can we book you now? >> yes, you can book me now i guess. i think it's fascinating but there are really important issues here. >> there are.

>> it is really a very complicated time and i started off by saying i feel badly, the government is spending money as fast as you can. if he wants to get inflation down, why doesn't he go across to the hill and have a temper tantrum and tell them to stop funding anything. more money this year than in the pandemic year? they were saving the earth and then they came one a bigger budget. that's where senator warren is wrong. increasing the supply of labor force would be wonderful. you get the immigrants and you get rid of programs that are keeping the people off of working because they're too generous. any able-bodied american should be able to work, we should encourage them to work, and this bring increased labor supply. you can go state by state and

look at all the problems done for generous reasons that don't apply today. i just talked to my guy like last night. he's like we have no house keepers. i'll pay $50 an hour and go be a housekeeper in hawaii. we can handle higher prices and people having higher income. that's actually creating wealth in the nation. that's a good thing. this 2% inflation target is made up. it could be 3. we have $33 trillion of debt and the deficit is going to be so much bigger than the federalis tell us. >> you got to come in here. we're going to see you the first week of april when you can be right here in studio with us. and some and some ti power e*trade's easy-to-use tools like dynamic charting and risk-reward analysis help make trading feel effortless and its customizable scans with social sentiment

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something like the long-term capital or lehman brothers event happening. it just happened a lot quick r than we anticipated. i mean, we were thinking more in the back half of theqñ year, bu 1goyuyknow, we went into this yr withko■ $620 billion in r losses on bank balance sheets,

which doesn't really matter unless deposits start moving around, and unfortunately, that's what started to xdhappen and with the money cut off from easy money, allxd of those start-ups bank atxd silicon valy bank and they had to start burning through those deposits of theirs, because they couldn't getxd easy money from the ventu capital people anymore, and that caused a run on the bank in añr very short period of time in the age of mobile banking where you don't have to stand in line at >> you made that call. it happened.ok is that it? qokçóit? what do you think happens from pnñ dans3 since we don't have a lot of lp time, i can'tlp wait you like, what y what you're still short. >> sure. i don't think we're through this yet. i think the next phase is we have to expand the fdic insurance. if we don't,ñ get a whole lot worse, but our belief is that that's going to occur. you're going to get this rally,

but if g/+ go back to theñp&ehmn experience, as an example of thisi&uárp" vsp go down 32% in three months. sfn t.a.r.p. passed and the market ralliesw3 24%, and everybody's callingçó the botto it's going to be wonderful. then earnings hit in q1 of '09 ■ went down 28% toe1 its ultimate lows, and so that's why we see this playing out. fdic, market rallies, then you get to deal with earnings from all of this tighter lending standards and you have a big issue. in terms of what we like, it's 1 i've said before, we like efens1 three-month treasury bills. you can get paid 4.7% with no risk in that. we like mut1ñ which is the best combination of probably offense and defense. they're doing very well with their tiktok competitivet( product. they/dd laid off 2vru2ñ their workforce or in the process of that over three separate cuts. just above a market multiple right now. if you want to get reallyçó out

there on the risk curve,t( you n do sports betting names liset draftkings, but remember, you need to have a lot of shorts in you're going to see a lot of these tech companies get hit, s a big portion of revenues. it's a low teens percentage of i.t. spending, and it only comes behind thet(çó techçó stocks themselves that is more in the mid-teens andt( that's at a+■ g. that's kind of a quick summary. >> how about some shorts?q >> without getting too2srecific advertising technologyfá in y■á recession,ñrlpi] advertising ge. obviously, chatgpt and generative a.i. is great, but it brings up the cost of search a lot, so googleñi isq one of the names we have matched up against meta, and we tradefb around tha. i think anything related to enterprise spending that has a high financials exposure, so there's, you know, names in the networking space, some of the

giants there. >> all right. >> all right. we're going to end interesting perspective. weqxd appreciate it. up last year, although you can't get tooq specific, but we're =oo going to listen to you. thanks, dan. >> my pleasure, joe. all right, tha4> ( does it usñi today.fá we are looking at the futures as we head outñi to "squawk on the street." your going futures up by about 60 po)uáip % >> no. >> just where they have been the entireñr show. we'll see you back here tomorrow. right now, it's time for "squawk on the street." ♪♪ñiñifáq good thursdaynnmorning, welcome to "squawk on the sara eisen and mike santoli. we're live at post nine at the new york stock exchange.b.■ morning off. let's give you look at futures as we get ready to start this thursdayçó tradingñi day. we can see where we are. no, we'reym■qñ not going to sho ght now.ñi take my word for it. looks like we're going to