ll prescription-strength? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme. good wednesday morning welcome to another hour of "squawk on the street. i'm carl quintanilla checking checking the agenda today, first reaction from the white house on this morning's inflation print. deputy director of the national economic counsel is with us

is buffet right? he'll be joining us. >> topping the tape, the market enthusiasm for today's inflation data, starting to wane here into the afternoon, after fed president barken of the richmond fed told us in the last hour that the trend is going in the right direction on inflation, but we are not where the fed wants us to be listen >> i certainly think we're past peak on inflation, but we still have a ways to go. and shelter came in at 0.6, which if you multiply that by 12 is over 7%, year over year core services came in at 0.4, which if you multiply that by 12, is about 5 if you want to get down to 2%, we're still a ways from there. >> a ways from there those comments taking some steam off the stock market right now the s&p 500 has gone negative. it was higher on inflation treasury yields right now. they were lower off the back of the inflation report, coming in cooler than expected that was considered good news.

there's the ten-year note and the two-year note, so we're still talking about lower yields investors are still pricing in a 69% chance of a 25 basis point hike in may. the next fed meeting and that's down from close to 80% yesterday. allianz out with some comments in the last half hour saying the data doesn't provide much runway for the fed to continue lifting policy rates after the may meeting. the debate becomes what happens after a rate hike in may and i don't know, listening to barken, carl, he's not a voting member, but represents a lot of what the fed feels, which is they want to see more progress on inflation and yes, today was a good step 5% is better than 6% on a headline number. but it's not 2%, which is where they wanted to be. >> a lot of stories on the tape this morning the fed commentary is starting to get frauctured, but it's onl been goolsbee who's been saying, let's be careful speaking of a hike in may, goldman removing their call for

a june hike sbbecause of the deceleration in shelter. we think that's going to continue so forr iyan to come out and sa, we're not looking for a hike in june is interesting. >> agree, the market is seemingly saying may and done. and is that matching up with the fed rhetoric not quite yet, i have to say let's dig deeper into some of these kcpi headlines and what i means for the economy. the top line number jumping about 5% from last year. that is good it's the softest pay since may 2021 some key drivers, food and shelter jumping nearly 8% used car prices and energy prices seeing the biggest dip energy down more than 6% here to discuss, live from the white house is deputy director for the national economic counsel, barra ramamurti it's great to have you, barra. how much progress do you see in these inflation numbers? >> i think it's a very, very positive report, as you highlighted just now, inflation

at the headline level continues to come down, night straight months after fighting inflations grocery prices actually went down over the last month and if you take a step back and look at the story of the last nine months, it's very simple. jobs are going up, wages are going up, and inflation is coming down, and that's exactly the kind of transition to steady and stable growth that the president said he wanted to see last year. >> it's progress, but, ugh, inflation is still pretty high and sticky in some places. and if you look at the core, which is what the fed is targeting, taking out food and energy, up 0.4% from the last month. it's not nearly where it needs to be, is it >> look, there's obviously more work to do the question is, are we on the right trajectory the president from the beginning has said, this is not going to happen overnight we need to make sure that we're moving in the right direction. quite clearly, we are, over the last several months. our job here at the white house is to make sure that we use all the tools that we have to help the fed in its effort to get

back down to its inflation target one of the main things we've been focused on is reducing costs for families, particularly prescription drug costs. we've seen a cap on insulin prices go into effect. that's saving families hundreds of dollars we're seeing a cap on the total out-of-pocket that seniors spend, which is $2,000 which is a huge cost savings for many seniors who have to pay for prescription drugs so we're doing what we can to help the fed in its everies. >> bharat, the street took notice of secretary granholm's comments about refilling the spr today. it seems unlikely that you'll be able to keep inflation low if you, in fact, do become a new marginal buyer of crude, right does the white house believe they lost a moment in their ability to refill the spr at some bargain prices? >> no, look, we're going to continue to look at that there were commitments made on that front and i know that secretary granholm and the team continue to explore options on that front it's important to look back at what we did with the spr last year, which was the historic release of 180 million barrels

of oil, contributed to a 40-cent reduction in prices at the pump according to the treasury department report. so we did use the spr strategically to help reduce prices following the disruptions of the russia/ukraine flconflic and now we'll look for opportunities to refill the reserve as secretary granholm has said >> i guess my question would be, if you do start purchasing back, that's going to arguably drive it deeper, oil prices incrementally higher, not lower. >> i hear you. i think there's a complexity here about when to refill the reserve, how to structure these contracts. i know secretary granholm and her team and folks at the white house are looking at this very carefully. i don't want to get ahead of any announcements on that front. but your point is a fair one and i think it's one thing that we're taking into consideration, as we decide how to structure these repurchases. >> what is the level of concern, bharat, in the white house at this point about some of the banking failures that we saw last month and potentially

ripple effects >> i think thanks to the decisive action that the administration took, we staved off the worst effects of a widespread bank run. we've saw deposit outflows largely stabilize, which was the main concern we had in the aftermath of the silicon valley bank failure and i think we've started to see some progress on accountability for executives and also progress on changing some of the regulatory rollbacks we saw in the previous administration. as you noted, the concern now is whether there's going to be a pullback in credit availability. we're monitoring that very carefully. we know that these regional banks in particular are a key source of credit for small businesses so now we're monitoring that careful. the data is still coming in. and i think we do have some options available to us, if we see that there's a big pullback in credit. >> like what >> well, i think the small business administration, again, looking specifically at the effect on small businesses, the sba may have some authorities to

step in and fill the body. and we can make some proposals to congress. i think one area where there is bipartisan agreement is on small businesses and so, our hope is that if there is a need, we can go to congress and get what we need from them in terms of filling that gap >> really interesting times right now, as you're aware, this story earlier in the week about commerce putting out for comment possible solutions about ai, right quick and whether or not there needs to be some kind of certification process for technology, bharat, that some argue has huge upside on productivity, which would then feed down to labor, wage inflation. how is the white house thinking about that can you afford to really put stringent guardrails on and not take advantage of what it promises >> well, look, there's both risks and rewards, as you've just detailed. and part of what we're trying to do is get our hands around what those are and what the best policy process is for reaping the rewards, while minimizing the risks. as you said, there's a real

opportunity here an economic opportunity that ai presents we want to make sure that the united states is the one leading the global effort on that front, is at the forefront of the efforts to take advantage of ai. but there are some real risks. we're working closely with our science and teams to figure out what those are what the guardrails are that would minimize those risks going forward? >> and finally, just to summarize the economic view right now, you know, since we last spoke to you guys at the white house, a lot of the data has come in weaker than expected for manufacturing, to services we're seeing jobless claims tick up wage growth calm down. what's your expectation right now of a recession in 2023 what's the probability >> look, i'm not going to put a number on it i think that a lot of people that have ventured that there's going to be a recession, including for a lot of last year have been proven very wrong. so what i'm going to say is that the data that we see right now is very strong 3.5% unemployment.

the number of new business applications is at an historic high we've seen just this last month, the percentage of working age people in the labor force has hit a 15-year high so it's a really good time to get a job. it's a really good time to trade up your job and find a better-paying job. and we think that overall, the economy is in a very strong position i don't think this there is another leading economy in the world that wouldn't want to trade places with us >> bharat, thank you very much for taking the time today off the back of that market-moving inflation report bharat ramamurthi. and these comments we're starting to get from the white house, everyone is watching the credit situation, but this idea that a credit crunch is inevitable and happening, i don't think people are seeing evidence of yet. didn't hear any alarm bells there from barken either. they're watching and waiting, but sort of diffusing the view that we're in a banking crisis still. >> what we saw those last two weeks of march, in terms of the

decline in loans, it's technically true that it's a record in nominal terms. but if you put it in real terms, it's nowhere near what we saw in contracting in say, '08, and '09, when things were, as many argue, a lot more dire than they are now. >> and small businesses in the nfib, paying higher rates, but still able to access higher credit we're piecing these things together and not seeing any kind of collapse at this point, but it's early >> still to come this hour, our former fed vice chair richard clarida on why the fed has likely moved closer to the end of the hiking cycle. ubs says there's one bank stock that will outperform amid the market volatility and it's time to buy ahead of earnings we'll get the name and the call. dow now lesshan t9% from the record high. don't go anywhere. ternet is tele a million different ways i should be trading. look! what's up my trade dogs? you should be listening to me.

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with their phones. oh i can't hear you... you're froze-- ladies, please! you put it on airplane mode when you pass our house. i was trying to work. we're workin' it too. yeah! work it girl! woo! i want to hear you say it out loud. well, i could switch us to xfinity. those smiles. that's why i do what i do. that and the paycheck. welcome back today's cooler than expected march cpi has bulls in full control on this idea that the fed might be close to the end of its hiking cycle markets have lost all of those gains and then some after we spoke to barken last hour, who still believes there is more work to do and is now concerned about demand >> i put particular focus on the core, which is still running a little over 5% year over year. and, you know, we had some good news on energy, but there's still more to do, i think, on the -- to get core inflation back down to where we would like

it to be i definitely see demand cooling. and then, you've got credit conditions, i'm watching that carefully. and of course, the lag impact. that's what i'm watching as we get into the may meeting and beyond >> joining us this morning, former fed vice chair richard clarida, who is a managing director at pimco. great to have you back thanks for joining us on such an important day for the economy and the markets. streets trying to navigate whether or not there is some migration in the fed commentary, after goolsbee last night. you seeing it? >> a little bit. i did take note of austan goolsbee's comments, but also recently, you had sue collins from boston, who is very much sounding, leaning in a more hawkish direction. so i think, it's not really a pattern so far and we'll have some chance to get further fed speak before the blackout, for sure >> meantime, minutes this afternoon, where i guess, i guess you would agree the focus

would be on what officials were saying about bank stress a few weeks ago. >> exactly there was some reporting a few weeks ago. obviously, that meeting occurred right really in the midst of the svb and credit suisse situation. so it's a little bttle bit stal nonetheless, i'll be looking for that >> did you guys at pimco, richard, think that there is a severe credit tightening happening, that will weigh on the economy, because we just have not heard that, really, from some of the fed officials new york fed president and then this morning, tom barkin of the richmond fed just didn't seem like they're seeing a strong evidence of that yet. >> yeah, so a couple of things on that, sarah first, the fed releases the so-called slew, and that showed before svb and credit suisse that there was some tightening in lending standards

that was in play already i do agree with the chair and the fed's statement a month or so ago, that incrementally, we would expect some further tightening in credit conditions. whether or not it's severe, i think it's too soon to tell. i think it moves in the direction of slowing demand, which within reason is what the fed wants. but i would agree that right now, i don't see anything flashing that is a severe crunch >> so, what do you do with the disconnect, between the market and the fed? here we are again. do you fade the cuts that the market is now pricing in, because we're not hearing that or seeing that or do you believe the market >> as i look at my screen this morning, it looks like roughly a three quarters chance, a 75% chance that they do hike in may. that seems reasonable to me. certainly, the projections that the march meeting indicated that all but one member of the committee thought at least one more hike would be appropriate, so i do think that they will get

that in. and right now, they will get it in at the may meeting. but i also think that they've done a lot, and certainly, inflation expectations appear to be an kochored so we are close to an extended pause. rate cuts are pushing back against that we saw the share push back against that pretty specifically in the march press conference. and if cuts do happen, i think they'll happen in the context of inflation coming down more quickly than the fed expects but right now, as you had tom barkin on, and i saw that segment, you know, there is some good news on inflation i think we have seen peak inflation, but it's still running somewhere in the fours, which is well above the fed's ultimate goal. so i think they have that in mind as well and i think that argues against some cuts in the near-term >> we mentioned at the top of the hour, goldman, a few moments ago, just removed their call for

a june hike. and they mentioned, richard, specifically, shelter. we expect the shelter trend to be lower going forward, because we believe the mark-to-market effect of existing tenant rents vetting higher post-pandemic is now in its advanced stages do you think shelter can really snowball here to the downside? >> i do. i wouldn't pretend to be an expert i don't look at the bottoms update like some of my colleagues do, but certainly, the way that the statisticians compute that is down and smooth. we did see a downshift in this report and i think we'll see more of that later in the year and because that is such a big piece of the cpi, you know, roughly 35% or so, it could have a big impact on the inflation numbers. and quite frankly, that is what markets are expecting, for example, if you look at inflation swaps. there's a pretty big downshift

in inflation in the second half of the year. >> what happens with jobs in that context >> you know, sarah, that is a puzzle now, typically, employment is a lagging indicator. and so the fact that the job market has not eased does not mean it's not going to, but quite frankly, the employment situation has maintained robust, much more so than i thought. remember, last year, we got a big downshift in gdp, in 2021, gdp growth was 6, last year it was 1. and notwithstanding, you really didn't see any slowdown in the labor market so i'm in the camp along with my former fed colleagues, that ultimately to get inflation into the 2s, we're going to need to see at least a modest rise in the unemployment rate, and until we've seen that, i think it's hard to get confident that we're on the path down to 2-point something inflation. >> but if you were still in the

fed, richard, wouldn't you be nervous that -- bank stocks haven't rebounded that much. and people are still worried that there are some more skeletons in that closet if something happens that people are going to say, look at may, that was a mistake why did they keep going? why didn't they just wait to see what the damage is and how it's shaping up we're seeing the trend continue. >> sarah, it's a good point. and i think that is one reason why when they do get that next hike in, whether or not it's may or june, that it's very likely that they do pause we heard a bit of that from austan goolsbee yesterday at the federal reserve bank of chicago. but i also would argue that because of the magnitude and persistence of the inflation overshoot, i think the fed institutionally also knows and indeed chair powell has said this a number of times, the risk of doing too little exceeds the risk of doing too much so i think they're cognizant of the fact that a year or two from now, it may look like one or two of these hikes weren't needed, perhaps.

but i also think that they do want to get them in. as john williams said the other day, to put policy in and keep it in a somewhat restrictive territory. >> richard, fantastic stuff. covered some nice ground there appreciate it, as always talk soon. >> thank you >> richard clarida one more wrinkle, sarah, is there was some discussion about some of the early moves right before the print, in the bond market bls now saying no indication of any early release of march data. >> that always makes you wonder, though, when you see those moves. up next, japan much like the u.s., targeting 2% inflation, but its new central bank governor taking a very different approach when it comes to interest rate increases. more details when we look at the story abroad a lot of moves on central banks today. plus, evercore isi's chairman ed hiyman with us he'll tell us whether he thinks the market has most likely locked in a recession. s&p 500 stl gaveilneti

welcome back to "squawk on the street." time to go abroad. european markets closing on a mix-to-higher note the euro stocks 50 closing right around positive sessions, i should say ecb president robert hoeltsman saying in an interview today that the ecb should increase rates by 50 basis points, meanwhile, in japan, completely different tune there the boj, bank of japan, says the central bank will continue its monetary easing to achieve its 2% inflation target, as wholesale inflation as low as for the third straight month and the bank of canada just this morning holding its key interest rates steady at 4.5% second straight month they've decided to pause despite the hold, banks saying that getting inflation the rest of the way back to 2% could prove to be more difficult as service price inflation and wage

growth remain evaluated. this is how you know it's a tricky time for central banks, because they're going in different directions right now bank of canada, australia have now paused will the fed pause in may? will it do may and then pause? and european central bank members calling for a double, because they still have an inflation problem and a single inflation mandate. it is not clear cut. now that this inflation is happening and demand is cooling and we've had some bank failures >> you look at charts that says canada usually leads the fmoc by a meeting or two but there were so many weird wild cards in what individual nations did, say, on fiscal stimulus and spending, that changed a lot of those analogs may or may not rhyme this time >> and also the fact that we're such a heavily dependent economy, so the fed's a little bit more worried about that services inflation it just makes foreign exchange

markets that much more exciting. >> and it doesn't even matter what they do rates are just headed down last year, the story was about anticipation of higher rates this year, the story is something very different >> mortgage rates down five straight weeks down to 6.3. >> let's get a market flash on an apple supplier today. kristina partsinevelos has it. >> sirius logic is sinking as closely watched apple analyst minh chin cho says they'll stick with traditional buttons so sirius is a supplier of products for solid state buttons, which is touch services that would replace the physical buttons. apple had some unresolved technical issues, so sticking with the traditional method should help simplify production. si cirrus is down the stock is down 12% right now. carl >> all right, kristina, thanks very much. big story. let's get a news update as well with bertha coombs

>> here's what's happening at this hour. the biden administration declaring that fentanyl mixed with animal tranquilizer kpilzine is an emerging threat for the country. the government now's publish a response plans in 90 days. new details from that leaked classified pentagon set of documents claim that serbia agreed to arm ukraine. serbia's defense minister, milos v visolive dismissed the intel as untrue in a statement and said serbia did not and will not supply weapons to ukraine or russia serbia is the on european country that has refused to sanction russia for its invasion of ukraine and firefighters are battling a large forest fire in ocean county, new jersey that has spread to 2,500 acres. the fire about 50 miles east of philadelphia started on tuesday night and has grown five fold as

of this morning. this prompted officials to issue evacuation orders for over 100 structures in the area this is prime season for those fires in april, sarah. >> all right, bertha thank you. bertha coombs. after the break, ubs says goldman sachs looks like a buy ahead of earnings. they up grade a few other financials as well we'll break down that call in just a moment. and watching shares of american airlines, near session lows, raising q1 guidance, but below consensus estimates. we're seeing a number of sectors turn read. consumer staples, consumer discretionary financials, communication services and technology all weaker with the s&p 500 overall unchanged. sq"squawk on the street" will be right back

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watching this reversal this morning as the enthusiasm comes off of cpi, holding 4,100, though let's get post-to-post with bob pisani >> an important thing is the cpi was about as good as you can ask for. i think the problem is evaluations right now. it's getting hard to push the market forward we've been talking about these rally in the deep cyclicals, the industrials and the material names. here's caterpillar 209 to 221 or so in the last week, and that's been a big mover up it's kind of running out of steam along with a lot of the other big industrial names but it's had a good run overall here flattish, is what you could say. these big deep cyclical names,

the material stocks, these are steel names like cleveland cliffs went from 17 to 19 in the last few days that's a big move up for a materials stock. and it's just sort of running out of steam here. there's no particular news, but they pushed it about as far as they can for the moment. one group that's noticeably weak today, retailers the retailers have moved essentially, trying to rally in the last two weeks or so after horrible in mid-march where they all got clobbered on the banking crisis look at gap, all of a sudden in the middle of the day, dropped, and we saw nordstrom, macy's big lots it's not news on gap here. it's just the whole retail group sort of dropped today. the other group that also dropped in the middle of the morning was the regional banks this is emblematic and these are still trading towards the lower end of their range. the m&t has been 118 to 124 for

the last several weeks that's sort of stable. now start dropping below 114, people will notice i guess, folks, technicals matter a lot when you're trying to figure out evaluations, you trade on technicals. so people tend to watch these levels very carefully. again, the problem, guys, and sarah and carl, valuations here. 18 times forward earnings for the s&p 500. you've got to believe, at this point, in the soft landing with, and if you have any problems with that, you'll have problems with the pricing in the market right now. guys, back to you. >> bob, talk in a bit. bob pisani a look at one note catching our attention today, that's ubs out with this bull call on goldman, upgrading the stock to buy, raising a target to 385 ahead of earnings next week they say the company looks pretty well positioned with an attractive valuation and less exposure to consumer deposits than its pieeers joining us this morning, brendan hawkin of ubs. i thought it was fascinating because it involves a company that just worked very hard to evaluate their consumer exposure, but not as much as it

appears, as you point out. >> and actually, they just had their investor day and backed away from the consumer lending effort to me, that was critically important, especially for the stock. the consumer, if they'll continue with consumer lending, that's a low multiple business, and you run the risk of de-rating. now that that has strategically been taken off the table, it's much more attractive easier to analyze and understand the outlook. >> where does it leave us in terms of capital market activity are you betting the back half does see some heating up >> it's certainly possible the good news to me about goldman and when you're thinking about financials, the estimates have come down a lot the past six months, estimates are down about 10% on 2024 numbers, '23 is down even more you've already seen the adjustment in the expectations around capital markets the investment bank has basically been closed for a year, right? it's not new news. think about what's been happening more recently. march was incredibly active.

we had bank failures the funding side for regular banks, that's really squeezing that's hurting the outlook and it's going to really, really squeeze the earnings and to me, given that we've already de-risked the investment banking outlook, you can rely on the investment banking outlook to a much greater degree than you can in other parts of financials it just feels much easier to own a name like goldman here plus, higher for longer, we had zerp for over a decade that really tamped down volatility in the markets. we're now seeing the last few years higher rates and what it can do to volatility it doesn't always feel good, but certainly for a trading business, it will give you a lot of volume. >> basically, it doesn't have the net interest margin pressure that some of its competitors have, right? it doesn't have the exposure to consumer deposits and all of the stuff that everybody is worried about with bank profiles is that in the stock that's fully appreciated >> it's already in the stock it's a wholesale funded business they have the markets' consumer

platform, that's a high beta platform, but already everybody expected to be a high beta platform it's a pretty good platform. you get almost 4%. i've got a bunch of money there myself but aside from that, nobody was thinking that they could benefit from cheap deposits or cheap funding. everybody knows that goldman has to wholesale fund. the incremental news of what we've learned in the last month or so doesn't hurt goldman in fact, increased volatility helps them a bit >> when i think about the negative calls from the sell side in recent months, they seem to be cultural, right? how much backing does solomon have among partners on the board. how is employee morale why have they fallen on the lists of companies that are highly sought after to work for. what do you make of those questions? >> it's certainly been a big topic on the media side. with that being said, it's still fair i think the consumer clarity

helps a lot. i think that a lot of the concerns internally was that they were spending money on the consumer push. didn't have a lot of buy-in on the partners now that that's been reduced, the risk of that's been reduced, they've made clear that they're exiting and de-emphasizing to me, that reduces that risk. also, what i would say is if you look at the share they've gained in trading, the trading businesses, since 2019, they have gained 5 percentage points of market share, and 1.1% of market share in equities that's really, really encouraging. and that's building on the top position that they have in equities so really outstanding franchise. and doesn't suggest what we're seeing in the market, doesn't suggest -- doesn't line up with all of the news stories. so it seems as if that's a little more smoke than fire. >> that's an interesting call. definitely got our attention today and i'm sure a lot of people will be chasing the note. thank you brendan hawkins with

ubs. >> up next, ed hyman on whether he thinks the fed can engineer a soft landing, still. po plus, his reaction to warren butt's warning with the dow up 24, nasdaq is lagging again. we're seeing the tech underperformance in the three-year treasury yield. still a little buying in bonds we'll be right back. from paying your people from anywhere to supporting your talent everywhere, we use data driven insights to design hr solutions and services to help businesses of all size work smarter today. so, they can have more success tomorrow. ♪ one thing leads to another ♪

dad, we got this. we got this. we got this. we got this. life is for living. we got this. let's partner for all of it. edward jones welcome back with today's inflation data and the market's interpretation that another rate hike is ahead, can the economy find its way to a

soft landing or will rates go too high our next guest looks towards the san francisco fed and says with rates climbing this hike, a recession is probably locked in. joining us is evercore isi chairman ed hyman. it's great to see you in person. >> thank you very much right back at you. >> so you're in the recession camp >> i'm in the recession camp you've got the rates, got an inverted yield curve and the money supply is contracting. that's mike tyson times three. >> were you encouraged by the trend that we got in the inflation report this morning? >> absolutely. and the trend in inflation, that must be 25 indicators that show a slowing trend. and so this is just, you know, one of them. but it's pretty broad spread from wages to rents to aluminum prices to egg prices online prices. it's everywhere, i think >> fed still thinks it has more work to do >> it still has more work to do. this business is tough

as, you know, because you talk to people all the time an year and a half ago, the fed was on the transitory thing and i was going crazy on the other side, because everything i looked up at was going up. now they're on the sticky side and everything i look at is now thawing. and rents about to come off the boil here. and i think wages might also, but that's a tough one on the wages. >> you think they're going to make a mistake >> they've already made a mistake. they've tightened too much you've got with the combination of rates and quantitative tightening, the fed funds are already 7, inflation is 5. and then the yield curve is massively inverted not just a little bit, bond yields are at 3.5. fed funds are 5, 6, or 7 and then, the money supply is contracting. and i've known that since the 1930s. >> i'm glad you brought up money

supply it is shrinking everywhere but china. >> good point, carl. >> there is this ongoing debate that there's some monetaryist argument that died 30 years ago. >> well, there's a fight between some of the liberals and conservatives. the liberals are anti-money stuff. and he sort of lost his way. he was a rock star in the '70s, because money was picking up and inflation would pick up. baa, you know, powell has said that he does not take the monetary aggregates into consid consideration, period. i'm like, woo! and it's oka growth is 4, 5, 6, or 7 but when it's 30, like it was a year and a half ago, you're going to get inflation and now it's minus 5, which is the biggest decline nin a very long time. so we'll see but, today's inflation news isn't nice for me to have sitting here with you, as somebody who has been expecting

inflation to slow and it's been a little sticky. >> so i tried pushing tom barkin of the richmond fed this morning on the fact that the trends are all moving in the right direction on inflation bank of canada decides to pause and sort of let it come down and he said, look, like, there's still evidence that it is way higher than it needs to be and pockets like services and rent and others that are worrisome. >> yeah. so, i think the one thing, sarah, to bring up at this point is that it takes a long time for rates to work. the one in my head i like the best is to turn a tanker takes ten miles, which is, when you think about that and trying to translate t it to- >> long and variable lags. >> i've seen enough. i know where this boat is going. >> there is the argument, of course, that, okay, let's go with the recession playbook then

that corporates have migrated so much debt into fixed that some of them may not have to deal with higher risks until 2030, some have argued discretionary income -- households on a debt profile still seem pretty healthy, meaning any recession would be mild can you go that far or would it be severe? >> no, i don't think so. so i have, you know, words are important. you guys, that's what you make a living doing and soft landing, i don't think so hard landing, probably severe recession no i don't think so because of what you mentioned. and there's never been a recession like this, if we have one, that's been so anticipated. ever >> meaning, if you're a corporate treasurer and you're not ready for this, you probably shouldn't have had your job to begin with >> anybody they had thing out yesterday, small business, is it a good

time to expand it was the lowest ever not low, but the lowest ever so, that takes a lot of risk out of the system. >> so, lack ofbusiness confidence i'm curious, ed, how it's affecting your business at everce evercorp what you see at capital markets, m&a. >> it's been tough i'm in the research sales trading part of the business and our business is steady and the banking part of the business is down significantly across the industry and at our firm as well so i would like to just get this over with. >> you think it changes when, what, when the fed cuts? >> i'll go with pause. you know, you need to take a step at a time and i feel confident that the fed should pause and then see what happens. should they cut right now? maybe wait a few more weeks and see how things -- but pause is a

good idea. if they shouldn't pause, they can always tighten again >> well, the market expects them to go in may and not pause >> yeah, no, the odds are 70%. and so i did a piece this morning assuming that they go to 5.25% and the fed funds rate adjusted for qt is now 7% or so. >> it's really good to talk to you in person, ed. >> my pleasure >> thank you so much ed hyman with strong views okay, carl >> i would reach over there and shake your hand, but i'll fall over >> after the break, live to burbank as warnebrher otrs discovery unveils its new combined streaming service some changes coming for hbo. we're going to find out.

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warner bros./discovery unveiling its new combined streaming certificaservice. julia boorstin with today's "tech check. what can we expect to hear >> reporter: well, i'm here on the warner bros. lot, and it will be a big day frunning the combined company we expect the company to unveil a new brand, exclusive content as well as pricing they are likely to announce a lower cost option with ads and a standard version incorporating both discovery and hbo content

that will cost about $16, which is the same hbo max costs right now. the company has reassured discovery fans its streaming content will continue to be offered as a standalone option truist initiated with a buy rating saying it expects the relaunch to drive average revenue momentum zaslav has been talking about the importance of this streaming combination for quite some time now and just last month warner bros./discovery cfo described this launch as a critical milestone saying,quote, we'll see better churn, we're going to see better engagement, and we're going to see a revenue inflex shun once that's in the market how often a combined service as currently hbo max costs could impact subscriber growth and also profitability all the announcements are going

to start right here at 1:00 p.m. and then coming up later today we're going to have an exclusive interview with warner bros./discovery ceo david zaslav at 3:15 p.m. eastern back over to you, carl a quick question on the stock. it had such a rough year last year and then a big comeback early this year, got a few upgrades i'm curious where the street is now on this name in general and what sort of the bull and bear case are >> reporter: one reason the stock is up so much this year is because analysts, many analysts, are so bullish on the potential for this combined streaming service to pose a real opportunity to be a rival to the likes of netflix and disney plus so there is the sense before that hbo max just didn't have the scale to really compete on the scale some of these larger players, but this consolidation could be really valuable and then the other thing to point out, sara, david zaslav did a lot of very deep cuts to

try to cut costs, and that happened last year so they've already done a lot of those cuts and now they're able to shift into more playing offense rather than playing defense. the fact they did some of those cuts earlier than some of their rivals, analysts see that as maybe providing an advantage right now. >> got it. julia, thank you we'll look for much more news from you throughout the day. julia boorstin up next, wall street's buzzing about san francisco again. one big defender of the tyowci n ditching more office space starting a new chapter can be the most thrilling thing in the world. there's an abundance of reasons to get started. how far we take an idea is a question of willpower. because progress... is a matter of character.

well, if you're in the market for 100,000 square feet of commercial real estate, look no further salesforce putting the last of its remaining office space up for sublease at the salesforce east tower in san francisco. the latest step in the company's cost cutting measures. another sign that remote work is here to stay and just the latest in a long line of companies vacating their office space in the bay area salesforce has its own issues and is restructuring and trying to boost efficiency and has embraced remote work but, carl, just another, i would say, piece of bad news for san

francisco. yesterday on whole foods, every day there's something. >> it's really tough they have some of the highest percentages of sublease space available in the nation. the census bureau did a piece asking various metro areas the percentage of people who are looking to leave they're, of course, at the top of the list. 8% the huge implications for the fiscal sustainability of the city, mass transit and everything else. >> between the crime and the taxes, business is really out. i'm not saying that's what the salesforce thing was about that tower stands very tall in san francisco. >> meantime, q1 numbers are out for lvmh the street was looking for 88.9. what they said about credit card use in this country. we'll see what friday brings

>> really bullish commentary from lvmh in china the reopening play, the luxury sector and the travel sector in china, they're just getting going and this is a reminder >> what a roundtrip we've had here opened up a couple hundred points on the dow as the shine was just on the cpi and settling back wholesale inflation numbers coming out tomorrow. let's get over to scott and "the half." carl, thank you very much. welcome to "the halftime report." i'm scott wapner front and center this hour cooling inflation, the cpi coming in lighter than expected. stocks are higher. all eyes now on the fed's next move our investment committee debating what all of that means to your money. joining me for the hour here at post 9, everybody is in the house. anastasia amoroso, jim lebenthal and steve weiss. a little bit of a roundtrip. got off to a positive start after the cpi came out we did go negative we are back positive the dow is good for about 79 orp